The Supreme Court has upheld the State’s negligence liability to O’Sullivan McCarthy Mussel Development Limited over its inability to harvest mussel seed in Castlemaine Harbour during the 2008 season. It sent the company’s damages claim back to the High Court for reassessment, limited to losses from that season.
In a judgment delivered by Clarke J. on 22 February 2016, the Court rejected the companies’ claim that the State had breached a legitimate expectation that traditional mussel-farming activities would continue. It also allowed the State’s appeal against liability to Cromane Seafoods Limited, which bought mussels from O’Sullivan McCarthy and claimed indirect losses.
The case arose after a European Court of Justice ruling required an appropriate environmental assessment before activities in protected areas could be authorised. Ireland had not assembled the scientific information needed for that assessment. Castlemaine Harbour was not opened for mussel-seed fishing during the normal 2008 season; when it opened in October, the season had passed and predators had damaged the stock.
Clarke J. concluded that the Minister had a duty of care to take reasonable steps to secure the information needed to assess whether the established activity could lawfully continue. He considered the duty narrow and administrative in nature, and found that the failure to gather data after the European Commission had challenged Ireland’s position breached it. The judgment records that the High Court had found that an assessment could have been completed in time to avoid an interruption, and that a later assessment enabled the activity to resume.
The Supreme Court excluded claimed losses for 2010. Although the harbour was open during the usual period that year, the evidence did not establish the precise legal reason O’Sullivan McCarthy could not operate or show that the Minister’s alleged failures caused its loss. The Court said the necessary causal link could not be assumed.
Cromane’s claim also failed. The judgment treated it as a separate company and a downstream purchaser from O’Sullivan McCarthy. Clarke J. concluded that its indirect commercial loss did not meet the required proximity test, despite the companies’ close business relationship and shared shareholders.
The High Court had awarded €125,000 to Cromane and €275,000 to O’Sullivan McCarthy. The Supreme Court set aside the damages calculation for O’Sullivan McCarthy because the evidence and figures did not allow a fair assessment on appeal. The High Court must reassess damages for O’Sullivan McCarthy’s 2008 losses only. The Court dismissed Cromane’s cross-appeal over the calculation.