“I am satisfied that the Minister was entitled to exercise a public interest judgment”

A, perhaps, less obvious point worth noting about today’s High Court ruling on the decision to cut public funds to the Conflict Transformation Initiative [added link], and its more prominent employees, is how it reflects on the reported legal advice sought at the time by the NI Social Development Minister – including that from Senior Crown Counsel for Northern Ireland, Bernard McCloskey.That legal advice according to reports noted by Mick at the time.

Senior Crown Counsel for Northern Ireland, Bernard McCloskey, warned if the Social Development Minister made a decision to withdraw funding it “would be vulnerable to successful legal challenge” – while the independent barrister warned of difficulties but said they could be “robustly defended”.

Brett Lockhart, QC, said, however, the question remained whether the SDLP minister “is lawfully entitled to cease funding on the basis of events to date”.

Mr McCloskey also advised the minister that the recent events in Carrickfergus, connected to the UDA, should be “disregarded” because the entire south east Antrim area does not constitute a “target area” of the CTI.

His opinion said the International Commissioning on Decommissioning had informed the minister they had “seen a document which they felt was significant” and the Ulster Political Research Group had told her ” the UDA planned to make a significant step forward on November 11 which could be jeopardised by the withdrawal of CTI funding as this would “derail their efforts to move the UDA forward and play into the hands of those who did not support the winding down of the UDA”.

And Mr Lockhart said: “There is no evidence in my possession that suggests that Farset as an organisation are in breach of any of the funding conditions.”

In a memorandum dated October 16, Mr McCloskey said he could identify “no freestanding statutory power to either reduce or withdraw the funding.”

The High Court ruling notes that some of those concerns had also been raised by the then-Finance Minister, the DUP’s Peter Robinson.

[10] On 18 September 2007 the Minister for Finance and Personnel wrote to the First and deputy First Minister in relation to the announcement of 10 August 2007. The burden of this correspondence is found in the following passages.

You will recall that in July a draft Executive paper from the Minister for Social Development was circulated in relation to the CTI. However, at that time it was felt that it was unnecessary for the matter to come before the Executive as there was a contract in place and there was no new decision to be taken. While in those circumstances that was the correct approach to take, I believe the subsequent decision announced by the Social Development Minister on this matter should be brought to the Executive to allow a collective decision to be taken on the best way forward….

I am also concerned as to whether the requirements announced by the Social Development Minister amount to laying down a new condition which is not found in the original contract offer. In addition, as far as I am aware, there appears to have been no study or detailed assessment made as to the extent to which the actual terms of the contract had been adhered to or the progress which has already been made in this area. CTI were not asked to provide any information in this respect.

And the sections of the ruling which deals with those issues

The target areas

[21] In the amended Order 53 statement an issue is raised about the extent to which the disorder and violence of July and August 2007 took place within the target areas of the project. This is specifically addressed in an affidavit by the Permanent Secretary of DSD sworn on 12 May 2008 and I am satisfied that the target areas included South East Antrim which included Castlemara and East Belfast which within the UDA structures included Bangor. No contrary argument was addressed in the course of the hearing although the point was not abandoned.

Public/Private Law

[22] It is common case that any private law issues that may arise between DSD and Farset are not to be determined by these proceedings. The award of grant in this case was made to Farset under article 3 (1) of the Social Need (Northern Ireland) Order 1986 for purposes set out in article 3 (2) of the 1986 Order. In particular those included matters relating to training, youth and child development and environmental decline. The project implicitly recognised the connection between deprivation and the conduct of paramilitary activity. The decision of the Minister under challenge is her judgment that the funding should cease. The manner in which scarce resources should be distributed is eminently a consideration involving the assessment of competing public interests. Whether one examines this issue by reference to the legal source of power exercised by the decision maker as suggested by De Smith or by reference to the public interest test developed in Re Phillips’ Application [1995] NI 322 and Re McBride’s Application [1999] NI 299 it is clear in my view that the decision at issue is one of a public law nature.

Predetermination, Consultation and Irrationality

[23] The applicant contends that the decision of 16 October 2007 was predetermined by the Minister’s announcement on 10 August 2007. That issue is closely connected to the applicant’s complaint about consultation and irrationality. From the time of her appointment the Minister made it clear that her interest was in securing real change on the ground. She specifically raised this with members of Farset at their first meeting in 16 May 2007. At that meeting one of the representatives of Farset noted that there had not been any mention of decommissioning but he felt that the sooner this came onto the agenda the better. It was in that context that the Minister asked for a message to be conveyed to the UPRG that now is the right time for decommissioning. It is clear, however, that the Minister was content at that stage that the project should proceed in the absence of an act of decommissioning and she so advised the Executive in her memo of 4 July 2007 despite the fact that if she had been Minister at the time she would not have entered into the contract or approved the funding. That displays a proper public interest consideration of balancing on the one hand the desirability of the initiation of the project and on the other the adverse consequences of termination.

[24] I am satisfied on the basis of the materials before me that the underlying purpose of the award of grant was to improve the social, economic and environmental circumstances of those living in communities adversely affected by the continuation of UDA paramilitary activity by way of drugs, extortion and violence. At the time of the award of grant it was recognised that within the UDA there were those who wanted to improve the social, economic and environmental lot of the community by moving away from paramilitary activity but that there were others who were resistant to that idea. The events of July and August 2007 demonstrated the strength of the latter group.

[25] The statement made by the Minister on 10 August 2007 indicated a firm intention to cease the funding if the conditions which she required were not achieved. That clearly supports the applicant’s contention that the statement made on 10 August 2007 had the character of a final decision. It is clear, however, that there was an extensive round of meetings after 10 August 2007 and that those meetings discussed the benefits which had arisen from the CTI project and the disadvantages that might accrue if the project were stopped. At the Executive meeting on 8 October 2007 the Minister referred to her discussions with a variety of interested bodies and individuals and stated that she had reached no conclusion. In his memo of 15 October 2007 the Permanent Secretary noted that the Secretary Of State had referred to the fact that there had been meaningful engagement with the decommissioning body. He prepared an advice on 15 October 2007 which recommended a course which would have involved the Minister departing materially from her statement of 10 August 2007. These factors all point in the direction that the outcome remained uncertain. In light of the Minister’s recorded comment at the Executive meeting of 8 October 2007 that she had reached no conclusion on the issue it would require cogent evidence to establish that her position had remained fixed (see Re D [2008] UKHL 33). The fact that the Minister failed to bring the matter back to the Executive does not assist the applicant on this point because it merely reflects the fact that the Minister was of the view that the decision was hers to make. I do not consider that the applicant has satisfied the burden of establishing that the decision was predetermined by the announcement of 10 August 2007 and I consider that the complaints in relation to consultation fall for broadly the same reasons.

[26] The next question to be determined is whether in deciding upon her response the Minister was confined to the rights which had been reserved under the contract for funding or whether she was entitled to make a broader public interest determination. I have no doubt that the latter is the true position. In Amphitrite v The King [1921] 3KB 500 the plaintiff obtained an undertaking from the British government that if it sent a particular ship with a particular cargo it would not be detained. The ship was sent but the government detained it. The court declined to hold that there was a contract and the reason for so thinking was that it was not competent for the government to fetter its future executive action. William Cory & Son Ltd v London Corporation [1951] 2 KB 476 was a case in which the Corporation as sanitary authority made a contract with the plaintiffs who were barge owners for the removal of refuge from a wharf where it was to be dumped. The Corporation subsequently acting as the port health authority made new bylaws relating to barges which were much more onerous than the existing bylaws as a result of which the contract became commercially unviable for the plaintiff. The plaintiff claimed that the provisions of the contract give rise to either express or implied terms that the Corporation should not impose more onerous burdens on the plaintiff in those contained in the contract. Lord Asquith noted that a party preventing the other from performing the contract is generally guilty of a breach. But in this case he held that the Corporation had a dual character as a sanitary or health authority. As health authority they are charged with making bylaws and any implied term would impose an unwarrantable fetter on the Corporation in the exercise of their statutory duties.

[27] Commissioner of Crown Lands v Page [1960] 2 QB 274 is a case in which the defendant leased premises from the Crown in 1937 under a 25 year lease. In 1939 the Minister of Works requisitioned the premises and did not derequisition them until 1955. Devlin LJ held that in making a lease or other contract with subjects the Crown does not promise to refrain from exercising its general powers under a statute or under the prerogative. A more recent example of this principle is Yarl’s Wood v Bedfordshire Police [2008] EWHC 2207 (Comm) where at paragraph 80 Beatson J stated that it was clear law that a contractual arrangement by a public authority may not fetter the authority in the exercise of its powers and duties. I am satisfied that the Minister was entitled to exercise a public interest judgment outside the terms of the funding award. In doing that she was bound to take into account the terms of the funding award but I am entirely satisfied on the papers that she did so.

[28] The last point which arises in this area is whether in taking into account a failure to begin decommissioning or to reduce paramilitary activity the Minister took into account an irrelevant consideration. It is plain that responsibility for decommissioning lies entirely outside the remit of the Minister as does responsibility for criminal justice. There are, however, many facets of government where the issues arising in one sphere cut across those in another. The background to this grant application was the desire of the government to build confidence within loyalist communities and empower those communities to achieve the skills which would enable them to move on from the deprivation caused by drugs, extortion and violence engineered by paramilitaries within those communities. A simple example suffices. A youth and child development programme is likely to be imperilled in a community in which there is active, organised drugs activity. The judgment about whether projects like these are the appropriate recipient of scarce resources may well need to take into account the extent to which it is likely that those resources will achieve the aim of empowering the community. That judgment may well be influenced by the extent to which there is evidence of the relevant paramilitary group’s action or inaction on decommissioning. In exercising that judgment the decision maker is not in my view straying into the forbidden territory of taking on responsibility for the issue of decommissioning but rather considering the impact on the desired community improvement of likely paramilitary interference. This is exactly the type of balancing of the application of resources in the public interest that is properly the territory of democratically accountable ministers. I consider that the challenge on irrationality must fail.

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