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26 February 2013
In addition to the existence of detailed court rules pursuant to which litigation proceeds, the Irish courts have 'inherent jurisdiction' at their disposal, which allows them to take certain steps with regard to the conduct of proceedings. Although the existence of an unwritten corpus of court powers may seem alien to practitioners from civil law jurisdictions, the inherent jurisdiction represents a body of default powers which enables a court to fulfil, properly and effectively, its role as a court of law. This update summarises the nature of the inherent jurisdiction and gives a concrete example, by reference to a recent case, of how it can operate effectively to secure justice.
Inherent jurisdiction facilitates the court in exercising full judicial power in all matters concerning the general administration of justice; it is a part of the procedural law of the court. Depending on the circumstances, it may be invoked not only in relation to parties in proceedings, but in relation to anyone – whether or not a party to the proceedings. In theory, it can also be raised in respect of matters not yet raised in litigation between the parties. Although it effectively represents a default power designed to operate where there is no express power, inherent jurisdiction may even be raised in circumstances governed by rules of court and statute, unless this right is rescinded by unequivocal statutory intervention. Accordingly, it can potentially be of wide import, but there are four general overriding circumstances in which the inherent jurisdiction is exercised:
Courts exercise their inherent jurisdiction in almost all areas of the law, including (but by no means limited to) the judicial appointment or removal of trustees, altering the terms of a trust, determining whether to strike out a claim, deciding whether to stay in proceedings, considering whether to strike a company off, in the application of family and child law and criminal sentencing. Inherent jurisdiction has also been used to create Mareva injunctions and Anton Piller orders. However, it should not be considered that inherent jurisdiction promotes uncertainty or arbitrariness. Rather, it is a tool which is used carefully, as decisions premised on it are susceptible to appeal. Moreover, the objective in having an inherent jurisdiction is to ensure that the court can perform acts which it must have the power to exercise in order to maintain its character as a court of justice, which means it is exercised in limited circumstances.(1)
In Dunne v Mahon(2) Judge Hogan of the High Court exercised the court's inherent jurisdiction to ensure that a fair and reasonable decision was reached in relation to the winding-up of an unincorporated association, Roadstone Group Sports Club. The club was established in 1957 and formed for the benefit of employees working with an associated company. At the time of the hearing, the club was located on a 6.7 hectare site and housed a substantial clubhouse, a variety of pitches, a putting course, a large function hall, a bar and a restaurant. Full membership of the club was open to employees of the company, while associate membership was open to those who were not company employees. By the end of 2010 there were 349 associate members, 53 full members, one honorary member and two life members. Although the court found that the club's finances were on a solid financial footing, the applicant contended that membership was in terminal decline and sought dissolution. Ultimately, the club's rules contained no provisions providing for their amendment and were originally silent as to what would become of the club's assets were it to be dissolved. Therefore, these were all issues before Hogan for determination as part of the application to wind up the club.
In acknowledging the significant difference from companies (which have significant legislative provisions governing dissolution), the judge noted that a club has no existence apart from its own members and is not a legal person in its own right. On that basis, he observed that the law and practice in relation to the existence of a jurisdiction to wind up such an association are obscure and not free from difficulty. The court relied on the Irish cases Feeney v McManus(3) and Buckley v Attorney General(4) to confirm that where the substratum of the respective associations no longer exists, there is jurisdiction to direct a winding up of the club and the distribution of the proceeds equally among the members. The judge also noted that the English authority of Re Lead Company's Workman's Fund Society(5) also confirmed jurisdiction to treat a club as having been dissolved where the substratum on which it was founded no longer exists. However, in the case at hand, the fact that the club still operated (albeit on a potentially declining basis) meant that it was not a failure of substratum case and those authorities did not afford the judge any clear jurisdiction.
Therefore, he had to consider whether he had a jurisdiction to wind up the club where the majority of its members desired it. He noted that English authorities on such jurisdiction are not easily reconcilable. One of the cases from which he cited was the English Court of Appeal decision in M'Kenna v Barnsley Corporation,(6) where the court refused to interfere with a resolution passed by a majority to register their society under the Friendly Societies Act 1875. In concluding on the existence of a jurisdiction, he observed that:
"Absent an express agreement to the contrary in a club's rules, it is unrealistic to expect or assume that an individual member can have the right to block each and every proposed change through the exercise of an individual power of veto. An implied power to amend through majority vote must generally be assumed, as otherwise the association would lack the necessary flexibility to enable it to adapt to the challenges of modern society."
Accordingly, he felt that he could imply a term to the effect that the rules of the club could, in principle, be amended by a simple majority vote. In reaching that decision, the judge found support in the right to disassociate protected by Article 40.6.1 of the Constitution and Green's article on the "Dissolution of Unincorporated Associations"(7) where it was contended that:
"Silence of the articles of an unincorporated body is evidence that the duration of the organisation and the method of dissolution were not considered. Since unanimity is rarely attainable and the will of the majority is the accepted mode of government, it is a fair inference that majority rule is tacitly agreed upon."
The judge also observed that, absent a pre-existing rule to the contrary, it is an implied term of the membership contract of an unincorporated association that the society's property should be distributed in equal shares on dissolution.(8)
Although of limited application in terms of the substantive area of law involved, the fact that the court relied on its inherent jurisdiction to establish a basis on which an unincorporated association could be wound up on the basis of the views of the majority of its members is a good example of how inherent jurisdiction can be invoked by a party in order to achieve a fair result. It also shows how the court's inherent jurisdiction can be used as a residual source of powers, to be drawn on as necessary when just and equitable to do so. Accordingly, it should be borne in mind that where procedural or substantive law may have a gap in terms of giving the courts a clear power to do something, there may be a basis on which to invoke the inherent jurisdiction to achieve the objective.
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