Litigation & Crime
Cases The Constitution
Digital Rights Ireland Ltd. v. Minister for Communications
[2010] 3 I.R. 279 McKechnie J.wrote
“The rights of a company
[50] It is obvious that if a plaintiff can show actual or potential infringement of a constitutional right, it must have locus standi. In this context it is therefore necessary to consider which rights, if any, a company, and therefore the plaintiff herein, may have. If it is possible that these rights may be infringed by the actions of the defendants, the plaintiff has standing to challenge such. However, which constitutional and/or European rights or rights pursuant to the Convention on Human Rights can be afforded to corporate persons?
[51] Some personal rights are clearly inapplicable to a company. Keane J. commented in the High Court in Iarnrod Eireann v. Ireland [1996] 3 I.R. 321 at p. 345 that:-
“Undoubtedly, some at least of the rights enumerated in Article 40, s. 3, sub-s. 2 – the rights to life and liberty – are of no relevance to corporate bodies and other artificial legal entities.”
In that case he considered that property rights under Article 40.3 of the Constitution, particularly, were in a different category and therefore capable of being enjoyed by corporate bodies. He noted at p. 345 that there would be:-
“[A] spectacular deficiency in the guarantee to every citizen that his or her property rights will be protected against ‘unjust attack’, if such bodies were incapable in law of being regarded as ‘citizens’, at least for the purposes of [Article 40.3].”
It is therefore clear that some constitutional rights may be enjoyed by companies; leaving aside the extent to which they may differ from those rights as enjoyed by human persons.”
Iarnrod Eireann v. Ireland
[1996] 3 I.R. 321 Keane J. wrote
“The ability of corporate bodies to rely on the guarantees contained in these provisions does not appear to have been questioned in decisions prior to 1969 in which the constitutionality of legislation was challenged by such bodies in reliance on those provisions: see The Attorney General v. Southern Industrial Trust (1957) 94 I.L.T.R. 161 and Educational Company of Ireland Ltd. v. Fitzpatrick (No. 2) [1961] I.R. 345. In that year, however, the question was adverted to by O’Keeffe P. in East Donegal Co-operative Livestock Mart Ltd. v. Attorney General [1970] I.R. 317. He observed that
“Artificial persons may possibly not be entitled to rely on the constitutional guarantees . . . (although they have been held to be so entitled in the United States) . . .”
The Supreme Court expressed no view on the question in that case.
In Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 the first plaintiff challenged the constitutionality of certain provisions of the Industrial and Provident Societies (Amendment) Act, 1978, which it claimed were invalid having regard to the provisions of Article 40 already cited guaranteeing the property rights of every citizen and the following provisions of Article 43:—
“1. 1 The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
“The first issue to be determined is whether the Society, as such, can claim that its constitutional rights under Article 40, s. 3 and under Article 43 of the Constitution have been infringed. The property rights which are guaranteed by Article 40, s. 3, are those stated in Article 43; see p. 176 of the report of The Attorney General v. Southern Industrial Trust Limited . In Article 43, s. 1, sub-s. 1, the State acknowledges that man, in virtue of his rational being has the natural right, antecedent to positive law, to the private ownership of external goods. The remainder of Article 43 flows from that statement. In Article 43, s. 1, sub-s. 2, the word ‘accordingly’ shows a reference back to s. 1, sub-s. 1 of that Article. Article 43, s. 2, sub-s. 1 specifically refers to the rights mentioned in the foregoing provisions of the Article and s. 2, sub-s. 2, of the Article refers to ‘the said rights’. In my opinion, the provisions of Article 43, s. 1, sub-s. 1, cannot be construed as acknowledging or conferring a constitutional right on a corporate body – itself a creature of positive law. The right protected by Article 43 is the right of a human person.
Therefore, insofar as a claim is made by the Society that its constitutional rights under Article 40, s. 3 and Article 43 have been infringed by the Act, the claim is unsustainable as the Society does not have such rights. This view is in accord with the view expressed, in respect of s. 1 of Article 40, by the Supreme Court at p. 14 of the report of Quinn’s Supermarket v. Attorney General .
However, Mr. Moore is a shareholder in the Society. He invested his money with other shareholders in a Society incorporated under the law which is entitled to carry on business intra vires. If the business of the Society is affected by the Act of 1978 in such a way that the property rights of Mr. Moore as a shareholder are affected, then he is entitled, prima facie, to make a claim that his constitutional rights that are protected by Article 40, s. 3 and Article 43 have been infringed. Ownership of shares is one of the bundle of rights which constitute ownership of private property: per Mr. Justice Kenny at p. 84 of the report of Central Dublin Development Association v. The Attorney General .”
In Quinn’s Supermarket v. Attorney General [1972] I.R. 1 to which Carroll J. referred in this passage, neither Article 40, s. 3 nor Article 43 was under consideration. The plaintiffs, however, did rely on Article 40, s. 1 which provides that:”
“All citizens shall, as human persons, be held equal before the law. This shall not be held to mean that the State shall not in its enactments have due regard to differences of capacity, physical and moral, and of social function.” (Emphasis added).
Speaking for the Supreme Court in that case, Walsh J. said of this provision (at p. 14):”
“Furthermore, it need scarcely be pointed out that under no possible construction of the Constitutional guarantee could a body corporate or any entity but a human being be considered to be a human person for the purposes of this provision. In my view this provision has no bearing whatsoever upon the point to be considered in the present case, as no question of human equality or inequality arises.”
It will be observed that the word “citizen” in the provisions under consideration in this case is not qualified by the addition of the words “as human persons” or similar words.
The plaintiffs, having failed on the substantive issue in Private Motorists’ Provident Association v. Attorney General [1983] I.R. 339 in the High Court, appealed to the Supreme Court. Their appeal was disallowed, but no opinion was expressed as to the locus standi of the first plaintiff. Having pointed out that the plaintiffs’ challenge in that case was based, not only on Article 40, s. 3, but also on Article 40, s. 6, sub-s. 1 (iii) guaranteeing freedom of association, O’Higgins C.J., delivering the judgment of the Court, said at p. 358:”
“The rights which are alleged to have been infringed are among the personal rights which the Constitution guarantees to citizens. The Society is a creature of statute law and it is argued that, as such, it does not enjoy that constitutional protection. However, Mr. Moore, as a citizen, is entitled to complain if the impugned legislation interferes with any of his personal rights. This he does in the claim that both his property rights and his freedom of association have been violated. In the circumstances, it is unnecessary to decide the question of the Society’s rights. Therefore, the Court does not express any opinion on this question.”
Having referred to the submission on behalf of the Attorney General in that case that the second plaintiff had no property rights as a shareholder in the assets or business of the first plaintiff but merely contractual rights in and against that body, O’Higgins C.J. went on at p. 359:
“In the opinion of the Court it is sufficient that, as a shareholder and to the extent of his investment, Mr. Moore has an interest in the Society and contractual rights arising therefrom. This interest and these contractual rights are property rights which belong to Mr. Moore and they are capable of being harmed by injury done to the Society. The Court, therefore, rejects the submission made on behalf of the Attorney General that, as a shareholder in the Society, Mr. Moore has no property rights capable of being invoked for the purposes of Article 40, s. 3 of the Constitution. The Court’s acceptance of the argument put forward by Mr. Moore on this point is in accordance with the judgment of Kenny J. in Central Dublin Development Association v. The Attorney General and with the judgments of O’Keeffe P. and of this Court in East Donegal Cooperative v. The Attorney General . Therefore, the Court will consider the question of the validity of the impugned legislation having regard to its effect on Mr. Moore’s property rights as a shareholder in the Society.”
As already noted, the capacity of bodies corporate to invoke the provisions of the Constitution now under consideration does not seem to have been questioned in cases decided by the Supreme Court in which they were plaintiffs prior to Private Motorists’ Provident Association v. Attorney General [1983] I.R. 339 and the issue does not appear to have been specifically addressed by that Court in any decisions subsequent to that case. It arose directly for consideration, however, in this Court in Chestvale Properties Ltd. v. Glackin [1993] 3 I.R. 35.
In that case, the applicant companies contended that the power claimed by the first respondent, an inspector appointed to investigate the affairs of those companies under the relevant provision of the Companies Act, 1990, was invalid having regard to the provisions of Article 40, s. 3 as being an unjust attack on their property rights. It is relevant to note that the particular enquiry being conducted by the first respondent was as to the identity of the persons effectively in control of the applicant companies and that none of the shareholders in either of the companies was joined as a plaintiff. Murphy J. dealt as follows (at p. 45) with the contention advanced on behalf of the respondents that the applicant companies had no locus standi:—
“As the rights guaranteed by [Article 40, s. 3] are the personal and property rights of citizens, the respondent and the Attorney General contended that an argument based on this subsection was not available to the corporate applicants. This objection is supported by the decision of Carroll J. in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339. Ordinarily when this problem arises it is overcome by joining as a plaintiff a shareholder of the corporate plaintiff who is an Irish citizen (as was done in the PMPS case). This solution was consciously rejected by counsel on behalf of the applicants in the present case.
Whilst I accept that the court should be astute to protect the rights of citizens, even when they are attacked only indirectly through particular corporate structures, it does seem to me that in the particular circumstances of this case, the absence of an individual Irish citizen asserting his own constitutional rights is fatal to the argument based on the constitutionality of the 1990 legislation. However, as the matter was argued before me it is proper that I should express a view on it.”
Murphy J. went on to reject the contention that, assuming the applicants were entitled to rely on the provisions of Article 40, s. 3, the purported exercise by the first respondent of the relevant powers would be invalid having regard to those provisions, holding that, to the extent that they interfered with the property rights of the applicants, they were justified under the terms of Article 43 as a means of reconciling the exercise of such rights with the exigencies of the common good.
It is an important feature of the decision of Carroll J. in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 that it was expressly based on the premise that the rights on which the plaintiff sought to rely derived from Article 43. The learned judge laid particular emphasis on the acknowledgment by the State in the opening words of that Article that “man, in virtue of his rational being” is entitled to rights of private property and that the remainder of the Article flows from that statement. She concluded, in the result, that the right protected by Article 43 is “the right of a human person”.
However, subsequent to the decision in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 the relationship of Articles 40, s. 3 and Article 43 was further elucidated in the judgment of the Supreme Court in Blake v. The Attorney General [1982] I.R. 117. In that case, certain provisions of the Rent Restrictions Act, 1960, were challenged as being invalid having regard to the provisions of Articles 40 and 43. Giving the judgment of the Court, O’Higgins C.J. said of Article 43 at p. 135:—
“It is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property, such as controlled premises. Such rights are dealt with in Article 40 under the heading ‘personal rights’ and are specifically designated among the personal rights of citizens. Under Article 40 the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition, he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property.
This question of the relationship of Article 40, s. 3, sub-s. 2 to Article 43 was discussed in The Attorney General v. Southern Industrial Trust Limited (1957) 94 I.L.T.R. 161. In that case Lavery J., when delivering the judgment of the Court, said at p. 176 of the report:—
‘In any event, in the opinion of the Court, the property rights guaranteed are to be found in Article 43 and not elsewhere and the rights guaranteed by Article 40 are those stated in Article 43.’
The Court is unable to accept this view. Article 43 does not state what the rights of property are. It recognises private property as an institution and forbids its abolition. The rights in respect of particular items of property are protected by Article 40, s. 3, sub-s. 2, by which the State undertakes by its laws to protect from unjust attack and, in the case of injustice done, to vindicate the property rights of every citizen.”
The learned Chief Justice went on to cite with approval the following statement by Davitt P. at first instance in The Attorney General v. Southern Industrial Trust Ltd. (1957) 94 I.L.T.R. 161:—
“Article 40, s. 3 seems to me to be the only provision in the Constitution which protects the individual’s rights to the property which he does own.”
It is, accordingly, clear that the rationale on which Carroll J. based her rejection of the locus standi of the corporate plaintiff in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 can no longer be supported. In contrast to Article 40, s. 1 and Article 43, Article 40, s. 3, sub-s. 2, in enumerating the rights which are thereby guaranteed, refers simply to “the property rights of every citizen”. If the decision in PMPS is to be supported, it must be on the ground that the “property rights of every citizen” thereby guaranteed are confined to rights enjoyed by the citizens as human persons.
Undoubtedly, some at least of the rights enumerated in Article 40, s. 3, sub-s. 2 – the rights to life and liberty – are of no relevance to corporate bodies and other artificial legal entities. Property rights are, however, in a different category. Not only are corporate bodies themselves capable in law of owning property, whether movable or immovable, tangible or intangible. The “property” referred to clearly includes shares in companies formed under the relevant companies’ legislation which was already a settled feature of the legal and commercial life of this country at the time of the enactment of the Constitution. There would accordingly be a spectacular deficiency in the guarantee to every citizen that his or her property rights will be protected against “unjust attack”, if such bodies were incapable in law of being regarded as “citizens”, at least for the purposes of this Article, and if it was essential for the shareholders to abandon the protection of limited liability to which they are entitled by law in order to protect, not merely their own rights as shareholders but also the property rights of the corporate entity itself, which are in law distinct from the rights of its members.
Article 43 undoubtedly treats the general right of private property, the abolition of which in its entirety is expressly prohibited, as one inhering in”man in virtue of his rational being” and, in that sense, as being”antecedent to positive law”, including the Constitution itself. But it does not necessarily follow that the property rights of the individual citizens which are protected against “unjust attack” by Article 40, s. 3 are confined to rights enjoyed by human persons. Had the framers of the Constitution wished to confine the comprehensive guarantee in Article 40, s. 3. in that manner, there was nothing to prevent them including a similar qualification to that contained in Article 40, section 1.
The present case demonstrates that the restriction on the property rights of the citizen which would logically result from confining the protection of Article 40, s. 3 to individual citizens would not necessarily be eased in every case by joining the shareholders as plaintiffs in the proceedings. If this case were to depend on the locus standi of the second plaintiff, it would appear that his property rights as an individual arising out of his ownership of one share in the first plaintiff are of so nominal a nature as not to afford him any such locus standi. It is unnecessary at this point to consider how many other corporate bodies would be in a similarly impotent state, although they would clearly include some in the private sector, such as companies limited by guarantee. It is sufficient to say that, although the strategy adopted in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 of joining the shareholder as a plaintiff was accepted by the Supreme Court as obviating any constitutional difficulty that might have arisen in that case, it is of critical importance that the Court expressly refrained from holding that the corporate plaintiff had no locus standi. In the result, I consider that I am not bound to hold that where, as here, it is not possible to make effective use of such a strategy, the claim of a corporate plaintiff must necessarily fail.
I am satisfied that the expression “every citizen” is not confined in Article 40, s. 3, sub-s. 2 to citizens in their individual capacity as human persons and that artificial legal entities must also be protected by the laws of the State against unjust attacks on their property rights. In the case of injustice done, it is peculiarily the role of the courts to vindicate the property rights of such entities in accordance with Article 40, s. 3, sub-section 2. No doubt such a conclusion might not be reached if one were to adopt a strictly literal approach to these provisions, but as Henchy J. observed in The People v. O’Shea [1982] I.R. 384:—
“It may be said of a constitution, more than of any other legal instrument, that ‘the letter killeth, but the spirit giveth life’.” …………
Statutes Costs Security
Companies Act, 1963
Security for costs
52. Where a company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his or her defence, require security to be given for those costs and may stay all proceedings until the security is given.
Rules of the Superior Courts 1986 Order 29
1. When a party shall require security for costs from another party, he shall be at liberty to apply by notice to the party for such security; and in case the latter shall not, within forty-eight hours after service thereof, undertake by notice to comply therewith, the party requiring the security shall be at liberty to apply to the Court for an order that the said party do furnish such security.
2. A defendant shall not be entitled to an order for security for costs solely on the ground that the plaintiff resides in Northern Ireland.
3. No defendant shall be entitled to an order for security for costs by reason of any plaintiff being resident out of the jurisdiction of the Court, unless upon a satisfactory affidavit that such defendant has a defence upon the merits.
4. A plaintiff ordinarily resident out of the jurisdiction may be ordered to give security for costs though he may be temporarily resident within the jurisdiction.
5. If a person brings an action for the recovery of land after a prior action for the recovery of the same has been brought by such person or by any person through or under whom he claims, against the same defendant, or against any person through or under whom he defends, the Court may at any time order that the plaintiff shall give to the defendant security for the defendant’s costs, whether the prior action has been disposed of by discontinuance or by non-suit or by judgment for the defendant.
6. Where the Court shall have made an order that a party do furnish security for costs, the amount of such security and the time or times at which, and the manner and form in which, and the person or persons to whom, the same shall be given shall, subject to rule 7, be determined by the Master in every case.
7. Where a bond is to be given as security for costs, it shall, unless the Master shall otherwise direct, be given to the party or person requiring the security, and not to an officer of the Court. Provided that in any matrimonial cause or matter where security for costs is to be given by bond the bond shall be given to the Master.
The above text in italics is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.