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You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Minister for Communications Marine and Natural Resources -v- Figary Water Sports Development Company Ltd [2015] IESC 74 (30 July 2015) URL: http://www.bailii.org/ie/cases/IESC/2015/S74.html Cite as: [2015] IESC 74 |
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Judgment
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THE SUPREME COURT [Appeal No. 290/2012] Clarke J. Laffoy J. Charleton J. BETWEEN THE MINISTER FOR COMMUNICATIONS, MARINE AND NATURAL RESOURCES APPELLANT AND
FIGARY WATER SPORTS DEVELOPMENT COMPANY LIMITED RESPONDENT Judgment of Ms. Justice Laffoy delivered on 30th day of July, 2015 A - Introduction Background to appeal 1. The High Court proceedings which are the subject of this appeal, in which the appellant (the Minister) was plaintiff and the respondent (Figary) was defendant, were commenced by plenary summons which issued on 10th October, 2005. As initiated, the objective of the proceedings was to enforce Figary’s obligations as lessee under a foreshore lease granted by the Minister, as lessor, in exercise of the power vested in him by s. 2 of the Foreshore Act 1933 (the Act of 1933) or, alternatively, to obtain possession of the foreshore the subject of that lease. In its defence and counterclaim delivered on 26th April, 2006 in the High Court proceedings, Figary opposed the claims of the Minister either to enforce the lease against Figary or, alternatively seeking possession. In addition, Figary counterclaimed for -
(b) damages for alleged breach of covenant and breach of contract and misrepresentation by the Minister; and (c) damages for alleged breach of statutory duty.
(b) the respective rights and obligations of the parties under a grant application made by Figary for funding under the European Structural Funds 2000 - 2006, in particular, under Interreg IIIA Programme for Ireland and Northern Ireland 2000 - 2006 (the Interreg IIIA Programme) in aid of a project which involved the development by way of expansion of a marina on the foreshore the subject of the foreshore lease at Fahan, County Donegal (the Marina), in respect of which the Minister’s Department had the role of implementing agent under a very complex scheme structure for the regulation and administration of the Interreg IIIA Programme.
(i) for enforcement of Figary’s obligations under the foreshore lease, that the Minister is entitled to judgment in the sum of €226,847.77 against Figary, and (ii) for possession, that Figary is entitled to relief against forfeiture of the foreshore lease subject to terms and conditions imposed on Figary; (b) in relation to Figary’s counterclaim for damages, that Figary is entitled to judgment in the sum of €2,045,000 against the Minister, representing damages for breach of statutory duty in relation to the grant application; and (c) in relation to costs - (i) that Figary pay the Minister’s costs of the claim measured at 4 days of hearing, and (ii) that the Minister pay Figary’s costs of the counterclaim.
(b) appealed against the granting of judgment to Figary on its counterclaim in the sum of €2,045,000 and sought instead an order dismissing the counterclaim, and (c) appealed against the award of four day’s costs of the proceedings in the High Court as against the Minister and sought instead an order awarding all costs to the Minister. 5. A significant feature of the appeal which it is important to stress even at the outset is that, consequent apparently on a deliberate decision to that effect, there was no cross-appeal or notice to vary served on behalf of Figary in relation to various issues which arose on the claim and on the counterclaim and which were determined in a manner favourable to the Minister and unfavourable to Figary. Accordingly, in broad terms, what this Court is concerned with on the appeal in relation to the issues arising from the landlord and tenant relationship of the Minister and Figary is whether the Minister is entitled to possession of the foreshore demised to Figary, rather than the relief in relation to the demised foreshore in the form of conditionality attached to Figary’s entitlement to relief against forfeiture which was given in the High Court, which will be outlined in detail later. In relation to Figary’s counterclaim in respect of the grant application under the Interreg IIIA Programme, the Court has to decide whether the Minister is liable for the wrong alleged and, if so, the appropriate quantum of damages. 6. It is suggested that each of the parties has shifted position in the course of the judicial process. 7. That is certainly true in the case of the Minister. The relief he sought in the plenary summons and in the statement of claim was primarily injunctive relief. For instance, the first relief sought by the Minister was a mandatory order directing Figary to take all steps and do all things forthwith for the purposes of constructing and completing the Marina upon the demised premises. The third relief sought was an order directing Figary to pay and discharge all arrears of rent which had accrued due to the Minister. It was only at item 14 in the prayer for relief that the Minister sought possession in the following terms:
9. The alleged breach of statutory duty as particularised (albeit in a most generalised manner) in the counterclaim which remains an issue is based on the contention that the Minister -
11. Even though some of the issues which arose in the High Court do not have to be addressed on the appeal, there remains an element of overlap between the remaining issues on the claim and the counterclaim. Nonetheless, I am satisfied that it is possible to address all of those issues under two headings, namely:
(b) the grant application under the Interreg IIIA Programme, which, while giving rise to a separate and distinct claim by Figary against the Minister, cannot be wholly divorced from the landlord and tenant relationship. B. - Landlord and Tenant Relationship Core factual issues 12. The history of the landlord and tenant relationship between the Minister and Figary is comprehensively outlined in the First Judgment. Therefore, it is only necessary to outline the core factual circumstances which are likely to inform the decision on the appeal. 13. The landlord and tenant relationship was created by a lease dated 26th April, 1993 made between the Minister (then the Minister for the Marine) of the one part and Figary of the other part (the Foreshore Lease), which created a demise of part of the foreshore situate in the Townland of Fahan, Barony of Inishowen West and County of Donegal comprising ten hectares, as depicted on the map annexed thereto for the term of ninety nine years from the 1st January, 1993 at the yearly rent specified, which was subject to remission during the first five years and was subject to review at five yearly intervals thereafter, and which was also subject to the covenants and conditions therein contained. Despite what has transpired over the last two decades Figary remains in possession of the foreshore demised by the Foreshore Lease. The relevant provisions of the Foreshore Lease and, in particular, the covenants on the part of Figary, qua lessee, are outlined in detail in the First Judgment. Probably the most important obligation imposed on Figary in the lessee’s covenants was the obligation to construct a marina on the demised premises in accordance with the terms and conditions set out in the second schedule to the Foreshore Lease. Those terms and conditions, which were headed “Technical Specifications”, were to some extent very general in terms. However, it was provided that the structure comprising the marina was to be erected on the foreshore in conformity with plans and drawings to be submitted and approved by the Minister and it was stipulated that Figary would provide the Minister with certain information, for example, detailed cross-sections of the breakwater. It was also provided that Figary was required to submit technical specification of the proposed works for the approval of the Minister prior to the commencement of the development. There followed some detail in relation to sanitary facilities, litter and pump out facilities. There were also general provisions in relation to the provision of safe navigational access to and from the marina. 14. As is pointed out in the First Judgment (at para. 8), despite the terms of the Foreshore Lease, no work was carried out on the project prior to 1998. In the first half of 1998 there was some interaction between the then Minister and the representatives of Figary, which did not resolve the differences between the parties. Eventually, on 12th June, 1998, the Chief State Solicitor, on behalf of the Minister, served a forfeiture notice under s. 14 of the Conveyancing Act 1881 (the Act of 1881) on Figary. The forfeiture notice recited many of the covenants on the part of Figary contained in the Foreshore Lease. It also recorded the proviso for forfeiture contained in the Foreshore Lease to the effect that, if the rent or any part thereof should be unpaid for twenty one days after the same should become due (whether demanded or not), or in the event of any breach or non-performance of any of the covenants or conditions therein contained and on the part of Figary to be observed and performed, then the term thereby created should cease and determine and the Minister might re-enter into and upon the demised premises and repossess the same without prejudice to any remedy of the Minister under any covenant by the lessee contained in the Foreshore Lease. Of course, it was recognised that, as a matter of law, the proviso for forfeiture was subject to the provisions of s. 14(1) of the Act of 1881 and was not enforceable for breach of covenant, other than the covenant to pay rent, unless and until the Minister served a forfeiture notice on Figary specifying the particular breach complained of and, if the breach was capable of remedy, requiring Figary to remedy the breach, and, in any case requiring Figary to make compensation in money for the breach. Accordingly, the forfeiture notice then set out the various breaches alleged on the part of Figary: non-payment of rent, the total arrears at the time being IR£72,000; failure to construct the marina in accordance with the terms and conditions set out in the second schedule to the Foreshore Lease; failure to obtain prior consent for the excavation, removal and stockpiling of beach material and to comply with prohibitory notices which had been served by the Minister upon Figary pursuant to s. 7 of the Act of 1933, as amended; breach in relation to the construction of a breakwater and the excavation of beach materials; failure to procure a bond; certain alleged breaches of the planning code; and failure to keep the demised premises in good and proper state of repair and free from all defects injurious to navigation or the adjacent land or public interest. 15. Matters between the parties seem to have stalled thereafter, with little progress of consequence until 2000. There was further interaction between the parties in the first half of 2000, which is outlined in the First Judgment. It culminated in a number of letters between the Minister’s Department and Michael Galbraith Associates (Galbraith), the architects and surveyors retained by Figary. The chronological sequence of the correspondence was as follows:
(a) the acceptance and clearance of the design and specifications of the marina and of a schedule of works which were to be agreed between the Minister’s Department and the engineering consultants to the project, namely, Ove Arup Engineering Consultants (Arup), within the following seven days; (b) the provision of a performance bond of suitable duration specifying the cover of all of the works set out in the schedule of works to be agreed; (c) the provision within seven days of confirmation by the engineering consultants to the project that all of the works set out in the schedule would be carried out under their direction and supervision and in accordance with the design and specifications to be agreed; and (d) that in the event of an agreement not being reached between Arup and the Minister’s Department within seven days all works on the site should be suspended and would not re-commence until such agreement was reached. The letter then stated: “Subject to receipt of the above written confirmation the Department will affirm in writing that the lease is active.” (ii) In Galbraith’s response of the same day, 19th May, 2000, which it would seem was sent by facsimile transmission, Galbraith confirmed on behalf of their client, Figary, its acceptance of the four conditions contained in the Department’s letter. The Department was asked to confirm by return its authorisation for the work on site forthwith and affirmation that the Foreshore Lease was active. (iii) The Minister’s Department on the same day responded to Galbraith’s response referred to at (ii) and to Figary’s acceptance of the conditions in the Department’s letter referred to at (i) above. It was then stated: “On foot of this undertaking, your clients are hereby authorised to commence works on the site forthwith. As indicated in the concluding paragraph of my letter, the Department confirms that the lease is active. 16. The project was then embarked on by Figary and the marina was constructed. As is recorded in the First Judgment (at para. 39), in September 2002 the Marina at Fahan was opened and became operational, although, at that stage, it was still only partially complete. Throughout 2001 and 2002 there was ongoing acrimony between the Minister and Figary, mainly in relation to how dredge sand, which the Minister alleged had been dumped on the foreshore, was to be treated. In that period and in 2003, as is recorded in the First Judgment (at para. 41), the Minister continued to have concerns about the operation of the Marina and the failure by Figary to comply with its obligations under the Foreshore Lease, for example, the obligation to pay rent. The interaction between the Minister’s Department and Figary, mainly in correspondence, through those years and into 2004 and 2005 is comprehensively outlined in the First Judgment. By late 2005 another issue had arisen between the parties, in that an official of the engineering section of the Minister’s Department had carried out a survey of the development and had discovered that Figary had extended beyond the demised premises and had encroached on foreshore and had, effectively, trespassed on State foreshore. That situation still persisted when the matter was before the High Court. As has been stated at the outset, the proceedings were initiated in October 2005. Outline of findings in the First Judgment on the landlord and tenant relationship issues/relevant grounds of appeal.
19. In summary, the grounds on which the Minister appealed the decision of the trial judge on the forfeiture issue were that -
(b) he erred in fact and/or law in concluding that the forfeiture notice had been abandoned by agreement, either express or to be inferred; (c) he erred on the facts in holding that the Minister had continually sought to rely upon the terms of the Foreshore Lease after service of the forfeiture notice and that, accordingly, it could be inferred that there was some agreement between the parties that the Foreshore Lease, and the covenants therein contained, continue to be active; (d) he erred in law and on the facts in construing that the contents of the letter dated 19th May, 2000 from the Minister meant that Figary’s acceptance of the conditions stipulated in that letter, as opposed to its compliance with the said conditions, constituted an agreement pursuant to which the forfeiture notice was abandoned and the Foreshore Lease treated as being active and in force from that point on; and (e) he erred in determining that the forfeiture had been waived without taking any proper account of the evidence of the Minister to the effect that any reinstatement of the Foreshore Lease, if accepted, was conditional on Figary meeting the conditions set out in the first letter of 19th May, 2000, which conditions were never met.
(b) Figary had not completed the works required to be carried out under the terms of the Foreshore Lease; and (c) Figary had carried out works on the site without any permission of the Minister to do so, as required under the terms of the Foreshore Lease. 21. The counterclaim by Figary against the Minister for damages for breach of contract and breach of covenant arose out of the parties’ landlord and tenant relationship. The ultimate outcome of this aspect of the counterclaim was that the trial judge found that the Minister was not liable in damages to Figary for any of the alleged breaches. However, the Minister has appealed certain findings of the trial judge and those findings and the relevant grounds of appeal will be considered insofar as it is necessary to do so after the issues in relation to forfeiture and relief against forfeiture and the Minister’s claim for possession under s. 52 of Deasy’s Act have been addressed. 22. The first issue which arises for consideration by this Court in relation to the landlord and tenant relationship is whether the forfeiture notice was waived or abandoned. Status of forfeiture notice when proceedings initiated and consequences 24. It is important in this context to emphasise that the finding and the remarks of the trial judge in relation to the forfeiture notice related to a right of re-entry or forfeiture which was governed by, and subject to the restrictions stipulated, in s. 14 of the Act of 1881. Accordingly, it related to a right of re-entry or forfeiture under the forfeiture proviso in the Foreshore Lease for breach of covenant, other than non-payment of rent. By virtue of subs. (8) of s. 14 that section does not affect the law relating to re-entry or forfeiture or relief in the case of non-payment of rent. What compliance with subs. (1) of s. 14 does is to give the lessor the right to enforce, by action or otherwise, the right of re-entry or forfeiture. Accordingly, as was remarked by the trial judge, the Minister within a reasonable time after Figary failed to remedy the breaches of the covenants in the Foreshore Lease could have enforced the right of re-entry or forfeiture by action or otherwise. Of course, had the Minister done so, Figary would have been entitled to claim relief against forfeiture under subs. (2) of s. 14. 25. In outlining the legal position which prevails following compliance with the requirements of s. 14(1) of the Act of 1881, the trial judge stated (at para. 111):
26. Counsel for the Minister were correct in emphasising the distinction between the entitlement of a lessor to bring a lease to an end in reliance upon the lessee’s non-compliance with a valid forfeiture notice, on the one hand, and forfeiture itself, on the other hand. That was recognised by the trial judge in the passage from his judgment quoted in the next preceding paragraph and, in particular, his reference to the decision of the High Court (O’Hanlon J.) in Bank of Ireland v. Lady Lisa Ireland Limited. 27. What counsel for the Minister did not allude to, however, is that it is well settled law that a lessor, in electing to determine the lease for forfeiture, must do so unequivocally. In Bank of Ireland v. Lady Lisa Ireland Limited (at p. 408), O’Hanlon J. quoted what he referred to as the statement of the law in modern times to that effect from Halsbury, Laws of England, 4th Ed., Volume 27 at para. 428. In that same paragraph, the editors of Halsbury made it clear that, if the writ for possession contains an unequivocal demand for possession, the service of the writ operates as a final election to determine the term, whether judgment is obtained or not. The decision of the English High Court (Buckley J.) in Calabar Properties Ltd. v. Seagull Autos Ltd. [1968] 1 All E.R. 1 was cited in Halsbury as authority for the proposition that where the writ contains a claim for a permanent injunction, it is not an unequivocal election by the landlord to determine the lease on the grounds of forfeiture, following an earlier decision in Moore v. Ullcoates Mining Co. Ltd. [1908] 1 Ch 575. O’Hanlon J. also followed that latter decision in Bank of Ireland v. Lady Lisa Ireland Ltd., although not in the context in which it was considered by Buckley J., namely, whether the writ was “an unequivocal claim for possession”. In the case before Buckley J., the plaintiffs had issued a writ claiming possession of premises. They also claimed, without prejudice to the foregoing, injunctions restraining the defendants from doing certain acts, which apparently would have been in breach of covenants in the lease. The plaintiffs then moved for injunctions pending the trial. On the defendants’ objection that, as the plaintiffs were claiming possession, they were not at the same time entitled to relief on the footing that the lease still subsisted, Buckley J. stated (at p.5):
30. The core issue on this aspect of the appeal is whether the Minister’s contention that the trial judge erred in finding that the forfeiture notice had been abandoned by agreement, either express or to be inferred, and that the Foreshore Lease was treated as being active and in force from 19th May, 2000 onwards was correct. It was submitted on behalf of the Minister that the correspondence of 19th May, 2000 must be considered in the context of the wider factual matrix that then existed between the parties and the evidence which was before the High Court. It was submitted that a proper analysis of what occurred leads to the conclusion that the Minister intended, and Figary agreed, that it would assume an obligation to actually perform all of the four conditions set out in the Department’s first letter of 19th May, 2000 as a condition precedent to the Foreshore Lease being revived. It was further submitted that the evidence before the Court established that no real effort was made by Figary to comply with those conditions. Counsel for the Minister relied on evidence adduced in the High Court in support of that contention. 31. Counsel for Figary submitted that the construction of the Department’s first letter of 19th May, 2000 contended for by the Minister was contradicted by its plain terms. Further, counsel for Figary reminded the Court of its limited jurisdiction in relation to findings of fact made and inferences drawn from evidence at first instance, as outlined in the judgment of McCarthy J. in Hay v. O’Grady [1992] 1 I.R. 210 (at pp. 217 - 218). 32. The judgment of Andrews L.J. in McIlvenny v. McKeever referred to earlier contains a useful summary of how the defence of waiver operates in answer to a claim for possession of demised property on the basis that the lease has been forfeited, although the facts underlying the issue in that case are totally dissimilar to the facts underlying the defence of Figary that the forfeiture notice in this case has been abandoned or waived. Andrews L.J. stated (at p. 172):
34. Even though the first letter of 19th May, 2000 from the Minister’s Department made no reference to the forfeiture notice, it seems to me that it is implicit in it that the forfeiture notice was being overridden, given that the actual notice given by the Minister in the forfeiture notice was that, unless the breaches of covenant itemised in the forfeiture notice which were capable of remedy were remedied within a reasonable time of service of the notice and compensation paid to the Minister, the Minister would exercise his right of re-entry and forfeit the Foreshore Lease. The first letter of 19th May, 2000 authorised Figary to commence works on the demised foreshore forthwith subject to immediate written confirmation by it of acceptance of the four conditions set out in the letter. It defies reason and credibility that it could have been the understanding of the Minister and his agents that Figary would undertake the obligations to be imposed by the four conditions stipulated, not to mention incurring the expenditure involved in commencing and implementing the works on the demised foreshore, if the forfeiture notice was to remain in place and was to hang over Figary “like a sword of Damocles”, as an official of the Minister’s Department testified in the High Court. The acceptance by Figary of the four conditions stipulated by the Minister was immediately confirmed by Galbraith and immediately thereafter the Minister’s Department reiterated that, on foot of that undertaking, Figary was authorised to commence works on the site forthwith and it was confirmed that the Foreshore Lease was active. The only sensible interpretation of the statement that the Foreshore Lease was active is that it was not at risk of forfeiture in the future in consequence of any previous breach of covenant by Figary, which had been the subject of the forfeiture notice, whether continuing or otherwise. 35. This is not a case in which the Court was asked to infer from the conduct of the parties that the forfeiture notice had been waived or abandoned, nor is it a case in which the Court is required to consider whether a continuing breach of covenant, for example a breach of covenant which is not remedied, would keep alive a forfeiture notice, notwithstanding acceptance of rent by the lessor. This is a case in which on 19th May, 2000 both the Minister and Figary committed in writing to new terms in relation to what counsel for the Minister correctly recognised as the dominant purpose of the Foreshore Lease, that is to say, the construction and operation on the demised foreshore of a marina. In so doing, the Minister recognised, through his authorised agent in writing, that the Foreshore Lease was “active”, which can only mean that it had not been determined and it was not at risk of being determined in consequence of past events. That does not mean, of course, that circumstances could not arise in the future which would give rise to an entitlement on the part of the Minister to invoke the proviso for forfeiture in the Foreshore Lease in the event of a breach of covenant by Figary. However, in such circumstances, the Minister would be required by subs. (1) of s. 14 to serve a new forfeiture notice on Figary, which complied with the requirements of that sub-section. 36. Having regard to the foregoing, I have no doubt that, as and from 19th May, 2000, the forfeiture notice had ceased to affect the landlord and tenant relationship of the Minister and Figary and that the trial judge was correct in finding that the Minister could not rely on it to seek to determine the Foreshore Lease by forfeiture and obtain possession of the demised foreshore as the Minister, relying on what was very much a “fallback” position in these proceedings as initiated in October 2005, subsequently sought to do. Accordingly, I am satisfied that, in consequence, the Minister was not entitled to an order for possession on the basis that the Foreshore Lease had been forfeited when the proceedings were initiated, nor is he entitled to an order for possession on that basis now. 37. On the basis of the conclusions that the forfeiture notice ceased to have effect in May 2000 and that the Foreshore Lease has not been determined by forfeiture on foot of the forfeiture notice, the question whether Figary is entitled to relief against forfeiture under s. 14(2) of the Act of 1881 does not arise. However, as has been noted, the trial judge did indicate that, even if it could not be held that the forfeiture notice ceased to have effect, he would have been disposed to grant relief against forfeiture having regard to general equitable principles. Before considering the plaintiff’s claim under s. 52 of Deasy’s Act, it is convenient to set out in summary form the terms upon which in the Second Judgment the trial judge considered it appropriate that Figary should be granted relief against forfeiture. Those terms, as set out at para. 79 and reiterated at para. 101(3), were as follows:
(b) that Figary provide an updated Schedule of Works and detailed drawings, plans and technical specifications with regard to the breakwaters and the marina facilities, all by reference, inter alia, to a new clause to be inserted in the lease, the text of which is set in para. 70 of the Second Judgment; (c) that Figary would retain Consulting Engineers of suitable speciality and skill, such as Arup, at whose direction and under whose supervision the remaining works necessary to fully complete the marina were to be carried out; and, (d) that Figary would apply and lay out the sum of €1,545,000 awarded to it on the counterclaim, the quantification of which will be explained later, or its equivalent, solely and exclusively in satisfactorily completing the Marina in accordance with the parties' contractual relationship with each other. Claim for order for possession under Section 52 of Deasy’s Act
(b) that the Minister was entitled to possession pursuant to s. 52 of Deasy’s Act.
39. The build up of the calculation of the sum of €212,909.65 referred to in paras. 79 and 101(3) of the Second Judgment is to be found in para. 58 of the Second Judgment, where it is set out in tabular format. Based on a portion of a table, which had been submitted on behalf of the Minister, it is clear that the figure of €212,909.65 was calculated on the following bases:
(b) that of the amount payable over that period, a balance of €161,038.71 remained outstanding, the remainder of the rent payable from 1st January, 1999 having been paid by Figary to the Minister prior to the commencement of the hearing in the High Court in 2009; and (c) that the additional amount of €51,870.94 represented interest at the rate of 8% per annum, that is to say, at the statutory court rate, on payments outstanding over that period, having given credit for the payments made. 41. As I understand the position, although Figary has retained possession of the foreshore demised by the Foreshore Lease, it has paid no rent to the Minister since the determination of the proceedings in the High Court. On the basis of the tables furnished to this Court, there is due to the Minister in respect of arrears of rent up to and including 1st January, 2014 the sum of €229,604.64. This Court was informed that simple interest calculated at 8% per annum on the cumulative amount outstanding comes to €98,670.65. Accordingly, the sum due for rent under the Foreshore Lease and interest thereon, as calculated in the same manner as the figure of €212,909.65 was arrived at in the Second Judgment, is €328,275.29 based on arrears due at 1st January, 2014. As that calculation obviously requires to be updated, on the same basis, but for illustrative purposes only, I calculate the amount due as at 1st January, 2015 at €369,498.95, made up of -
(b) the sum of €117,039.02 in respect of interest at the statutory court rate of 8% on the said arrears.
(b) if so, the application of the doctrine to the position of Figary in this case, given the conclusion that the issue of statutory relief against forfeiture under s. 14(2) of the Act of 1881 does not arise. 44. Section 52 of Deasy’s Act provides for a special action for ejectment for non-payment of rent whenever a year’s rent shall be in arrear. In Deale on The Law of Landlord and Tenant in Ireland, it is pointed out (at p. 262) that “non-payment of rent” in s. 14(8) of the Act of 1881 means the contractual right to forfeit for failure to pay rent, and not the right to eject for non-payment of rent under Deasy’s Act, section 52. 45. Wylie deals with proceedings under s. 52 in Chapter 27 (op. cit.) in some detail. He observes (at para. 27.19) that an ejectment for non-payment of rent is primarily a proceeding to enforce payment of rent under a tenancy which still exists, but with the possibility that an order for possession will be made, if the rent is not forthcoming. At para. 27.31 he deals with s. 60 of Deasy’s Act, which provides that the proceedings are stayed, if the defendant pays the amount of rent claimed plus costs, to the plaintiff or his agent within ten days from the service of the proceedings. He points out that apart from that, at any time before service of notice of trial or judgment, the defendant can pay the sum for rent into court, with an undertaking to pay costs, and thereafter the plaintiff proceeds “at his peril” (s. 62 of Deasy’s Act). Wylie also points out (at para. 27.32) that, even where judgment has been given against the defendant, he may obtain a stay of execution by tendering at any time before execution the rent stated as due in the decree, plus costs and any expenses incurred towards execution. Wylie deals with ss. 70 and 71 of Deasy’s Act in paras. 27.33 to 27.38. The effect of those provisions is that the tenant may obtain “restitution”, i.e. an order restoring him to possession of the demised premises, if he tenders or lodges in court the arrears of rent, plus full costs, within six months after execution of the order for possession granted to the landlord. It is pointed out that the application should be made to the Court which made the order for possession. 46. Under the heading “Equitable Relief”, Wylie states (at para. 27.37) that, according to s. 71 of Deasy’s Act, the Court hearing the application may “give such relief therein as a court of equity might have done”. He observes that it seems clear, therefore, that the Court should exercise its discretion on usual equitable principles for giving relief against forfeiture and he refers to his earlier commentary (at para. 24.20). He goes on to state that, thus, the conduct of the parties may be relevant, e.g. the landlord’s refusal of a tender of rent, which necessitated an application for relief, may result in him being deprived of his costs. He also states that the form of order is usually that the tenant is to be restored to possession on the basis that he accounts to the landlord for the rent and costs and the landlord accounts for any profits he has made during his interim possession following execution of the original order for possession. Once made, the order for restitution is final. 47. Deale (op. cit) (at p. 260) emphasises that a proviso for re-entry if rent is unpaid should not be confused with the statutory right to eject for non-payment of rent which is a year or more in arrear contained in Deasy’s Act, s. 52. The statutory right exists “without any need for a proviso thereabout in the contract”. Such an ejectment is not a forfeiture. In relation to the provision in s. 71, which provides that it shall be lawful for the Court “to give such relief therein as a court of equity might have done”, Deale states in the notes on s. 71:
49. For the foregoing reasons, given the conclusion that the forfeiture notice had ceased to affect the landlord and tenant relationship of the parties prior to the initiation of the proceedings, so that the Minister is not entitled to forfeit the Foreshore Lease and relief against forfeiture under s. 14(2) of the Act of 1881 does not arise in these proceedings, I consider that it is not open to the Court to impose the requirements set out in the Second Judgment at para. 101(3), namely, -
(b) at sub-paragraph (iii), retaining consulting engineers, such as Arup, (c) at sub-paragraph (iv), applying any award of damages under the Interreg IIIA claim in completing the Marina, 50. If Figary discharges the arrears of rent and, if the Court concludes that it should do so, interest on the arrears of rent and the costs in relation to the s. 52 application, the correct outcome on foot of the s. 52 claim is that an order for possession under that statutory provision is not made and the lease continues to exist. That gives rise to the following considerations:
(b) In relation to interest on arrears of rent, the Court has not been referred to any authority in which payment of interest at the statutory court rate on the arrears was imposed on the defaulting lessee as a condition to avoiding an order for possession under s. 52. Nonetheless, the proper application of the principles of fairness and justice does seem to require that Figary should pay interest at the statutory court rate, that is to say, 8%, on arrears of rent which are not statute-barred. In my view, it is appropriate for the Court to exercise its discretion in this manner because Figary has continued in possession of the Marina without paying the outstanding rent as it became due for such possession to the Minister. If the Court was, for example, giving judgment in summary proceedings for the arrears of rent due to the Minister, in my view, it would be appropriate to award pre-judgment interest under s. 22 of the Courts Act 1981 to the Minister. The Minister’s case for interest at the statutory court rate is even stronger, where the Court is giving Figary relief in the nature of avoidance of an order for possession. (c) On the calculations set out in para. 31 and at (a) above, there is due by Figary to the Minister as at 1st January, 2015 the following sums:
(ii) €252,459.93 in respect of arrears of rent from 1st January, 1999 to 1st January, 2015; and (iii) interest in the sum of €117,039.02 on the arrears of rent which are not statute-barred. The total amount due for arrears of rent and interest, therefore, is €445,554.24. As stated previously, those updating calculations have been done for illustrative purposes only. Obviously, in the event of any dispute as to the accuracy of the calculations, the Court will hear submissions from the parties and also as to any further updating as may be necessary. Other issues arising from landlord and tenant relationship: general approach
(b) the liability of the Minister for alleged unreasonable withholding of consent in relation to removal of sand; and (c) liability of the Minister for alleged unreasonable withholding of consent by the Minister in relation to the performance bond. 52. Finally, in addressing many of the issues arising from the parties’ landlord and tenant relationship, counsel for the Minister emphasised the fact that the Foreshore Lease was a lease of foreshore granted pursuant to s. 2 of the Act of 1933. It was submitted that sufficient consideration was not given by the trial judge to the public interest aspect of the landlord and tenant relationship arising from the legislation governing the State’s ownership of foreshore and the powers of the Minister to act in a manner proper or desirable in the public interest. That issue will be considered separately. Liability of the Minister to assist Figary in relation to the development of the marina 54. In taking an overview of Figary’s contention of breach of covenant on the part of the Minister, the trial judge (at para. 141) recognised that the parties’ relationship was somewhat fraught. He made the following observation in relation to the position of the Minister:
(b) the Minister at times put in place barriers to the completion or continuance of the construction of the Marina as required by the terms of the Foreshore Lease and/or took an approach to his dealings with Figary which was obstructionist or unhelpful in the context of Figary’s obligations under the Foreshore Lease. 57. The reality of the situation is that the trial judge only upheld two of Figary’s allegations of breach of covenant against the Minister. In the circumstances, it seems to me that the proper course for this Court to take is to consider, in relation to each of those covenants, the basis on which it was found that the Minister was in breach. Liability of the Minister for unreasonable withholding of consent in relation to removal of sand
59. The grounds on which the Minister challenges those findings are that the trial judge erred in law and on the facts -
(b) in determining that it was not for the Minister and/or that it was unreasonable for the Minister to require Figary to produce evidence of appropriate permits or licences for the removal and/or transportation of sand or beach material before giving its consent for the purposes of covenant No. 10 of the Foreshore Lease; (c) in determining that it would have been sufficient for Figary to undertake to the Minister to obtain relevant licences and/or permits in respect of the removal and transportation of sand or beach material for a consent to be provided for the purposes of covenant No. 10 of the Foreshore Lease; and (d) in determining that the Minister was in any way in breach of covenant in unreasonably withholding consent for Figary to move sand off the site for use elsewhere. 61. Counsel for Figary’s response is that the findings made by the trial judge are findings of primary fact and/or inference of fact based on extensive and credible evidence which were correct. 62. There was extensive evidence, both oral evidence and contemporaneous documentary evidence, before the High Court in relation to the interaction between Figary, qua lessee, and the Minister, qua lessor, in relation to the excavation and disposal of sand and beach material. Given that notwithstanding the finding that the Minister, qua lessor, acted unreasonably, and further, given that the finding of the trial judge resulted in no remedy in favour of Figary against the Minister, so that this aspect of the counterclaim can have no practical impact on the outcome of the appeal, and having regard to the limited function of this Court under the Hay v. O’Grady principles in this area, it would serve no useful purpose to review the evidence with a view to determining whether the conclusions of the trial judge were incorrect on the bases alleged on behalf of the Minister. Therefore, I consider that it is neither necessary nor appropriate to consider these grounds of appeal any further. Liability of the Minister for unreasonable withholding of consent in relation to the performance bond
64. The outcome of the counterclaim in relation to the bond issue was that in the Second Judgment (at para. 101(4)), the trial judge indicated that he would make an order in the following terms:
65. The qualification is that, while the direction to procure the bond quoted in the next preceding paragraph is expressed as a condition of granting relief against forfeiture in the perfected order of the High Court, the reference to an order directing Figary to obtain a bond in para. 101(4) of the Second Judgment appears to be a standalone direction, rather than a condition of relief against forfeiture. If one assumes that the perfected order is correct, then that the direction to procure the bond will fall away on relief against forfeiture ceasing to be relevant. However, if the perfected order is not correct in this regard, the Court will have to hear further submissions from the parties as to how it is to be dealt with in the order of this Court. It is hoped that the parties will reach consensus on the approach to be taken. Whether the Minister is liable for damages for breach of covenant/breach of contract 67. The Minister has challenged the findings the trial judge made on the issue of damages for breach of covenant in two respects. First, it is the Minister’s position that the trial judge erred in determining that the position of this Court in Meagher was distinguishable from the circumstances of the present case and that damages were recoverable by Figary for breach of covenant on the part of the Minister. Secondly, it is the Minister’s position that the trial judge erred in his interpretation of covenant No. 10 as giving rise to a positive obligation on the part of the Minister and not a mere refinement of the obligations of Figary (so as to inform Figary of what was required of it in relation to its obligations under the Foreshore Lease). 68. Again, neither of the challenged findings ultimately gave rise to an award of damages in favour of Figary against the Minister, nor did either have any implications in relation to the overall outcome of the proceedings in the High Court. Moreover, there is no cross-appeal by Figary against the determination that no damages should be awarded to Figary for breach of covenant. In the circumstances, it is not necessary, and it would be a futile exercise, for this Court to consider the damages issue any further. Public interest issue 70. In relation to that ground, it seems to me that one must assume that, in granting the Foreshore Lease to Figary, the Minister considered that it was in the public interest to grant a lease of the demised foreshore to Figary and that he was also satisfied that the terms of the Foreshore Lease complied with the statutory requirement of the protection of the public interest. In this context, counsel for the Minister made some sweeping assertions as to how a court should treat the landlord and tenant relationship in the context of a lease of foreshore made on the authority conferred by the Act of 1933, as amended. The primary target of those assertions is the circumstance that the trial judge was prepared to grant relief against forfeiture on certain conditions. Having found that the Foreshore Lease has not been forfeited, that aspect of the outcome in the High Court decision is no longer effective. In all those circumstances, the submissions made on behalf of the Minister as to the impact of the public interest aspect of leases of the foreshore on relief against forfeiture address a hypothetical situation. The issues they raise are for another day. Summary of conclusions on the landlord and tenant relationship 72. Provided Figary discharges the arrears of rent due to the Minister and interest thereon at the statutory court rate calculated on the basis outlined earlier and the costs of the Minister related to the claim for possession under s. 52 of Deasy’s Act, the basis of quantification of which will be subject to further submissions, the Minister shall not be entitled to an order for possession of the demised foreshore under s. 52 of Deasy’s Act. Of course, assuming compliance by Figary with those conditions, the landlord and tenant relationship of the Minister and Figary will continue to exist unless and until the Foreshore Lease is terminated. The obligations of Figary, qua lessee, and of the Minister, qua lessor, in accordance with the terms of the Foreshore Lease will continue. One would hope that a more common-sense approach is adopted on each side in the future in relation to performance of their respective obligations under the Foreshore Lease. Claim for trespass 74. As has been recorded earlier, it was pleaded in the statement of claim that Figary effected an encroachment beyond the demised foreshore in the construction of the Marina. It was also pleaded that Figary proposed effecting other works outside the demised foreshore. It was pleaded that the works in question amounted to an unauthorised act creating a permanent trespass by encroachment. Specific injunctive reliefs were sought by the Minister against Figary in relation to that alleged trespass: prohibitory injunctions restraining Figary from carrying on any works otherwise than within the boundaries of the demised foreshore and from encroaching on adjoining foreshore. The Minister also sought a mandatory injunction demanding Figary to remove and take away all structures as project beyond the boundaries of the demised foreshore. There was also a claim for damages for trespass. In its defence Figary denied trespass and it pleaded that it had taken meticulous steps to remain within the boundaries of the demised foreshore. 75. The trial judge found in the First Judgment (at para. 157) that there had been a technical trespass. The trial judge then went on to explain the position he proposed adopting (at para. 158) as follows:
C - Grant application under Interreg IIIA Programme Issues Figary’s claim arising from the grant application 78. To recapitulate, Figary has included in its counterclaim a claim for damages for breach of statutory duty on the ground that the Minister wrongfully frustrated Figary in its endeavours to develop the Marina, the relevant wrongful conduct being particularised as preventing Figary from seeking funding under the Interreg IIIA Programme and failing to reasonably assist Figary in obtaining such funding. In order to put Figary’s application for the grant in issue and the manner in which it was processed into its legislative context, both under European Union law and under Irish law, and to understand the administrative framework within which it was submitted, it is necessary to outline the EU and national legislative and the administrative structure applicable to the Interreg IIIA Programme as it operated in this jurisdiction and, in particular, the elements of it relied on by counsel for Figary. Legislative/administrative structure 79. At the apex of the structure, although below the relevant Treaty provisions, is Council Regulation (EC) No. 1260/1999 of 21st June, 1999 (the General Regulation) laying down general provisions on the Structural Funds. As is predicted in the recitals therein, no less than fifty nine in number, the General Regulation is very broad ranging in its objective and scope. The focus for the purposes of the issues which arise on this appeal is on the provisions governing implementation. 80. In Article 8, having provided that Community actions shall complement or contribute to corresponding national operations and that the “partnership” between the Commission and the Member State, together with authorities and bodies designated by the Member State within the framework of national rules, shall cover the preparation, financing, monitoring and evaluation of assistance, it is provided in Article 8(3):
81. Programming is dealt with in Title II and “Operational programmes” are dealt with in Article 18. Article 18(1) provides that assistance covered by a Community support framework shall as a general rule be provided in the form of an integrated operational programme by region, as defined in Article 9. The expression “operational programme” is defined in Article 9(f) as meaning the document approved by the Commission to implement the Community support framework and the definition elaborates on the nature of the document. The prescribed contents of each operational programme are set out in Article 18(2). It contains provisions for implementing an operational programme, which it is stipulated shall include, inter alia, -
(b) a description of the systems for monitoring and evaluating, including the role of the Monitoring Committee. 82. Article 18 also makes provision for a “programme complement”, which is defined in Article 9(m) as meaning -
83. Various articles mandate the Commission to publish guidelines, for example, Article 10 and Article 15, and also Article 21(1), which is of relevance here and is referred to later. It is convenient to refer at this juncture to Article 15, which is headed “Preparation and approval”, in which the provisions in Article 18 in relation to operational programmes and programme complements are anticipated and which is the subject of a decision of the European Court of Justice relied on by the Minister and considered later (Italian Republic v. The Commission). In Article 15 it is provided that the Commission shall appraise the proposed operational programmes submitted by the Member States to determine whether they are consistent with the aims of the corresponding Community support framework and compatible with other Community policies (Article 15(4)). It is also provided that the Member State or the management authority shall adopt the programme complement defined in Article 9(m) and a time limit is stipulated for the Member State sending the programme complement to the Commission for information (Article 15(6)). It is clear from Article 15 that the Commission has a different function in relation to operational programmes, which it appraises, and programme complements, which are sent to it for information, a difference which is highlighted because of the Minister’s reliance on the decision in Italian Republic v. The Commission. 84. Article 20(1) provides that Community initiatives shall cover the four fields specified in that Article, the first of which is -
85. Article 21(1) provides that the Commission shall lay down guidelines describing for each initiative the aims, scope and appropriate method of implementation and that those guidelines shall be published in the Official Journal of the European Communities. 86. Commission Regulation (EC) No. 438/2001 of 2nd March, 2001, was the implementing regulation which was in force at the time relevant to the issues on this appeal. In Article 1 its function was stated as to lay down “detailed rules for the implementation of [the General Regulation] as regards the management and control systems for the assistance granted under the Structural Funds that is administered by The Member States”. It envisaged “intermediate bodies”, which were defined in Article 2(2) as meaning “all public or private bodies or services acting under the responsibility of managing or paying authorities or performing tasks on their behalf”. The provisions in relation to management and control systems outlined in Article 2 et seq. imposed on each Member State responsibilities not only in relation to managing authorities, but also in relation to intermediate bodies. While this regulation was, as counsel for Figary submitted, of significance in the present context, its significance was as part of the overall scheme. National legislation 87. At national law level, the apex of the structure is the British-Irish Agreement Act 1999 (the Act of 1999), which gave effect to the Belfast Agreement of 10th April, 1998. Section 22 thereof identified a body known as “The Special EU Programmes Body” (the SEUPB), with the attributes of a body corporate, as the “implementation body for special European Union programmes”. Section 23 provided that the functions of the SEUPB would be the functions specified in Part 4 of Annex 1 to the Belfast Agreement. Part 4, the text of which is set out in Annex 1 to the Act of 1999, inter alia, provided that, in relation to post-1999 Structural Funds, the SEUPB would have grant-making and other managerial functions in respect of Interreg III. In effect, the SEUPB thereby became the managing authority. SEUPB Operational Programme 88. The operational programme which is of relevance for present purposes is Interreg IIIA Programme 2000 - 2006 Ireland/Northern Ireland (the SEUPB Operational Programme). The SEUPB Operational Programme was adopted by the SEUPB and approved of by the Commission. 89. Chapter 13 dealt with managing and implementing provisions, being, as stated in para. 13.1, the provisions required under Community and national arrangements, including the General Regulation and Regulation 438/2001, and also the Guidelines for Interreg IIIA produced by the European Commission, to which reference is made below. The succeeding provisions of Chapter 13 were very detailed. Paragraph 13.4 provided that the SEUPB was to be the managing authority carrying out the functions laid down in Article 34 of the General Regulation. It was provided that the SEUPB would put in place adequate and appropriate procedures and arrangements to ensure compliance with the regulations referred to above and the relevant national requirements. Provision was also made for various bodies, apart from the managing authority, within the regulatory framework: the Joint Technical Secretariat (JTS), for which the managing authority (i.e. the SEUPB) would be responsible; the Programme Monitoring Committee; and the Steering Committee. It was also provided that a document setting out in detail “the Programme Strategy and Priorities”, that is to say, the Programme Complement, would be prepared by the SEUPB, as the managing authority, and submitted to the Programme Monitoring Committee for its approval and that it would also be submitted to the European Commission “for approval” (sic). Its contents were to be as defined in Article 18(3) of the General Regulation. 90. Chapter 13 also provided that the SEUPB, as managing authority, might delegate certain of its functions in relation to management of the assistance to implementing (sometimes referred to as implementation) bodies and it was provided that, in the event of such delegation, the implementing bodies would take reasonable steps to ensure that separate units within the organisation would carry out implementing functions and delegated functions. As regards project selection, it was provided that joint project development, assessment and selection processes would be established and set out in the Programme Complement. As regards project selection, while it was envisaged that there would be an arrangement for the processing of applications through technical appraisal by the implementing body set out in the Programme Complement, the clear intention expressed in para. 13.34 was that the end of the process as set out in the Programme Complement would be the “final decision by the Steering Committee”. Commission Guidelines 91. The guidelines for the Interreg IIIA Programme produced by the European Commission referred to in Chapter 13 of the SEUPB Operational Programme, which governed Interreg III at the time of the controversy in relation to Figary’s grant application, were contained in the document entitled Communication from Commission to Member States of 2nd September, 2004, laying down guidelines for a Community initiative concerning trans-European co-operation intended to encourage harmonious and balanced development of the European Territory - Interreg III (2004/C226/02)(the Guidelines). These consolidated guidelines replaced earlier guidelines. 92. Certain provisions of the Guidelines, which expressly related back to Article 20 of the General Regulation, are of particular relevance for present purposes. Point 25 dealt with the contents of the operational programme to be put in place, for example, the inclusion of provisions for implementing the programme, such as the designation of a management authority within the meaning of Article 9(n) and Article 34 of the General Regulation, which contents were reflected in the provisions of the SEUPB Operational Programme. It was also provided at point 27 that each programme would be supplemented by a Programme Complement as defined in Article 9(m) and described in Article 18(3) of the General Regulation. Point 29 provided that joint selection of operations and the co-ordinated monitoring of their implementation would be carried out by the Steering Committee. Further, as counsel for Figary emphasised, under Point 40 it was provided that the operations and projects would be selected on the basis of their eligibility for Interreg III by the Steering Committee. The requirements of point 29 and point 40 were reflected in para. 13.34 of the SEUPB Operational Programme. SEUPB Programme Complement 93. The Programme Complement for the Interreg IIIA Programme post-dated, and was intended to be read in conjunction with, the SEUPB Operational Programme. It stated in Chapter 2 that the Programme would be implemented in a manner consistent with “the national and Structural Funds regulatory framework” and would ensure compliance with “Community policies and Interreg IIIA Guidelines”. Specific reference was made to the General Regulations and the guidance provided by the European Commission. Chapter 2 also addressed the responsibilities of an implementing agent (sometimes referred to as the implementation agent), one of whose core tasks would include receiving, processing and assessing applications “against Measure level Criteria” (sic). Chapter 4 dealt with project application and selection. In Clause 4(2) it was provided as follows:
SEUPB Procedures Manual 94. In January 2004 the SEUPB produced a document entitled “Procedures Manual for Implementing Agents” under the Interreg IIIA Programme. As is disclosed in the document, there were a number of different implementing agents responsible for administering the various measures under the Interreg IIIA Programme, including Government departments. The object of the manual was to set out the operating procedures for applications, such as Figary’s application for grant assistance, under the Interreg IIIA Programme. The Minister’s Department was, in fact, the relevant implementing agent. 95. The Procedures Manual is a useful document in that it dealt comprehensively with evaluation of applications for grant assistance in a format against which what happened in relation to Figary’s application can be readily identified and understood. It stipulated the form and content of applications for grant assistance and provided for a six stage assessment process of the applications as follows:
(b) Stage (2) involved scoring applications and was to be carried out by an Assessment Panel; (c) Stage (3) was approval by the JTS, which was to be conducted in accordance with Clause 2.4.5 quoted below; (d) Stage (4), as outlined in Clause 2.4.6, was the Steering Committee evaluation, which could result in, inter alia, approval or rejection of the application; (e) Stage (5) involved communicating the decision of the Steering Committee to the applicant; and (f) Stage (6) involved economic appraisal, if the Steering Committee had in principle approved of the application, which, in the case of an application for funding in excess of €400,000, was put out to independent consultants to be identified via a tender process. 96. Clause 2.4.5 of the Procedures Manual provided:
• the Assessment Report (which includes a summary of the application form); • full Part B Application Form; • all relevant papers; and • all relevant notes on scoring and assessment. . . . Following its assessment, the JTS collates all applications (including recommended rejections) for presentation to the Steering Committee. The JTS aims to send all papers to the Steering Committee within fifteen days of the meeting. Therefore the Implementing Agents should forward all papers to the JTS at least three weeks before a Steering Committee meeting.” History of processing of Figary’s application
(b) Having got through Stage (1), the initial eligibility screening stage, the application came before an Assessment Panel, where it passed the score threshold for Stage (2). (c) The application also obtained JTS approval at Stage (3). (d) The next step in the process was that the application went before the Steering Committee, but it did not get through Stage (4) in December 2003 because of lack of a cross-border element to the project. Figary successfully appealed that decision to a Review Panel. However, the initial application did not proceed further. (e) As is recorded in the First Judgment (at para. 66), Figary obtained a partner from Northern Ireland in order to satisfy the cross-border element and submitted an amended application to the Minister’s Department as implementing agent. Thereafter, in September 2004, at the request of the Minister’s Department, Figary submitted additional information. Eventually, the amended application came before an Assessment Panel in December 2004 and once again the application got over the score threshold. The Assessment Panel recommended that the application be forwarded to the Steering Committee for consideration. At that stage the Commission guidelines 2004/C226/02 were in place. (f) The amended application also went through the JTS process successfully. (g) Figary was then informed by the Minister’s Department of the positive recommendation of the Assessment Panel and that the amended application would be sent to the Steering Committee. Figary expected the Steering Committee to assess the amended application at its scheduled meeting in late January 2005. That did not happen, because the Minister’s Department, as implementing agent, did not forward the application to the Steering Committee, despite having been advised by the SEUPB that it should do so. (h) By letter dated 23rd March, 2005, the Chief State Solicitor, on behalf of the Minister, informed Figary’s solicitors that the amended application would not be progressed further due to outstanding issues. 99. Ultimately, the conclusion of the Directorate General for Regional Policy at the Commission on Figary’s complaint was set out in correspondence to SEUPB on 29th May, 2008. The conclusion is quoted in the First Judgment (at para. 76) as follows:
(ii) that the original objection by the Steering Committee (the project did not meet the cross-border criteria) had been remedied; (iii) that the further objections raised by the Department above should have been signalled to the Steering Committee for it to take a decision to approve/reject the project; (iv) in effect, the Department has assumed to itself the decision of the Steering Committee.” Findings in the First Judgment on liability for breach of statutory duty in relation to grant application 101. The trial judge first considered the circumstances in which an administrative action which is ultra vires will found an action for damages, doing so by reference to the decision of this Court in Pine Valley Developments Ltd. v. Minister for the Environment [1987] I.R. 23, quoting the “clear summary” from Wade on Administrative Law, 5th Ed., 1982 quoted by Finlay C.J. at p. 36. He also considered that question by reference to the decision of this Court in Glencar Exploration Plc v. Mayo County Council (No. 2) [2002] 1 IR 84, stating (at para. 166) that, in order for a statutory duty to be actionable, “it is clear that the provision[s] relied upon must have been created for the protection or benefit of a specific person, or class of persons, rather than the public at large”. He also considered the commentary on the “tort of misfeasance in public office”, or, put another way, the liability of a public body for ultra vires actions, by Fennelly J. in the Glencar case (at pp. 148 - 149), although he had earlier remarked that no claims for misfeasance in public office or wrongful interference with constitutional rights had been made by Figary. Following on from the foregoing analysis, he stated (at para. 169):
104. The trial judge then (at paras. 173 and 174) considered the decision of this Court in Emerald Meats Limited v. Minister for Agriculture (No. 2) [1997] 1 I.R. 1 (Emerald Meats (No. 2)). The trial judge noted that, in that case, this Court had found that the Minister for Agriculture had been wrong, as a matter of law, not to forward an application of the plaintiff for an import licence under certain EEC Regulations to the Community. The trial judge focused on the passage from the judgment of Blayney J. in which he dealt with the claim on behalf of Emerald Meats Limited that it was entitled to damages by reason of the breach by the Department of Agriculture of its obligations under the Commission Regulation 4024/89. In the passage quoted, Blayney J. stated that the case made on behalf of Emerald Meats Limited in reliance on the decision in Francovich was correct. He emphasised that it was not an action against the Community, but rather an action against a Member State. In the passage quoted by the trial judge, Blayney J. stated that the decision in the Pine Valley case was distinguishable on the following basis:
105. The trial judge then stated (at para. 175):
106. The trial judge then set out the following summary of his conclusions (at para. 177):
(ii) If the duty imposed is one which is imposed for the benefit of the public, the breach is not actionable unless:- (a) it involves the commission of a recognised tort, (b) it is actuated by malice, (c) the authority knew it did not possess the power it purported to exercise; (iii) Breach of a duty under European law will give rise to an action for damages as if it were a breach of statutory duty; (iv) Damages for breach of duty under European law will give rise to both general and special damages.” 107. The foregoing principles were then applied by the trial judge (at paras. 178 and 179). He stated in para. 178:
Grounds of appeal on liability
(b) that the trial judge erred in fact and/or in law in concluding that Figary was entitled to damages as against the Minister in respect of the Minister’s management of Figary’s application for grant aid under the Interreg IIIA Programme.
(ii) the trial judge erred in fact or in law in failing to take any proper account of the fact that Figary had not at any stage sought to bring proceedings by way of judicial review challenging the alleged ultra vires action. Figary’s submissions on liability
56. The factors which the competent court may take into consideration include the clarity and precision of the rule breached, the measure of discretion left by that rule to the national or Community authorities, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, the fact that the position taken by a Community institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to Community law. 57. On any view, a breach of Community law will clearly be sufficiently serious if it has persisted despite a judgment finding the infringement in question to be established, or a preliminary ruling or settled case-law of the Court on the matter from which it is clear that the conduct in question constituted an infringement.” 111. Turning to the second condition, whether the breach is a serious breach, in reliance on the “decisive test” outlined by the Court of Justice in Brasserie du Pêcheur, which is quoted above, it was submitted on behalf of Figary that there was a serious breach by the Minister. It was submitted that the Minister’s Department, as implementing agent, had no discretion whatsoever in relation to sending forward Figary’s grant application to the Steering Committee. Further, its failure in the course of the investigation of the complaint to the Commission, to identify any provision of the scheme which could have justified its position, rendered the error made inexcusable. Counsel for Figary also placed some reliance on the fact that the Minister’s Department ignored advice which it had been given in unequivocal terms in August 2004 and in January 2005 by the SEUPB that the application should be forwarded to the Steering Committee. 112. As regards the third condition, namely, that there should be a direct causal link between the breach of obligation by the Minister and the damage sustained by Figary, the failure of the Minister’s Department to forward Figary’s application to the Steering Committee, it was submitted, was the direct cause of Figary losing the opportunity to obtain the grant. Moreover, it was submitted that the damage which resulted was very substantial and was irreversible in that, by the time Figary’s complaint to the Commission had been investigated, the relevant funding had ceased. 113. On the hearing of the appeal, counsel for the Minister referred this Court to a recent decision of the Court of Justice (Second Chamber) delivered on 3rd September, 2014 on a request for a preliminary ruling under Article 267 TFEU from a court in Lithuania in proceedings entitled Case C - 410/13 ‘Baltlanta’ UAB v. Lietuvos valstybë (‘Baltlanta’). Counsel for Figary also addressed this authority, which concerned the interpretation of a provision of the General Regulation, Article 38. Article 38(1) provides that, without prejudice to the Commission’s responsibility for implementing the general budget of the European Communities, Member States shall take responsibility in the first instance for the financial control of assistance. There are then outlined the measures which the Member States shall take to that end including, at paragraph (e) -
115. What is of significance for present purposes is that the Court gave consideration to Commission guidelines which had addressed matters such as projects which were unfinished and non-operational at the time of closure. In relation to the guidelines the Court stated (at para. 64 and 65):
65. It should be noted, secondly, that those guidelines must be interpreted in accordance with the binding European Union provisions which they seek to supplement, namely Regulation No 1260/1999.” The Minister’s response on liability 117. In essence, the Minister adopted a similar position in response to the submissions made on behalf of Figary on the appeal. The Minister’s position remained that the answer to Figary’s contention that the failure of the Minister to progress Figary’s application constituted a breach of European Union law continued to be that the grant application process under Interreg IIIA did not have a European Union rule of law or a statutory basis, but was an ad hoc arrangement. Further, the Minister continued to focus on the first condition of the Francovich test. Overall, the answer, it was submitted, was that the framework for the Interreg IIIA Programme, which derives from the General Regulation, did not have as its intendment the conferral of any rights on individuals, the breach of which might give rise to a damages claim against the Minister. In particular, Figary was not an affected person or body which was entitled to invoke what were described as Francovich rights. 118. Counsel for the Minister helpfully produced further written submissions in response to the written and oral submissions made on behalf of Figary on the liability issue on the appeal. In those submissions the scope of the liability of a Member State for breach of European Union law in the light of the case law and of commentary in the academic authorities relied on by Figary, in particular, “Public Liability in EU Law, Brasserie, Bergaderm and Beyond” by Pekka Aalto (2011, Oxford and Portland, Oregon) is considered. What follows in the submissions is an interesting commentary on the evolution of the law on the liability of a Member State for reparation to an individual for breach of European Union law. The discussion culminates in an analysis of one of the most recent cases relied on by counsel for Figary: the decision of the Court of First Instance in Case T - 415/03, Cofradia de Pescadores de San Pedro [2005] ECR II - 4355 (Cofradia). In its judgment, the Court of First Instance having, at para. 85, observed in a passage relied on by counsel for Figary, that it is unimportant whether or not the rule of law infringed constitutes a higher-ranking rule of law, stated as follows (at para. 86):
120. Finally, counsel for the Minister directed the Court’s attention to two decisions of the European Union courts, which it is suggested support the Minister’s argument, each of which involved issues which came within the framework of the General Regulation. 121. The first, chronologically, was the decision of the Court of First Instance (Fourth Chamber) of 15th March, 2004 in Case T - 139/02 Idiotiko Institouto . . . and Others v. The Commission. There the Court was concerned with an application for the annulment of a decision of the Commission not to bring to an end alleged discrimination between public and private vocational training bodies in Greece with regard to their access to the financing from the structural funds under an operational programme in Greece. The application was found to be inadmissible. Counsel for the Minister rely on the following passage in the judgment of the Court of First Instance at para. 44:
122. In the later case, - Case C - 301/03 Italian Republic v. Commission of the European Communities - the Court of Justice (Second Chamber) in a judgment delivered on 15th September, 2005 held that the application by the Italian Republic to annul certain notes and a document sent by the Commission to Italy, which, in broad terms, related to the operation of an operational programme and a programme complement, was inadmissible. The gravamen of the Court’s decision was that neither the notes nor the contested document were intended to have legal effect. Counsel for the Minister, apart from relying on certain passages from the opinion of the Advocate General, relies on the following passage from the judgment of the Court (at para. 30):
123. As has been noted above, the nub of the Minister’s answer to Figary’s claim on liability is that the Minister could not be considered liable as implementing agent for a breach of European Union law by reference to the duties imposed on him by the provisions of the Programme Complement. Apart from that, as regards Figary’s invocation of Article 34 of the General Regulation, the point is made on behalf of the Minister that Article 34 refers to the role and responsibilities of “the Managing Authority” as defined in Article 9(n) of the regulation. The role of the Minister in relation to the Interreg IIIA Programme was as “implementing agent”, which role it is suggested was a creature of the Programme Complement only, and is a role in respect of which there is no reference in the General Regulation or in any regulation. As has been pointed out earlier, Regulation 438/2001 clearly envisaged intermediate bodies, such as implementing agents, being part of the legislative and administrative framework. Having regard to the definition of “managing authority” in the General Regulation and, in particular, the requirement that, if the Member State designates a managing authority other than itself, it shall determine all the modalities of its relationship with the Managing Authority and of the latter’s relationship with the Commission, it is suggested that the General Regulation “divorces” from European Union law how the processes or procedures to be operated in respect of the General Regulation are to be operated. It is suggested, for example, that the relationship between the managing authority and the implementing authority are to be determined by the Member State. Further, it is submitted that this is consistent with the argument that there is nothing in the Commission guidelines which can change the scope of the rights or obligations arising under the General Regulation. 124. The approach of the Minister to the interpretation of the legislative and administrative framework as outlined above, in my view, wholly fails to adopt the proper approach to consideration of the relevant provisions of the legislative and administrative structures in failing to consider them in the round. Conclusion on liability: general approach Overview of legislative/administrative structures
(b) contravening the SEUPB Programme Complement on the same basis. While Clause 2.4.5 of the Procedures Manual, which mandated the implementing agent to ensure that the relevant documents would be forwarded to the Steering Committee, was at the base of the national administrative structure, as emphasised earlier, it gave effect to the Programme Complement, which, although part of the national administrative structure, was derived from the General Regulation. Accordingly, an overview of the legislative and administrative structures demonstrates that the relevant provisions of the Programme Complement interlocked with measures provided for higher up the chain of those structures. For example, Clause 4.2 in Chapter 4 of the Programme Complement, to which Clause 2.4.5 of the Procedures Manual gave effect, itself actually gave effect to point 29 of the Commission guidelines. Chapter 4 of the Programme Complement in turn, reflected the clear intention manifest in para. 13.34 of the SEUPB Operational Programme that the final decision on a grant application would be the decision of the Steering Committee, which was prescribed by the SEUPB on the basis of the statutory authority given to it by the Act of 1999. It was also prescribed with the approval of the Commission pursuant to the General Regulation. 128. As regards the question posed in the next preceding paragraph, in my view, the answer is clear. The Minister, as implementing agent, did have a mandatory duty under European Union law to forward Figary’s grant application to the Steering Committee for “final decision”. The overview of the legislative and administrative structures outlined above clearly demonstrates the interconnection between the different structures and the interlocking nature of the various levels of the structures. In particular, having regard to the paragraphs from the judgment in Baltlanta quoted earlier, this Court is bound to take the Commission guidelines into consideration in determining this question. The relevant Commission guidelines unquestionably cast light on the interpretation of the national measures adopted to implement them, particularly, the Programme Complement. They are also clearly designed to supplement binding European Union provisions, being specifically provided for in the General Regulation. As was made clear in Baltlanta they must be interpreted in accordance with the General Regulation. 129. The relevant provisions of the Commission guidelines clearly provide that project selection under the Interreg IIIA Programme is the function of the Steering Committee. The national measures from the SEUPB Operational Programme downwards all provide that the Steering Committee has the “final decision” on selection and that is clearly consistent with the Commission guidelines. As the trial judge found, in reality the Minister’s Department, in the role of implementing agent, illegally usurped that function of the Steering Committee. By that action, the Minister was not only in breach of the national measures put in place by the SEUPB on the basis of the authority conferred on it by the Act of 1999, but also breached the Commission guidelines and ultimately the requirements of the General Regulation. Accordingly, I am satisfied that there has been a breach of a rule of European Union law on the part of the Minister in his Department failing to forward Figary’s amended application to the Steering Committee. 130. It is perhaps worth recording that counsel for Figary also placed some reliance on an agreement entitled Interreg IIIA Service Level Agreement between the SEUPB and the Implementing Departments. In addition, counsel for Figary referred this Court to Circulars issued by the Department of Finance to other Government Departments in relation to responsibilities under the General Regulation and Regulation 438/2001. In particular, this Court was referred to Circular 34/2001 of 27th July, 2001, in which the addressees were informed that conformity with the Circular and with the relevant EU Regulations was obligatory. However, the conclusion reached that the Minister’s obligation, as implementing agent under the Interreg IIIA Programme, arises under European Union law is not informed by those matters. They do, however, compound the absurdity of the proposition that the role and duty of the implementing agent in the enormously complex legal and administrative structures derived from the General Regulation employed in the implementation of the Interreg IIIA Programme could be seen as being an ad hoc arrangement. Application of Francovich/ Brasserie du Pêcheur test The Minister’s liability for damages 133. On this appeal, having regard to the findings on the application of the Brasserie du Pêcheur test set out above, I am satisfied that the Minister is liable in damages to Figary, for both general damages and special damages. The measure of damages must now be considered. As part of that exercise, it is necessary to address the controversy alluded to earlier concerning the amount of the grant sought by Figary and it is convenient to address it at this juncture. Amount of grant funding sought by Figary
136. In any event, I am satisfied that the starting point for the assessment of the damages for which the Minister is liable is that the Minister by his actions prevented Figary’s application for a total grant in the sum of €2.46m being considered by the Steering Committee. Some general observations in relation to the assessment are appropriate. Assessment of damages: general observations 138. Another distinguishing feature of the approach necessitated by the factual circumstances in Emerald Meats (No. 3) is addressed in para. 39 of the judgment of O’Donnell J. Having recorded that the nature of the issue for the Court there was the assessment of damages which had been described by the Supreme Court in Emerald Meats (No. 2) as “general damages”, and having stated that, taking a broad view, it was “the assessment of the disruption to Emerald’s business and its relationship with other traders caused by failure to obtain the quota”, O’Donnell J. stated that it was accepted that the Court was engaged in the assessment of general damages, which in the words of Martin B. in Prehn v. Royal Bank of Liverpool (1870) L.R.M. 5 Ex 92:
139. The trial judge in the Second Judgment (at para. 92), having commented that the principle of restitutio in integrum still applies, notwithstanding evidential difficulties, quoted the following passage from the judgment of O’Flaherty J. in Callinan and Deane v. VHI (Unreported, Supreme Court, O’Flaherty J., 28th July, 1994), which had been referred to in the judgment of the High Court in Emerald Meats (No. 3). O’Flaherty J. stated:
(b) loss of profits deriving from what Figary contended was the potentially expanded level of business which might have been conducted had the grant been obtained, so that the Marina project would have been implemented, and such an expanded business would have become operational. 140. The trial judge addressed the first heading, which he referred to as loss of chance, in the First Judgment at para. 189 et seq. He recorded that there was agreement between the parties as to the relevant principles in relation to assessing damages for loss of chance, but that it was the correct application of the principles to the facts which was in dispute between them. Having cited two authorities of United Kingdom courts and stated that they identified the correct approach, the trial judge outlined that approach (at para. 191) as follows:
(ii) This extends to showing that there were not actions which, on the balance of probabilities, would have prevented that chance from being real and substantial; (iii) Once this is done, the Court will assess the quantum of damages based on the likelihood of that chance.”
142. The trial judge then went on (at para. 193) to evaluate the chance, stating:
143. In order to outline the factual context, reference to some of the narrative earlier in the First Judgment is apt at this juncture. The trial judge had recorded (at para. 59) that, as of 21st April, 2006, the construction of the Marina had cost Figary over €2.8m. It would be necessary to carry out substantial works in order to provide safe and appropriate breakwaters and restore portions of the foreshore and the estimated cost of completing the Marina properly was somewhere in the region of €2.7m, inclusive of VAT, although that did not include construction supervision costs or any costs attached to removal of sand off site. Since becoming operational in 2002 the Marina had generated the following profits: €308.00 to the end of March 2003; €1,204 to the end of March 2004; and €1,793 to the end of March 2005. The trial judge also recorded (at para. 64) that, if the grant application was successful, the monies paid to Figary would be a percentage, in this case 26%, of the expenditure to be actually incurred on the Marina project. On the basis of the grant application form submitted in September 2003, as completed on behalf of Figary, the estimated total project cost was €9,433,239.00. Counsel for the Minister relied on the foregoing matters and other evidence in urging this Court to find that the assessment of loss of chance at 50% was not supported by the evidence. The question as to whether Figary had a reasonable or substantial chance of being awarded a grant in the amount claimed, as found by the trial judge, will be considered later. 144. The second component of the claim of damages for breach of duty, that is to say, loss of profits, was dealt with by the trial judge in the Second Judgment. In reviewing what had transpired up to the time of delivery of the Second Judgment, the trial judge observed (at para. 21) that the Minister complained that, despite directions of the Court that further material and information with regards to reports by an accountancy firm, McCambridge Duffy, which had been put before the Court be provided to the Minister “which might have shed some light on the claim” for loss of earnings, this was not done. The trial judge then stated:
146. The general sum which the trial judge arrived at for loss of profits was €500,000. It was premised on the basis that, if Figary had got grant funding for the Marina project and had expanded the Marina as contemplated in the project, the number of berths at the Marina would have increased from 164 to 396. It would have taken eighteen months to complete the construction of the extended Marina. However, by 2007 the additional berths should be available. The trial judge presumed that occupancy of the berths, once completed, would be 90%, which he acknowledged was a relatively generous presumption. As to the duration of the loss, it would be incurred over the period from 2007 to when the Marina will actually be constructed. Given that he was giving judgment in 2012, he assumed that that would not happen until after 2013 and, accordingly, he determined that he should compensate for loss of profits from 2007 to 2013, that is to say, for seven years. He calculated the loss on the basis of accounts of Figary referred to in the McCambridge Duffy report and, in particular, Figary’s turnover on the basis of 164 berths for the period from 2005 to 2009. He also factored in increased costs associated with the enlarged Marina, using the figure of €100,000 per annum, rather than the figure of €73,000 per annum suggested by McCambridge Duffy, as representing the increased costs. The bottom line was that the calculation of loss of earnings was €132,000 per annum, which over seven years would have amounted to a total loss of profit of €924,000, which figure was adopted as a guideline of the general damages for breach of statutory duty. It was acknowledged that those damages must also be reduced by 50% in line with the loss of chance damages reduction. The resulting figure was rounded to €500,000 and it was added to the figure awarded for damages for loss of chance. Accordingly, the total damages for breach of duty under Interreg IIIA to which Figary was held to be entitled being stated to be €2,045,000. If that figure was adjusted in line with the finding above that the correct amount of grant funding sought by Figary was €2.46m, the total damages awarded would amount to €1,730,000. Conclusions on damages issues 147. Having expressed the view above that there was ample evidence to allow the trial judge to conclude that Figary would have received approval in principle from the Steering Committee, it is now necessary to consider what would have been the probable outcome of the subsequent independent economic appraisal of Figary’s application at Stage (6). There were three possible outcomes - that Figary’s application would be granted more or less in full; that Figary’s application would be refused; or that, on the basis of the economic assessment, Figary would qualify for a grant in a lesser sum than the amount sought. The trial judge did not consider that last possibility in the context of the hypothetical situation which was being assessed. Aside from that, in my view, consideration of the likely outcome of the independent economic assessment gives rise to very considerable difficulty, some features of which will be referred to. 148. First, a question arose on the evidence before the High Court as to the source of the expenditure which had already been incurred in relation to the Marina prior to the making of the grant application. On the evidence, that expenditure was not reflected at all in Figary’s accounts in any manner. Even to the extent that the evidence suggested that the expenditure was, in fact, incurred by other companies connected to Figary, Figary’s accounts did not reflect either the expenditure or whatever arrangements might have been entered into by Figary with those connected companies. Moreover, there was no evidence to establish what legal mechanism might be adopted to ensure that Figary got the benefit of that expenditure without being exposed to a corresponding obligation. It might be asked whether the connected companies could have made a voluntary transfer of their interests, whatever they were, to Figary and, if so, whether such transaction would have tax implications. None of these matters were explored and none of the questions resolved. That evidential deficit must be laid at Figary’s door. In the circumstances just outlined, there must be a significant doubt about the extent to which a proper independent economic assessment would have regarded the treatment of the expenditure on the works carried out prior to the grant application in the accounts of Figary as satisfactory. That unsatisfactory feature would likely lead to legitimate doubts on the part of the independent economic assessor as to the suitability of Figary for grant funding for the future Marina project. 149. Secondly, there was a significant paucity of evidence as to the exact cost of bringing the Marina up to the level contemplated in the project the subject of the grant application. While figures are given in the grant application, it is reasonable to assume that those figures would have been subjected to in-depth scrutiny in the independent economic assessment. Unfortunately, there is very little evidence available from which any conclusion could be reached as to the likely result of such appraisal. Once again, that evidential deficit must be laid at Figary’s door. 150. Finally, and significantly, it is by no means clear on the evidence that an independent economic assessor would have taken the view that a project of the scale of the Marina project contemplated was economically justified. In particular, differing reports on the likely demand for berths in the enlarged Marina were put in evidence in the High Court. On balance, those reports did not suggest that a marina on the scale which was under contemplation in the grant application might be justified. In short, it is impossible to come to any definitive conclusion as to what the result of the independent economic appraisal would have been, based on the materials and information available at the relevant time. Accordingly, there must be significant doubt as to whether the independent assessor would have concluded that the full scale of expansion which was contemplated by the grant application would have been justified. 151. Having regard to the foregoing matters, it seems to me that, in assessing, on the basis of the evidence before the High Court, the probable outcome of the independent economic assessment of Figary’s grant application, it is necessary not only to factor in a significant risk that the grant application would have been refused, but also a very significant risk that, even if it was allowed, the total amount of the grant which would ultimately have been approved would have been considerably less than the amount sought on the application. In all the circumstances it seems that the only conclusion on the evidence was that the chance of obtaining the full grant would have been extremely slight. 152. In the light of that conclusion, I consider that there was an error in the manner in which the assessment and calculation of the loss of chance of Figary receiving the grant sought was approached in the High Court judgment. While it is open to find that there was sufficient evidence to sustain a conclusion that there was probably a 50/50 chance of getting some grant, assuming that it is probable that there was some momentum in favour of allowing grant funding from Structural Funds for projects in the area in question, there was a complete failure to factor in the significant risk that, even if a grant was approved, the probability is that it would have been for less, and probably a lot less, than the amount of the grant sought by Figary. 153. Bearing in mind the general observation made earlier as to the risk inherent in adopting a soft policy to enforcing compliance with the applicable legal principles in relation to the burden of proof, one must ask whether it is appropriate that Figary should get the benefit of the doubt in respect of any area of uncertainty in the calculation of the loss of chance risk, which stems from its own failure to put adequate reliable evidence before the Court. The answer, in my view, is that it is not, having regard not only to that factor, but also to all of the other factors outlined above. Given the lack of adequate reliable evidence, it is not possible to be confident that, even if the ultimate outcome would have been that Figary would have received a grant, it would have been equivalent to the amount sought by Figary. On the contrary, it seems probable on the evidence that, on the basis of an independent economic assessment conducted in the first half of 2005, the amount of the grant would have been in the range of €800,000 to €1m. That assessment would have been conducted on the basis of the accounts of Figary and other material available in relation to the content of those accounts at the time of the assessment. That evidence is what must inform this Court as to the approach which would have been adopted in the independent economic assessment. The evidence suggests that the assessor would have been unlikely to conclude that Figary would have had the ability to match funding of €2.4m, which on the basis of Figary being liable for 74% of the total project cost, would be in the region of €7m. Indeed, it is perhaps being generous to Figary to conclude that it would be able to match grant funding within the range of €800,000 to €1m. 154. Accordingly, on the basis of a 50/50 chance of getting some grant and on the basis that that grant would be, at most, in the region of €800,000 to €1m, I have come to the conclusion that the proper measure of damages for loss of chance is between €400,000 and €500,000 and should be fixed at €450,000. Damages for loss of profit/earnings 155. It will be recalled that the award of general damages in the sum of €500,000 made by the trial judge was premised on the Marina project being implemented by Figary and the additional berths being available for use by 2007, if Figary’s grant application had been successfully processed to conclusion, so that Figary’s earnings from the business conducted would have increased in the seven years after March 2007. The fundamental question on this aspect of the claim is whether there was adequate evidence to support that premise. In my view, there was not. By way of general observation, the failure of Figary to provide adequate evidence to support its claim for damages for loss of profits or earnings is a more serious category of failure than the paucity of evidence in relation to the probability of the grant application being successful. Given that Figary had been conducting business at the Marina in Fahan for approximately three years when the grant application fell for consideration in early 2005 and continued to trade thereafter, it is not possible to justify a “back of envelope” approach to assessing what loss of profit Figary has suffered after 2007 by reason of the expanded Marina not having been developed. 156. To pose an obvious question as to the viability of the premise underlying the assessment of the general damages by the trial judge, it is whether there was evidence to support the probability that the expanded Marina would be in use by 2007. As has been outlined above, even if Figary obtained the full grant sought, €2.46m, that would only represent 26% of the total cost of implementing the Marina project, so that Figary would have to put in the region of €7m into the project itself. That raises the question as to how Figary would fund that expenditure. This aspect of the evidence was wholly unsatisfactory. It is true that it was suggested in the evidence that promoters behind Figary were wealthy men. However, there was a complete lack of adequate evidence to identify where the significant sums which would have been required to carry out the project were to come from and, not least, whether some or all of them would have to have been borrowed. In that latter event, a significant interest charge would have been incurred on the cost of implementing the development and expanding the Marina, which clearly would be a material factor in assessing Figary’s profit, or even perhaps loss, on a current account basis. Accordingly, on the evidence adduced, it is by no means clear that an expanded Marina funded by significant borrowing would necessarily have been more profitable than the Marina as it was in 2005. In order for it to have been more profitable, any additional income less any additional operating expenses would have to have been sufficient to outweigh any likely interest charges. There was simply no evidence before the Court on which one could reach that conclusion. In the circumstances, it seems to me that the Court must conclude that Figary has failed to discharge the burden of proving that it has suffered loss of profit in consequence of the expansion of the Marina not having been carried into effect by reason of its failure to obtain the grant funding it sought. 157. Apart from that, observing Figary’s trading history at the Marina in Fahan up to 2005 and Figary’s profit as recorded in the First Judgment (at para. 59), one might ask, albeit at a very trite level, how would doubling, or even trebling, the number of berths have given rise to a profit of €132,000 per annum in 2007 and subsequent years, when the profit in the year up to March 2005 was merely €1,793. 158. In general, there are serious deficiencies in the evidence adduced by Figary to support its claim for additional damages for loss of profits. Not only that, but as is recorded in the Second Judgment (at para. 21), Figary failed to comply with the directions of the High Court that further material and information in relation to the McCambridge Duffy reports be provided to the plaintiff. The consequence is that, hovering in the background of Figary’s claim for damages for loss of profits, there are possible realistic scenarios as regards the likely increase in business as a result of the expansion of the Marina and the corresponding increase in overheads and interest charges on funds borrowed to effect the development, which, if they would have materialised, would not reveal any extra profit, if the development had been implemented. In order to disregard those realistic scenarios, it would be necessary for the Court to conclude that it was more probable that a more beneficial scenario would have pertained. The onus was on Figary to produce the evidence to satisfy the Court of that likelihood. Its failure to do so means that it did not discharge the burden of proof as to loss of profit. Accordingly, no damages are awarded under this heading. Total award of damages 159. The total award of damages is the sum of €450,000, representing damages for loss of chance. D - Summary of core determinations
(b) interest on the arrears of rent which are not statute-barred at the statutory court rate from the respective dates on which the same became due, and (c) the costs of the Minister related to the claim for possession under s. 52 of Deasy’s Act, the basis of quantification to be stipulated in the order of the Court following further submissions from the parties. 162. Obviously, provision will require to be made for setting off one against the other -
(b) the damages awarded against the Minister in favour of Figary on Figary’s counterclaim. | ||||||||||||||||||||||||||||||||||||||
