Cromane Foods Limited & anor -v- Minister for Agriculture, Fisheries & Food & ors, [2016] IESC 6 (2016)

Docket Number:307/2013
Party Name:Cromane Foods Limited & anor, Minister for Agriculture, Fisheries & Food & ors
 
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THE SUPREME COURT[Appeal No: 307/2013]

Clarke J.

MacMenamin J.

Laffoy J.

Dunne J.

Charleton J.

Between/

Cromane Seafoods Limited and O’Sullivan McCarthy Mussel Development LimitedPlaintiffs/Respondentsand

The Minister for Agriculture, Fisheries and Food, Ireland and the Attorney General

Defendants/Appellants

Judgment of Mr. Justice Clarke delivered the 22nd February, 2016.

  1. Introduction

    1.1 The circumstances in which the State may be liable for mistakes on the part of officials or employees is a complex and sometimes controversial area of the law. That a mistake occurred in this case which had, at least, some impact on the plaintiffs cannot be doubted. The issue which this case raises is as to whether there is any proper legal basis on which it can be said that the defendants/appellants (“the State” unless the context otherwise requires when “the Minister” will be used) is liable in damages. I will collectively refer to the plaintiffs/respondents as “Cromane”, unless the context makes it clear that it is only the first named plaintiff/respondent which is being referred to. The second named plaintiff/respondent will, when separately relevant, be referred to as “O’Sullivan McCarthy”. In the High Court, Cromane put forward two bases on which it was asserted that it was entitled to an award of damages. First, it was said that it was possible and appropriate for the Court to award damages under the heading of legitimate expectation. Second, it was said that damages arose under the tort of negligence.

    1.2 For present purposes, it is sufficient to note that the circumstances which give rise to these claims arise out of the implementation in Ireland of European Union environmental legislation. In the events that happened, O’Sullivan McCarthy was, for a period of time, precluded from continuing to carry on its business of harvesting mussels in Castlemaine Harbour as a result of the absence of necessary permission to carry on that activity after new measures for the authorisation of such activity in protected areas had come into force. Cromane has argued that the Minister was in breach of a legitimate expectation or, alternatively, was negligent arising out of the circumstances in which it was forced to cease its activities.

    1.3 The trial judge (Hanna J.) found in favour of Cromane under both headings and made an award of damages in the sum of €125,000 in respect of Cromane and €275,000 in respect of O’Sullivan McCarthy. The State has appealed to this Court against that finding. In addition to raising questions as to whether an award of damages can properly be made either in the context of legitimate expectation or on the basis of negligence, the State has also appealed against the amount of damages awarded and also, as a separate basis of appeal, by asserting that damages could not, in any event, be awarded in favour of Cromane in respect of any losses attributable to that company.

  2. The Issues

    2.1 On that basis, there are four sets of issues at least potentially before this Court on this appeal. The first and second issues concern whether, in the circumstances of this case, it was properly open to the trial judge to make an award of damages at all under the headings of, respectively, legitimate expectation or negligence.

    2.2 In the event that both of those issues were to be found in favour of the State then clearly no further issues would arise. However, in the event that this Court were to uphold at least the principle of an award of damages under either (or, of course, both) headings, then the two separate issues which relate to the question of damages would require to be addressed. On that basis, the third issue concerns the calculation of damages by the trial judge (in that context it should be recorded that Cromane cross appealed on the basis that the calculation by the trial judge of the award of damages was inconsistent, it was said, with some of the judge’s findings as to the evidence) and the fourth issue concerns whether it was appropriate, even if damages, in principle, were available to O’Sullivan McCarthy, to award any damages in favour of Cromane in respect of losses attributable to that company. In that latter context, it should be noted that the issue between the parties concerns the level of connection of Cromane with the alleged cause of action.

    2.3 As already noted, the underlying issues which arise in these proceedings concern certain licensing functions of the State, and in particular the Minister, relating to the shellfish operations of Cromane. As will be discussed later in this judgment, O'Sullivan McCarthy is a separate legal entity which has a shareholding connection with Cromane. O’Sullivan McCarthy is involved in cultivating shellfish. Cromane was not, therefore, directly affected by any of the licensing issues which are at the heart of these proceedings, but claims to have suffered loss indirectly as a result of the inability of O’Sullivan McCarthy to supply shellfish because of the licensing difficulties to which I have referred. The separate question which arises in the context of Cromane is, therefore, as to whether, even if O’Sullivan McCarthy is entitled to successfully maintain proceedings for either or both of legitimate expectation or negligence, Cromane is likewise entitled, notwithstanding the more remote connection of that company to the events which give rise to these proceedings.

    2.4 The background to this case is to be found in the developing legislative framework enacted at European Union level for the purposes of protecting the environment. In that context, it is necessary to turn briefly to that framework.

  3. The EU Framework

    3.1 Council Directive 92/43/EEC of the 21st May, 1992 (“the Habitats Directive”) was concerned with the conservation of natural habitats and of wild fauna and flora (O.J. L 206 4/7 22.7.1992). In respect of activity which it was proposed should take place in a Special Area of Conservation (“SAC”) as specified under the Habitats Directive, it was required that an appropriate assessment first be carried out to determine whether such activity would affect the integrity of the site.

    3.2 The European Communities (Natural Habitats) Regulations 1997 (S.I. No. 94 of 1997) were introduced for the purposes of transposing the Habitats Directive into Irish law. As part of the gradual measures introduced for the purposes of implementing the Habitats Directive, various candidate SACs (“cSAC”) were identified and notified to the relevant European authorities. Castlemaine Harbour was one such area identified.

    3.3 It is also worth noting that, as will be discussed in section 5 of this judgment, in parallel with those developments, Castlemaine Harbour had earlier been designated as a special protected area for birds under the Irish implementing measures designed to transpose Council Directive 79/409/EC (“the Birds Directive”).

    3.4 In any event, the critical legal requirement which, as a result of those measures, applied to Castlemaine Harbour was Article 6.3 of the Habitats Directive which reads:-

    “Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.”

    3.5 One of the questions which arose was as to whether that provision applied, or applied in the same way, in respect of existing activities which were being carried out in an area of conservation prior to its designation as such and, indeed, prior to the relevant European legislation or its Irish implementing measures coming into force. The relevance of that question to these proceedings is that, as will appear later in this judgment, the activities which Cromane was carrying on in the harbour were well established prior to the developments in European environmental and conservation law to which I refer.

    3.6 The European Court of Justice (“ECJ”) delivered two important judgments in relation to the interpretation of Art. 6 of the Habitats Directive in the mid-noughties. These were – Landelijke Vereniging tot Behoud van de Waddenzee, Nederlandse Vereniging tot Bescherming van Vogels v. Staatssecretaris van Landbouw, Natuurbeheer en Visserij (Case C-127/02) [2004] ECR I-07405 and Commission v. Ireland (Case C-418/04, ECR [2007] I-10947). The net effect of both of these decisions was to make clear that the regime specified in Art. 6 was required to be applied to activities which existed prior to the designation of an area as a SAC or cSAC. Furthermore, it was made clear that the requirement for an appropriate assessment of the implications of any such activity required that the relevant authorities had, prior to authorisation, to be satisfied that, in the words of the ECJ, “in the light of the site’s conservation objectives…no reasonable scientific doubt remains as to the absence of such effects” (being adverse effects on the integrity of the site).

    3.7 This interpretation of the legal position undoubtedly caused significant difficulties for the Minister and also, as a result, for Cromane. As will be clear from an account of the facts to which I will shortly turn, the Minister had provided various forms of permission which allowed for the continuation of Cromane’s activities notwithstanding the coming into force in this jurisdiction of the regime under the Habitats Directive. However, no specific analysis or assessment had been carried out and, indeed, the necessary...

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