Cromane Foods v Minister for Agriculture: Minister not negligent as Habitats Directive created no duty of care towards fishermen

2011-12-02-04-15-42-Liv-Mussels1-CIn this case, the Supreme Court held that:

firstly, a public body cannot be liable in negligence for exercising a statutory duty, where the legislation does not create a duty of care towards the claimant;

secondly, it cannot be liable in negligence based upon the policy it pursued in applying legislation, unless the claimant has brought successful judicial review proceedings impugning that policy; and,

thirdly, the High Court should not award damages to a company for a wrong perpetrated against a related company because both companies have shared directors.

Background

Cromane Seafoods Ltd and O’Sullivan McCarthy Mussel Developments Ltd are companies with a common shareholding. Since the 1970s, O’Sullivan is involved in the cultivation and harvesting of mussels in Castlemaine Harbour, which it sells exclusively to Cromane. In 1993, the National Parks announced that it was going to designate Castlemaine Harbour as a special protection area. Its notice in the Irish Times stated that: “It is not envisaged that designation will restrict the current usage pattern of these areas for activities such as fishing … or their use for shellfish culture”. In 1997 the Habitats Directive was transposed into Irish law. Subject to those regulations, Castlemaine Harbour was designated as a Special Area of Conservation (SAC). ECJ case law (2004 & 2007) on Article 6.3 of the Directive confirmed that activities within SACs are prohibited until an impact assessment proves that they will not cause harm.

Subsequent to its designation as an SAC, mussel cultivation and harvesting proceeded in Castlemaine Harbour without interruption. In 2008, O’Sullivan invested €1 million in a new vessel for mussel cultivation. However, subject to the ECJ decision in 2007, and because the Minister for Agriculture and Marine had not carried out the necessary environmental impact assessments, the Harbour was closed to mussel cultivation for most of 2008 to 2010. Cromane and O’Sullivan issued High Court proceedings against the Minister for Agriculture for negligence and breach of legitimate expectation. O’Sullivan was claiming for its loss of income from being unable to access the Harbour; Cromane was claiming for loss of profit due to O’Sullivan being unable to supply produce.

High Court

Hanna J (here) held that it would have been possible for the Minister to place himself in an informed position to balance the obligation to protect the environment within the Harbour while allowing the cultivation of mussels. Therefore he was negligent in not doing so. He awarded Cromane €125,000 and O’Sullivan €275,000.

The Minister appealed that decision.

Supreme Court

The Court split 3 – 2. Clarke J wrote the dissenting judgment (here). He asked:

Why, without good reason and the presence of an appropriate countervailing factor, should public authorities not be liable for the consequences of their actions in exactly the same way as anyone else? [14.5]. …

The real question on the duty of care, therefore, comes down to this. 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? [15.4].

He would have upheld the High Court decision that the Minister was liability for negligence against O’Sullivan, but he would have allowed the rest of the appeal. Laffoy J concurred with Clarke.

Writing for the majority though (here), Charleton J stated that any analysis of liability for negligence begins with the question of whether there is a duty of care. He held that, where the relationship between parties is governed by statutory powers, the analysis begins with 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.

Charleton J allowed the Minister’s appeal. MacMenamin J wrote a concurring judgment (here) and Dunne J concurred with Charleton.

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