Communicated on 23 November 2016
FIFTH SECTION
Application no. 44460/16
O’SULLIVAN MC CARTHY MUSSEL DEVELOPMENT LTD
against Ireland
lodged on 25 July 2016
STATEMENT OF FACTS
The applicant, O’Sullivan McCarthy Mussel Development Ltd, is a company located in Co. Kerry, Ireland. It is represented before the Court by the firm of Philip O’Sullivan & Co., Tralee, Co. Kerry.
The circumstances of the case
The facts of the case, as submitted by the applicant company, may be summarised as follows.
The applicant company is engaged in the cultivation and sale of shellfish. It carries out its activities in Castlemaine harbour in Co. Kerry, where it has farmed mussels since the 1970s. One of the steps in this process is the gathering of mussel seed, which takes place over the summer period. The applicant’s activities are subject to obtaining the appropriate licences and permits from the relevant Minister – an aquaculture licence, a sea-fishing boat licence and a permit for transplanting mussel seed.
In 1993, the competent authorities published a notice in the national press announcing the intention to classify Castlemaine harbour as a special protection area (SPA) within the meaning of the domestic legislation implementing Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds (“the Birds Directive”). The notice indicated that it was not envisaged that this would change the usage of the harbour, including for shellfish culture. The harbour’s SPA classification took effect in 1994. The applicant company continued its activities each year, obtaining the necessary licences and permits without difficulty.
In 2000, Castlemaine harbour was designated a special area of conservation (SAC) within the meaning of the domestic legislation implementing Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (“the Habitats Directive”). As it was now subject to the two Directives, it was known as a “Natura 2000” site.
The European Commission considered that Ireland was not correctly implementing the Habitats Directive. Between 11 November 1998 and 18 April 2002, it issued four letters of formal notice relating inter alia to a failure to transpose and apply, fully and correctly, the Birds and Habitat Directives. Following three reasoned opinions issued by the Commission in October 2001 and July 2003, infringement proceedings were instituted against Ireland in September 2004. One aspect of the case concerned the authorization of aquaculture in protected areas without a prior assessment of the environmental impact of such activities. In its judgment in Case C‑418/04 Commission v. Ireland, [2007] ECR I-10947, delivered on 13 December 2007, the Court of Justice of the European Union (hereinafter “the CJEU”) found in favour of the Commission and held:
“235. As to the application of Article 6(3) and (4) of the Habitats Directive, the Commission relies on examples of aquaculture programmes and drainage work inside the Glen Lough SPA. It is, accordingly, appropriate to consider them in turn.
236. Firstly, regarding the aquaculture programmes, the Commission relies, essentially, on the Review of the Aquaculture Licensing System in Ireland carried out in 2000 by BirdWatch Ireland as the basis for its view that Ireland has systematically failed to carry out a proper assessment of those projects situated in SPAs or likely to have effects on SPAs, contrary to Article 6(3) and (4) of the Habitats Directive. In that context, it emphasises the importance of a prior assessment for the purpose of weighing the implications of a project with the conservation objectives fixed for the SPA concerned.
237. The Court notes that that study covered 271 authorisations for aquaculture programmes issued by the Department of Communications, Marine and Natural Resources during the period from June 1998 to December 1999 and 46 applications yet to be decided on. Moreover, 72 licences and nine pending applications concerned aquaculture programmes situated inside or near an SPA. The authorisations issued concern, in 84% of the activities authorised in SPAs, oyster and clam farms.
238. It should also be borne in mind that, under the first sentence of Article 6(3) of the Habitats Directive, any plan or project not directly connected with or necessary to the management of the site is to be made subject to an appropriate assessment of its implications for the site in view of the site’s conservation objectives if it cannot be excluded, on the basis of objective information, that it will have a significant effect on that site, either individually or in combination with other plans or projects (Case C‑127/02 Waddenvereniging and Vogelbeschermingsvereniging [2004] ECR I‑7405, paragraph 45).
239. The study carried out by BirdWatch Ireland refers to a number of potential negative effects of shellfish farming, including the loss of feeding areas and disturbances caused by increased human activity and states that, even when an aquaculture programme is inside an SPA, very little protection is provided for bird habitats. Ireland, for its part, does not allege that no aquaculture programmes have any effects on SPAs.
240. It follows that the authorisation procedure ought to have included an appropriate assessment of the implications of each specific project. It is clear that Ireland merely stated, without offering further explanation, that the Irish scheme for authorising mollusc farms, including the provisions on consultation, does in fact provide for detailed consideration of all aspects of an aquaculture development project before a decision is taken on authorisation.
241. Accordingly, the Court Ireland fails to ensure systematically that aquaculture programmes likely to have a significant effect on SPAs, either individually or in combination with other projects, are made subject to an appropriate prior assessment.
242. This finding is supported by the fact that Ireland has not put forward any specific scientific studies showing that a prior, detailed ornithological study was carried out, in order to challenge the failure to fulfil obligations alleged by the Commission.
243. Under Article 6(3) of the Habitats Directive, an appropriate assessment of the implications for the site concerned of the plan or project implies that, prior to its approval, all aspects of the plan or project which can, by themselves or in combination with other plans or projects, affect the site’s conservation objectives must be identified in the light of the best scientific knowledge in the field. The competent national authorities are to authorise an activity on the protected site only if they have made certain that it will not adversely affect the integrity of that site. That is the case where no reasonable scientific doubt remains as to the absence of such effects (see Waddenvereniging and Vogelbeschermingsvereniging, paragraph 61).”
Similar infringement proceedings were instituted against several other EU Member States, and the CJEU found similar violations of their EU obligations by The Netherlands, France, Finland, Italy, Spain, Greece and Portugal.
In response to the infringement decision of the CJEU, the Minister decided that, as regards Castlemaine, it was not legally possible to open the harbour for commercial activity. By virtue of Statutory Instrument No. 176/2008, which took effect on 9 June 2008, the harbour remained closed during the summer months of 2008. Given the difficulties that this created for the applicant company, and similar businesses located elsewhere in Ireland whose activities were also affected by the Minister’s decision, the Irish authorities entered into discussion with the European Commission to seek a solution to the situation. The outcome of these negotiations was that Castlemaine harbour was opened in early October 2008 until the end of the year. By that time, however, natural predators had decimated that year’s mussel seed. According to the applicant company, it is economically unviable to obtain mussel seed from other locations in Ireland, due to the high mortality of the seed and to transport costs. It is therefore wholly dependent on local resources. Since mussels need two years to mature, the closure of Castlemaine harbour in 2008 severely affected the applicant company’s profits for 2010. Not having had any reason to expect that its usual commercial activities would be restricted in 2008, the applicant company had just acquired a new boat at a cost of one million euros when the Minister decided that the harbour must remain closed. It would not have taken on such substantial expenditure at the time had it had any forewarning that it would be prevented from harvesting mussel seed that year.
In 2009 the harbour was opened for the first half of the month of May, allowing the applicant company to harvest mussel seed. It closed again until 15 September, when it was opened until 23 December 2009. The applicant company was able to conduct its business in the ordinary way that year. In 2010, the harbour was opened so as to allow the harvest of mussel seed (29 April-25 May), but the applicant company was not in a position to do so for reasons that are unconnected to the present application, which relates to the 2008 closure only.
Along with another local company, the applicant company instituted proceedings in the High Court in February 2009 against the Minister for Agriculture, Fisheries and Food. The plaintiff companies sought discovery of documents from the defence. This stage took three years to complete (October 2009 to October 2012), and involved a ruling from the Master of the High Court and appeal to the High Court on the issue. The hearing took place in November 2012. Judgment was given on 31 May 2013, in favour of the plaintiffs.
The High Court held that there had been a breach of legitimate expectation as well as negligence on the part of the Minister. Regarding the first ground, the judges stated:
“[T]here was a representation made to the plaintiffs in both the government notice and the newspaper notice of 1993. There was comfort given. What happened from then onwards, the annual allocation of seed collection authorisations and the constant refurbishing of the plaintiffs business gave rise to a pattern of events where the plaintiffs had good reason to rely upon the comfort given to them that there would not be a summary closure of their business without some good scientific reasons or without some consultation process before doing so.”
In his conclusion on this ground the judge held:
“I am satisfied that the plaintiffs had a legitimate expectation that fishing activities would carry on as before not alone based upon the 1993 newspaper notice but on the years of mutual dealings and interaction between the parties exemplified not least by the substantial investment in a boat not long before the closure.”
On the question of negligence, the judge referred to “operational negligence”, i.e. the failure of the authorities to carry out the necessary scientific tests or monitoring that would have provided the data required by EU law. The failure to undertake these steps was a mistake of law by the Minister, which led to the closure of the applicant company’s access to the harbor in 2008, causing financial loss. The judge accepted the expert evidence presented by the plaintiffs that it would have been possible to conduct the requisite analysis within two months. Had that been done, there would not have been any disruption of the plaintiff’s activities.
He stated:
“The State did not operate the regime in an orderly way which would have allowed harmony between environmental protection and the plaintiffs continuing with their business. The sequence of events points out what should have been a necessary state of knowledge on the part of the defendants, who nevertheless decided to sit on their hands and allow matters to carry on in what appears to be defiance of the clearly stated will of the European Court of Justice. Failure to comply with obligations with European law is relevant in flavouring the state of knowledge of what the parties understood as being their modus vivendi that came to a screeching halt in June 2008.
The Minister was negligent in failing to operate the protection of the environment in a balanced way which would allow for protection of the aquaculture business. This arose from a) failure to carry out investigations, b) inconsistency in the activities permitted and c) allowing the plaintiffs to spend huge sums of money on renewing their vessel. The result is a glaring lack of a structured approach. There is a requirement on the part of the decision maker, who has the controlling decision making in relation to the plaintiffs’ ability to earn their livelihood, not to make sudden, unmeasured, haphazard and arbitrary decisions; the process should be managed in an orderly way by regularly gathering information, so that all parties can organise their affairs in an appropriate way with minimum disruption.”
The High Court awarded damages of 275,000 euros to the applicant company.
The State appealed. The case was heard by the Supreme Court in April 2015, and judgment was given on 22 February 2016. The High Court’s ruling on legitimate expectation was overturned unanimously. Its finding on negligence was also rejected by a majority of three judges, two of whom gave judgment.
McMenamin J observed that strong policy considerations arose in the case. The question of how to afford redress to individuals who have suffered the detrimental effects of wrongful actions by the executive was a legitimate concern. Yet changes in the law of negligence and reformulations of State liability must be carefully and incrementally approached with a clear view as to their long-term consequences. He referred to the strong public interest in ensuring that government can actually function, and that administrators not be impeded in making decisions through fear of a morass of litigation. There must be clear lines of demarcation and principle in developing the law. The courts should not become a form of surrogate government, second guessing prima facie lawful government actions in areas of discretion that did not raise questions of exceeding statutory powers. He considered that there were several conceptual difficulties with the notion of operational negligence in connection with the acts of public bodies. Reviewing the relevant domestic case-law, he concluded that the concept had not been accepted in Irish law. He considered that the High Court had identified a tort with such broad headings lasting over so many years that it was questionable whether there was a justiciable controversy at all. It was impossible to say whether it was a tort of act or of omission. It was unclear at what point in time the Minister had acted wrongfully in relation to the plaintiffs.
He referred to the legislative complexity of the situation, which involved provisions of EU law, as well as primary and secondary domestic legislation, and to the complexity of the situation that the State faced in the aftermath of the ruling of the CJEU. It was not just and reasonable to impose liability in the circumstances of the case. He did not believe that the Minister had owed a duty of care to the plaintiffs in 2008. The Minister had been aware of their situation, but also of the situation of other businesses in other parts of the country which had been placed in the same predicament. It could not be said that the duty to the plaintiffs outweighed the duty to comply with EU law. Identifying the appropriate standard of care was problematic too. A further conceptual difficulty lay in the idea of imposing liability on the State for acts that were carried out by valid legal instruments for the purpose of implementing a legal duty. He was concerned that the reasoning of the High Court might intrude into the domain of the executive. The case concerned ministerial discretion exercised in particularly difficult circumstances. While the situation had been brought about by the Minister, it did not disclose an actionable wrong. The fallacy in the case was to seek to isolate some private duty owed to the plaintiffs by the Minister from his overarching public duty to comply with and implement EU environmental law.
Charleton J, concurring, noted that under Article 6 of the Habitats Directive, the Minister had no discretion at all. He underlined three salient facts. First, many of the sites designated under the Habitats and Birds Directives were, like Castlemaine harbour, places of commercial activity. Following the ruling of the CJEU, State officials had entered into discussions with the European Commission so that the companies concerned might be permitted to continue their business activities. Second, the State had not given a firm undertaking that the new environmental classification of Castlemaine harbour would not affect the applicant company’s activities. Third, the closing and opening of the harbour was done by valid statutory instruments. He considered that this excluded any question of liability for negligence. He then referred to the primary legislation governing fishing, the main objective of which was the conservation and rational management of the national fish reserves. This point was central to where any duty of care might lie. He recalled the principle of the separation of powers in the Constitution, noting the limits to judicial power where secondary legislation was concerned. For a court to hold that the policy behind a statutory instrument was negligent, or that such instrument became necessary because of the negligence of the State, would be going too far. Rather, it was established in case-law that secondary legislation must first be found to be invalid (e.g. as repugnant to the Constitution, or outside the scope of the relevant primary legislation) before any question of negligent policy could be examined. He then turned to the question of whether a duty of care was owed by the Minister to the applicant company, which must be the starting point in the tort analysis. There was a need for caution in holding that the public authorities owed a duty of care in particular circumstances, since it could greatly hinder their normal functioning. There were other means to deal with improper conduct by a public body, such as judicial review and the tort of misfeasance in public office. These implied that the authority had had a choice, which was not the case here since the Minister had acted as prescribed by EU law. The concept of operational negligence had not yet been accepted as part of Irish law. It would mean a lack of certainty in the law, and make public decision-making subsidiary to the views of experts at several removes from the pressures of government. It would mean arrogating broader functions to the courts than provided for in the Constitution. The tort of negligence had not submerged other relevant torts, notably that of misfeasance. However, one of the necessary elements of the latter tort – malice – was clearly not present in the case. The Minister had exercised powers based on statute and each decision had been correctly expressed through a statutory instrument. Given the general conservationist aims of the primary legislation, there was no statutory duty in favour of the applicant company. There was no discretion vested in the Minister to exempt any economic actor from EU rules. There was therefore no duty of care towards the applicant company that could found an action in negligence. Instead, the Minister’s duty to protect the environment was owed to the wider community.
He summed up his reasoning in the following way:
“38. ... 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, the first point of analysis must be the legislative matrix. It must be shown that these 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. In the context of discretion as to the allocation of resources or as to the order in which problems might be tackled, any argued for existence of a duty of care may, depending on the context, be inimical both to the wider duty owed within that statutory context to the community at large and also to the non-application of the law of negligence even where the decision maker acted beyond the powers conferred, unless that decision maker otherwise acted wrongfully by misfeasance in public office. This requires malice, in the sense of improper motive, or knowledge by the decision maker that the decision would be in excess of the delegated powers. Otherwise, public bodies may also commit recognised torts, including negligence. Here, 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 are 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, no discretion arose once Castlemaine Harbour had been declared an SPA and an SAC. Under the Habitats Directive, 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, 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. All this was done in good faith.
39. The analysis in this judgment precludes any award of damages from negligence based on an underlying policy which is expressed in the application of either primary or subordinate legislation to situations without that legislative justification being removed first of all through judicial review in the case of delegated legislative powers or by a declaration of constitutionality in the case of Acts of the Oireachtas.
40. There was no basis, in terms of the press statement relied on, as founding a legitimate expectation. 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.”
Writing for the minority, Clarke J considered that the High Court judgment should be upheld as regards the ground of negligence. He observed that it was not a routine case that fitted within well-established parameters, but one that required analysis of the boundaries of the law of negligence in order to determine whether liability could arise. This area of law was perhaps the most controversial across the common law world, he stated. He referred to the Article 6 case-law of this Court, citing the case of Osman v. United Kingdom (28 October 1998, Reports of Judgments and Decisions 1998‑VIII), which found a violation of the right of access to court, and the later case of Z. v. United Kingdom ([GC], no. 29392/95, ECHR 2001‑V) in which this Court revised its assessment of the situation. He commented that if the Irish authorities were to enjoy a form of immunity from suit, it might give rise to concerns about compliance with Article 6 of the Convention. Concerning the position of the State, he acknowledged the justification for not imposing a duty of care too readily on the public authorities, but warned about over-protecting the State. Not every act or omission of a public authority in the course of exercising public power could be properly characterised as involving the determination of policy, the exercise of a discretion or an adjudicative power. Some acts were purely administrative, and there would be less justification for excluding a duty of care in such circumstances. In order to guard against giving the State immunity or excessive protection, a court should carefully scrutinise any restriction on the liability of a public authority to ensure that it is justified and proportionate in light of the public interest at stake. The court should satisfy itself that there truly are countervailing public interest factors sufficient to provide a legitimate basis for excluding a duty of care which might otherwise arise. He considered that this approach was not a departure from the relevant Supreme Court case-law but rooted in it. He disagreed that this would mean that the tort of negligence would swamp other relevant torts, such as misfeasance in public office – the limits of those torts would likely be accepted as valid considerations for not finding a duty of care in a given set of circumstances.
Applying the principles he had described, the judge formulated the relevant question as follows:
“In the light of developments in European law, did the Minister owe a duty of care to those who, to his knowledge (and up to then with his permission), were carrying out activities in protected areas, to ensure that he had appropriate survey(s) and other scientific evidence available to enable a decision to be made for the purposes of considering whether to permit the continuance of traditional activities and, should appropriate evidence be found to be present, to allow those activities to be authorised?”
He considered that the test of foreseeability and proximity were met in the circumstances. To hold otherwise would be to afford the State a degree of immunity or exclusion that would not be afforded to a private party. As to the presence of any countervailing policy factor, he reiterated that the case did not concern matters of policy, discretion or adjudication. It was about the duty to take reasonable steps to ensure that the Minister would be in a proper position to make a decision under European law and any relevant Irish measures. The claim in this case did not require the Supreme Court to consider whether, and if so in what form, the concept of operational negligence was part of domestic law. Instead, it was sufficient to have regard to any countervailing considerations. He did not find any that would justify exonerating the Minister. There was no question of policy at stake here. The Minister had simply erred in thinking that pre-existing activities could be continued without an appropriate assessment of their impact on the environment. A similar failure by a private person in an analogous situation would likely lead a court to hold that there was a duty of care and that the person had failed to respect it. He continued:
“15.33 ...[I]t seems to me that the duty of care which I suggest should be held to lie on the Minister does not derive from any balancing exercise at all and does not involve any aspect of the undoubted over-arching public duty which the Minister was obliged to perform. Against what can it be said that the Minister was balancing when he decided not to assemble the necessary scientific information and data (despite the Commission’s reasoned opinion) prior to the decision of the ECJ? What over-arching public duty would have been in any way impaired by the collection of such data? There is no evidence to suggest that the failure to assemble the necessary data was based on any decision involving policy, discretion or adjudication.
15.34 Because, for the reasons already identified, I do not think it is either necessary or desirable in the context of this case to come to a concluded view as to whether operational negligence, in the sense in which that concept has developed in the courts of the United Kingdom, forms part of the law of tort in this jurisdiction, I will not use that term. However, it seems to me that it is possible for a state authority to be liable in respect of the tort of negligence when, in respect of a purely administrative part of its function not involving, to any material extent, questions of policy, discretion or the like, it is in breach of a duty of care in accordance with [the relevant domestic] principles to a person to whom that duty is owed. Where such negligence is alleged, the important countervailing factor which often operates to the exclusion of a duty of care in cases involving policy, discretion or adjudication will be missing, and will provide no sufficient and proportionate justification for the exclusion of a liability which might otherwise be said to arise in the event that the tests of forseeability and proximity were met.”
Finally, he did not accept that the applicant company’s business would have been interrupted anyway if the Habitats Directive had been correctly implemented, since it could not have continued without the necessary assessment being made. The evidence was that this could have been done in a manner that did not cause any cessation of the applicant company’s activities. There was thus a causal link between the failure to assemble the relevant data and conduct the assessment at an earlier point in time and the interruption of the applicant company’s activities in 2008.
COMPLAINTS
The applicant company complains under Article 6 of the Convention about the duration of the domestic proceedings. It further complains under Article 8 and Article 1 of Protocol No. 1 of the restrictions in 2008 on its right to earn a livelihood. Finally, it complains under Article 13 that there was no effective remedy in domestic law for its complaint relating to the restriction of its activities.
QUESTIONS TO THE PARTIES
1. Was the length of the proceedings in the present case in breach of the “reasonable time” requirement of Article 6 § 1 of the Convention?
The parties are asked to address in particular the period of time before the High Court gave judgment and the duration of the appellate stage of the proceedings.
2. In relation to the applicant company’s complaint of restrictions on its right to earn a livelihood, did it exhaust domestic remedies?
3. Has there been an interference with the applicant company’s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1?
If so, was that interference necessary to control the use of property in accordance with the general interest?
In particular, did that interference impose an excessive individual burden on the applicant company? In this regard, in the wake of the decision of the Court of Justice of the European Union in Case C-418/04, how many other companies engaged in the same activity as the applicant company were affected and for how long?
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