The Supreme Court reduced compensation awarded to Lett & Company Ltd over restrictions on mussel farming in Wexford Harbour from €1.15 million to €650,000, while upholding the finding that the State had created a legitimate expectation that compensation would be provided.
In a judgment delivered on 3 February 2012, Mr Justice O’Donnell said the company had farmed mussels in the harbour for more than a century. A sewage treatment plant’s outflow pipe led to a 500-metre exclusion zone around mussel beds known as 30A and 30D. The Department had required Wexford Borough Council to make compensatory provision for any impact on adjoining mussel businesses as a condition of the foreshore licence. The licence also provided for compensation for proven loss of income under an agreement with fishermen.
No scientific survey, monitoring programme or compensation agreement was put in place. Lett’s application for licences covering the affected beds remained undecided while the 500-metre restriction operated. In June 2006, shortly before the High Court hearing, the Department reduced the exclusion zone to 50 metres and granted the company a licence for the remaining area.
The High Court found that the Department’s representation to fishermen and the licence terms had created a legitimate expectation of compensation. The Supreme Court agreed. The State argued that any compensation was to be paid by the Council, and that the licence excluded ministerial liability. O’Donnell said the court could provide a remedy for breach of a legitimate expectation, including damages, where needed to make good the equity. The Council’s position was not under appeal, so its potential liability was not for the Supreme Court to decide.
The High Court had assessed past and future losses at €1.15 million. On appeal, O’Donnell considered that figure too generous, particularly because it relied on the possibility that Lett would have increased mussel production in the absence of the restriction. The company’s output had not fallen after the exclusion zone was imposed, and its historical accounts showed losses in six of the seven years from 1997 to 2003. The judge described the projected lost profits as speculative.
O’Donnell substituted an award of €650,000. That sum retained the High Court’s €500,000 assessment for past loss and added compensation for future uncertainty or possible remediation. He said the amount was sufficient to meet the minimum equity of the case and the broader justice of the claim. The judgment also criticised the State bodies’ failure to establish a compensation scheme and manage the dispute, which led to a 29-day High Court hearing and the appeal.