The Supreme Court allowed the State’s appeal against a High Court judgment that had awarded a total of €400,000 to two companies over restrictions on mussel cultivation in Castlemaine Harbour, County Kerry. The appeal concerned damages for negligence and alleged legitimate expectation; the Supreme Court held there was no basis for the awards.
The plaintiffs were Cromane Seafoods Limited and O’Sullivan McCarthy Mussel Development Limited. The latter held the relevant aquaculture licence and permissions for mussel cultivation in the harbour. The High Court had awarded it €275,000 and Cromane Seafoods €125,000. The Supreme Court judgment delivered by Mr Justice Charleton said the first company bought seafood and exported it, but had no direct role in dredging, transplanting, nurturing or harvesting mussels there.
The litigation arose after Castlemaine Harbour was designated both a special protection area and a candidate special area of conservation. Under the applicable European rules, non-conservation activity could proceed only after an appropriate assessment established that it would not adversely affect the protected site. The court noted that mussel-fishery openings and closures were made through statutory instruments. Fishing in the harbour was permitted during specified periods in 2008, 2009 and 2010, amid restrictions linked to the protected-site rules.
The High Court had found the State negligent in its handling of the fishery, including delays in reopening it and in carrying out environmental studies. The companies argued on appeal that the State’s approach undermined their business. The State argued that the closures and openings were made under legislation and that negligence damages could not be awarded without first invalidating the relevant statutory instruments.
Charleton J said a negligence claim must begin by establishing a duty of care. In this case, the fisheries legislation was directed to conservation, sustainable exploitation and rational management of fish stocks, and did not create a duty of care in favour of the companies. The judgment also said the European rules left no discretion to permit economic activity in a protected area unless the required environmental certainty had been established. The limited openings achieved, it said, followed negotiations with the European Commission.
The court rejected the claim that State statements created a legitimate expectation that the harbour would remain open. It also held that the first company could not recover damages based on losses said to have flowed from the second company’s difficulties, including because the companies shared directors. The judgment stated that damages based on policy expressed through legislation could not be awarded without first having the relevant legislation removed or invalidated through the appropriate legal process.