Celtic Atlantic Salmon (Killary) Ltd v Aller Acqua (Ireland) Ltd and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Hogan
• Judgment Date: 31 July 2014
• Neutral Citation: [2014] IEHC 421
• Court: High Court
• Docket Number: [2009 No. 3075 P]
• Date: 31 July 2014

[2014] IEHC 421

THE HIGH COURT

[No. 3075 P/2009]

BETWEEN

CELTIC ATLANTIC SALMON (KILLARY) LIMITED (IN VOLUNTARY LIQUIDATION)

PLAINTIFF

AND

ALLER ACQUA (IRELAND) LIMITED AND (BY ORDER) ALLER ACQUA A/S

DEFENDANTS

EEC REG 44/2001 ART 5(1)(A)

EEC REG 44/2001 ART 5(1)(B)

EEC REG 44/2001 ART 28

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GLEESON v J WIPPELL & CO LTD 1977 3 AER 54 1977 1 WLR 510 1977 FSR 301 1977 121 SJ 157

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EEC REG 44/2001 ART 34(1)

Brussels Regulation (Council Regulation No. 44/2001EC) – Counter-Claim – Damages – Breach of Contract – Negligence – Conflict of Laws - res judicata – Foreign Proceedings

Facts: The plaintiff (Celtic Atlantic) was an Irish company who carried on the business of fish farming before it went into voluntary liquidation in November 2008. The first defendant (Aller Ireland) was the Irish subsidiary of its Danish parent ('Aller Denmark'), who was joined to the proceedings in October 2013,without prejudice to its right to contest the jurisdiction of the Court. Aller Denmark had since issued a motion contesting that jurisdiction. While the motion in form principally sought relief as against Aller Denmark, in practice the question had long since become whether the entire action (whether as against Aller Ireland or Aller Denmark or both) was barred by reason of doctrines such as res judicata, issue estoppel and the operation of the Brussels Regulation. The defendants carried on the business of the sale and supply of fish feed. The present proceedings were commenced in Ireland in 2009 and in those proceedings Celtic Atlantic claimed that Aller Ireland sold and supplied fish feed which did not contain an appropriate phosphorous content. It further contended that, as a result, its fish failed to thrive and they developed feed related dystrophy. It was further claimed that it suffered very significant financial loss (estimated at over €2m) by reason of the alleged breach of contract and negligence. In July, 2008 Celtic Atlantic commissioned a report from a specialist veterinarian, Hamish Rodger. According to his report, 209 fish were caught in cages and drugged. Of these it was said that between 49% to 80% of them had obvious defects and had developed obvious deformities and nutritional disorders. Mr. Rodger attributed this unusual state of affairs to a phosphorous deficiency. Having examined the labelling on the boxes of feed, Mr. Rodger noted that the phosphorous level was below the recommended level for growing juvenile Atlantic salmon. The dispute between the parties then started with a letter sent by Celtic Atlantic"s solicitors in July, 2008 claiming damages for the (allegedly) defective fish feed. Aller Denmark"s solicitors responded by denying liability, but also claimed the sum of €834,000 for unpaid invoices in respect of the fish feed. Further correspondence between the parties later ensued. In November, 2008, Aller Denmark commenced proceedings as plaintiff against Celtic Atlantic as defendant by writ of summons in the Civil Court at Kolding. The scope of these Danish proceedings was of some importance. There were, in fact, two separate claims. First, Aller Denmark claimed €58,655 plus interest in respect of certain unpaid invoices for the fish feed ('claim 1'). (It also reserved its position to make further claims in that regard.) Second, it sought an order that 'Celtic be ordered to admit that the delivered feed on which Aller Acqua"s claim was based is in conformity with the contract.' ('claim 2'). The feed supplied prior to the 1st January 2008 was supplied by Aller Ireland, whereas the feed supplied after that date was supplied by Aller Denmark. The claim which was actually advanced by Aller Denmark in the Danish court was approximately 7% in value of the total unpaid invoices claimed (€58,655/€834,000) on behalf of the Aller companies. From Mr. Rodgers report it was not possible to ascertain whether the alleged deficiency stemmed from particular identifiable batches of feed. On the contrary, it seems that these deficiencies occurred during the life cycle of the fish as they grew to maturity. The scope of the potential claim and defence in that regard was, moreover, not absolutely clear. In February, 2009 the solicitors for the liquidator, Lyons Kenny, instructed Danish lawyers, Maare Advockataktieslkab ('Maare') to act for the then liquidator, Kieran McCarthy, to act on behalf of Mr. McCarthy in the Danish proceedings. Following discussions between the parties, Lyons Kenny advised that it would be unwise to bring a counter-claim in the Danish proceedings, because to do so 'would preclude us from bringing proceedings in Ireland for damages for breach of contract.' A plenary summons was issued in Ireland claiming damages against Aller Ireland and that summons was served on Aller Ireland on 26th May, 2009. A conditional appearance was entered on behalf of Aller Ireland on 30th June, 2009. The proceedings were admitted into the Commercial Court on 27th July, 2009, and in the meantime a motion contesting the jurisdiction of this Court had been filed by Aller Ireland. The proceedings themselves amounted to a claim for damages for negligence and breach of contract by reason of the allegedly defective nature of the fish feed. Matters had also begun in Denmark where the jurisdiction of the Danish courts had been challenged by Celtic Atlantic. So far as the jurisdiction of the Danish Court was concerned, Aller Denmark pointed to the separate statutory ratification by Denmark of the Brussels Regulation in December, 2006. As the claim was based on the obligation on Aller Denmark to deliver the fish feed 'ex works' to Celtic, it was contended that the Danish court had jurisdiction pursuant to Article 5(1)(a) or Article 5(1)(b) of the Brussels Regulation as Denmark was place for the performance of the obligation in question. The jurisdiction of the Danish court was challenged by Celtic Atlantic and in August, 2009 a motion contesting that jurisdiction was heard by the Kolding District Court. At the hearing of that jurisdictional motion, oral evidence was given by James Murray, the former general manager of Celtic Atlantic, stating that the parties had never considered the question of whether the contractual obligation regarding the delivery of the feed was ex works or whether it was an obligation to deliver the feed to Celtic Atlantic in Donegal. This view was disputed by the witnesses called by Aller Denmark. One of them, Svend Kristensen, gave evidence that the fish feed in this case came from Aller Denmark"s factory in Christiansfeld rather than from the alternative source of supply, namely, Aller Denmark"s factory in Golob-Dubryzn in Poland. In the light of that latter evidence the Kolding District Court...