The Supreme Court allowed sheep farmer Brendan Rafferty’s appeal over compensation for the compulsory cull of his flock during the 2001 foot-and-mouth outbreak on the Cooley Peninsula, County Louth. It declared that compensation under the Diseases of Animals Act 1966 could cover financial loss and damage, including consequential loss linked to the cull, and remitted the matter to the High Court to assess his total loss.
The judgment, delivered by Chief Justice Susan Denham on 7 November 2014, concerned the meaning of “compensation” in section 17(2) of the Act. Rafferty’s sheep were not infected but were culled to prevent the disease spreading. He had received compensation for the animals, but argued that it fell short of the losses his farming business sustained.
The High Court had dismissed his action in 2008. It found that the compensation paid exceeded the sheep’s strict market value, while also accepting that Rafferty had suffered losses beyond market value. It rejected his claim that the Act required compensation for consequential losses and held that the compensation scheme was not unjust or unconstitutional. Rafferty appealed. The respondents also cross-appealed the High Court’s decision to make no order as to costs.
The Supreme Court judgment said the Act and the 1956 Foot-and-Mouth Disease Order did not define compensation or set clear limits on it. Section 17 required the Minister to pay compensation for animals slaughtered under the provision, while the Order provided for an appointed person to value them. The Court said the statutory term was ambiguous and capable of a broader meaning than the market-value interpretation adopted by the High Court.
The judgment stated that, in principle, a person deprived of property by the State is entitled to compensation for the total resulting loss, including consequential loss. A restriction may be permissible for legitimate reasons, subject to strict scrutiny and proportionality. The Court said no such exception arose for consideration in this case.
The order did not set a damages amount. The High Court must assess Rafferty’s total loss, taking account of the compensation already paid, any amount established to have exceeded market value, and his duty to mitigate loss. The judgment explained that the assessment must consider the business consequences of a sudden loss of stock and the need to restock and resume operations.
The judgment also noted that the Animal Health and Welfare Act 2013 had since replaced the 1966 Act, but said the newer provisions applied prospectively and did not govern this appeal.