Lett & Company Ltd v Wexford Borough Council & others

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: O'Donnell J.
• Judgment Date: 03 February 2012
• Neutral Citation: [2012] IESC 14
• Date: 03 February 2012
• Docket Number: [2004 No. 7059

Lett & Co Ltd v Wexford Borough Council & Ors

Between/

Lett & Company Ltd.

Plaintiffs

and

Wexford Borough Council, The Minister for Communications, Marine and Natural Resources, Ireland and the Attorney General.

Defendants

[2012] IESC 14

Denham CJ.

Macken J.

O'Donnell J.

[Appeal No.: 196/2007]

THE SUPREME COURT

DAMAGES

Quantum

Assessment - Standard of proof - Balance of probabilities - Loss of production - Calculation of future losses - Loss of opportunity - Whether plaintiff established any loss - Whether continuing losses attributable to existence of exclusion zone notwithstanding its discontinuance - Whether plaintiff mitigated loss -Legitimate expectation - Minimum equity - Whether general principles of calculation of damages applicable - Likely damage to plaintiff as result of non-implementation of scheme - Webb v Ireland [1988] IR 353 and Crabb v Arun DC [1976] 1 Ch 179 approved; Abrahamson v Law Society of Ireland [1996] 1 IR 403 and Amalgamated Property Co v Texas Bank [1982] 1 Q.B. 84 considered - Appeal on quantum allowed (196/2007 - Sc 3/2/20120 [2012] IESC 14

Lett v Wexford Borough Council

LOCAL GOVERNMENT

Legitimate expectation

Public authority - Test to be applied - Exercise of statutory discretion - Fairness of administrative powers or actions - Differences between doctrines of estoppel and legitimate expectation - Whether public authority made statement or adopted position amounting to promise or representation - Whether promise or representation conveyed directly or indirectly to identifiable person or group of persons - Whether acts of reliance - Whether promise or representation created reasonable expectation that public authority would abide by promise or representation to extent where it was unjust to resile from it - Whether plaintiff had legitimate expectation that compensation would be paid - Webb v Ireland [1988] IR 353 and Crabb v Arun DC [1976] 1 Ch 179 approved; Abrahamson v Law Society of Ireland [1996] 1 IR 403 and Amalgamated Property Co v Texas Bank [1982] 1 Q.B. 84 considered - Appeal on quantum allowed (196/2007 - Sc 3/2/20120 [2012] IESC 14

Lett v Wexford Borough Council

Facts: The State defendants appealed against a judgment of the High Court finding that the plaintiff mussel farming company had a legitimate expectation created by the State that it would receive compensation for loss of an exclusion zone incurred as a result of a restriction on the use of certain mussel beds in Wexford Harbour relating to the construction of a sewage pipe. Compensation was assessed at Eur 1.15 million. The Court considered the calculation of loss in the years prior to and subsequent to the existence of the exclusion zone.

Held by O' Donnell J. (Denham CJ, Macken J. concurring), that it was an unavoidable conclusion that Eur 1.15 million represented too generous a calculation of the plaintiff's claim of anticipated profits. There was no reason for a Court to adopt the most generous scale of assessment of loss. The assessment of past loss was on the generous side. The future loss was even more speculative. A total award of Eur 650,000 was more than enough to satisfy the minimum equity of the situation but also the broad justice of the plaintiff's claim. This allowed in full the trial courts assessment of past loss and a further amount for future uncertainty or remediation.

Reporter: E.F.

FORESHORE ACT 1933

FISHERIES (AMDT) ACT 1997

MULLUSCAN SHELLFISH (CONSERVATION OF STOCKS) ORDER 1987 SI 118/1987

GLENCAR EXPLORATIONS PLC & ANDAMAN RESOURCES PLC v MAYO CO COUNCIL (NO 2) 2002 1 IR 84

ABRAHAMSON & ORS v LAW SOCIETY OF IRELAND & AG 1996 1 IR 403 1996 2 ILRM 481 1996/9/2635

AMALGAMATED INVESTMENT & PROPERTY CO LTD (IN LIQUIDATION) v TEXAS COMMERCE INTERNATIONAL BANK LTD 1982 QB 84 1981 3 WLR 565 1981 3 AER 577

WEBB v IRELAND 1988 IR 353 1988 ILRM 565

CRABB v ARUN DISTRICT COUNCIL 1976 CH 179 1975 3 WLR 847 1975 3 AER 865

1 Judgment delivered on the 3rd day of February 2012 by O'Donnell J.

2 JUDGMENT DELIVERED BY O'DONNELL J. [NEM DISS]

3 1 This is an appeal by the Minister for Communications, Marine and Natural Resources, Ireland and the Attorney General ("the State defendants") against the judgment and order of Clarke J. of the 23 ^rd May, 2007, which found that the plaintiff company had a legitimate expectation, created by the State, that it would receive compensation for losses incurred as a result of a restriction on the use of certain mussel beds in Wexford Harbour. Compensation was assessed at €1.15 million. It is also a dispiriting story of mismanagement by giving rise to an exposure to a large claim for compensation, and permitting a dispute between the plaintiff, the first named defendant ("the Council") and the State defendants to become the subject of a costly 29 day hearing in the High Court, and this appeal.

Facts

4 2 The plaintiff company, run by the Lett family, farms mussels in Wexford Harbour and has done so for over a century. In its essence, mussel fishing is the traditional activity of gathering mussels from areas on the seashore where they can be found. By the time of this litigation mussel farming had become a reasonably sophisticated operation involving the harvesting of mussel seed at sea, its transport to a favoured location, its deposit, and the subsequent collection, up to two years later, of grown mussels.

5 3 It is clear that the mussel business will not normally own the area where the mussels are grown; accordingly the legal basis for the industry is somewhat precarious. At a basic level, mussel farming is carried out, and was carried out in Wexford Harbour, on part of the foreshore, which is regulated pursuant to the Foreshore Act, 1933. The entitlement to farm mussels in any such location was dependent therefore on the grant of a foreshore licence, which was also the only vehicle for regulation by the State. However, in the late 1990s it was sought to regulate aquaculture businesses, including mussel farming, by the provisions of the Fisheries (Amendment) Act, 1997. Under the scheme created by that Act, an aquaculture licence was required for any aquaculture activity. Application for a licence was made to the Minister, with an appeal to the Aquaculture Licenses Appeals Board. The intention was, apparently, that existing operators would be licensed for the area which they had traditionally used, and that new applicants would be licensed on a case by case basis. At the time of the proceedings, the plaintiff company was in the process of applying for such licences in respect of the mussel beds in Wexford Harbour and it received a licence for areas other than beds designated 30A and 30D which are the subject matter of these proceedings. It was found by the trial judge, and plainly was the case, that in the normal course of events, the plaintiff company would have received an aquaculture licence in respect of the entirety of beds 30A and 30D as well, if it were not for the events which are the subject matter of this litigation. One further relevant area of regulation, is that created by the Molluscan Shellfish (Conservation of Stocks) Order 1987, S.I. No. 118 of 1987, which required a licence to move mussels and mussel seed within the State, or its territorial waters. This was the regulatory regime which affected the plaintiff company at the time of this litigation, and which set the legal context in which this case was debated. There was no exploration in this case as to whether the plaintiff company had any other rights as a matter of law.

6 4 In the late 1990s it was proposed to install a state of the art sewage treatment system to service the town of Wexford. A tertiary treatment plant was to be constructed, which would have the effect of greatly improving the water quality in Wexford Harbour. This was a development which ought to have been of great benefit to mussel fishermen, especially those such as the plaintiff company, which were involved in the export business, as once the treatment plant was operational, not only would the risk of contamination of the stocks be removed, but it would be possible to say that the mussels were reared in water with the highest water quality. The fact that instead of celebration the sewage treatment plant gave rise to 29 days of costly litigation and an award of €1.15 million against the State, and further cost involved in this appeal, is its own rather perverse tribute to the lack of coordination between and management in, the relevant State bodies.

7 5 The water treated by the effluent plant was to be discharged into the sea through an outflow pipe. That outflow pipe would be placed in the seabed, and the design of the system required the outflow pipe to emerge in the area of the mussel beds traditionally cultivated by the plaintiff. Since this was an area of the foreshore, a foreshore licence was required from the Minister for Communications, Marine and Natural Resources. As part of its application for such a licence, the Council was required to prepare an Environmental Impact Statement (EIS). That document noted that the precautionary principle required that an exclusion zone be established around the outflow, which it was anticipated could be reduced in due course when it was apparent that the outflow posed no threat to the mussel population in the adjoining area. A necessary consequence of this development therefore was that there would be a restriction on mussel cultivation on a permanent basis within a limited exclusion zone, and for a shorter period, within a wider area. It would normally follow that since this was a work of public utility being undertaken by a public body, any private interest affected should receive compensation for any loss occasioned by the development. The...