AT the time of concluding the deal with the religious orders on the compensation of victims of clerical abuse, the Government knew there were legal difficulties with the deal and that a prominent element in the deal was inserted purely for political proposes, without legal effect, writes Vincent Browne
The legal difficulties concern the entitlement of the religious orders to transfer assets from the trusts which own these assets for the compensation of victims of clerical abuse. Under the law on trusts, assets may be used for purposes that conform to the objectives of the trust or for an objective close to the original objectives of the trust.
Therefore, the question arises: how can the religious orders transfer properties held in trust for a purpose outside the objectives of those trusts? The compensation of victims of clerical abuse is obviously outside the objectives of most of the trusts, if not all.
This has been acknowledged by Sister Elizabeth Maxwell of the Conference of Religious of Ireland (CORI), who was central to the negotiation of the deal on the part of the religious orders.
I asked her about this issue last Friday, and she said: "My understanding of it is that the Government is aware of the dilemma of congregations in relation to this, but every effort is being made to ensure that the objectives of the trust is honoured.
"In other words, if the property was held in trust for the education of the visually impaired then by the transfer of the ownership of that property to the State the objective of the trust would be continued" (by the State using the property for the education of the visually impaired).
Even if this were legally valid the further question arises: if the properties are to be used only for the purpose that are seen to advance the objectives of the trusts from which they come, the value of such properties would represent a fraction of the commercial values which have been attached to them for the purpose of the deal.
There is a further difficulty. Part of the deal involves the transfer of €41.14 million to the State in cash, and of this €12.7 million is to be used by the State for educational programmes for former residents and their families.
This means that €27.44 million will be used for other purposes, and it is reported that this money will be used by the State to compensate clerical abuse victims.
A senior official of the Department of Education and Science, who was also centrally involved in the negotiation of the deal, has also acknowledged that this difficulty obtains.
However, he has suggested that the Department is relying on a Canadian Supreme Court judgment to get around the difficulty. He says there is confidence the Irish courts would follow that.
The Canadian case (Bazley v Curry (1999) 2 SCR 534) he referred to has only the most tenuous relevance to the issues here. It concerns, primarily, whether a non-profit foundation was vicariously liable for the harm perpetrated by one of its employees (i.e. the sexual abuse of a child in residential care).
An incidental issue had to do with whether non-profit organisations should be treated differently from other organisations. It was argued that such organisations care for the neediest in society and if they are to be held liable in such circumstances they risk going out of business. The court found "the suggestion that the victim must remain remediless for the greater good smacks of crass unsubstantiated utilitarianism".
The case is therefore irrelevant to the question about the use of the assets of trusts established for educational, healthcare and religious purposes being used for the compensation of victims of sexual abuse. If the Department of Education and Science is relying on this case - as the senior official familiar with these issues has told me - then it seems there is no authority for the contention that the assets can be transferred for these purposes.
I understand from another source that there is another Canadian case which may be more helpful to the State's case. But, clearly, this is not what is or was relied upon in the negotiation and conclusion of the deal.
And the other problem. This concerns the legal notion of "past consideration". For a contract to be legally binding there have to be three elements: an offer, an acceptance of that offer and consideration (usually payment) for the subject matter of the contract. But consideration has to be current or prospective. The relevance of this in relation to the church-religious orders deal is that part of the consideration for the State's indemnity is past consideration, the €42.32 million in properties that was transferred to the State prior to the signing of the deal.
A political decision was taken to ignore this and to include reference to the €42.32 million transfer of properties, apparently, for cosmetic purposes, i.e. to wrongly convey the impression that what was being paid by the religious orders was €42.32 million more than was in fact the case.