Judicial Review Number 147 of 1987

NOEL GREEN

.V.

THE SOUTH EASTERN HEALTH BOARD

Judgment of Mr. Justice Barron delivered the 11th day of
December 1987.

These proceedings arise out of the requirement by the Minister for Health that the several Health Boards must cut their budget deficits. By letter dated the 2nd of April 1987 the Minister set out the overall annual net expenditure which he was prepared to approve in respect of the South Eastern Health Board.  It was clear from this letter that considerable        overall savings would be required in the services provided in order to meet the target set.  The Chief Executive Officer accordingly prepared a memorandum indicating the nature and extent of the cuts which would be required.  This was submitted to the Board on the 30th April 1987 and rejected.

This rejection had immediate consequences.  Section 31 of the Health Act, 1970 which limits the expenditure of Health Boards in so far as material is as follows:

"31. (1) A health board shall not, save with the Minister's consent, incur expenditure for any service or purpose within any period in excess of such sum as may be specified by the Minister in respect of that period. 

(2) (b) If at any time the chief executive officer of a health board is of opinion that a decision or proposed decision of the board would incur expenditure by the board in contravention of this section, he shall so inform the board and the Minister."

In accordance with the provisions of Section 31 (2) (b) the Chief Executive Officer of the Board by letter dated 1st May 1987 informed the Minister that the Board would incur expenditure in excess of the sum specified by the Minister.  In order to resolve this situation if possible, the matter was again brought before the Board on the 7th May 1987 and on this occasion the necessary resolution was passed.

One of the financial savings so approved required the closure of St. Vincent's District Hospital, Tipperary, which is now being challenged by the Applicant. The provision and maintenance of hospitals by Health Boards is governed by the provisions of Section 38 of the Health Act, 1970.  Section 38 so far as material is as follows:

"38 (1) A health board may, with the consent of the	Minister, provide and maintain any hospital, sanatorium, home, laboratory, clinic, health centre or similar premises required for the provision of services under the Health Acts, 1947 to 1970.

(3) A health board may and, if directed by the Minister, shall discontinue the provision and maintenance of any premises provided and maintained by it under subsection (l).

(4) A health board shall not exercise its powers under subsection (3) in relation to the discontinuance of the provision and maintenance of a hospital, sanatorium or home save with the consent of the Minister. (5) The Minister shall not give a direction under subsection (3) in relation to the discontinuance of the provision and maintenance of a hospital, sanatorium or home save after having caused a local inquiry to be held into the desirability of the discontinuance." It is submitted on behalf of the Applicant that the closure of the hospital has in effect been directed by the Minister and that it is ultra vires because the local inquiry required by Section 38 (5) has not been held.  It is undoubtedly correct to say that the closure has been brought about by the direction of the Minister.  That direction was not to close that or any particular hospital, but to reduce expenditure.  The Board has chosen to reduce its expenditure inter- alia by closing that hospital.  It is a decision made under the powers conferred by Section 38 (3).  Clearly on normal principles of statutory interpretation since the requirement of a local inquiry is specified by Section 38 (5) but is not specified by Section 38 (3) it is proper to construe the latter provision as one which does not impose an obligation upon the Board to hold a local inquiry before coming to its decision to close that hospital. The Board is obliged to obtain the consent of the Minister which it did.  Objection is taken that this was obtained after the resolution was passed. Had the consent not been obtained an issue may have arisen as to the validity of acts done in pursuance of the resolution. Once the consent is forthcoming such acts must be validated.

It is further submitted on behalf of the Applicant that the exercise of the power was contrary to the guarantee of fair procedures.  The basis of this argument is that no statutory power can be unfettered and that it was unfair to exercise the power without proper consultation with the local community.

The Respondents contend that the Applicant has no locus standi to make such submissions since no legal right of his has been affected by the decision of the Board. The arguments for both parties have to a large extent proceeded upon the basis that the power being exercised was one which had to be exercised judicially.  This, however is not the position here in the sense of one party having to make his case and the other having to answer it.  The Board is not obliged to put its case to any interested party nor is it obliged to consider the case of, or representations made by, any such party.  There are no facts to be decided upon which the exercise of its power is to be based.  The Board find themselves in a particular situation, their expenditure exceeds their- income and it is unlawful for them to permit this.  In these circumstances they must decide as a matter of policy what items of expenditure must be reduced.  This is a matter for them alone.  The Courts have no function in determining whether or not they came to the right policy decision.  Nevertheless, the supervisory power of the Court remains to ensure that the statutory power has been exercised in accordance with fair procedures, which in the present case requires the Court to be satisfied that the power has been exercised bona fide and reasonably for the purpose for which it was granted.

There is no doubt that the exercise of the power in the present case is bona fide and for the reason stated that is to reduce the expenditure of the Board to the level permitted by the Minister.  Unfortunate as it may be, this is clearly a type of situation which was visualized by the framers of the power granted by Section 38(3).  I have no doubt whatsoever but that the power has been properly exercised.

Other objections have been taken on behalf of the Applicant to the exercise of the power.  It is submitted that on the 19th May 1987 the Minister for Health ordered a study for a national review of overall spending on the health services so that proposed cuts in those services could be carried out with the maximum efficiency and the least hardship.  It is submitted that once this study was directed that the board ought to have held its hand pending the publication of the study report.  I can see no ground in this submission for invalidating the resolution of the Board. In the first instance it is something of which the Board could not have been aware at the date of the passing of the impugned resolution and secondly it would be a matter for the Board alone to take into consideration before voting on the proposed resolution.

It is also contended that the resolution is ultra vires because it was passed contrary to the provisions of standing orders. These required a special notice of meeting in respect of the resolution having regard to the fact that the same resolution had been defeated at the previous meeting unless such a proposed resolution was necessary in order to comply with any requirement made by or under any enactment or order. The Respondents contend that the resolution was proposed in order to comply with a direction of the Minister made pursuant to the provisions of Section 31 of the Health Act 1970. I am prepared to accept the Respondents' contention.  If I am wrong on this, it seems to me to be a matter which could only be challenged by a member of the Board.  In this regard, I
accept the submission of the Respondents that a challenge to the resolution cannot be made unless the person making the challenge can show that some legal right personal to him alone, as opposed to a right to which he might be entitled as a member of the public has been affected by the passing of the resolution.  I also accept the Respondents' further submissions that, if the point had been taken at the meeting, standing orders could have been suspended and also the further submission that it would now be useless to make the orders sought.  There is no suggestion that if the same resolution is again put to the Board its decision would be any different from the impugned decision. 

In conclusion, I am satisfied that the Applicant as a member of the local community and therefore a person affected or likely to be affected by the closing of the hospital had the necessary locus standi to invoke the supervisory jurisdiction of the Court.  I am satisfied that the power was properly exercised and, even if the resolution was procedurally bad, that  the Court should exercise its discretion and refuse the relief  sought.

 
AUTHORITIES

PMPS -v- AG (1983) IR 339

McMahon and others -v- Ireland and others (Blayney J.)

Irish Commercial Society -v- Plunkett and others (1968) IR 258

U.S. Tobacco Company -v- Minister for Health

Doyle -v- An Taoiseach (1986) ILRM 693

The State (Keegan) -v- Stardust Tribunal (1987)ILRM 202

In re The Solicitors Act 1954 (1960) IR 269

Costello -v- the D.P.P. (1984) IR 436

D.P.P. -v- Olympic Amusements Bundoran (1987) ILRM 320

Hamilton -v- Hamilton (1982) IR 466

O'Reilly -v-  The Minister for Environment (1986) IR 143

The State (Clarke) -v- District Justice Roche and Senezio (1987)
ILRM 309'

Bennion on Statutory Intrepretation Selangor United Rubber Company -v- Craddock (1969) 1WLR 1773

The State (Calcul International Limited and Solatrex International Limited) -v- The Appeal Commissioners and the Revenue Commissioners (Barron J. 18th December 1986)
East Donegal Co-Op  -v- Attorney General

In re The Solicitors Act 1954 (1960) IR 239

McDonald -v- Bord na gCon (1965) IR

M. -v- The Medical Council (1984) IR 485

Murphy -v- Telecom Eireann (1986) IR 483

D.P.P. -v- Flanagan (1979) IR 265

Tormey -v- Ireland (1985) IR 289