THE SUPREME COURT
Appeal No. 553/2013
The Minister for Finance, Ireland and the Attorney General
Judgment of Denham C.J., O’Donnell J., McKechnie J., Clarke J., Dunne J. and Charleton J. delivered on the 16th day of December 2016
1 This is a judgment to which all members of the Court have contributed.
2 At issue in this appeal is, firstly, whether the Government exceeded powers conferred upon it by the Credit Institutions (Financial Support) Act 2008, (“the Act of 2008”), in granting promissory notes to the Irish Bank Resolution Corporation (“IBRC”), and the Educational Business Society (“EBS”) in 2010. The case also raises, secondly, the issue whether the Oireachtas exceeded its powers and acted unconstitutionally in passing the Act of 2008 in the context of the financial crisis which arose in that year, in giving powers to the Minister for Finance (“the Minister”) to commit public monies without a financial cap being placed on the amount. This second issue falls to be considered in the light of the Constitution and especially Articles 11, 17.2 and 28 thereof.
3 This is an appeal by Joan Collins, TD, the plaintiff/appellant, herein referred to as “the plaintiff Ms. Collins”, from the judgment of the Divisional Court of the High Court (Kelly, Finlay Geoghegan, and Hogan JJ.), delivered on the 26th November, 2013, and from the order of that Court made on the 17th December, 2013, wherein the plaintiff’s claim was dismissed;  I.E.H.C. 79. The Minister for Finance, Ireland and the Attorney General are the defendants in these proceedings and the respondents to this appeal and are referred to collectively as “the defendants” or “the State”.
5 The plaintiff challenges the lawfulness of procedures by which the Minister agreed to issue promissory notes in excess of €30 billion to IBRC and EBS. The plaintiff also challenges the validity of payments made under those procedures.
6 The plaintiff grounds her challenge on the inability of Dáil Éireann to cede to the Minister wide powers to enter into these financial commitments and to pay monies under the said procedures.
7 A statement of facts was agreed between the parties and is set out in an appendix to the judgment of the Divisional Court of the High Court. Hence it is not now necessary to set out the facts in detail once again.
8 In simple terms, however, the issues in this case arise because in 2010 both Anglo Irish Bank and the Irish Nationwide Building Society ( “Anglo/INBS” which in 2011 became the IBRC), which at that time were effectively in State ownership, and the EBS, were in substantial need of capital; although in the case of the EBS this was to a much lesser extent. Anglo/ INBS and EBS were participants in the Bank Guarantee Scheme established under the Act of 2008 and approved by the Dáil. The requirement for capital arose because of the regulatory requirement to maintain so called Tier 1 Capital. The potential prospective deficit in such capital itself arose from the substantial writing down of assets transferred at considerably less than book value to the National Assets Management Agency. The Central Bank was prohibited from providing Emergency Liquidity Assistance (ELA) funds because under European law such funds could not be advanced to institutions which were insolvent. It was necessary, therefore, to provide capital to both Anglo/INBS and EBS so that they could maintain solvency and thus access ELA. However, due to the parlous position of the State finances in 2010, and the scale of the capital required, the most obvious methods for providing capital were not available to the State, as the financial markets were effectively not accessible to Ireland at that point, and the issuance of government bonds to the institutions would have had a knock-on and highly damaging effect on the cost of public borrowing. It was not possible, therefore, to simply either advance monies, borrow monies on the open market, or to issue bonds to the institutions. Therefore, the State issued long-term promissory notes to both institutions. However, unlike government debt, which normally involves periodic repayment of interest with a single repayment of capital at the end of the term, the promissory notes were required to be amortising, providing for the regular repayment of both capital and interest. In the case of Anglo/ INBS the State advanced €30.6 billion in promissory notes during 2010. The terms of the notes required repayments on an annual basis until 2031 of €3.06 billion every year between 2011 and 2024, decreasing until the promissory notes were completely repaid in 2031. In the case of EBS a promissory note was issued by the Minister of €250 million which required annual repayments of €25 million until 2024 and a final payment in 2025. In 2013 the promissory notes in favour of Anglo/INBS, (which by then was the IBRC and was being wound up) were cancelled in exchange for long-term government debt issued to the Central Bank, which was by that stage the effective owner of the notes. As of 2010 these promissory notes required annual repayments in excess of €3 billion. These figures are, in ordinary terms, enormous. It should be added for contextual purposes that the Estimates for 2011 presented to the Dáil provided for total State expenditure of €49 billion. Also the Government introduced €625 million into EBS by way of special investment shares in 2010 alone. The total quantum of liability under the Credit Institutions Support Scheme reached, at one stage, contingent liabilities of in excess of €35 billion.
9 The requirement for annual payments on the promissory notes of such magnitude became a focus for political controversy and raised two related issues which can be said in broad terms to be constitutional in nature, and with which, in essence, these proceedings are concerned. First, it was said that the repayment on the promissory note made in 2011 was an enormous item of State expenditure in that year, yet was not itself the subject of any approval by the Dáil. In effect, therefore, the case made by the plaintiff Ms. Collins is that the State spent over €3 billion in 2011 over which the Dáil had no control. Second, the requirement to make an annual payment in excess of €3 billion had itself a significant impact on budgetary decisions which were made by the Government and required to be approved by the Dáil. The Dáil has an important traditional constitutional function in raising funds and making expenditures. Again, however, although the requirement to make a repayment of in excess of €3 billion had a necessarily significant impact on all subsequent decisions made by the Government and Dáil in respect of revenue raising and expenditure, the payment itself was not subject to any separate Dáil procedure. Its legal basis was the terms of the Act of 2008 and in particular s. 6 thereof, which permitted the Minister to provide financial support to credit institutions.
10 Subject to one issue which it will be necessary to consider in some detail, the plaintiff does not contend that either the statutory formalities such as they were under s. 6 of the Act of 2008 or the constitutional procedural requirements under Article 17, were not complied with. In essence however, the plaintiff contends that s. 6, insomuch as it permitted the Minister for Finance to incur a liability on the part of the State without any limit set in the legislation itself, constitutes an abdication of key parliamentary functions by the Dáil to the Minister, and effectively subverted the constitutional scheme which provides that both raising of revenue and expenditure of funds be approved of, and therefore controlled by, the Dáil.
11 The plaintiff is a member of Dáil Éireann, having been elected in the general election held in 2011, and was re-elected in the general election of 2016. Thus the plaintiff was not a member of Dáil Éireann when the Act of 2008 was passed, or indeed when the promissory notes were issued in 2010.
12 There were extensive written and oral submissions made on behalf of the plaintiff Ms. Collins which were considered by the Court. Inter alia the plaintiff submitted that the promissory notes issued in 2010 exceeded the powers conferred on the Minister by s. 6 of the Act of 2008 because they provided for payments to be made up until 2031, and therefore after the date beyond which no further financial support could be provided specified in s. 6(3) of the Act of 2008; which was the 29th September, 2010, and which period had been extended pursuant to the Financial Measures (Miscellaneous Provisions) Act of 2009, to the 31st December, 2015. If however such promissory notes were intra vires the Act of 2008, the plaintiff submitted that the constitutional powers and duties of the Oireachtas in relation to financial oversight had been radically redefined by the Act of 2008 and that there had been a shift in power, substantially diminishing that of the Dáil in particular and hugely increasing that of the Executive. Thereby, it is argued, if this model of the ceding of limitless power by the Dáil to an individual minister were allowed to stand, the control and oversight by the Oireachtas of the State’s expenditure, required by the Constitution, would be set at nought.
13 The plaintiff placed heavy reliance on a reference contained at paragraph 143 of the judgment of the Divisional Court to a statement of Alexander Hamilton in The Federalist Papers, describing what is said to be the parallel provisions of the US Constitution. Hamilton had stated that every appropriation must be for an object to an extent and out of a fund which the laws have prescribed. The plaintiff focussed on the words “to an extent”. It was argued that the fact that the Act of 2008 does not specify or provide for any financial limit on the Ministerial power to provide financial support to credit institutions rendered the relevant section unconstitutional because the Act permitted the Minister to appropriate limitless monies without any responsibility to or oversight by the Dáil.
14 While the promissory notes in favour of IBRC had been cancelled on the 8th February 2013, pursuant to a transaction under s. 17 of the Irish Bank Resolution Corporation Act 2013 (“The Act of 2013”), carried out in the context of the winding up of IBRC, it was maintained that the issue in the proceedings was not moot. The promissory note in favour of EBS still existed. Furthermore, and more importantly, the plaintiff contended that the government bonds issued under s. 17 could only be issued in respect of a liability of the State. This, it was argued, must mean a lawful liability. If, therefore, the issuance of the promissory notes was invalid for any reason, it was contended that such promissory notes could not constitute a valid liability in respect of which Government bonds could be issued under s. 17.
15 There were extensive oral and written submissions made on behalf of the respondents which have also been considered by the Court. Inter alia the respondents have relied on the provisions of the Act of 2008 and in particular s. 6 thereof. The respondents submitted that s. 6 of the Act of 2008 was a valid legislative and constitutional basis for the power exercised by the Minister to issue the promissory notes and to make payments thereon, and to bind the State.
16 The articles of the Constitution centrally relevant to this appeal are Articles 11, 17.2 and 28. Article 11 of the Constitution creates a central fund and provides:
17 Article 17 of the Constitution provides routes for the Dáil to address financial matters through the estimates process, the appropriation Acts and under specific legislation. It provides:
“All revenues of the State from whatever source arising shall, subject to such exception as may be provided by law, form one fund, and shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law.”
Article 28.4.4° is the corresponding provision in the section of the Constitution dealing with the Executive. It provides:
“1 1° As soon as possible after the presentation to Dáil Éireann under Article 28 of this Constitution of the Estimates of receipts and the Estimates of expenditure of the State for any financial year, Dáil Éireann shall consider such Estimates.
1 2° Save in so far as may be provided by specific enactment in each case, the legislation required to give effect to the Financial Resolutions of each year shall be enacted within that year.
2 Dáil Éireann shall not pass any vote or resolution, and no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Éireann by a message from the Government signed by the Taoiseach.”
18 It should be said, at this point, that it is common case that the formal requirements of these provisions have been complied with. Thus both the Act of 2008 and the Act of 2013 were accompanied by messages from the Government, signed by the Taoiseach then holding that responsibility. Estimates in each year since 2010 have been prepared, and the estimates show, under the heading “Non-Voted expenditure”, the annual repayments under the promissory notes. Note 6 to the 2011 estimates is headed “Non-Voted Capital Expenditure” and contains the item “Payment of Promissory Notes “ and the figure, € 3.138 billion, which it is accepted is almost wholly made up of payments on the Anglo/INBS and the EBS notes in issue in these proceedings. Finally, it is of course accepted that the grant of financial support is provided for “by law” in the shape of the Act of 2008. The plaintiff Ms. Collins contends, however, that any law, for the purposes of Article 11 of the Constitution, must respect the fundamental allocation of powers within the constitutional scheme, and particularly in this case the historically vital and inescapable role of the Dáil in financial affairs. The plaintiff submits, therefore, that s. 6, insomuch as it permits the Minister to incur a liability without any limit, is inconsistent with the fundamental allocation of powers within the Constitution and constitutes the abrogation of a key parliamentary function of approval of expenditure by transferring that power to the Minister, resulting in the effective subversion of the constitutional scheme which provides that both the raising of revenue and its expenditure shall be approved and controlled by the Dáil. Accordingly, it is necessary to consider the specific terms of that legislation.
“The Government shall prepare Estimates of the Receipts and Estimates of the Expenditure of the State for each financial year, and shall present them to Dáil Éireann for consideration.”
Legislation: Credit Institutions (Financial Support) Act 2008
19 The Act of 2008 was passed by the Oireachtas during turbulent financial times. This is apparent from the long title of the Act of 2008 which provides:
“Financial support” was defined by the Act as including:
“An Act to provide, in the public interest, for maintaining the stability of the financial system in the State and for that purpose to provide for financial support by the Minister for Finance in respect of certain credit institutions, to amend the Competition Act 2002 and other enactments, and to provide for connected matters.”
20 Section 2 of the Act of 2008 details the basis upon which the functions contemplated by the Act were to be performed by the Minister in the public interest as follows:
21 It is noteworthy that s. 2 is drafted in the present tense. It records the fact that the Minister has the functions provided for because he is of the relevant opinion, namely that there is a serious threat to the stability of the credit institutions in the State, and that the performance of functions under the Act is necessary in the public interest for maintaining the stability of the financial system in the State and to thereby remedy a serious disturbance in the economy. By the passage of the legislation, the Oireachtas must be taken to have accepted and endorsed this Ministerial opinion and the necessity therefore that the Minister has the functions provided for under the Act.
“a loan, a guarantee, an exchange of assets and any other kind of financial accommodation or support.”
Provision as made for financial support for financial institutions
22 Section 6 of the Act of 2008 is the critical provision. The Oireachtas authorised the Minister to provide for financial support for credit institutions as and from the relevant date. It stated:
23 Financial support as defined may be provided in a number of ways. This is set out in subsection 6(4):
“(1) As and from the relevant date, the Minister may provide financial support in respect of the borrowings, liabilities and obligations of any credit institution or subsidiary which the Minister may specify by order having regard to the matters set out in section 2, the extent and nature of the obligations (including the degree of control over possible abuse of the financial support) undertaken and which might be undertaken in the future and the resources available to him or her in that behalf.
(2) In subsection (1) a reference to borrowings, liabilities and obligations includes borrowings, liabilities and obligations to the Central Bank or any person.
(3) Financial support shall not be provided under this section for any period beyond 29 September 2010, and any financial support provided under this section shall not continue beyond that date.”
24 When financial support is provided by way of a scheme the following applies:
25 The Minister may impose conditions on any financial support:
“(4) Financial support may be provided under this section in a form and manner determined by the Minister and on such commercial or other terms and conditions as the Minister thinks fit. Such provision of financial support may be effected by individual agreement, a scheme made by the Minister or otherwise. Without prejudice to the Minister’s discretion as to such conditions, all financial support provided shall so far as possible ultimately be recouped from the credit institution or subsidiary to which the support was provided.”
26 Again, it is worth noting that, subject to the issue arising in respect of the date fixed by s. 6(3), which will be addressed later, no issue arises as to the compliance by the Minister with the statutory requirements. It is also useful to observe at this stage the significance of the provisions of s. 6(12). This provides that any money paid shall be paid “out of the Central Fund or the growing produce thereof.” This is parliamentary language with considerable history, predating independence, and which has a well understood meaning, which is accepted by the plaintiff Ms. Collins. It means that any expenditure is charged directly on the Central Fund by the legislation, and does not form part of the annual appropriation vote on the Estimates and is treated as a “non-voted” item. It is not, therefore, dependent on the annual vote procedure in the Dáil. Instead, the appropriation was provided for by law with the Act of 2008. There are a number of payments which are, as a matter of history (and law), paid out of the Central Fund or the growing produce thereof. Examples include salaries of constitutional officeholders, payments to political parties under electoral legislation, the Oireachtas budget, Ireland’s contribution to the European Union budget and the cost of servicing the national debt, among other items. These are treated as “non-voted current expenditure”. Other items are treated as “non-voted capital expenditure” because they are not seen as recurring expenditures, such as the Euro area loan facility to Greece in 2010, and the payments on these promissory notes in 2011 and subsequent years.
(6) Without prejudice to subsection (4), the conditions under which the Minister provides financial support under this section may include conditions regulating the commercial conduct of the credit institution or subsidiary to which the support is provided, and in particular may include conditions to regulate the competitive behaviour of that credit institution or subsidiary.
(7) The Minister may, as a condition of providing financial support to a credit institution or subsidiary under this section, require the credit institution or subsidiary to fulfil the requirements for the time being imposed by the Central Bank or equivalent authority (including those in relation to the conduct of its business and its competitive behaviour) and to continue to do so.
(8) A condition referred to in this section—
(a) may, where financial support is provided to a credit institution under this section, regulate the commercial conduct of a subsidiary (whether or not financial support is being provided to the subsidiary), and
(b) may, where financial support is provided under this section to a subsidiary of a credit institution, regulate the commercial conduct of the credit institution or another subsidiary (whether or not financial support is being provided to the credit institution).
(9) The Minister may subscribe for, take an allotment of or purchase shares and any other securities in a credit institution or subsidiary to which financial support is provided under this section on such terms as the Minister sees fit.
(10) The Minister may withdraw or revoke financial support provided to a credit institution or a subsidiary under this section in accordance with the terms or conditions of the financial support as the Minister thinks fit.
(11) For the purposes of this section, the Minister may, whenever and so often as he or she thinks fit, create and issue securities—
(a) bearing interest at such rate as he or she thinks fit, or no interest,
(b) for such cash or non-cash deferred consideration as he or she thinks fit, and
(c) subject to such terms and conditions as to repayment, repurchase, cancellation and redemption or any other matter as he or she thinks fit.
(12) All money to be paid out or non-cash assets to be given by the Minister under this section may be paid out of the Central Fund or the growing produce thereof.
(13) Money paid by a credit institution or subsidiary to the Minister, or any non-cash consideration received by the Minister from such credit institution or subsidiary, is to be paid into, or disposed of for the benefit of, the Exchequer in connection with the performance of his or her functions under this section or for any other purpose in such manner as the Minister thinks fit.
(14) Where financial support has been provided under this section to a credit institution or subsidiary, the Minister—
(a) shall from time to time review the necessity for the financial support, and
(b) if he or she is satisfied, having regard to the considerations set out in section 2, that the financial support is no longer necessary, shall withdraw the financial support.”
Report before each of the Houses of the Oireachtas
(16) The publication of the reports required by subsection (15) shall be taken as satisfying any obligation of the Minister under Regulation 3 of the European Communities (Financial Transparency) Regulations 2004 (S.I. No. 693 of 2004 ).”
27 The Act makes provision for an annual report by the Minister to each House of the Oireachtas:
28 The issue of the date up to which there could be provision of financial support was addressed several times by the Oireachtas and hence by the Dáil. Originally, the date for provision of financial support, under the Act of 2008, was stated not to continue beyond 29th September, 2010. That date was extended by the Financial Measures (Miscellaneous) Provisions Act 2009, and a number of statutory instruments, including ultimately the Credit Institutions (Financial Support) (Financial Support Date) (No. 2) Order 2012, S.I. No. 520 of 2012. The history of those extensions now follows.
Financial Measures (Miscellaneous) Provisions Act 2009
A new subsection to s. 6 of the Act of 2008 was added:
29 The Financial Measures (Miscellaneous) Provisions Act 2009, hereinafter referred to as “the Act of 2009”, amended the Act of 2008 and substituted the following for s. 6(3):
(3B) The Minister may specify by order a period or periods during which credit institutions may incur borrowings, liabilities and obligations in respect of which financial support may be provided under this section.”
“(3A) The Minister may specify a date under subsection (3)(b) if and only if—
(a) he or she is satisfied, after consulting the Governor and the Regulatory Authority, that the circumstances set out in section 2 exist and are likely to continue to exist until the date to be specified, and
(b) he or she is satisfied that it is necessary in the public interest that assistance continue to be provided under this section until that date.
Section 6(3B) as inserted by the 2009 Act was then deleted by the Stabilisation Act 2010.
30 A number of statutory instruments extended the time further after the 29th September 2010. Thus S.I. No. 548 of 2010 provided:
Ultimately, by way of the Credit Institutions (Financial Support) (Financial Support Date) (No. 2) Order 2012, S.I. No. 520 of 2012, the date was extended further. It provided:
“2. For the purposes of section 6(3) of the Credit Institutions (Financial Support) Act 2008 (No. 18 of 2008), financial support may be provided to 30 June 2016.”
Credit Institutions (Stabilisation) Act 2010
31 The Act of 2008 was amended by the Credit Institutions (Stabilisation) Act 2010, under which s. 6 now includes the following:
“2. For the purposes of section 6(3) of the Credit Institutions (Financial Support) Act 2008 (No. 18 of 2008), financial support may be provided to 30 June 2018.”
1(A) For the purposes of this section, the provisions of indirect financial support includes the provision of financial support to a person (in particular, a company whose objects include the provision of such financial support) in connection with financial support provided or to be provided to that person to –
1(B) The Minister may establish a company incorporated under the Companies Acts whose objects include the provision of financial support or operating as a parent undertaking of one or more credit institutions to whom the Minister has provided financial support.”
“6—(1) As and from the relevant date, and in accordance with this section, the Minister may provide financial support directly or indirectly to any current or former credit institution or current or former subsidiary of a credit institution or former credit institution which the Minister may specify by order having regard to –
(a) the matters set out in section 2,
(b) the extent and nature of the obligations (including the degree of control over possible abuse of the financial support) undertaken and what might be undertaken in the future, and
(c) the resources available to him or her for that purpose.
The Unwinding of the Anglo Notes
32 The Act of 2013 was enacted by the Oireachtas on the 7th February, 2013. It provided for the immediate winding up of the affairs of the Irish Bank Resolution Corporation, the entity into which Anglo Irish Bank had evolved by legislation, and for the procedure under which the IBRC promissory notes were effectively unwound and cancelled. The long title to the Act of 2013 set out the background and purposes of the Act:
“AN ACT TO PROVIDE FOR THE WINDING UP OF IBRC AND TO PROVIDE FOR CONNECTED MATTERS.
33 Section 17 of the Act of 2013 provided a procedure under which the promissory notes were to be cancelled. This stated that:
The “Bank” is defined as the Central Bank of Ireland. Section 17 is therefore the vehicle under which the IBRC promissory notes were returned to the Minister for Finance and cancelled. In return the Minister had created debt securities which he issued to the Central Bank. The Central Bank was, at this stage, the effective economic owner of the IBRC promissory notes because they had been pledged to the Central Bank to secure the supply by the Central Bank to IBRC of Emergency Liquidity Assistance. As already mentioned, the Plaintiff maintains that if her argument in respect of the invalidity of the promissory notes is correct, this transaction was consequently ineffective as being beyond the powers set out in the legislation, and the bonds issued invalid.
WHEREAS it is necessary, in the public interest, to provide for the orderly winding up of the affairs of IBRC to help to address the continuing serious disturbance in the economy of the State;
AND WHEREAS vital assistance has been provided by the State to maintain the functioning of IBRC to support the financial stability of the State;
AND WHEREAS vital assistance has been provided by the Central Bank of Ireland to maintain the functioning of IBRC to support the stability of the Irish financial system;
AND WHEREAS the maintenance of the functioning of IBRC is no longer necessary to support the financial stability of the State or the stability of the Irish financial system;
AND WHEREAS it is necessary to end the exposure of the State and the Central Bank of Ireland to IBRC;
AND WHEREAS the winding up of IBRC is now necessary to help to restore the financial position of the State and to help to enable the State to re-establish normalised access to the international debt markets;
AND WHEREAS it is necessary in the public interest to ensure that the financial support provided by the State to IBRC is, to the extent achievable, recovered as fully and efficiently as possible;
AND WHEREAS the winding up of IBRC is necessary to resolve the debt of IBRC to the Central Bank of Ireland;
AND WHEREAS in the achievement of the winding up of IBRC the common good may require permanent or temporary interference with the rights, including property rights, of persons …”
34 The plaintiff Ms. Collins was the only witness called on the plaintiff’s side in this action. No evidence either as to the operation of financial markets in any other comparable democratic system or the financial structures and problems of the State was offered. The case for the plaintiff was essentially the legal and political argument already outlined. The State for its part called witnesses whose evidence is summarised in the judgment of the Divisional Court. Anthony Linehan was the Deputy Director of National Treasury Management Agency (“NTMA”). Jimmy McMeel was a civil servant in the Department of Finance in charge of the Pay Master’s General Office, and who gave detailed evidence as to the State’s financial procedures. Professor Shivdasani was the Professor of Finance at the University of North Carolina at Chapel Hill. Finally, Ms. Ann Nolan, the Second Secretary General of the Department of Finance with responsibility for the Financial Services Division, also testified.
36 These are statements in the most general terms and do not advance the issues for the determination of the Court much beyond the contention that the provision of funding by the promissory notes was unlawful, and that this claimed-for unlawfulness affected the subsequent issuance of government bonds in exchange for the promissory notes in 2013.
35 The parties were requested to provide an agreed issue paper but this did not occur. The plaintiff/appellant offered the following issues:
37 It is apparent, however, from the matters raised in argument that the appellant raises issues of statutory interpretation and application, and a constitutional challenge. In accordance with the jurisprudence of the Court, the Court will proceed to address the non-constitutional issues first.
38 Issues of locus standi arose at the outset of this case and indeed in its inception. As recorded in the judgment of the Divisional Court, the immediate catalyst for the institution of these proceedings was the determination of Kearns P. in Hall v. The Minister for Finance  I.E.H.C. 39, that an ordinary member of the public did not have the requisite standing to challenge the failure on the part of Dáil Éireann to vote on the issuing of the promissory notes. The plaintiff in this case was one of a number of Teachtaí Dála who then sought to join the proceedings in the Supreme Court, which course of action was plainly misconceived as Fennelly J. found: Hall v. Minister for Finance  I.E.S.C. 10. The plaintiff then initiated these proceedings. It is not clear if locus standi was put in issue in respect of the plaintiff Ms. Collins in the pleadings in the Hall proceedings, but it was raised here. However, at the hearing in the High Court, counsel for the State parties withdrew any objection based on locus standi. It is not necessary, therefore, to consider the matter in any detail. The arguments in this litigation and its predecessor have developed somewhat and it is fair to say that the issues which most engaged the attention of the parties in this Court have moved on quite significantly from the manner in which the arguments were originally made. The origin of this case was the political and legal-structural concerns that substantial annual payments were made on foot of the promissory notes, and that these payments were not themselves the subject of any consideration by Dáil Éireann. It is perhaps conceivable that, if that had remained the focus of complaint, it might be one in which a member of the Dáil would have a particular interest. However, the fact that payments on foot of the promissory notes continue to be made is itself a consequence of financial support provided under the Act of 2008 when the promissory notes were issued in 2010. The heart of the plaintiff’s complaint therefore relates to the decision of Dáil Éireann in 2008 to grant such power to the Minister. If a member of the public lacked locus standi to challenge this state of affairs, then it is hard to see that the present plaintiff is in any better position because she was not elected to Dáil Éireann at the time and was therefore, at the relevant point, a citizen like any other and her capacity to claim locus standi cannot be improved by subsequent election to the Oireachtas. However, if the substance of the claim made here is that the constitutionally mandated procedures for the scrutiny of financial matters were not followed in this case, then we would not consider that locus standi would be limited to elected representatives, albeit that any claim made by such a representative might have a particular focus and force.
39 At paragraphs 60-70 of its judgment, the Divisional Court addressed what it described as the temporal issue. This was the argument that, irrespective of any larger constitutional issue, the issuance of the promissory notes to both Anglo/INBS and EBS was ultra vires the powers conferred on the Minister under the Act of 2008 because the notes, it was claimed, exceeded the period for which financial support could be provided or continued under s. 6(3) of the Act of 2008. This issue arises in the following way. It is accepted that the promissory notes issued contemplated and required repayments, both capital and interest, on an annual basis until 2025 in the case of the EBS note and 2031 in the case of the Anglo/IBRC note. The plaintiff contends that the issuance of these promissory notes was not within the powers of the Minister because of the provisions of s. 6(3) of the 2008 Act. That section as originally enacted provided:
That section was amended in 2009 by the Financial Measures (Miscellaneous Provisions) Act of that year, which inserted a new s. 6(3) as follows:
“Financial support shall not be provided under this section for any period beyond 29th September 2010, and any financial support provided under this section shall not continue beyond that date.”
“(3) Financial support provided under this section shall not continue beyond –
40 The 2009 Act therefore made two changes to the position that had prevailed under the 2008 Act. First, it limited the restriction on the power of the Minister under s. 6(3) to the continuation of financial support beyond the specified date, thereby removing the prohibition on the provisions of such support beyond that date. It is not clear that this had any practical impact. Second, it permitted the date itself to be extended by Ministerial order, but only if the Minister was of the opinion specified by section 6(3A) of the Act. By the time the promissory notes were issued to EBS and Anglo/INBS, that power had been exercised and the date had been extended to the 31st of December 2015 by the Credit Institutions (Financial Support) (Financial Support Date) Order 2010 (S.I. No. 471 of 2010).
41 The plaintiff’s contention in this regard was simple: the promissory notes provided for repayment of capital and interest to be made to the relevant institutions on an annual basis long after the 31st December, 2015 and indeed up until December 2031. Thus, it was argued, the promissory notes required that financial support would continue beyond the statutory date. It followed, it was argued, that the promissory notes were ultra vires the power contained in the Act and therefore invalid.
42 The Divisional Court rejected this challenge. It concluded that the 2009 Act removed the restriction on the provision of support after the relevant date. Therefore the issuance of a promissory note requiring payment after the 31st December, 2015, was itself valid. The Court considered that what s. 6(3) (as amended) prohibited was the “keeping in place” of the promissory note after the relevant date and the payment of financial support after the cut-off date, or such later date as the Minister might consider and order. Accordingly, the Court concluded that the notes were valid when issued. The only difficulty would be the payment of such notes after the statutory cut-off date. However, that was a date which could be altered by Ministerial order. The Divisional Court dealt with the implications of this at paragraphs 135-136 of its judgment. It pointed out that the date had been extended once again, and was now the 30th June, 2018. The Anglo note had been cancelled in February 2013, and therefore no further temporal issue arose in respect of it. In relation to the EBS note the Court recognised that the payments were “likely to continue” past the present deadline of the 30th June, 2018. Therefore the EBS note could not be left in place or payments made thereunder after the 30th June, 2018 unless that date was further extended. The outcome of this reasoning is that unless the EBS note was cancelled, or unless the cut-off date was further extended, the State would be acting unlawfully if it made payments which it was obliged to make on foot under the promissory note after the 30th June, 2018, or any extended date.
43 Both parties took issue with this analysis by the High Court. The plaintiff accepted much of the reasoning in that judgment but argued that the logic of the Divisional Court’s analysis should have led it to the opposite conclusion. It follows from the conclusion of the Divisional Court that each of the annually recurring payments on foot of the promissory note amount to the provision of financial support under the Act. It is not in dispute that the promissory notes required the State to make payments after the cut-off dates specified in the legislation both originally and extended, and therefore, on the Divisional Court’s reasoning, the promissory notes committed the State to the provision of financial support after the period specified in s. 6. Therefore, the only logical conclusion was said to be that the issuance of the promissory note was ultra vires the power of the Minister, since the only power of the Minister was to provide support in accordance with the terms of s. 6 which contained a specific limitation in s. 6(3) and that limitation was exceeded by the promissory note when issued. Therefore it was contended that the promissory notes were invalid.
44 As already noted, the plaintiff also contended that this argument had consequences not just for payments on the EBS note, but also and more substantially for the Anglo/IBRC transaction. The plaintiff points to the reasoning of the Divisional Court at paragraphs 30-31 of the judgment where it found that the claim in respect of the Anglo promissory note was not moot merely because of the cancellation of that promissory note by the Irish Bank Resolution Corporation Act 2013. The Court accepted there that s. 17 permitted the issuance of government bonds in exchange for “the redemption release or cancellation or the transfer to the Minister of any other liability or obligation of the Minister to the Bank”. The Divisional Court considered, however, that this section must be understood to refer to lawful obligations and liabilities. If it were the case that the promissory note granted to Anglo and pledged by it to the Central Bank was invalid because it was issued ultra vires the powers of the Minister, then there was no lawful liability in respect of which the bonds could be issued. Adopting that reasoning, the plaintiff then argued, that if the Anglo promissory note was ultra vires when issued, then it follows that the issuance of bonds to the Central Bank under s. 17 of the IBRC Act 2013 was unlawful, and presumably therefore that those bonds are invalid so that the State is now not obliged or indeed permitted, to honour them.
45 The State respondents support the conclusion of the Divisional Court, but for very different reasons. They point to the unchallenged evidence in the case and argue that the provision of financial support by way of a promissory note occurs when the note is issued and not when any payments are made under it. Thus the support was provided to EBS and Anglo in June and December of 2010, well within the limitation established by s. 6(3). Accordingly it would not be necessary to extend the period to permit payment on the EBS note after 2018, and there was no question about the validity of the bonds issued to the Central Bank under s. 17 of the IBRC Act 2013.
Evidence on the Temporal Issue
46 One of the unusual features of this aspect of the case is not only that evidence was given as to the manner in which certain financial instruments operated, and the understanding in the financial world of certain terms, but also, the evidence was all one way. It will be recalled that the only witness to give evidence on behalf of the plaintiff Ms. Collins was the plaintiff herself. The evidence of two witnesses called on behalf of the defendant is particularly relevant in this respect. Ms. Ann Nolan was the Second Secretary General of the Department of Finance at the relevant time with responsibility for the Financial Services Division. She had occupied that position since 2010, and previously held other senior positions within the Department. She testified that the promissory note was regarded by the recipient banks as the equivalent of capital and was treated as such on Anglo’s balance sheet. The note was then pledged to the Central Bank as collateral, under a special master repurchase agreement, in order to permit the Central Bank to provide Emergency Liquidity Assistance. The thrust of her evidence on this point is contained in the following passage from her witness statement:
In her evidence she said (Day 2, p.51):
“The actual financial support was given at the time the asset was provided i.e. when the relevant promissory note was issued. Subsequent payments do not amount to additional financial support but rather payments required under financial support previously provided. Had the financial support taken the form of the provision of a sovereign bond, with a coupon and a bullet payment at the end in the normal way, the redeeming of the bond on expiration would similarly not amount to new financial support.”
Later in the cross-examination she said:
“The fact is the promissory note was a payment upfront. It had to be a payment upfront. Anglo could not have continued operating unless the full value of the promissory note was available to them on the day they got it or the various days that they got it.”
47 Evidence on this issue was also given by Professor Shivdasani. He said:
“. . . once the support is given, it has to be clearly given. You cannot have a financial stability question around the support”.
“Similar to the economic value of a sovereign bond, the Promissory Notes had economic value to the institutions on the date they were issued and therefore represent a contribution of capital on the issuance state. The fact that there was no transfer of cash that occurred on the date of the issuance does not imply that economic value was not provided to the Irish institutions at the time the Notes were issued. . . . In contrast to the issuance of the Promissory Notes, the actual payments that occurred . . .did not constitute incremental capital support. These payments did not increase the market value of the institutions’ assets, nor did they further increase the capital reserves and capital ratios of the institutions.. . . The payments. . . honoured the obligations arising from the issuance of the Promissory Notes but did not represent new or additional supports to the institutions.”
In cross-examination he said:
“In summary, from a financial markets perspective, financial support was provided by the Minister for Finance at the date of issuance of the promissory notes to the Irish institutions 2010. Subsequent payments that fulfilled the obligation of the Minister for Finance arising from the issuance of the promissory notes do not represent financial support.”
His evidence was pithily summarised by the presiding udge, Kelly J:
“The financial support started and ended at the date at which the promissory notes were issued.”
48 No objection was made to this evidence, and in any event we consider it was both relevant and helpful to the trial court in two ways: first, in establishing how the financial instruments in question operated, and second, in establishing the manner in which matters were understood in financial markets which was the intended field of operation of the statute. This evidence was not contradicted or qualified by any witness called on behalf of the plaintiff, and was not undermined in cross-examination. Plainly it was accepted by the High Court. This was set out in express terms at paragraph 65 of the judgment: “We fully accept this evidence which was not, in any event, seriously challenged. The financial support given by the issue of the EBS and Anglo notes in 2010 was provided on the date of issue of the notes in June and December 2010. ” The conclusion of the Divisional Court at paragraphs 135-136 however would appear to mean that as a matter of law (and contrary to the finding just set out) financial support was being provided (or continued) when payments were made on foot of the promissory notes even when none of the participants to the transaction, or indeed the market in which that transaction was effected, considered that such payments, on foot of a legal obligation entered into earlier, constituted themselves new and independent acts of financial support. The conclusion of the Divisional Court in this regard deserves careful scrutiny.
“Well, I think what his evidence boils down to is this, that even Parliament cannot un-ring a rung bell. The support is given when the pro note is issued. There are obligations that arise on foot of the pro note. But the Minister cannot withdraw that support that has already been given. It may be that he will dishonour the pro note. That is a different thing.”
49 We agree with counsel for the plaintiff Ms. Collins, insomuch as he contends that the conclusion of the Divisional Court that annual payments on foot of a promissory note are financial support does not sit easily with the conclusion that the entry into a promissory note which required such repayments after the statutorily mandated final date for the provision of such support, was nevertheless valid. If it is the case that payments on foot of a promissory note are themselves independent acts of providing financial support under the Act, then we would perhaps consider that the issuance of a promissory note committing the Minister to making such repayments after the period which was then the statutorily defined limit, would be ultra vires the Minister. We would, however, leave for another day any question as to the consequences of such a conclusion for the validity of the note. For reasons which we will now set out, we consider with respect to the reasoning of the Divisional Court, that the premise is flawed.
50 First, there is a danger in any piece of litigation involving statutory interpretation to interpret the statute retrospectively through the prism of the facts of the case, as if the statute had been enacted solely to deal with those circumstances. We do not consider, for example, that the statute amended and given effect to in 2009 is of particular relevance in this case. It should be recalled that the primary purpose of the Act of 2008 was to provide legislative support for the controversial blanket guarantee offered to financial institutions by the State. By 2009 that guarantee was already in place. The amendment in 2009 was, it appears, directed primarily to limiting the continuation of any such guarantee (although permitting an extension by Ministerial order).
51 It is understandable that, when looked at solely on the facts of this case, it might be thought that the section contemplates financial support continuing, and that this necessarily leads to a legal interpretation of the concept of financial support as something which subsists and continues. However, it should be remembered that financial support is not limited to promissory notes. Indeed, such instruments are not specifically mentioned in the Act. Section 1 of the Act defined financial support as including “a loan, a guarantee, an exchange of assets and any other kind of financial accommodation or support”. The most obvious type of support then in contemplation was a guarantee. It is entirely logical to speak of such a guarantee continuing and indeed it is logical that a party issuing a guarantee, particularly of this magnitude, would wish to limit the period for which such guarantee was provided. A promissory note operates in quite a different way. The classic definition is that contained in section 83 (1) of the Bills of Exchange Act 1882 : “A promissory note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a future fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer.” See the commentary in: (1) Crossley Vaines on Personal Property, 5th Ed., (London, 1973), pp. 244-245; (2) Breslin, Banking Law, 2nd Ed., (Dublin, 2007), p.241; and (3) Forde, Commercial Law, 2 Ed. (Dublin, 2003), pp.162-164. It is a present obligation to pay an amount on a future specified or defined occasion, and can be immediately negotiated, and value obtained thereon. Accordingly, and given the unchallenged evidence as to how a promissory note operates, there is no difficulty in concluding, and indeed no other conclusion seems available but that, the issuance of the promissory note was the provision of financial support at the time of its issuance. It is perhaps noteworthy in this regard that the judgment suggests that s. 6(3) did not permit the “keeping in place of a promissory note after the cut-off date”. ‘Keeping in place’ is not a concept provided for in the statute. Furthermore, the evidence before the Divisional Court clearly showed that there was no question of the State or any other party “keeping in place” or “continuing” a promissory note. Once issued, the Minister was not required to do anything to give efficacy or force to the promissory note: the only option available was to dishonour the note and, as was observed by the President of the Divisional Court in the intervention noted at paragraph 46 above, that is quite a different thing. Accordingly, while differing from the Divisional Court as to the reasons, we would uphold the conclusion that the issuance of the promissory notes in June and December of 2010 was not ultra vires the powers of the Minister.
52 This conclusion means that it is not necessary to consider what would flow from any finding that the issuance of a promissory note was ultra vires the powers of the Minister. It is desirable, however, to reserve specifically the question of the correctness of the assumption made by the plaintiff, and in part apparently accepted by the Divisional Court, that it would follow both that the promissory note itself was invalid, and further that any such ultra vires action or potential invalidity would necessarily affect the validity of the bonds issued to the Central Bank under the 2013 Act. The process of judicial review of administrative action, and in particular the adjudication on the constitutionality of legislation, should not readily be assumed to be akin to the process of finding a loose thread and demanding that the entire fabric be unpicked. In this case for example, the plaintiff contends that the issuance of bonds and securities to the Central Bank under the 2013 Act, is invalid because of what was asserted to be an illegality or even unconstitutionality in the exercise of the 2008 Act which affected the capacity of the Minister to exercise powers under it. But in the first place, a promissory note was issued by the State under which it undertook certain obligations as a matter of contract. It would be a large and substantial question as to whether a finding of invalidity in the underlying legislation would necessarily mean that the State could not honour its obligations and would accordingly be forced to default. Even allowing for such a possible conclusion, no such finding of invalidity had been made by the only body constitutionally entitled to do so, nor indeed had proceedings even been initiated, when the 2013 Act became law, and when the securities were issued under it. Nor was there any declaration or finding of ultra vires and still less any conclusion that there was no liability by the State. It is a standard proposition of both constitutional and administrative law that, at least in general, an Act of the Oireachtas is valid and fully binding until otherwise declared invalid by the courts empowered under the Constitution to do so, and that an administrative Act is valid unless quashed. As was said in Smith v. East Elloe Rural District Council  A.C. 736, at p.769:
It should not readily be assumed that the finding of invalidity at an earlier part of the process under a different Act would necessarily and inexorably lead to the Court making declarations as to the validity of financial instruments issued under subsequent legislation issued in a different statutory context. These are complex issues which may depend upon a number of factors and should await a case in which they arise and require to be determined.
“An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.”
The Constitutional Issue
53 No one can doubt the importance of the decisions made which are the subject of these proceedings and the significance, therefore, of the plaintiff’s challenge. However, the plaintiff’s case raises, if anything, even more important issues since it requires the Court to analyse, for perhaps the first time, the constitutional provisions relating to the public finances. No one who possesses even passing familiarity with constitutional history could doubt the centrality of the role of parliament in liberal democracies in permitting the gathering and spending of monies, and no one who has lived through the financial turmoil of the past decade could doubt the impact of the decisions made upon the citizens of this country.
54 The appropriate starting point is not, however, any generalised theory of constitutional control of financial matters, as advanced by the plaintiff. Furthermore, it is unhelpful to approach this through the observations of theorists, however eminent, whose comments were made in an entirely different constitutional context. In particular the separation of powers between Congress and the Executive in the United States system is quite different to that established in the Irish constitutional system. For example, Article 1.8 of the US Federal Constitution provides for congressional control of the national debt. This is something which has no parallel in the Irish system. Accordingly, the appropriate starting point must be the terms of the Irish Constitution itself.
55 The provisions of the Irish Constitution in relation to financial matters clearly reflect the history and development of the Westminster system. Indeed the framers of the 1922 and 1937 Constitutions did not merely retain the broad division of functions between Executive and Parliament, but also retained the primacy within the legislative branch of the popularly elected House. Thus, the constitutional provisions in relation to money bills (Articles 21, 22 and 24), the provisions requiring Dáil approval of international agreements involving a charge on the public funds (Article 29.5.2°), the requirement that the Minister for Finance be a member of the Dáil (Article 28.7), the nomination of the Comptroller and Auditor General by the Dáil (Article 33.2) and the obligation of the Comptroller and Auditor General to report to the Dáil (Article 33.4), all illustrate the primacy of the Dáil over the Seanad in financial matters. This is a reflection not just of constitutional history but perhaps also a view that, in the changed dispensation in 1922 and 1937, there remained valid reasons to provide for the special function of the popularly elected House of the Oireachtas in financial matters. However, while this case is brought by a Dáil deputy, it does not concern the allocation of functions between the Houses within the legislative and representative branch of government: rather it concerns the separation of powers between the executive and the legislature albeit that within that legislature, the Dáil exercises a particular function in financial matters.
56 What emerges from a survey of the relevant provisions of the Constitution is that the Constitution does not purport to regulate with precision the financial affairs of the State. No one would have an understanding, even in broad terms, of the operation of the public finances of the State from a mere reading of the constitutional text. Instead, the Constitution controls certain important features of that process and by that direct control of specific matters exercises a degree of indirect control of other aspects. The Constitution’s main control point on financial matters, is that the appropriation and therefore expenditure of all monies is required by Article 11 to be provided for “by law”, and to be recommended to Dáil Éireann by a message of the Government signed by the then Taoiseach (Article 17.2).
57 The Dáil received a message from the Government in relation to the Act of 2008 and the Act of 2013, signed respectively by Taoisigh Cowen and Kenny. In a document headed “Credit Institutions (Financial Support) Bill 2008”, it was stated:
It is dated the 30th September, 2008, and signed by Taoiseach Brian Cowen.
“Message from the Government under Article 17.2 of the Constitution
For the purposes of Article 17.2 of the Constitution the Government recommend that it is expedient to authorise such charges on and payments out of the Central Fund or the growing produce thereof and such payments out of moneys provided by the Oireachtas as are necessary to give effect to any Act of the present session to provide, in the public interest, for maintaining the stability of the financial system in the State and for that purposes to provide for financial system in the State and for that purpose to provide for financial support by the Minister for Finance and in respect of certain credit institutions, to amend the European Act 2002 and other enactments, and to provide for connected matters.”
In a document entitled “Irish Bank Resolution Corporation Bill 2013”, it stated:
It is dated the 6th February, 2013, and signed by Taoiseach Enda Kenny.
58 The Constitution also makes provision for the annual consideration of estimates which is of course a key parliamentary activity. It is noteworthy, however, that the pinch-point at which the Oireachtas, and in particular the Dáil, can influence public finances, is by control of expenditure. Decisions made in relation to expenditure will necessarily have an impact on the raising of finances whether by taxation or by borrowing, and it is for that reason, no doubt, that the Government must present an estimate of receipts to the Dáil on an annual basis. The Constitution itself does not directly regulate the process of taxation or other revenue-raising or public borrowing. It can be said that all these areas are interrelated, and a decision made in respect of one can have an impact on the other. Furthermore, taxation is a process of legislation subject to the special provisions in relation to money bills, and therefore within the control of the Dáil. But expenditure of monies raised is particularly the subject of constitutional provision. The Dáil must consider (and vote) on the annual estimates, pass an appropriation Act, and provide for specific expenditure by statute. In all cases both the fact of, and the manner of appropriation of funds, requires legislation, or a Dáil vote.
59 It is also noteworthy that the procedure referred to in Article 17 for annual estimates does not purport to provide a comprehensive or exclusive procedure. It deals only with the receipts and expenditure for any financial year. The evidence of Mr. McMeel establishes that the State has, since independence, continued the practice of distinguishing between voted and non-voted expenditure. This is not contested by the plaintiff. The process is considered in Gwynn Morgan, Constitutional Law of Ireland 2nd Ed., (Dublin, 1990), pp.112-113, wherein voted expenditure is described as: “the expenditure which is authorised every year by way of the Appropriation Act as part of a complicated process. . .”. Non -Voted expenditure is “money which a specified Act has authorised to be paid from the Central Fund (or Exchequer), indefinitely, so that this expenditure does not have to come under the annual review of the Dáil”. Voted expenditure is the expenditure involved in the annual exercise of determining the votes for each Department of State and other heads of expenditure, which each have their “votes”. That is, of course, an important budgetary exercise which occupies much parliamentary time and departmental energy. However, the State has always been able to commit itself to expenditure which is not subject to the estimates procedure and therefore, not subject to the possibility of annual revision, approval, reduction or even refusal. Such expenditure is made from the Central Fund indicated by the formula such as that used in s. 6(12) of the Act of 2008, namely that such sums shall be “paid out of the central fund or the growing produce thereof”. The State may be committed to such expenditures for reasons of broad policy. The classic example advanced is that of the payment of salaries of constitutional office holders, such as judges. It is an important manifestation of the constitutional independence of such officers that their salary is not subject to annual vote but rather is fixed by statute and paid from the Central Fund. Salary is fixed therefore by enactment and is thus in accordance with Article 11 provided for by law, but it is not subject to annual estimates and the vagaries of an annual vote. The expenditure required is necessarily recorded in the estimates which the Dáil receives on an annual basis, and the decision made on those estimates is made in the light of such expenditure to which the State is committed. The annual vote therefore recognises, but cannot interfere with, the obligations undertaken which are to be paid out of the Central Fund. This example is important in theoretical terms but it is in reality a tiny element of the public finances and is dwarfed by the annual vote in respect of areas such as health, education, social welfare, and even the broad vote accorded to the Department of Justice. An example which is closer to the present is that of the national debt. It is presumably for reasons of commercial reality, rather than constitutional principle, that repayment of the principal and interest on securities issued under s. 54 of the Finance Act 1970, by s. 54(2) is “charged on the Central Fund or the growing produce thereof”. Monies borrowed under s. 54 are placed in the account of the exchequer and form part of the Central Fund and are available in any manner in which that fund is available. If repayment of principal and interest on borrowings was dependent on a future vote, then it is unlikely that any lender could be persuaded to advance monies on any viable terms. Once, therefore, securities are issued by the Government pursuant to s. 54, the annual repayment of interest and the eventual repayment of principal become an obligation on the Central Fund. The annual cost is recognised in the estimates as payments due in the year, and decisions made by the executive and legislative branches must take account of that obligation, and indeed other decisions made may give rise to a requirement for further such borrowings. Accordingly the repayment of principal and interest, the payment of salaries of constitutional office holders, and indeed matters such as contributions to the budget of the European Union, are all matters which are provided for by law and made from the Central Fund and accordingly form part of non-voted expenditure, and therefore do not require an annual vote in the estimates procedure. The Constitution does not refer to this procedure, but clearly it is permitted. Accordingly, insomuch as the Constitution controls or refers to such matters, it does so in accordance with the terms of Article 11 requiring appropriation “by law” and Article 17.2 requiring that any such Act be preceded by a message to the Dáil from the Government signed by the Taoiseach.
60 There is no doubt but that the constitutional provisions under consideration in this case are of the highest importance. Decisions as to how governments raise funds, whether by taxation, borrowing or otherwise are at the heart of, and fundamentally affect, very many areas of public life and policy. While this case is not particularly concerned with the raising of funds as such, it is inevitable that the total amount of funds available to government at any given time will be finite, even though there may be policy considerations as to whether, and in what manner, taxation should be raised and whether, and if so, to what extent and on what terms it may be prudent, or indeed possible, to borrow.
61 Decisions as to how such funds as are available are to be spent lie at the heart of a great many of the policy decisions which the Executive and the Oireachtas, each acting within its own constitutional remit, have to make. As the plaintiff Ms. Collins points out, money spent in one way is, by definition, not available to be spent otherwise. By the same token it might be said that money spent has to be raised in some fashion. Such decisions lie at the heart of a whole range of policy areas from health, justice, education, defence, social security and many others. Against that backdrop, the constitutional regime which governs the legitimacy of expenditure must be seen as reflecting one of the most important structural aspects of the Constitution, precisely because it has the potential to affect so many other areas. It follows that where there is a challenge to the constitutional legitimacy of any proposed Government expenditure, the question requires to be carefully scrutinised to ensure that the requirements, which the Constitution sets as a precondition to lawful expenditure, have been complied with.
62 It might be said that the Constitution provides something of a double lock on expenditure. The Dáil is not permitted to require expenditure by vote or resolution, and the Oireachtas is not permitted to enact a law providing for public expenditure except on the formal recommendation of the Government and signed by the Taoiseach (Article 17.2). Likewise, the Government is not entitled to expend monies which are not authorised “by law”, both as to purpose and manner of expenditure (Article 11). That in turn requires that there be a lawful measure passed by the Oireachtas or a vote by the Dáil authorising the expenditure concerned. Neither the Government, nor the Dáil, nor the Oireachtas can, therefore, validly authorise the expenditure of public monies without the approval of the other branch. It is important to recognise that this is the Irish constitutional model. Statements of general principle as to what might be considered desirable as a model for governing public expenditure may be of interest, but must yield to an analysis of what the Constitution itself says about the manner in which Irish public expenditure can be permitted. This case does not of course involve any asserted attempt on the part of the Dáil or Oireachtas to authorise expenditure which has not been proposed by the Government. Furthermore, both the Act of 2008 and the Act of 2013 were accompanied by appropriate messages from the Government and signed by the respective Taoisigh. That aspect of the double lock does not therefore arise in this case, although it clearly might arise in other circumstances.
63 What does arise in this case is the other side of the double lock. The expenditure with which the Court is concerned here undoubtedly has Government approval. The question is as to whether it is authorised “by law”, thus protecting and acknowledging the separate and independent role of the Oireachtas in the process, and indeed the particular function of the Dáil in financial matters. The law, on which reliance is placed is, of course, the Act of 2008. For the reasons already addressed, the Court is satisfied that the technical requirements of that legislation have been met, and the issuance of the promissory notes was within the powers conferred by the Act. However, for any law to be valid under Article 11, it must not merely have been enacted by the Oireachtas, but it must be consistent itself with the dictates of the Constitution, and the order and structure it contemplates. It would not be permissible, for example, for a law to dispense with the requirements of Article 17.2, or which permitted the Government to avoid the estimates procedure. Here, the Act of 2008 is undoubtedly law, but it does not itself provide for the issuance of the promissory notes or the provision of financial support in this case. Instead, under s. 6, the Minister is authorised to do so. It follows that this appeal turns on whether that section involves an impermissible delegation or transfer by the Oireachtas to the Government of the power of expenditure and consequently an impermissible abdication by the Oireachtas of a role which the Constitution requires should be performed by it, the importance of which cannot be doubted.
64 It was not disputed at the hearing of this appeal that it would be impermissible for the Oireachtas to give something approaching carte blanche or blank cheque to the Government or an individual Minister, or any other person, to make provision for expenditure generally. To do so would be for the Oireachtas, and in particular the Dáil, to impermissibly fail to exercise a function which the Constitution specifically confers on it, and further, to impermissibly permit it to be performed by another arm of government, in this case the Executive. But it was equally accepted that, at the other end of the spectrum, each and every item of expenditure does not require specific legislative provision. However, the boundary between what might be considered to be a permissible delegation of the detail of expenditure on the one hand, and an impermissible transfer or abdication of the constitutional role of the legislature and the Dáil, on the other, comes into sharp focus in the context of these proceedings. Precisely because that boundary has the constitutional importance already addressed, it is necessary that the Court carefully analyse whether that boundary has been breached in a case such as this.
65 The plaintiff’s case is that the fact that there was no financial limit on the extent of the financial support which the Minister could advance under s. 6 to an individual credit institution rendered the power an impermissible abdication of a vital constitutional function by the Oireachtas and in particular the Dáil, and its transfer or delegation to a member of the Executive. There was an attractive simplicity to this argument: a scheme for financial support could be prepared by the Minister which was required to be laid before the Oireachtas under s. 6(5). The plaintiff did not dispute that circumstances may also require that a minister may be required to provide financial support by individual agreement as contemplated by s. 6(4). If the section had simply provided for a financial limit on the amount of the support, such a provision would, on the plaintiff’s interpretation, be consistent with the Constitution. However the absence of a limit was, it was asserted, fatal.
66 We agree with the approach of the Divisional Court that the analysis of the plaintiff’s claim can benefit from the approach the courts have taken to the question of whether there has been an impermissible delegation of a legislative function. However, it should be noted that in that case the sole and exclusive power of making laws is expressly vested in the Oireachtas by Article 15.2. No similar statement is made in respect of financial matters, and the role of the constitutional organs in that regard, are to be deduced from the constitutional provisions already set out. Nevertheless, the method of analysis first offered in Pigs Marketing Board v. Donnelly (Dublin) Ltd.  I.R. 413, and in Cityview Press v. An Comhairle Oiliúna  I.R. 381, 399, and discussed in this Court in McGowan v. Labour Court  3 I.R. 718, Island Ferries v. Galway County Council  I.E.S.C. 95 and Bederev v. Ireland  I.E.S.C. 34, is instructive and useful.
67 There are no permissible grounds on which an organ of State can abdicate its powers under the Constitution. As Denham J. stated in Laurentiu v. Minister for Justice Equality and Law Reform & ors  4 I.R. 26, 61:
68 This is a fundamental principle which applies to every institution established under the Constitution. An organ of government established under the Constitution may not abdicate its powers. Thus, for example, this Court has held that the Government may not abdicate its powers under the Constitution: Crotty v. An Taoiseach  I.R. 713, Pringle v. Ireland  3 I.R. 1.
“There are limits to permissible delegation by the organs created by the Constitution. The Oireachtas may not abdicate its power to legislate. To abdicate would be to impugn the constitutional scheme. The scheme envisages the powers (legislative, executive, judicial) being exercised by the three branches of government - not any other body. The framework of the Constitution, the separation of powers, the division of power, retains a system which divides by function the powers of Government to enable checks and balances to benefit democratic Government. Also, in accordance with the democratic basis of the Constitution, it is the people’s representatives who make the law, who determine the principles and policies. The checks and balances work as between the three branches of government - not elsewhere. Thus Article 15.2 must not be analysed in isolation but as part of the scheme of the separation of powers in the Constitution.”
69 Both Laurentiu and the judgment of Blayney J. in the High Court in McDaid v. Sheehy  1 I.R. 1 provide useful points of comparison in that they illustrate circumstances in which it can be said that there has been an impermissible transfer or delegation of a constitutional function. Laurentiu concerned the provisions of s. 5 of the Aliens Act 1935 which permitted the Minister by order to make provision for the exclusion or deportation or exclusion of “all aliens or of aliens of a particular nationality or otherwise of a particular class, or of particular aliens”. The section, and the power conferred under it is in entirely general terms. In McDaid v. Sheehy, s. 1 of the Imposition of Duties Act 1957, permitted the Government by order to impose a customs duty or excise duty of such amount as they should think fit on any particular description of goods imported into the State. Blayney J. found observed at page 9 that:
70 There is no doubt that the measures provided for under the Act of 2008 are extraordinary, and the sums involved enormous. However, an analysis of the statutes commences from the principle that they are presumed to be constitutional. As Hanna J. said at page 417 in the Pigs Marketing Board case:
“the fundamental question in regard to the imposition of customs or excise duties on imported goods is first, on what goods should a duty be imposed, and secondly, what should be the amount of duty? The decision on both these matters is left to the Government. In my opinion, it was a proper subject for legislation and could not be delegated by the Oireachtas”.
It is apparent from the terms of the 2008 Act that it was enacted in response to the extraordinary events posing a substantial threat to the economy of the State.
“When the Court has to consider the constitutionality of a law it must, in the first place, be accepted as an axiom that a law passed by the Oireachtas, the elected representatives of the people, is presumed to be constitutional unless and until the contrary is clearly established.”
71 The financial crisis which began to break in 2008 is reflected in the long title of the Act. While there has not been a history of explanatory long titles in this jurisdiction, it is a useful method of setting out the policy of the Act. The policy described in this long title is clear. The kernel of the long title is the explanation that it is an Act to provide:
72 The policy stated is clear. It is an Act passed in the public interest, to maintain the stability of the financial system at a time of financial crisis, and for that reason it provides for financial support to be given by the Minister to certain credit institutions.
“…in the public interest, for maintaining the stability of the financial system in the State, and for that purpose to provide for financial support by the Minister for Finance in respect of certain credit institutions.”
73 This clear statement of policy is of assistance in interpreting the Act of 2008. As is stated in Dodd, Statutory Interpretation in Ireland, (Dublin, 2008), p.44:
74 While in some earlier cases the Court referred to the long title as only being of use in the case of ambiguity, that approach has essentially been overtaken by the approach advocated by McCarthy J. in DPP v. Quilligan and O’Reilly  1 I.R. 495 where he stated at page 524:
“Where the context or purpose of an Act becomes relevant for interpretation, then the long title may be used to aid identification of such matters. Matters expressed in the long title should also be manifest in the Act. Considering a provision in light of “the Act” as whole often involves some consideration of the long title. Where the legislature has used broad words intending them to be used in a narrowed context or for a particular purpose and those matters are expressed in the long title and the Act as a whole, then the long title may be used to limit the interpretation of the provision. Though rarely decisive, the long title may bolster a particular view arrived at by other means.”
This approach was recently endorsed by this Court in Bederev v Ireland  I.E.S.C 34, where it was held that the long title of the Misuse of Drugs Act 1977 could be of assistance in determining the extent of powers conferred to the Minister under the Act and, following from this, whether there had been an unconstitutional delegation of powers under Article 15.2; and see Minister for Industry and Commerce v Hales  IR 50 at 75.
“It is not, in my opinion, a question of ambiguity in the construction of particular provisions; it is a question of giving a schematic interpretation where such is the plain intent of the statute.”
75 Section 2 of the Act is particularly important. Unusually it is framed in the present tense, and records both the fact that the Minister has the functions provided for under the Act, and sets out the reason for the functions, namely that after consulting with the Governor of the Central Bank and the Regulatory Authority, the Minister is of the opinion set out in s. 2. The section does not confer powers for the future where the Minister may be of such opinion. Rather it states the fact that the Minister for Finance is of such an opinion after consulting with two independent bodies with important functions in the field of finance within the State. The fact that the Act is passed by the Oireachtas means that the Oireachtas must be taken to have endorsed the Minister’s opinion not only as to the existing financial situation, but also as to the necessity that the Minister should have the powers conferred under the Act.
76 The opinion formed by the Minister after consultation with the Governor and the Regulatory Authority, and necessarily endorsed by the Oireachtas, is threefold, and requires three related opinions in ascending order of seriousness: first, that there is a serious threat to the stability of credit institutions in the State generally, or that there would be such a threat if the functions under the Act were not performed; second, that the performance of those statutory functions is necessary for maintaining the stability of the financial system in the State; and third, that the performance of those functions is necessary to remedy a serious disturbance in the economy of the State. Significantly, under s. 2(2) it is envisaged that the Minister may continue to consult with Governor and Regulatory Authority in the continuing performance of the functions under this Act.
77 It is worth considering these provisions in some detail. The first requirement is that the Minister be of opinion that there is a serious threat to the stability of credit institutions in the State generally. Accordingly, it is not sufficient that there should be a threat to the stability of one or more institutions. The threat must be of general or systematic instability. Furthermore, the Minister must come to the conclusion not merely that there is such general instability, but that the performance of functions under the Act is necessary to maintain the stability of the financial system in the State. Therefore, it is not every threat, even to the stability of credit institutions generally, that make it necessary that functions under the Act be performed. Furthermore, the performance of the functions under the Act must be necessary not merely to maintain the stability of credit institutions in the State generally, but for the broader purpose of maintaining the stability of the financial system in the State. However, and once again, it is not even sufficient that the Minister be of opinion that it is necessary to perform the functions to maintain the stability of a credit institution, or credit institutions generally, or even the stability of the financial system in the State, but the performance of the functions must be necessary to “remedy a serious disturbance in the economy of the State”. These demanding criteria are not merely the basis upon which powers are conferred upon the Minister. The Minister must also have regard to those matters in the provision of any financial support under s. 6(1).
78 It should not be forgotten that, under the Act, financial support may only be provided to a credit institution and defined in the Central Bank Act 1997, and it follows from the foregoing, that it may only be advanced under legislation recording that the Minister has formed the relevant opinion; an opinion which must be taken to be endorsed by the Oireachtas by the passage of the legislation, and in circumstances where the Minister, with the possibility of continued consultation with the Governor and the Regulatory Authority, has had regard to the matters set out in s. 2. Even then the Act imposes further qualifications. Financial support may be provided under a scheme which would be of general application. In such case a scheme must be laid before the Houses of the Oireachtas and cannot take effect unless and until the draft is approved by each House of the Oireachtas. Accordingly, while s. 6(4) permits the Minister to provide financial support by individual agreement, such individual agreement would only arise outside a scheme made and approved under s. 6(5). The power of individual agreement recognises the fact that where a threat to the credit stability of one institution is significant enough and may have an impact on the stability of credit institutions generally, it may become a threat to the stability of the financial system of the State, and ultimately be capable of creating a serious disturbance in the economy of the State. There is no doubt that the difficulties faced by both financial institutions at issue in these proceedings were capable of posing such a threat and creating such a disturbance.
79 Section 6 also contains one further significant limitation. Section 6(3) provides of course, for a limitation of time. It is clear therefore that the Act was originally intended to be an emergency and temporary provision that would exist for a two year period. That provision was of course amended, but solely to allow the Minister to extend the period only when of the opinion that the conditions in s. 2 continued to exist. Thus it can be said that at every stage, the Act and therefore the powers were limited in time.
80 There are also other provisions of the section which are important. The Act prescribes the conditions which may be imposed when financial support is provided, and includes a specific obligation that so far as possible all financial support supplied should be recouped from the credit institution involved (s. 6(4)). The Act also imposes an obligation on the Minister to review financial support provided (s. 6(14)), and if satisfied, having regard to the consideration set out in s. 2, that the financial support is no longer necessary, the Minister is obliged to withdraw the financial support. Finally, the Minister is obliged to lay an annual report before the Houses of the Oireachtas (s. 6(15)). This facilitates Oireachtas review and control and provides information to underpin the responsibility of the Government to Dáil Éireann under Article 28.
81 It can be seen therefore that the powers of the Minister to provide financial support are significantly constrained by the legislation. The contrast with the situation under the Aliens Act 1935, or under the Imposition of Duties Act 1957, is significant. If the Minister was given power to provide financial support to any commercial body as he should think fit, then there would be a much closer analogy with the facts of Laurentiu or McDaid v. Sheehy. The distance between the terms of the Act of 2008, and that of the legislation involved in both cases, illustrates the fact that it cannot said that the Minister has been given free rein.
82 It is the case however that the limits placed upon the exercise of Ministerial power under the Act of 2008 does not include a financial cap beyond which the financial support could not extend. However, the Constitution does not either expressly or by implication require such a limit. What the Constitution requires is that the functions conferred by it upon the organs of State must be exercised by the appropriate organ and no one else, in the manner prescribed the Constitution and in no other way.
83 It is true that, in this case, the potential exposure was enormous. The amount actually involved here was vast, and the impact on the State’s finances significant. The legislation is therefore in every sense exceptional. But these factors, whatever their merit in public discourse, do not render the Act unconstitutional, if it was designed and tailored to meet a situation which was in itself exceptional; addressing an extraordinary risk to the State’s economy which could itself be said to represent a systemic economic danger. No challenge was made to the fact that the Act permits the Minister to provide financial support in an individual case, rather than have such support provided directly by the legislature or approved by the Oireachtas. This is not surprising. It is a feature of financial affairs, and financial crises in particular, that matters move very quickly. Speed is often of the essence. If it is accepted, therefore, that it was appropriate to make provision for a swift response in an individual case to a financial crisis in a credit institutions, then there can be no quarrel with the fact that the Minister for Finance is the body designated to make that decision, having consulted with the Central Bank and the Regulatory Authority, and subject to the restrictions already identified. If this is permissible, then it is difficult to understand how the absence of a financial limit could render the provision unconstitutional.
84 It is entirely conceivable that the crisis which might be faced might require financial support to be provided which was unlimited, whether by guarantee or otherwise. If the plaintiff’s argument is correct, however, then that support could not be provided at all, even by direct and specific legislation consciously and knowingly adopted by the Oireachtas simply because there was no express limit on the exposure, even though it might be the case that the crisis being faced could only be met by some such measure. If this were indeed the case, that would be a severe limitation on the powers of the Oireachtas and its capacity to address crises of this, thankfully rare, dimension and threat and a significant weakness in the system created by the Constitution. We do not accept that the power of the Oireachtas is constrained in this way. But if that is so then the question becomes whether, if the Oireachtas could directly take such measures, it can authorise the Minister to do so if the circumstances justifying the use of such powers are found to be present? Thus narrowed it is apparent that in the extraordinary circumstances that constitute the backdrop to, and which are reflected in this, legislation, and subject to the conditions and limitations already identified, it was permissible to confer such power on the Minister. The Act is undoubtedly exceptional. But it is not consistent with the Constitution as an exception to some otherwise generally applicable rule: rather it is a permissible constitutional response to an exceptional situation. It cannot therefore be considered to be a template for broader Ministerial power on other occasions. Indeed it is unlikely that the Oireachtas would concede such wide ranging power in other less pressing circumstances, but if it did, and, for example, a minister or other body was permitted to provide unlimited financial support, and without limitation in time or object, to any commercial entity, then it clearly would not follow from this case that such was constitutionally permissible.
85 The argument that the Act requires a financial limit to be permissible under the Constitution is also unpersuasive at a number of levels both practical and theoretical. There is, for example, no limit imposed by s. 54 of the Finance Act 1970, on the amount which may be borrowed by the State, even though such borrowings may burden present and future generations, and constrain present and future decisions in relation to the economy. The imposition of a limit would in any event not in itself be any necessary protection of the State’s finances. The limit might be set at such a high level, as would not impose any constraint upon the Minister’s activity, or provide any real protection for the State’s solvency. The suggestion lurking in the argument that if a limit were imposed, it might make the Oireachtas less likely to pass such a scheme, cannot withstand analysis. First, such a consideration could not determine the constitutionality of the provision. Second, the proposition involves the strange reasoning that a person will pay more heed to, and be more careful of, a financial exposure with a limit albeit high, that to an exposure which is unlimited. The fact that no financial cap is placed on the financial support capable of being provided might be imprudent. Conversely, it might instead be an entirely prudent, though necessary and awesome response to an exceptional situation. In either case it is a decision made by the organ empowered by the Constitution to do so, and it cannot be said to be, by itself, per se unconstitutional. The Oireachtas is of course free to decide to impose limits on the extent to which the State may borrow or spend either in general or in particular, but that decision is one which the Constitution consigns to the legislative rather than judicial branch of government. The Court’s function in this regard is to ensure that the organ mandated by the Constitution to take such a decision does so, and the function is not abdicated to, or usurped by, any other branch including the judicial branch itself.
86 One issue which arose in the course of this case requires to be noted. The system of voted and non-voted expenditure, although in existence since independence, is a distinction which is not required by, or reflected in, the Constitution. What the Constitution says is that all expenditure, whether pursuant to legislation charging such expenditure to the Central Fund or by annual appropriation is subject to the same constitutional constraint, namely that provision must be made for such expenditure “by law”. As this case illustrates however, the extent to which the State may be committed to charges upon the Central Fund can have an impact, sometimes significant, on the annual budgetary exercise, not just for that year, but for future years, and in extreme cases could remove much if not all substance from that annual budgetary process. No complaint is made in this case as to the provision of financial support from the Central Fund and there is a clear logic for that decision and an obvious point of comparison with national borrowing. Indeed, as was emphasised on a number of occasions in this case, had the State not faced such dramatic difficulties in 2010, then the provision of financial support would normally have been achieved by use of the power of borrowing, as was indeed the case when the IBRC notes came to be extinguished in 2013, and substituted by long-dated government debt. If financial support was provided in this way it too would have been charged on the Central Fund, and the budgetary impact would have been the same. It is not necessary therefore to consider what constraints, if any, are to be applied to the decision to make provision for appropriation from non-voted expenditure. It is to be noted, however, that there is already an express constitutional constraint on that process, in that it must be provided by law. The Oireachtas is therefore in a position, in the first place at least, to control the manner in which such commitments are to be made. It is clear, however, that any such decision may necessarily have an impact on the budgetary process, and not just in the current year, but in future years. Indeed a similar point may be made about commitments which are entered into extending over a number of years and where payment is made from voted expenditure. It is illusory to suggest that the Oireachtas is free to not vote the relevant expenditure in any given year if the outcome would be a default by the State on a contractual obligation imposing a liability upon the State. This case illustrates clearly therefore that choices now made have consequences both for the present and the future. Decisions made or approved by the current Oireachtas can significantly constrain the freedom of action of future Oireachtas, just as decisions made in the past may continue to constrain the present . This Court has no function, however, in considering the wisdom of decisions taken by the other branches of government, only the limited capacity to review that judicial review constitutes. It is this Court’s function to ensure that the constitutional organ which has responsibility to make such decisions, whether they be wise or foolish, trivial or far reaching, is allowed to do so within the limits imposed by the Constitution. The momentous nature of the decisions which have been made in relation to the crisis which the Irish economy experienced in recent years, including those made in this case, highlights the importance of each organ of government respecting the field of operation of the other branches, and performing its own functions conscientiously and carefully.
87. For the reasons set out above, the order of the Court will be to dismiss this appeal.