Cromane Seafoods Ltd v Minister for Agriculture

JurisdictionIreland
CourtSupreme Court
JudgeMr. Justice Clarke,Mr Justice Charleton,Mr. Justice John MacMenamin
Judgment Date22 February 2016
Neutral Citation[2016] IESC 6
Docket Number[S.C. No. 307 of 2013],Record number: 2009/1374P [Appeal No: 307/2013]
Date22 February 2016

[2016] IESC 6

An Chuirt Uachtarach

THE SUPREME COURT

Clarke J.

Charleton J.

MacMenamin J.

Record number: 2009/1374P

[Appeal No: 307/2013]

Clarke J.

MacMenamin J.

Laffoy J.

Dunne J.

Charleton J.

Between/
Cromane Seafoods Limited and O'Sullivan McCarthy Mussel Development Limited
Plaintiffs/Respondents
and
The Minister for Agriculture, Fisheries and Food, Ireland and the Attorney General
Defendants/Appellants

Negligence ? Liability ? Legitimate expectation ? Respondents seeking damages ? Whether appellants are liable in damages

Facts: The second plaintiff/respondent, O?Sullivan McCarthy Mussel Development Ltd, 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. In the High Court, the first plaintiff/respondent, Cromane Foods Ltd, and the second respondent asserted that they were entitled to an award of damages, arguing that the first defendant/appellant, the Minister for Agriculture, Fisheries and Food, was in breach of a legitimate expectation or, alternatively, was negligent arising out of the circumstances in which they were forced to cease their activities. The trial judge (Hanna J) found in favour of the respondents 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 defendants/appellants, the State, appealed to the Supreme 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 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 the respondents in respect of any losses attributable to those companies.

Held by Charleton J that any analysis of liability in negligence must commence with the consideration of whether a duty of care exists between the plaintiff and defendant. Where the relationship is governed by statutory powers, Charleton J held that the first point of analysis must be the legislative matrix; it must be shown that those powers expressly set up a duty of care to be exercised by the defendant in favour of the plaintiff or that such a duty of care arises by necessary implication. Charleton J held that there was nothing to suggest that the duty of the appellant Minister under the Sea-Fisheries and Maritime Jurisdiction Act 2006 gave rise to any duty of care towards these fishermen; on the contrary, the considerations in the legislation were expressly directed towards the conservation of fish stocks, their rational exploitation, the furtherance of the common fisheries policy and the consequent benefit towards the community. Even if that were not the case, Charleton J held that no discretion arose once Castlemaine Harbour had been declared a special protection area for birds (SPA) and a special area of conservation (SAC). Charleton J held that under the Habitats Directive (Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora), article 6.3, the duty of the State was clear, which was to conserve the protected sites and to not allow any non-conservation activity until it was certain that it would not impact upon the environment and the species within. Hence, Charleton J noted that any amelioration in the decisions made as to the opening of Castlemaine Harbour were negotiated from the European Commission by the appellant Minister as a concession. Charleton J held that all this was done in good faith. Charleton J held that there was no basis, in terms of the press statement relied on, as founding a legitimate expectation and that there was no entitlement for anyone to conclude that it was clear and unequivocal that Castlemaine Harbour would not be shut by reason of the designation of much of that area as an SPA or an SAC. Charleton J held that damages should not be awarded to related companies on the basis of any analysis that a wrong was perpetrated against one of them which was felt by the other because they shared common directors.

Charleton J held that the appeal should be allowed.

Appeal allowed.

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...

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