Gaeilge

Title:	Beatty & anor -v- Rent Tribunal
Neutral Citation:	[2005] IESC 66
Supreme Court Record Number:	290/03
High Court Record Number:	2001 110 JR
Date of Delivery:	10/21/2005
Court:	Supreme Court
Composition of Court:	Denham J., Hardiman J., Geoghegan J., Fennelly J., McCracken J.
Judgment by:	Fennelly J.
Status:	Approved
Result:	Allow And Set Aside
Judgments by Link to Judgment Concurring Geoghegan J. Link Denham J., Hardiman J. Fennelly J. Link McCracken J. Link

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Denham J.
Hardiman J.
Geoghegan J.
Fennelly J.
McCracken J.
BETWEEN
JUDGMENT delivered by MR JUSTICE FENNELLY on the 21st day of October, 2005.

1. The task of the Rent Tribunal is to fix rents. Does it owe a duty of care to landlord or tenant in doing so? The Respondents secured Judicial Review of a rent fixed by the Tribunal and the High Court gave them damages. This appeal requires the Court to examine once more the boundaries of liability in negligence.

The statutory background

2. This court, in Blake v Attorney General [1982] I.R. 117, declared the principal provisions of the Rent Restrictions Act, 1960 to be invalid having regard to the provisions of the Constitution: they so limited rents as to represent an unjust attack on the property rights of landlords.

3. The first legislative attempt to remedy the gap in protection for tenants of controlled dwellings resulted in failure, when this Court, in Re Article 26 of the Constitution and the Housing (Private Rented Dwellings) Bill, 1981, [1983] I.R. 181, declared also incompatible with the Constitution the central rent-fixing provisions of that Bill.

4. The Oireachtas then enacted the Housing (Private Rented Dwellings) Act, 1982. Section 11 of that Act provided that, in default of agreement, the rent of any dwelling to which the Act applied was to be fixed by the District Court. The Act applied generally to dwellings which had formerly been controlled dwellings under the Rent Restrictions Act. Rents were to be fixed having regard to the considerations set out in sections 12 and 13 of the Act. These were designed to approximate rents more to economic or market reality than had been the case under the former Rent Restrictions Acts. Nonetheless, landlords of controlled dwellings remain bound by statutory control.

5. The Housing (Private Rented Dwellings) (Amendment) Act, 1983 provided for the establishment of the Rent Tribunal, which is, of course, the Appellant in the present appeal. The Act took the rent-fixing function away from the District Court and conferred it on the Rent Tribunal. The Tribunal is “to perform the functions assigned by this Act.” (Section 2(1)). The Minister for the Environment appoints the members of the Tribunal, which is to consist of “a chairman and so many vice-chairmen and ordinary members” as the Minister “considers necessary from time to time for the performance by the Tribunal of its functions under this Act.” Under Regulations (Housing (Rent Tribunal) Regulations, 1983, S.I. 222/1983), the Tribunal sits in divisions of three to determine applications. One member of a division must have “knowledge of, or experience in, the valuation of property.”

6. Although, the Tribunal is to have a seal (section 4), it is not provided with any independent budget or staff, but the Minister “may from time to time appoint from among his officers so many person as he considers necessary to assist in the performance of its functions under this Act.” Section 21 of the Act provides that the “expenses incurred by the Minister in the administration of this Act shall be paid out of moneys provided by the Oireachtas.”

7. The Tribunal now performs the function formerly assigned to the District Court. The decision of the Tribunal is final and conclusive (section 12(3)) save that section 13(1) permits an appeal to the High Court on a question of law. The Minister may also, at the request of the Tribunal, refer a question of law to the High Court (section 13(2)).

The Facts and Judicial Review proceedings

8. The Respondents are the landlords and the Notice Party is the tenant of a controlled dwelling within the meaning of the Acts of 1982 and 1983. The rent had been determined by the Tribunal in 1995 at £300 per month. The Respondents applied in July 2000 to have a new rent determined by the Tribunal. The Tribunal on 12th December 2000 determined the rent at £500 per month, a figure below even the figure proposed by the tenant’s valuer. This surprising circumstance does not, however, concern the Court at this point, though it must, naturally, have had an impact on the return the Respondents obtained from the dwelling.

9. The Respondents had two principal complaints about the procedures followed by the Tribunal in the course of performing its task of fixing the rent and one concerning the form of the decision. The Respondents succeeded in their application for Judicial Review of the Tribunal’s decision. Finnegan J, as he then was, granted Judicial Review by way of certiorari of the decision of the Tribunal on the following grounds:

1. The Tribunal carried out an inspection of the premises in the presence of the Notice Party but in the absence the Respondents; Finnegan J found it unnecessary to decide whether the Tribunal’s indisputable failure to respect the right of the Respondents to be present (they had made their wish to be present abundantly clear) had resulted in any actual unfairness. He proceeded on the basis that justice must be seen to be done;

2. The Tribunal afforded the Respondents insufficient time to respond to the valuation report submitted by the Notice Party; in this respect, there was a clear and substantive failure to respect fair procedures; the Tribunal, having laid down a time limit for the receipt of valuation reports from both sides, with which the Respondents had complied, accepted a report from the Notice Party, which raised new issues about the condition of the premises, well outside the time; this report was received within days of the date the Tribunal had notified for the pronouncement of its decision, but the Tribunal refused the Respondents’ request for an adjournment and an opportunity to respond to the report; thus, it proceeded to determine the rent without giving the Respondents any fair opportunity to respond;

3. The Tribunal failed to give any or any adequate reasons, even when requested, for its determination; Finnegan J held that they should have specified, inter alia, their finding as to the “gross rent” and “the allowance for improvements.”

The damages claim and High Court Decision

10. The Respondents then sought damages suffered as a result of the invalid decision of the Tribunal. The Statement of Grounds presented at the time of the application for leave to apply for Judicial Review included as one of the reliefs sought: “damages……for breach of statutory duty, negligence and misfeasance in public office.” Finnegan J did not deal with the claim for damages, but the High Court order made on foot of his judgment gave liberty to the Respondents to apply in relation to damages. The question became whether, as a matter of law, the Tribunal is liable in damages to compensate the Respondents for the consequences of the invalidity of their decision of 12th December 2000.

11. The claim for damages was heard by O’Donovan J on the basis of affidavits and without oral evidence. It is his judgment of 16th May 2003 which is the subject of this appeal. Following a detailed and considered review of the principal authorities, he found in favour of the Respondents and awarded a sum of €5,817.15. His principal conclusion was:

“……when making the determination of 12th December 2000 [the Tribunal] owed to both the [Respondents] and the [Notice Party] ……… a duty to take reasonable care to insure that the said determination accorded with principles of law and that, in the event that it failed to do so and that, as a result of that failure, adverse consequences were suffered by either [party] then the [Tribunal ] is liable in damages to the injured party………………[T]he loss of rent suffered by [the Respondents] flowed directly from the [Tribunal’s] failure to comply with the principles of natural and constitutional justice and that it was foreseeable that such a loss would arise in the event of such non-compliance, and it also seems to me that the current state of the law in this country is that economic loss arising in such circumstances is recoverable by the injured party.”

The appeal

12. The Tribunal appealed the decision of O’Donovan J.

13. Counsel for the Tribunal, Mr Maurice Collins, Senior Counsel, submitted that the learned High Court judge had found in favour of the Respondents only on the basis of common law negligence. I think this is correct. Nonetheless, on the hearing of the appeal, Mr Michael Counihan, Senior Counsel for the Respondents, sought to argue a case of misfeasance in public office. He submitted that the courts have now recognised that the tort in question extends to cases of recklessness, referring to the decision of the House of Lords in Three Rivers District Council and others v Bank of England [2000] 2 AC 1. However, O’Donovan J found it “reasonable to conclude” that the Tribunal had not been “motivated by malice.” Mr Counihan was not able to put the matter beyond stating that the Tribunal had patently acted in breach of the rules of natural justice; the Tribunal was negligent in the extreme and this amounted to recklessness.

14. This argument misunderstands the nature of the recklessness to which, for example Lord Steyn referred in Three Rivers. Lord Steyn certainly recognised the possibility that recklessness in the exercise of public-law power might suffice to establish the tort, but he also said, at page 192, that “bad faith in the exercise of public powers … is the essence of the tort.” The sort of recklessness that will qualify as equating to malice is something much more than gross carelessness. It requires clear advertence to the risk (for example that there is no power to do the act) and not caring about the consequences. Objective recklessness is not enough. Geoghegan J, in his judgment in Kennedy v The Law Society (unreported 21st April 2005), accepted that recklessness could amount to malice but insisted that “subjective mala fides is an essential feature of” the tort. There is no evidence whatever of recklessness of that sort in the present case.

15. There has been no attempt to further the Respondents’ case on the basis of breach of statutory duty. Hence, the appeal is concerned with common law negligence.

16. Mr Collins submitted that, in order for the Tribunal to be liable in damages for negligence, it would have to be demonstrated that, over and above its public-law duties, which render the Tribunal liable to have its decisions judicially reviewed, it owed a duty of care in private law to the Respondents. In order to establish the existence of such a duty, it would be necessary for the claim to pass a three-part test: there would have to be a relationship of proximity between the parties such as the law has recognised; that it was foreseeable that damage would flow from want of care in the performance of the public duty; that it was fair and reasonable that the duty of care be imposed.

17. Mr Collins submitted, in effect, that the claim of the Respondents does not satisfy the test of proximity or, alternatively, that it is not fair and reasonable to impose the duty. He said that there is no decided case in which a duty has been held to be owed by a statutory body of the nature of the Tribunal. He cited very widely from the decided cases and I will refer to these in more detail. Perhaps most precisely, he submitted that the decisions of this Court in Siney v Dublin Corporation [1980] I.R. 400 and in Ward v McMaster [1988] I.R. 337 should be considered in the light of the qualifications apparent from Sunderland v Louth County Council [1990] I.L.R.M. 658. In that case a claim for damages for negligence failed. It was based on the failure of the planning authority to inspect the suitability of the ground for the development for which planning permission sought. The first two cases can be explained by the existence of a statutory scheme designed to protect the interests of particular groups of people who were unable to provide from their own resources the sort of protection the legislation was intended to provide.

18. Mr Collins also referred to the well-established immunity from suit of Judges (Deighan v Ireland [1995] 2 I.R. 57; O’Connor v Carroll [1999] 2 I.R. 160) and arbitrators (Sutcliffe v Thackrah [1874] A.C. 727).

19. Finally, and as an alternative to his main argument, Mr Collins submitted that the Respondents’ claim is for the recovery of pure economic loss, referring to the dictum of Keane C.J. on the subject in Glencar Exploration plc v Mayo County Council, at page 134. He submitted that, as a general principle, pure economic loss is not recoverable in negligence.

20. Mr Counihan supported the decision of O’Donovan J, stating that the Respondents were entitled to rely on the Tribunal to take reasonable care in the exercise of their statutory powers. Having regard to its history, the legislation applies to a specific and identifiable category of persons, namely both the landlords and tenants of controlled dwellings. Thus, in contradistinction with the situation in Glencar Exploration plc v Mayo County Council [2002] 1 I.R. 84 and Sunderland v Louth County Council, cited above, the duty of the Tribunal was not one merely owed to the public in general. In the cases of landlords, the legislation restricts constitutionally protected property rights. Thus, a failure of the Tribunal to act with due care should sound in damages in the same way as an action for damages for breach of constitutional rights. The Tribunal is sui generis and should not enjoy immunity from suit in the same way as planning authorities or other public bodies, as explained in Pine Valley Developments v Minister for the Environment [1987] I.R. 23. The parties before the Tribunal are members of a closed class of persons and are in a particularly close relationship with that body. There is no public interest in the amount of the rent fixed. It is a matter exclusively of interest to the parties.

21. The Respondents accept that, unlike the plaintiffs in Siney v Dublin Corporation and in Ward v McMaster, both cited above, they cannot claim to be persons unable to provide for themselves, but submit that, in the light of Blake v Attorney General, they are entitled to a measure of protection. They do not accept that the adjudicative nature of the Tribunal’s decisions is relevant: the Tribunal is bound to act fairly and with a reasonable measure of expertise. There is no justification for immunity (Desmond v Riordan [2000] 1 I.R. 505).

22. Finally, the Respondents support the conclusion of the learned trial judge that the fact that they seek to recover damages for pure economic loss does not prevent them from recovering. Also, towards the end of the hearing, Mr Counihan introduced a number of examples of cases where damages have been awarded for various wrongs committed. Principal among these was Philips v Medical Council [1991] 2 I.R. 115, where Costello J awarded damages for breach of statutory duty against the defendant for failure to determine within a reasonable time an application for registration as a medical doctor.

The authorities

23. The boundaries of the law of negligence will continue to be debated whenever the courts are asked to award damages in novel categories. The underlying principles are, nonetheless well established. They are:

· That there is a relationship of such proximity between the parties such as to call for the exercise of care by one party towards the other;

· That it is reasonably foreseeable that breach of the duty of care will occasion loss to the party to whom the duty is owed;

· That it is just and reasonable that the duty should be imposed.

24. In addition, as I will discuss later, the law has been slow to impose liability in negligence for damage consisting of pure economic loss. Whether there is a relationship of proximity is essentially one of fact. The court must look at the circumstances of the parties. Keane C. J., in his comprehensive treatment in Glencar, with which all members of this Court agreed, cited the memorable formulation by Lord Atkin in Donoghue v. Stevenson [1932] A.C. 562 at p. 580:

"The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer's question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be - persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question."

25. In all truth, it has proved very difficult to improve on Lord Atkin’s dictum. It underlies the thinking of our courts in the four leading Irish cases decided in recent years, which have been cited to us. All four cases concerned allegations of negligence in the exercise of statutory powers.

26. Siney v Dublin Corporation and Ward v McMaster lie on one side: they said that there was proximity and a duty of care. Sunderland v Louth County Council and, of course, Glencar fall on the other side and the plaintiffs lost.

27. The plaintiff in Siney became the tenant in a new block of flats built by Dublin Corporation, as it was then known, pursuant to its statutory powers as housing authority. Within two months water began to appear under the floor and fungus grew on the walls, all due to defective ventilation. This should have been discovered on inspection. The flat was unfit for human habitation. In addition to finding that there was an implied term in the letting agreement regarding the fitness of the dwelling, this Court unanimously held that the Corporation owed a duty of care at common law to the tenant. The two factors underlying this conclusion were that the flats were provided for persons of insufficient means to provide houses for themselves and that the defective ventilation was concealed, so that the incoming tenant could not have been aware of it and could not reasonably have been expected to discover it (see O’Higgins C.J. at page 415). Henchy J gave judgment to the same effect, stating at page 422 that “there was a proximity of relationship creating a general duty on one side and a justifiable reliance on the other side on the observance of that duty….”

28. Ward v McMaster concerned a local authority loan granted under section 39 of the Housing Act, 1966 and the regulations made thereunder. Regulations required the local authority, before making a loan, to satisfy itself as to the value of the house. The scheme it had adopted for the grant of loans was designed for persons unable to obtain loans from commercial agencies. The plaintiffs obtained a loan from the council to finance the purchase of a house, but had no professional survey carried out. The local authority engaged a valuer, who reported on the value, but they failed to engage anyone to carry out a structural survey. The house bought by the plaintiffs with the benefit of the loan turned out to be seriously structurally defective. Costello J, in the High Court, held that there was a relationship pf proximity between the plaintiffs and the local authority:

“They should have been aware that it was unlikely that the [first named] plaintiff (in view of his knowledge that they were going to value the premises and his very limited means) would not himself employ a professional person to examine it and so they should have known that if the valuation was carelessly done it might not disclose defects in the premises and as a result the plaintiff might suffer loss and damage.”

29. This reasoning also underlay the two judgments of Henchy J and McCarthy J on the appeal to this Court. Both held that there was a relationship of proximity. Henchy J, with whose judgment two other members of the court agreed, speaking of the regulations under which the local authority had acted, expressed the view at page 342 that a “paternalistic duty of that kind would not normally be imposed on a mortgagee in favour of a mortgagor...” He considered that the plaintiff was in a special position: “A borrower of that degree of indigency could not have been reasonably expected to incur the further expense of getting a structural survey of the house done.”

30. An attempt was made in Sunderland v Louth County Council [1990] I.L.R.M. 658 to apply the reasoning of these two cases to loss alleged to flow from the grant of a planning permission by a planning authority. The plaintiff purchased a house which had been built with the benefit of a planning permission granted by Louth County Council. Due to the unsuitable condition of the site, the house became uninhabitable. In an action for damages against the Council, McCarthy J, at page 663, speaking for a unanimous Supreme Court, distinguished the earlier cases, saying that they dealt with “provision in a social context for those who are unable to provide for themselves.” The role of the planning authority, on the other hand, was to act in “a watchdog role that is for the benefit of the public at large.” He concluded:

“The Act [referring to the planning acts] in conferring statutory powers on planning authorities imposed on them a duty toward the public at large. In my view, in conferring those powers, the Oireachtas did not include a purpose of protecting persons who occupy buildings in the functional area of the planning authorities from the sort of damage which the plaintiffs have suffered.”

31. The last case of the four is Glencar Exploration plc v Mayo County Council. That case concerned a provision included in the development plan for County Mayo prohibiting mining in a large area of the county. In earlier proceedings the High Court had held the mining ban to be invalid (Glencar Explorations plc and another v. County Council of the County of Mayo. [1993] 2 I.R. 237). The plaintiff, a mining company, had, to the undoubted knowledge of the defendant Council, spent a large amount of money prospecting for minerals in the areas affected by the mining ban pursuant to licenses granted under statutory powers. Having succeeded in having the mining ban set aside, the plaintiff sued the Council for damages. Keane C.J., speaking for a unanimous Court, held that the mining ban had been imposed for the benefit of the community as a whole. He contrasted this situation with Siney and Ward v McMaster, where each of the plaintiffs “belonged to a category of persons for whose benefit a particular statutory framework had been created and who might reasonably be said to have relied on the local authority in each case taking reasonable care in the exercise of the statutory powers vested in them.” In the following conclusive passage, at page 141, Keane C.J. held that there was no relationship of proximity between the parties, though combining this conclusion with reference to the test of whether it was “just and reasonable” that liability should be imposed. He said:

“In considering whether such a relationship of "proximity" existed and whether it would be just and reasonable to impose a duty of care on the respondent, I think one also has to bear in mind that this was not a case in which it could reasonably be said that the applicants, in incurring the expense of their prospecting activities, could be said to have been relying on the non-negligent exercise by the respondent of its statutory powers. Their position is in contrast to that of the plaintiffs in both Siney v. Corporation of Dublin [1980] I.R. 400 and Ward v. McMaster [1985] I.R. 29; [1988] I.R. 337 where, in each case, they belonged to a category of persons for whose benefit a particular statutory framework had been created and who might reasonably be said to have relied on the local authority in each case taking reasonable care in the exercise of the statutory powers vested in them. The applicants in the present case could rely on no more than a general expectation that the respondent would act in accordance with the law which is not, in my view, sufficient to give rise to the existence of a duty of care.”

32. The former Chief Justice, as I have said, appears to combine his conclusion on “proximity” with the assessment of whether it would be just and reasonable to impose a duty of care. However, it is clear that he did not think that the necessary relationship of proximity existed between the plaintiffs and the planning authority. Essentially, the planning function must be exercised for the benefit of the public at large. A duty to consider the interests of a particular potential developer would potentially conflict with the duty to the public. By contrast, in both Siney and Ward v. McMaster, the performance of the duty to the plaintiffs, in each case to inspect properly, was in no sense in tension with a public duty. Rather it was consistent with and in support of the duty to look after the council’s own interests.

33. The learned trial judge in the present case, having noted that the damages claimed by the Respondents represented compensation for pure economic loss suffered by them stated that:

“However, while, from time to time, the courts in this country have paid lip service to the proposition that damages for an economic loss, as distinct from compensation for injury to person or damage to property, are normally not recoverable in tort, it is recognized that, in an appropriate case, damages for economic loss resulting from tort is [sic] recoverable.”

34. The learned judge went on to quote a passage from the judgment of Keane CJ on this question in Glencar, upon which the Tribunal relies. Having referred to the necessity, as a condition of liability to show a relationship of proximity, he spoke as follows, at page 134, on the question of economic loss:

“So too with the principle that no action for negligence lay in respect of purely economic loss. A major qualification of that principle was established in Hedley Byrne & Co. Ltd. v. Heller and Partners Ltd. [1964] A.C. 465 in the case of pecuniary loss caused by a negligent misstatement, but until the much discussed decision of the House of Lords in Junior Books Ltd. v. Veitchi Co. Ltd. [1983] 1 A.C. 520 it remained the law in both England and Ireland that, negligent misstatement apart, no action in negligence lay in respect of such damage.”

35. Returning to this issue at page 143, the former Chief Justice said:

“I would expressly reserve for another occasion the question as to whether economic loss is recoverable in actions for negligence other than actions for negligent misstatement and those falling within the categories identified in Siney v. Dublin Corporation and Ward v. McMaster and whether the decision of the House of Lords in Junior Books Ltd. v. Veitchi Co. Ltd. [1983] 1 A.C. 520 should be followed in this jurisdiction.”

36. It would be difficult to say that the Respondents in the present case do not satisfy the test of proximity taken in isolation. Both landlord and tenant come into a direct relationship with the Tribunal once the latter is asked to review and determine a rent. It has only those two parties in contemplation. I would not go so far as to accept the submissions of Mr Counihan that performance of the Tribunal’s function is exclusively of interest to the parties. There is a clear public interest in ensuring that rents generally are fairly set and that the law is properly interpreted in doing so. That is confirmed by the power of the Minister to refer a point of law to the High Court, at the request of the Tribunal. Nonetheless, in reality, the only parties with a direct and real interest in the outcome of the proceedings of the Tribunal are the landlord and the tenant respectively.

37. I do not find any support for the exclusion of proximity from the fact that the Tribunal performs an adjudicative function. The case law on that subject, whether in the sense of the immunity from suit of judges or arbitrators proceeds from considerations of public policy. None of those cases states that there is no sufficient proximity between a person damnified by a judicial or quasi-judicial decision and the person making it. On the contrary, it seems that historically, in English law, while judges of the superior courts were immune from suit, those of inferior courts were not. To quote Lord Denning M.R. in Sirros v Moore [1975] 1 Q.B. 118, a judge of an inferior court who went outside his jurisdiction “was liable to an action for damages, even though he made an innocent mistake of law in so doing.” More relevant for present purposes is the decision of the House of Lords in Arenson v Arenson [1977] A.C. to the effect that the immunity of judges and arbitrators was an exception to the general rule that there should be liability for negligence and that there was no reason of public policy for extending to valuers appointed by mutual agreement to value property. The immunity of judges at least flows from considerations of public policy.

38. Consequently, I have come to the clear conclusion that the Respondents claim cannot be defeated for lack of a relationship of proximity between the Respondent and the Tribunal.

39. It has not been suggested on behalf of the Tribunal that it was not foreseeable that want of care on the part of the Tribunal would cause loss to the Respondents. Accordingly, it remains to consider the third question, namely whether it is just and reasonable that liability be imposed.

40. There is a difference of emphasis between the respective dicta of McCarthy J in Ward v McMaster and Keane C.J. in Glencar Exploration plc v Mayo County Council. In the former case, at page 349, McCarthy J said:

“Whilst Costello J. essentially rested his conclusion on the "fair and reasonable" test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage, and the absence of any compelling exemption based upon public policy. I do not, in any fashion, seek to exclude the latter consideration, although I confess that such a consideration must be a very powerful one if it is to be used to deny an injured party his right to redress at the expense of the person or body that injured him.”

41. However, at the end of his judgment, McCarthy J found it possible, at page 352, to decide the case “…without entering into the question of whether or not it is "just and reasonable" to impose the duty…” Henchy J, at page 342, rather than positively stating that it would be just and reasonable that liability be imposed expressed the converse conclusion that it would be“unconscionable and unfair…” for the council to be allowed to escape.

42. Keane C.J. considered this issue very fully in Glencar. Having reviewed a number of authorities, some of which are expressly mentioned in the passage I am about to quote, he said:

“It seems to me that no injustice will be done if they [plaintiffs] are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J. at first instance in Ward v. McMaster [1985] I.R. 29, by Brennan J. in Sutherland Shire Council v. Heyman (1985) 157 C.L.R. 424 and by the House of Lords in Caparo plc. v. Dickman [1990] 2 A.C. 605. As Brennan J. pointed out, there is a significant risk that any other approach will result in what he called a "massive extension of a prima facie duty of care restrained only by undefinable considerations ..."

43. In reaching that conclusion, Keane C.J. accorded particular weight to the approach in England as summed up by Lord Bridge in Caparo plc. v. Dickman, mentioned above, at p. 617:-

"What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of 'proximity' or 'neighbourhood' and the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other." (emphasis added)

44. There was some discussion at the hearing of the appeal as to whether the test of liability being “fair and reasonable” was the same as whether there was an immunity based on grounds of public interest. I believe that there is a difference. Immunity from suit, where it has been held to exist, normally proceeds from overriding considerations of public interest. Foreign sovereign States have been held to be immune from the jurisdiction of our courts (McElhinney v Williams [1996] ILRM 276). Witnesses in legal proceedings are absolutely immune from suit in respect of the evidence they give (see discussion in McMullen v McGinley, Supreme Court unreported, 15th March 2005 per Fennelly J). The immunity of judges is based on public policy considerations ( See Morris P in Desmond v Riordan [2000] 1 I.R. 505). Formerly, barristers enjoyed complete immunity from suit by their clients in respect of their conduct of proceedings. All of these are or were examples of general immunity granted a priori on grounds of public policy. The immunity is available even where all the elements of a tort are otherwise established.

45. The alternative formulation, namely whether it is just and reasonable that liability be imposed, on the other hand, asks whether the duty exists. It is a threshold question. It is also a more flexible formulation. It is more adaptable to the many circumstances presented in litigation and preferable for cases such as the present. This test has been adopted in most of the modern English cases, as it was by Costello J in his judgment in Ward v McMaster, and, finally, by Keane C.J. in Glencar. I also applied it in my judgment in Breslin v Corcoran [2003] 2 I.R. 203, with which Denham J and Murray J, as he then was, agreed. That decision was not, however, cited on the hearing of the present appeal. It did not concern the performance of statutory powers. I would emphasis that it is necessary to consider all the relevant circumstances of the case.

46. The duty of the Tribunal to determine a fair rent is owed, as a matter of public law, to both landlord and tenant. While this may not be determinative, it is an important element and distinguishes the case from Siney and Ward. In neither of those cases was the duty owed to the plaintiff in tension with a duty owed to another person or body. In both of those cases, the remedy in damages was the only possible remedy for the loss suffered. Each plaintiff relied on the defendant to perform a function which he or she was unable for financial reasons to perform for him or herself. Without the remedy in damages, each plaintiff would have been left without redress.

47. The landlord and the tenant before the Tribunal are in a quite different situation. Either the landlord or the tenant may, pursuant to section 13 of the Act, appeal on a point of law to the High Court within three months of the determination by the Tribunal. This remedy necessarily implies that the Tribunal should, as Finnegan J held, give a reasoned decision. That procedure will enable either party to have a review of the correctness of the legal approach adopted by the Tribunal.

48. Furthermore, either party may, as occurred in this case, obtain redress by way of Judicial Review. This remedy which extends to cases where the determination is unreasonable in the sense of the decisions of this Court in O’Keeffe v An Bórd Pleanála [1993] 1 I.R. 39 and Keegan v Stardust Compensation Tribunal [1986] I.R. 642. In the present case, the Respondents complained that the Tribunal fixed a rent significantly below that suggested in the valuers’ reports submitted by the parties. Although it did not ultimately become necessary to decide the issue, this might well have formed the basis of a distinct ground for Judicial Review. The Tribunal must act on the basis of the submissions of the parties. It would be difficult to defend a decision fixing a rent outside the parameters of the valuations submitted by the opposing parties.

49. Thus, by way of Judicial Review, either party has the right to apply to have a decision set aside and a new determination made. Finally, the tort of misfeasance in public office is available in the admittedly rare event that the decision can be shown to have been actuated by actual malice or mala fides.

50. There remains, admittedly, the possibility, as in the present case, that loss will be suffered by one party during the period necessary to have a first irregular decision rectified. The issue here is whether it is just and reasonable to impose liability. Damages, as is now well established, do not flow from the mere invalidity of a decision. (see, in particular, the dictum of Finlay CJ in Pine Valley Developments v Minister for the Environment [1987] I.R. 23; Glencar, already cited, per Fennelly J at page 148; Kennedy v Law Society and others, Supreme Court unreported 21st April 2005, per Geoghegan J). The gist of the claim is not, therefore, that the Tribunal has made an invalid decision. It is that it has committed a breach of a duty of care. But none of the headings under which Judicial Review was granted by the High Court have any necessary connection with the loss claimed. Both the failure to allow the Respondents a fair opportunity to be present at the inspection and the failure to adjourn the making of a decision to allow them to respond to the Notice Party’s valuation report are procedural failures, with no necessary link to the loss suffered. Finnegan J could not determine that there had been any actual unfairness. The essence of the loss alleged by the Respondents is that an unduly low rent was fixed and that the Respondent suffered loss of rent from the time of the original decision until a new decision was made. The failure to give reasons postdates the decision and is not causally linked.

51. Thus there is no necessary causal link between the failure to respect fair procedures and the losses claimed by the Respondents. But the Respondents say that the Tribunal was negligent insofar as it followed unfair procedures and that they suffered loss as a result.

52. The Respondents, in justifying the High Court award, must necessarily be driven to argue for the larger proposition that the Tribunal, when fixing a rent, owes a general duty of care exposing it potentially to liability in damages to either party, not merely for following unfair procedures, but also generally for lack of care when determining the amount of the rent —to the landlord, if the rent is too low; to the tenant if it is too high. As I have already said, either party will have a remedy of Judicial Review where the rent fixed is so unreasonable as to be irrational. The loss in a case such as the present will essentially consist of the consequences of delay. If such loss is recoverable, however, it is difficult to see why a landlord or tenant should be denied a remedy in damages for the negligent fixing of an unduly high or low rent respectively. It would require compelling reasons to impose liability for this kind of loss on a public authority such as the Tribunal. The Tribunal is necessarily required in every case to make a choice between conflicting submissions as to the amount of the rent. If a Tribunal were exposed to potential claims from either landlord or tenant where it favoured the submission of one over the other, it might tend towards compromise in every case. I believe that the independence of the Tribunal would potentially be compromised by the existence of such a remedy. As counsel for the Tribunal has pointed out, the imposition of such liability on the Rent Tribunal, would have implications for a wide range of public bodies performing adjudicative functions. For present purposes, the most closely analogous cases are of those bodies which determine, as between contending parties, amounts to be paid as purchase money or for compensation, such as the property arbitrators, the Employment Appeals Tribunal or An Bórd Pleanala.

53. It is not, I believe, necessary to review the law regarding the immunity of judges, though I have already mentioned the decision of the Court of Appeal in England in Sirros v Moore. This heading of immunity has been considered by the High Court in Deighan v Ireland [1995] 2 I.R. 56 and Desmond v Riordan [2000] 1 I.R. 505. A more directly relevant authority may be the English Court of Appeal decision in Jones v Department of Employment [1989] 1 Q.B. 1, where a social welfare adjudication officer was held not to be liable in negligence. Glidewell L.J. said at page 22:

“Having regard to the non-judicial nature of the adjudication officer’s responsibilities, and in particular to the fact that the statutory framework provides a right of appeal which, if a point of law arises, can eventually bring the matter to this court, it is my view that the adjudication officer is not under a common law duty of care.”

54. The decision in Jones v Department of Employment did not turn directly on the adjudicative character of the decision. However, arbitrators were generally considered to be immune from suit in negligence in England prior to the introduction of statutory immunity by section 29 of the Arbitration Act, 1996. The distinction made by the House of Lords in Arenson v Arenson, already cited related to a valuer engaged to fix a price to bind two parties by agreement. Such a valuer would not be immune from suit. The majority of the House of Lords accepted, by contrast, that an arbitrator would be immune. This seems implicit in the speech of Lord Simon of Glaisdale, pages 424 to 425, Lord Salmon at page 436 and Lord Fraser of Tullybelton at page 441. In giving his reasons for declining to strike out the claim against the defendants, Lord Salmon said that it would be open to the respondent at the hearing of the action “to show that their role was a judicial one……so that they were appointed arbitrators………If the respondents succeed in this, they can claim immunity.” I think the Rent Tribunal performs a role akin to an arbitrator. The fact that it was assigned a task formerly performed by the District Court tends to confirm the judicial character of its decisions.

55. Whether it would be just and reasonable to impose a duty of care sounding in damages for negligence on the Tribunal should be considered having regard to all the circumstances of the particular relationship. The need for a remedy in damages must take account of the extent of other available remedies and the nature of the loss alleged. I have already mentioned that each party has a potential remedy by way of appeal on a point of law to the High Court, the full range of remedies by way of Judicial Review to correct errors of law or procedure made by the Tribunal, including, in extreme cases, determinations of the amount of rent, and finally the remedy of misfeasance in public office in the admittedly rare cases where actual malice or recklessness amounting to malice can be established. In this situation, the possibility of severe irremediable loss is limited.

56. Against this background, I believe that two considerations work against the imposition of liability. Firstly, this does not appear to be the sort of case of reliance on the behaviour of the other party which would justify departure from the normal reserve in respect of damages for pure economic loss. In both Siney and Ward v McMaster, the Court found that the plaintiff had relied on the local authority to perform a particular function. Secondly, I believe the Tribunal performs a role akin to that of an arbitrator; the existence of a remedy in damages might tend to compromise the independence of the Tribunal by inhibiting its judgement in performing its essentially adjudicative role.

57. Geoghegan J agrees that the appeal should be allowed. However, he proceeds on the broader basis that statutory tribunals such as the Rent Tribunal enjoy immunity from suit in negligence at common law. This immunity would be based on an analogy with the immunity of judges as described in the speech of Lord Kilbrandon in Arenson v Arenson, cited above and the judgment of Lord Denning M.R. in Sirros v Moore. I see great force in these arguments. Indeed, as Geoghegan J points out, they overlap to a significant extent with my own reason for finding the Tribunal not to be liable. However, I hesitate to go so far, certainly on the facts of this case.

58. I believe that both the material and the personal scope of any immunity would need very careful consideration.

59. I would, therefore, restrict myself to stating that I do not consider it just or reasonable to impose liability on the Tribunal in negligence in the circumstances of this case. I would, therefore, allow the appeal, set aside the order of O’Donovan J and substitute an order dismissing the Respondents’ claim for damages.