Judgment of Mr. Justice Clarke delivered the 22nd February, 2016.
1. Introduction
1.1 The circumstances in which the State may be liable for mistakes on the part of officials or employees is a complex and sometimes controversial area of the law. That a mistake occurred in this case which had, at least, some impact on the plaintiffs cannot be doubted. The issue which this case raises is as to whether there is any proper legal basis on which it can be said that the defendants/appellants (“the State” unless the context otherwise requires when “the Minister” will be used) is liable in damages. I will collectively refer to the plaintiffs/respondents as “Cromane”, unless the context makes it clear that it is only the first named plaintiff/respondent which is being referred to. The second named plaintiff/respondent will, when separately relevant, be referred to as “O’Sullivan McCarthy”. In the High Court, Cromane put forward two bases on which it was asserted that it was entitled to an award of damages. First, it was said that it was possible and appropriate for the Court to award damages under the heading of legitimate expectation. Second, it was said that damages arose under the tort of negligence.
1.2 For present purposes, it is sufficient to note that the circumstances which give rise to these claims arise out of the implementation in Ireland of European Union environmental legislation. In the events that happened, O’Sullivan McCarthy was, for a period of time, precluded from continuing to carry on its business of harvesting mussels in Castlemaine Harbour as a result of the absence of necessary permission to carry on that activity after new measures for the authorisation of such activity in protected areas had come into force. Cromane has argued that the Minister was in breach of a legitimate expectation or, alternatively, was negligent arising out of the circumstances in which it was forced to cease its activities.
1.3 The trial judge (Hanna J.) found in favour of Cromane under both headings and made an award of damages in the sum of €125,000 in respect of Cromane and €275,000 in respect of O’Sullivan McCarthy. The State has appealed to this Court against that finding. In addition to raising questions as to whether an award of damages can properly be made either in the context of legitimate expectation or on the basis of negligence, the State has also appealed against the amount of damages awarded and also, as a separate basis of appeal, by asserting that damages could not, in any event, be awarded in favour of Cromane in respect of any losses attributable to that company.
2. The Issues
2.1 On that basis, there are four sets of issues at least potentially before this Court on this appeal. The first and second issues concern whether, in the circumstances of this case, it was properly open to the trial judge to make an award of damages at all under the headings of, respectively, legitimate expectation or negligence.
2.2 In the event that both of those issues were to be found in favour of the State then clearly no further issues would arise. However, in the event that this Court were to uphold at least the principle of an award of damages under either (or, of course, both) headings, then the two separate issues which relate to the question of damages would require to be addressed. On that basis, the third issue concerns the calculation of damages by the trial judge (in that context it should be recorded that Cromane cross appealed on the basis that the calculation by the trial judge of the award of damages was inconsistent, it was said, with some of the judge’s findings as to the evidence) and the fourth issue concerns whether it was appropriate, even if damages, in principle, were available to O’Sullivan McCarthy, to award any damages in favour of Cromane in respect of losses attributable to that company. In that latter context, it should be noted that the issue between the parties concerns the level of connection of Cromane with the alleged cause of action.
2.3 As already noted, the underlying issues which arise in these proceedings concern certain licensing functions of the State, and in particular the Minister, relating to the shellfish operations of Cromane. As will be discussed later in this judgment, O'Sullivan McCarthy is a separate legal entity which has a shareholding connection with Cromane. O’Sullivan McCarthy is involved in cultivating shellfish. Cromane was not, therefore, directly affected by any of the licensing issues which are at the heart of these proceedings, but claims to have suffered loss indirectly as a result of the inability of O’Sullivan McCarthy to supply shellfish because of the licensing difficulties to which I have referred. The separate question which arises in the context of Cromane is, therefore, as to whether, even if O’Sullivan McCarthy is entitled to successfully maintain proceedings for either or both of legitimate expectation or negligence, Cromane is likewise entitled, notwithstanding the more remote connection of that company to the events which give rise to these proceedings.
2.4 The background to this case is to be found in the developing legislative framework enacted at European Union level for the purposes of protecting the environment. In that context, it is necessary to turn briefly to that framework.
3. The EU Framework
3.1 Council Directive 92/43/EEC of the 21st May, 1992 (“the Habitats Directive”) was concerned with the conservation of natural habitats and of wild fauna and flora (O.J. L 206 4/7 22.7.1992). In respect of activity which it was proposed should take place in a Special Area of Conservation (“SAC”) as specified under the Habitats Directive, it was required that an appropriate assessment first be carried out to determine whether such activity would affect the integrity of the site.
3.2 The European Communities (Natural Habitats) Regulations 1997 (S.I. No. 94 of 1997) were introduced for the purposes of transposing the Habitats Directive into Irish law. As part of the gradual measures introduced for the purposes of implementing the Habitats Directive, various candidate SACs (“cSAC”) were identified and notified to the relevant European authorities. Castlemaine Harbour was one such area identified.
3.3 It is also worth noting that, as will be discussed in section 5 of this judgment, in parallel with those developments, Castlemaine Harbour had earlier been designated as a special protected area for birds under the Irish implementing measures designed to transpose Council Directive 79/409/EC (“the Birds Directive”).
3.4 In any event, the critical legal requirement which, as a result of those measures, applied to Castlemaine Harbour was Article 6.3 of the Habitats Directive which reads:-
“Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.”
3.5 One of the questions which arose was as to whether that provision applied, or applied in the same way, in respect of existing activities which were being carried out in an area of conservation prior to its designation as such and, indeed, prior to the relevant European legislation or its Irish implementing measures coming into force. The relevance of that question to these proceedings is that, as will appear later in this judgment, the activities which Cromane was carrying on in the harbour were well established prior to the developments in European environmental and conservation law to which I refer.
3.6 The European Court of Justice (“ECJ”) delivered two important judgments in relation to the interpretation of Art. 6 of the Habitats Directive in the mid-noughties. These were - Landelijke Vereniging tot Behoud van de Waddenzee, Nederlandse Vereniging tot Bescherming van Vogels v. Staatssecretaris van Landbouw, Natuurbeheer en Visserij (Case C-127/02) [2004] ECR I-07405 and Commission v. Ireland (Case C-418/04, ECR [2007] I-10947). The net effect of both of these decisions was to make clear that the regime specified in Art. 6 was required to be applied to activities which existed prior to the designation of an area as a SAC or cSAC. Furthermore, it was made clear that the requirement for an appropriate assessment of the implications of any such activity required that the relevant authorities had, prior to authorisation, to be satisfied that, in the words of the ECJ, “in the light of the site’s conservation objectives…no reasonable scientific doubt remains as to the absence of such effects” (being adverse effects on the integrity of the site).
3.7 This interpretation of the legal position undoubtedly caused significant difficulties for the Minister and also, as a result, for Cromane. As will be clear from an account of the facts to which I will shortly turn, the Minister had provided various forms of permission which allowed for the continuation of Cromane’s activities notwithstanding the coming into force in this jurisdiction of the regime under the Habitats Directive. However, no specific analysis or assessment had been carried out and, indeed, the necessary scientific work had not been engaged in so as to allow for an immediate assessment of the type which the ECJ held was required in order that activity be permitted.
3.8 As a result, it was clear that, as a matter of law, the Minister could not grant any permissions which would have the effect of allowing activity within the boundaries of the protected area unless and until an appropriate assessment had been carried out and such assessment satisfied the requirements identified by the ECJ, being that there was no reasonable scientific doubt as to the absence of adverse effects.
3.9 While efforts were made to deal with the situation which had emerged as a result of the decision of the ECJ in Commission v. Ireland, there can be no doubt that, at least to some extent, the existing commercial activities of Cromane were interfered with. There can also be little doubt but that the Minister was mistaken as to the proper interpretation of the Habitats Directive and its Irish implementing measures for it is clear that the Minister considered that it was possible to continue to provide appropriate licences for the existing activities of Cromane notwithstanding that they were to take place in a protected area and notwithstanding the fact that no specific assessment had been carried out. It is as against that background that the claim for damages in respect of breach of legitimate expectation and/or negligence was brought. On that basis it is appropriate to turn to the facts.
4. The Facts
4.1 The trial judge found that, in general terms, the business currently being carried out by Cromane in Castlemaine Harbour had been in place since the 1970s. However, so far as the issues which are now before this Court are concerned, the relevant events commenced in the early 1990s. At that time, the possibility of the designation of areas as special protection areas was under consideration. On the 7th April, 1993, a public notice was published in the Irish Times by the National Parks and Wildlife Service of the Office of Public Works announcing the intention to classify Castlemaine Harbour as a special protection area. That notice stated that:-
“It is not envisaged that designation will restrict the current usage pattern of these areas for activities such as fishing … or their use for shellfish culture”
It was also suggested in evidence that this statement was echoed in a Government Notice at the time. On this issue, the trial judge, at p. 14, found as follows:-
“… there was a representation made to the plaintiffs in both the government notice and the newspaper notice of 1993. There was comfort given. What happened from then onwards, the annual allocation of seed collection authorisations and the constant refurbishing of the plaintiffs business gave rise to a pattern of events where the plaintiffs had good reason to rely upon the comfort given to them that there would not be a summary closure of their business without some good scientific reasons or without some consultation process before doing so.”
4.2 Thereafter, the mussel fishing business carried on by Cromane proceeded without interruption until difficulties were encountered in relation to the permission regime which is at the heart of these proceedings. I will turn shortly to that regime. However, so far as the situation on the ground is concerned it is also necessary to note that in May, 2008, O’Sullivan McCarthy spent in excess of €1 million renewing a mussel cultivator, “Western Adventure” T246, in order to qualify for a new certificate of compliance under the Torremolinos Protocol of 1993 relating to the Torremolinos International Convention for the Safety of Fishing Vessels 1997 as provided for in European Council Directive 97/70/EC, as amended, and as transposed into national law by the Fishing Vessels (Safety Provisions) Regulations, 2002 (S.I. No. 418 of 2002).
4.3 It should also be noted that there were various communications between Cromane and/or O’Sullivan McCarthy, on the one hand, and State agencies, on the other hand, which it is said led to the State generally being, at least in broad terms, aware of the commercial activities being conducted in Castlemaine Harbour. The trial judge also accepted that the Department of Agriculture, Fisheries and Food has at all times been fully aware of what was described as the modus operandi of Cromane and that there was, at all times up to the matters complained of, a close and good working relationship with the Department including “on the ground” operations through the offices of departmental officials. In this regard, the trial judge accepted that the Department was “well aware of the workings and operational activity in Cromane” and that the Department “knew, through constant contact and face-to-face communication in Cromane through its officials how the plaintiffs (and others) carried on their business.”
4.4 Further, the evidence before the trial court, which was accepted by Hanna J., was to the effect that attempts to import mussel seed from elsewhere in the country proved unsuccessful and that, given the location of their fishery grounds, such alternative supply was not viable.
4.5 In respect of the assessments which were required to be carried out before the harbour could be opened, the High Court found that the carrying out of screening tests was within the control of the Minister. Hanna J. accepted the evidence of Dr. O’Connor, expert witness for Cromane, that if there had been a screening test carried out this project would have been “screened out as having no adverse consequence on the environment”. Dr. O’Connor gave evidence that he could have undertaken the appropriate analysis within two months, which analysis, the High Court found, should have been done quickly in 2008.
5. Licensing and Permissions
5.1 As set out in the judgment of the High Court, Castlemaine Harbour has been a Special Protection Area (SPA) since 1979 in accordance with Council Directive 79/409/EEC ("the Birds Directive") as amended. In 2000, a wider area of protection, a Candidate Special Area of Conservation (cSAC), was opened under Council Directive 92/43/EEC ("the Habitats Directive") as amended. As it comes within the remit of both of these Directives, the site is known as a "Natura 2000 site". As a consequence, the harbour is closed annually for a period of time to allow for stock conservation, and authorisation of the Minister is required to obtain mussel seed.
5.2 Apart from the protection afforded to the harbour under the Natura 2000 scheme, appropriate licences must be granted to O’Sullivan McCarthy in order that they may engage in their commercial activities, such as the bottom cultivation of mussels, in this area. Secondly, it is required that Castlemaine Harbour be “open” for the purposes of these aquacultural activities. The opening and closing of the harbour in this regard is governed by Statutory Instruments made by the Minister which will be outlined in more detail in due course.
5.3 In fact, in relation to individual licences, O’Sullivan McCarthy was licensed to engage in bottom cultivation of mussels at two sites in Castlemaine Harbour (301A and 301B) in accordance with a ten-year aquaculture licence granted under the Fisheries (Amendment) Act 1997 and a Molluscan Shellfish (Conservation of Stock) permit which allows them to move seed to farm the mussels. It also has a sea-fishing boat licence (number 141805994) issued under the Fisheries Acts 1959 to 2006 for its boat Western Adventure II. O’Sullivan McCarthy is involved in fishing and transplanting mussel seed to the aquaculture site licensed at Castlemaine Harbour.
5.4 Traditionally, O’Sullivan McCarthy obtained mussel seed from an area within the bay. From there, it placed the seed in the nursery ground for further development for a period of six weeks. The mussel seed collection activities usually lasted for a period of twenty days during the summer months. As noted by the trial judge, these were almost invariably non-consecutive days as they were determined by tidal and weather conditions. After that, the seed was taken from the nursery ground and then put into other areas (one shared area under the Fishery Order Licence and two other areas within the SPA where O’Sullivan McCarthy had exclusive rights under Aquaculture Fishing Licenses) where it was left for a period of two years for later harvesting.
5.5 Up to the determination of the ECJ in Commission v. Ireland on the 13th December 2007, Cromane carried out these commercial activities within the harbour on a regular basis. However, following the determination of the ECJ, a decision was made not to open the harbour for mussel seed fishing activity during the summer months in 2008. In this regard, an overview of the Statutory Instruments regulating the opening and closing of the Harbour will demonstrate the access, or lack thereof, extended to Cromane in order to operate within the Harbour.
6. Statutory Instruments
6.1 An overview of the Statutory Instruments regulating the opening and closing of the harbour and the permissions required to operate therein is necessary at this point. In essence, a sequence of S.I.s was introduced by the Minister to open and close the harbour for mussel fishing each year. There were some 29 Statutory Instruments outlined in the Book of Statutory Instruments as prepared by the State, but it is not intended to refer to all of those instruments here. The focus will be on the relevant Statutory Instruments purporting to regulate the opening and closing of the harbour for Cromane’s purposes, and those relevant to the operation of their activities.
6.2 Closure of the harbour began, for these purposes, on 30th November, 2007, with S.I. 789/2007, also known as the Mussel Seed (Prohibition on Fishing) Regulations 2007. Two Statutory Instruments were then introduced to take effect from 9th June, 2008. The first, S.I. 162/2008 revoked S.I. 798/2007 which theoretically opened the fishery. However, the second, S.I. 176/2008, imposed a prohibition on fishing for mussel seed within the areas described in the schedule thereto, which included, inter alia, an area in Dingle Bay described at paragraph (u) of the Schedule, and comprising an area which included Castlemaine Harbour.
6.3 It would appear that in 2008, the harbour was not opened for fishing until 5th October, by which time the season for mussel seed fishing had passed as serious damage had been done to the mussel seed by predators such as starfish and green crabs.
19.2 In 2009, the situation was different. The fishery was opened for mussel seed collection on 30th April by S.I. 150/09 and remained open until 14th May.
6.5 However, another statutory instrument was introduced in 2009 which is relevant to the Court’s analysis. The European Communities (Habitats and Birds) (Sea Fisheries) Regulations 2009 (S.I. 346/09), commenced on 27th August, 2009, provided for the issuance of so-called Natura permits, which added what Cromane describe as an “extra layer of regulation” in terms of the operation of their commercial activities within the harbour. As this S.I. was commenced after Cromane had obtained the requisite mussel seed in 2009, it did not impact on their operations that year.
6.6 However, in 2010, the regulatory landscape was as follows. In fact, S.I. 174/2010 opened the fishery on the 4th of May and it remained open until the 25th of May that year, which was within the season for obtaining mussel seed. However, Cromane did not gain access to the fishery until August that year when it was opened for a second period of time, by which time the mussel seed had been seriously damaged. It emerged in argument before this Court that what had prevented Cromane from operating their activities in May that year was, in fact, that a Natura permit was not obtained by them until August 2010. Cromane state that they applied for such a permit as soon as they learned that it was required, and argue that this extra layer of authorisation was but part and parcel of their case and that the lack of essential scientific information available to the Department, in essence, lead to the imposition of a regulatory scheme that was poorly informed and, consequently, in breach of their rights. However, it was strongly disputed by the State that this was ever part of Cromane’s case. Ultimately, it did emerge in Cromane’s argument before this Court that the matter of the Natura Permit scheme and any purported connection with the absence of monitoring and scientific tests of the fishery site had not specifically arisen before the trial court.
7. Interim Measures
7.1 As noted, the determination of when the harbour was open or closed, for present purposes, was regulated through a series of Statutory Instruments made by the Minister under the legislation as outlined in the previous sections of this judgment. However, certain interim measures are also relevant. For example, Cromane refers to a letter from the Minister to Cromane on 2nd July, 2008, stating as follows:-
“It is the environmental issues associated with the Natura 2000 sites that have caused the delayed opening of the mussel seed fishery in Cromane. In order to comply with the requirements of the Habitats and Birds Directive, baseline data for the area must be collected and then an appropriate assessment carried out on the area based on this data.”
The letter further stated that:-
“The interim approach is being finalised at the moment with a view to presenting it to the European Commission in the near future. Any re-opening of the Mussel seed fisheries in 2008 will be dependent on the Commission agreeing to the management/interim approach proposed.”
7.2 In light of these matters, it is necessary to set out what actually occurred on a year by year basis after the difficulties arising from the decision of the ECJ first arose.
7.3 In essence, as Hanna J. described the matter, concerns arose in the Department of Agriculture and Fisheries and in the Department of the Environment as to whether there was a risk of adverse environmental impact in the areas of the SPA arising from the gathering of the mussel seed. Following the determination of the ECJ, it was decided not to open Castlemaine Harbour for mussel seed fishing activity in 2008 as would normally occur during the spring/summer months. Between late August, 2008, and 9th September, 2008, various statements were made by the Minister to Cromane to the effect that the harbour remained closed for mussel seed fishing. Ultimately, as outlined in the previous section of this judgment, Castlemaine Harbour was not opened by the Minister for mussel fishing until 5th October, 2008. By then, the season for mussel seed fishing had passed, and predators such as green crabs and starfish had seriously damaged the mussel stock. As a result, O’Sullivan McCarthy was without any stock of mussels from 2008 for maturation on their licensed sites.
7.4 In 2009, the “relaxation” of the regulations pertaining to the closing of the harbour occurred from the 30th of April, 2009, to the 14th of May, 2009, within the season for mussel seed fishing, so that Cromane had sufficient opportunity to gain access to the fishery.
7.5 However, in 2010, although the relevant “relaxation” of the regulations closing the harbour for commercial mussel fishing operations occurred at the appropriate time, the difficulty in accessing the fishery stemmed from the “extra layer of regulation” imposed under S.I. 346/2009, which introduced the requirement for a Natura Permit in order to gain access to the harbour, and the fact that one was not obtained by Cromane until August of that year. As noted earlier, it was stated in argument before this Court that the Natura permit was sought and obtained as soon as Cromane became aware that such was necessary.
8. The Relationship Between Cromane Seafoods Limited and O’Sullivan McCarthy Mussel Development Limited
8.1 Cromane and O’Sullivan McCarthy are two separate corporate entities that have worked closely together for a period of years. They also have a common shareholding, and Castlemaine Harbour is the centre of their operations. O’Sullivan McCarthy sells all of its harvested mussels to Cromane. However, Cromane does have other suppliers in the Castlemaine area.
8.2 The State argued that Cromane and O’Sullivan McCarthy have chosen, for business reasons that have presumably served them over the years, to organise their relationship inter se in the manner they have done, that is to say, using two companies with separate legal personalities and accounts. Quite simply, it is said that Cromane is a downstream purchaser of goods from the party with whom the State dealt, namely O’Sullivan McCarthy. The State submits that any dealings it had with Mr. O’Sullivan or Mr. McCarthy were had with them as directors of O’Sullivan McCarthy.
8.3 In essence, it is stated that Cromane purchases shellfish and fish for wholesale from O’Sullivan McCarthy and from others holding Aquaculture Licences situate at Castlemaine Harbour. O’Sullivan McCarthy engages in the cultivation and wholesale of molluscs.
9. Causation and Damages
9.1 In all claims for damages it is usually necessary to establish liability (for example a breach of contract or a tort), causation (a causal link between the cause of action established and some consequence or consequences) and quantum or amount (being a valuation of the amount of damages which it is necessary to award). In the ordinary course of events it is normal to first address questions which relate to the liability of a party to pay damages at all before going on to consider causation and the amount of those damages or, indeed, issues which might affect how those damages should be calculated. However, there are some cases where an alternative approach may make more sense. For reasons which I hope will become apparent, this case is, in my view, such a case.
9.2 I have already identified some of the issues which arose on this appeal under the broad damages heading. One of those issues concerned the losses claimed in respect of 2010. As already noted, that year was the third year after problems emerged concerning Cromane’s business. It is clear that Cromane was unable to carry on its business in the first year (2008) and while, therefore, there remain significant disputes between the parties as to the manner in which the trial judge went about the task of calculating the losses attributable to that year, there can be no doubt but that, if liability is established, O’Sullivan McCarthy (but not necessarily Cromane) is entitled to such damages as they might be able to establish in respect of 2008. Again, it is common case that O’Sullivan McCarthy was able to conduct its business in the ordinary way in the second year (2009) so no question of damages in respect of that year arises. There is, however, a question about the third year (2010) to which I now turn. It is clear that the trial judge awarded damages in respect of losses attributable to an interference with O’Sullivan McCarthy’s business in that year. That O’Sullivan McCarthy did not carry out its ordinary business during the normal season for 2010 is not in dispute. However, in the course of questioning by the Court at the hearing of this appeal, it became clear that, to use the language which was applied to the situation on the ground at that time, the harbour was, in fact, “open” during the normal time when harvesting would have occurred in the year in question. It may well be that there was another licensing or permission difficulty which prevented O’Sullivan McCarthy from actually conducting its commercial activities during the relevant period in that year. As already noted, it was said at the hearing of the appeal that a Natura 2000 permission or licence may also have been required and may not have become available until well after the period during which relevant activity was to take place.
9.3 However, having carefully reviewed the evidence which was given before the High Court, it does not seem to me that the trial judge had any evidence before him to explain the precise legal basis on which it was not possible for O’Sullivan McCarthy to carry out its activities in 2010. It cannot have been because the harbour was “not open” for the harbour was, in fact, “open”, in the sense in which that term was used, during the relevant period.
9.4 The reason why this is of very great significance is that without having a clear finding of fact as to the legal reason why activity did not occur in the year in question, it is impossible to assess whether any of the alleged failings on the part of the Minister (whether breach of legitimate expectation or negligence) could have been responsible for the inability of O’Sullivan McCarthy to conduct its activities that year. I can well see that, from a colloquial point of view, and from O’Sullivan McCarthy’s perspective, it may not have mattered very much as to which licence or permission was absent for, from a commercial point of view, the only thing which was likely to have really mattered to O’Sullivan McCarthy was whether it could carry on its business or not.
9.5 However, from the point of view of a claim in damages, the precise legal reason why O’Sullivan McCarthy was unable to carry on its activities in that year is crucial. To take but a simple example, there was little or no evidence as to the criteria which needed to be met in order to obtain a so-called Natura 2000 licence or in relation to the facts necessary to establish an entitlement to such a permission or licence. Even if it could be established that the Minister was in breach of legitimate expectation or negligent in failing to have ensured that the necessary scientific work had been done to enable a proper assessment to be carried out so as, in turn, to enable a valid permission to be given, there could well have been other reasons why, in any event, O’Sullivan McCarthy did not, at the time in question, qualify for the necessary licence or permission. There was insufficient evidence tendered on this point. If it were, for example, to be the case that there was some reason, wholly independent of the necessary scientific assessment, why O’Sullivan McCarthy could not have carried on its activities in the third year, then there would be no arguable causal link between any alleged failure on the Minister’s part and O’Sullivan McCarthy’s inability to carry on its business in that year, for even if the Minister had secured the availability of the necessary scientific information to meet the requirements of the Habitats Directive so as to allow O’Sullivan McCarthy’s activity to be authorised, they would not have been able to carry on that activity anyway for some separate and independent reason.
9.6 Whether there was such an independent reason, or whether the reason why O’Sullivan McCarthy did not have all of the necessary permissions were truly based on the same problem concerning the absence of an adequate scientific assessment, we just do not know, for this issue was not addressed in the High Court, there was no evidence on which the High Court judge could have reached any conclusions in that regard, and there is no basis on which this Court can now be expected to make assumptions about the reasons.
9.7 In that context, it must be recalled that the onus of proof in respect of damages (including causation) lay on O’Sullivan McCarthy. It was for O’Sullivan McCarthy to establish the precise legal reason why it was unable to carry on its activities in any relevant year in respect of which damages were claimed and to establish any factual basis for suggesting that there was a causal link between any of the alleged failures on the part of the Minister and that inability. There just was no evidence presented at the trial from which any sustainable conclusion in that regard could be reached. I am, therefore, satisfied that, in any event, and irrespective of the situation which might properly be said to arise either in respect of legitimate expectation or negligence, no claim for loss in respect of 2010 can be sustained, for there was no evidence from which it could legitimately or sustainably be concluded that there was a causal link between any such alleged failure on the part of the Minister and the inability of O’Sullivan McCarthy to conduct its business in that year.
9.8 It follows that this case must be confined to the claim in respect of 2008. The reason why it seemed to me to be appropriate to address this question first was that there was at least the possibility that somewhat different considerations might apply to the issue of whether the Minister might be said to be liable (and in particular liable in negligence) depending on whether one was assessing damages arising in 2008, on the one hand, or 2010, on the other hand. This is so not least because the manner in which the Minister and his officials responded to the problem which emerged was arguably a much more significant potential issue so far as the third year is concerned but is of much less significance so far as the first year is concerned, for the closure in that year occurred at a time very soon after the judgment of the ECJ in Commission v. Ireland and at a time when the Minister and his officials had had a very short period to respond.
9.9 In the light of that finding, I will leave over the question of the criticisms made on behalf of the Minister of the manner in which the High Court carried out the assessment of damages in respect of the first year until I have set out my views on the proper legal analysis of O’Sullivan McCarthy’s claim that it is entitled to damages in respect of that year under either heading. I will also leave over an assessment of the position in respect of Cromane for, as already noted, the issue which the case made on their behalf raises relates to the fact that the effect on the business of Cromane of the licensing regime was indirect rather than direct. However, in order properly to address the legal issues which arise under that heading it is necessary to identify the legal basis (if any) on which a claim under either legitimate expectation or negligence might be sustained at all. I propose to turn first to the question of legitimate expectation.
10. Legitimate Expectation
10.1 First it should be acknowledged that, as Fennelly J. noted in Glencar Exploration plc v. Mayo County Council (No.2) [2002] 1 IR 84, the jurisprudence in the area of legitimate expectation continues to evolve. The views which Fennelly J. expressed in that case were described by him as provisional but they have come to be accepted as providing at least the broad outline of the law in this area. At pp. 162-163 of his judgment in that case, Fennelly J. said the following:-
“Firstly, the public authority must have made a statement or adopted a position amounting to a promise or representation, express or implied as to how it will act in respect of an identifiable area of its activity. I will call this the representation. Secondly, the representation must be addressed or conveyed either directly or indirectly to an identifiable person or group of persons, affected actually or potentially, in such a way that it forms part of a transaction definitively entered into or a relationship between that person or group and the public authority or that the person or group has acted on the faith of the representation. Thirdly, it must be such as to create an expectation reasonably entertained by the person or group that the public authority will abide by the representation to the extent that it would be unjust to permit the public authority to resile from it. Refinements or extensions of these propositions are obviously possible. Equally they are qualified by considerations of the public interest including the principle that freedom to exercise properly a statutory power is to be respected. However, the propositions I have endeavored to formulate seem to me to be preconditions for the right to invoke the doctrine.”
10.2 More recently, O’Donnell J., writing for this Court in Lett & Company Limited v. Wexford Borough Council and ors [2014] 2 I.R. 198, [2012] IESC 14, expressly adopted the tests identified by Fennelly J. in Glencar. I should also add that there has been a debate for some time as to the question of whether damages can be awarded in a claim where it is established that there is a breach of a legitimate expectation. For reasons principally connected with the fact that the matter had not been fully argued, O’Donnell J. was reluctant, in Lett, to express a definitive view on the issue, but he did cite the judgment of McCracken J. in Abrahamson v. Law Society of Ireland [1996] 1 I.R. 403 in which it was stated that the courts would endeavour to obtain a benefit in respect of which a legitimate expectation arose “or to compensate the applicant… by an award of damages…”. It is, I think, fair to say that, while not definitively decided, the tendency in the more recent case law has been to recognise that, at least in some cases, an award of damages for breach of legitimate expectation may be permissible. However, it will be necessary to consider that question in this case only if there is a breach of legitimate expectation in the first place.
10.3 It is also worth noting that in my own judgment in the High Court in Lett (Lett & Company Limited v. Wexford Borough Corporation and ors [2012] 2 I.R. 198, [2007] IEHC 195), I suggested that the case law established, in addition to the positive elements which must be met in order for a legitimate expectation to arise as set out in the three tests identified by Fennelly J. in the passage from Glencar to which I have referred, that there were also negative factors whose presence might exclude a legitimate expectation. In that context, at para. 29, I said the following:-
“The negative factors are issues which may either prevent those three tests from being met (for example the fact that, as in Wiley v. The Revenue Commissioners [1994] 2 I.R. 160 , it may not be legitimate to entertain an expectation that a past error will be continued in the future) or may exclude the existence of a legitimate expectation by virtue of the need to preserve the entitlement of a decision maker to exercise a statutory discretion within the parameters provided for in the statute concerned or, alternatively, may be necessary to enable, as in Hempenstall v. Minister for Environment [1994] 2 I.R. 20, legitimate changes in executive policy to take place.”
I do not see any reason to depart from those views at this stage. However, it is inevitable that the starting point has to be to consider whether the criteria identified by Fennelly J. in Glencar have been met.
10.4 In summary, those criteria are first that there must be an appropriate promise or representation, second, that it must be addressed to an identifiable group of persons creating a relationship between that group of persons and the public authority concerned, and third, that the expectation created by the promise or representation in question must be such that it would be “unjust to permit the public authority to resile from it”. It is hardly a surprise that Fennelly J. started with the question of the promise or representation itself, for it is necessary to identify what it is that the public authority said or did (or, perhaps, in an appropriate case, refrained from doing or saying) that amounted to what Fennelly J. described as a “promise or representation” as to how it would “act in respect of an identifiable area of its activity”. Therefore the starting point must be an analysis of the actions or statements attributed to the Minister in those circumstances. I will shortly turn to that analysis.
10.5 In passing, it should be said that, while it will almost always be necessary to look at the representation or promise to identify the person or persons to whom it might be said to have been directed, it may be, at least in respect of some of the matters relied on in this case, that that issue would not prove unduly problematic, for those persons were a definable group which was engaged in commercial activity within the areas which were proposed to have special status conferred upon them, and whose activities might, therefore, have the potential to be interfered with by the introduction of the Habitats Directive and its implementation. Thus, the second leg of the test may not pose particular difficulties on the facts of this case. The third leg of the test, however, is more problematic, for it is necessary to identify the precise nature of the promise or representation made and, indeed, the circumstances in which it came to be made, in order to determine whether it would be unjust to allow it to be resiled from. There can, therefore, often be a close connection between the question of whether there truly was a representation or promise (as opposed to a vague indication) and whether it would be just to permit the relevant public authority to resile from same.
10.6 It must be recalled that Cromane relies on certain specific matters as amounting to the representation or promise in this case. It is necessary to identify these and to analyse whether they can properly be said, either individually or cumulatively, to amount to the sort of representation or promise which would meet the first leg of the criteria identified by Fennelly J. in Glencar.
10.7 As noted earlier, the only representation which it can be said was expressly made by the Minister to Cromane was to the effect that “it is not envisaged” that there would be any restriction on traditional activities. That statement was made in April, 1993, and was in the context both of developing European environmental legislation and also in the context of the process leading to the identification of areas within Ireland which would be designated for the purposes of that European legislation. It could not be said to amount to a clear commitment on the part of the Minister that there could never be any adverse consequences. What the consequences were going to be of the designation of an area for European environmental purposes was a matter of European law.
10.8 As events unfolded, it became clear that the Minister did not have the legal authority, as a matter of European law, to allow for the uninterrupted continuance of traditional activities in protected areas unless and until an appropriate assessment had been carried out. The Minister had no discretion in the matter. The Minister was bound by European law as interpreted by the ECJ. The Minister could give no greater assurance than that, in the then view of the Minister, it was not envisaged that there would be problems for traditional activities. But the question of whether there would be such problems was not a matter within, as it were, the Minister’s gift. It was determined by the proper application of European law. Such an indication by the Minister does not, in my view, amount to the type of representation which meets the criteria identified by Fennelly J. in Glencar. It is neither precise nor is it of a nature which could, in any event, be delivered by the Minister, for it was not within the Minister’s power, as a matter of European law, to insist that there would be no interference with traditional activities.
10.9 For those reasons, I am not satisfied that it was legitimate to entertain an expectation, based on the sort of comments made in 1993, that European law might not, nonetheless, interfere with traditional activities.
10.10 Next, reliance is placed on the fact that, as found by the trial judge, the ongoing activities of Cromane were carried out to the knowledge of the Minister and on the basis of annual legal measures put in place by the Minister which facilitated the so-called opening of the harbour. However, as was noted by this Court in Wiley v. The Revenue Commissioners [1994] 2 I.R. 160, the fact that there may have been an error in the past cannot create a legitimate expectation that that error will be continued into the future. The fact that the Minister was mistaken in his view that traditional activities, of which the Minister undoubtedly knew, could continue provided that the Minister put in place the appropriate legal measures, and was also in error about the fact that those legal measures could be put in place in conformity with European law without carrying out an appropriate assessment, cannot create a legitimate expectation to the effect that that situation would continue.
10.11 While there undoubtedly was significant expenditure, and while the incurrence of expenditure on foot of a representation may form part of the Court’s assessment in determining whether it would be appropriate to allow a public authority to resile from a representation made, expenditure will not be relevant if there was no legitimate expectation in the first place.
10.12 Finally, before leaving this aspect of the analysis, it is worth commenting on one of the representations which was made on behalf of local producers to the Minister after difficulties had been encountered arising from the decision of the ECJ. It was said to the Minister that he was disregarding local interests and jobs by reason of an unproven risk to the environment. Unfortunately from the perspective of those local producers, that is just what the Minister was required to do as a matter of European law. As interpreted by the ECJ, a permission for activity in a protected area can only be given when there is an appropriate assessment. An appropriate assessment requires that, on a scientific assessment, risk be excluded. The Minister was required, therefore, as a matter of European law, to be concerned not with unproven risk but rather with proven absence of risk. Until a sufficient analysis had been carried out to justify a finding that absence of risk had been proved, the Minister was precluded, as a matter of European law, from giving any permission which would have allowed for the continuance of mussel farming in the harbour. Given that legal position, it is impossible to see how any party could have entertained a legitimate expectation that the Minister would permit unlawful activity.
10.13 On that basis, I am not satisfied that the actions of the Minister and his officials could be said to amount to the sort of representation or promise which can, even potentially, give rise to a legitimate expectation. It follows that it is unnecessary to reach any definitive view as to whether a pure claim for damages for breach of legitimate expectation can be maintained. In the High Court in Atlantic Marine Supplies Ltd & Anor v. Minister for Transport & Ors [2010] IEHC 104 I came to the view that such a claim could be made. I remain tentatively of that view, but like O’Donnell J. in Lett, I would prefer to leave it until a case in which the issue fairly and squarely arose and was decisive for the result to come to a definitive view on the issue. It might, for example, be the case that a proper review of the underlying principles and their application might lead to the conclusion that, while damages may be claimed in some cases, there may be circumstances where damages would not be appropriate for various reasons of policy. In that context, it might be necessary to consider whether the finite resources which may be available under a particular statutory scheme could, in substance, be required to be at least in material part diverted to those who might successfully bring a legitimate expectation claim where the overall effect of such a decision might be to require that those resources were allocated in a way other than in accordance with the statute concerned. If it is not possible, by legitimate expectation, to require that a particular decision be made in a particular way, for to do so might be to infringe on the proper exercise of a statutory decision-making role, then there may be cases where the award of damages may do much the same thing.
10.14 However, I would leave these issues to a case in which those questions squarely arose. For the purposes of this case, I am satisfied that there was no sufficient and clear representation or promise made to the effect that there would be no potential impact on commercial activity within the proposed areas and, therefore, the claim in legitimate expectation must fail. To that extent I would, therefore, allow that aspect of the Minister’s appeal. It follows that Cromane’s claim in damages must then be considered on the alternative basis proposed, being that of negligence. For the reasons already identified I am also satisfied that the claim concerned can only relate to losses attributable to the first year. Against that background, I now turn to the question of negligence.
11. Negligence
11.1 One of the curious features of the law of negligence is the extent to which it is, on the one hand, routinely and mundanely applied without any great controversy in a large number of cases on a daily basis but, on the other hand, has generated, at the level of high principle, perhaps more debate than any other issue of controversy in the common law world. The vast majority of negligence actions pass off without any direct reference to the law of negligence at all. This is, doubtless, because the routine application of the law of negligence to the sort of circumstances in which it is most commonly invoked is wholly uncontroversial, so much so that the parties and their advisors do not even need to discuss how it might be applied. The contentious motor accident case hardly ever turns on a debate concerning the parameters of the law of negligence except in unusual cases such as McComiskey v. McDermott [1974] I.R. 75 where this Court had to consider an injured navigator in a motor rally car and the extent of the duty of care owed by the driver of that car to his navigator. Ordinarily, contentious motor accident cases turn on the facts as to how the accident happened, the injuries actually suffered by the claimant and questions concerning the appropriate compensation for such injuries.
11.2 On the other hand, it would, in my view, be fair to characterise the legal debate concerning the proper scope of the law of negligence over the last century or so as being a search for a coherent scheme which also worked in practise. I remain unconvinced that the search has been successfully concluded. Why is it necessary, in the context of this case, to address these issues? The reason is that the claim of negligence in these proceedings is not one of those routine types of claim where the parameters of the law are so well established and well known that it need not be mentioned. Rather, this case requires an analysis of where the boundaries of the law of negligence lie in order to determine whether liability may arise. It is inevitable, therefore, that at least to some extent it is necessary to return to some of the issues which have been the subject of long-standing debate and which concern the scope of the law of negligence.
11.3 As a starting point, it might well be appropriate to attempt to analyse why this area has given rise to so much difficulty and so much debate in almost all common law jurisdictions. Can I suggest that perhaps part of the true underlying difficulty stems from the fact that we live in a highly interactive world where each of our fortunes are constantly affected, sometimes trivially, sometimes significantly, by decisions made or actions taken or avoided both by ourselves and by many others on a daily, or even hourly, basis? One of the lessons which the modern area of mathematics which has come to be known as “chaos theory” has taught is that in a highly interactive model very tiny variations at one point in time can make huge differences in conditions at another point in time and often in a far different place. The theory is often associated with the title of a talk given by one of the fathers of that area of mathematics, Edward Lorenz, at the 139th meeting of the American Association for the Advancement of Science in 1972 which appeared under the title “Does the flap of a Butterfly’s wings in Brazil set off a Tornado in Texas?”
11.4 I do not, for a moment, suggest that many (or perhaps any) lawyers have had chaos theory specifically in mind as they search for solution to the elusive question of a principled approach to the law of negligence. However, I do suggest that lawyers and judges have intuitively understood one of the underlying lessons which chaos theory has taught us. The messy world of human beings involves a hugely dynamic system in which we constantly interact with each other in ways great and small. In such a situation it is inevitable that many actions or inactions have a myriad of consequences, some trivial, some potentially significant. A set of traffic lights breaking down on a busy commuter route will inevitably cause some level of traffic chaos. For most, the consequence will be a small irritation and perhaps an apology to a (hopefully) understanding boss, co-worker or client. To some, the consequences may be more severe. A missed flight which had to be rebooked at significant expense. A missed interview and a lost opportunity to obtain a job. Anxiety and tension which might trigger illness or a row with colleagues or friends which might have lasting consequences. The list could go on and on.
11.5 While it might be an exercise in reverse engineering, it is appropriate to recall that the underlying principle of almost any area of redress in law is to attempt to put a party back into the position in which it was before any wrongful act occurred. But the range of potential consequences of a minor lapse can be so wide, so disparate, so disproportionate to the extent of the lapse and, as one moves away from direct to consequential or indirect knock-on effects, so difficult to analyse, it is hardly surprising that judges have been concerned to ensure that some limit has to be placed on the extent of legal liability for lack of care and, indeed, the scope of that duty of care itself.
11.6 However, the undoubted acknowledgement that there has to be some limit does not provide any easy answer to the question which has troubled the jurisprudence for many years, which is as to where that limit should be placed or, perhaps, even more fundamentally, by reference to what type of principle or overall approach should we assess where those limits are to be placed in particular types of cases.
11.7 Those broad questions arise in two ways in the circumstances of this case. The first is as to the general overall approach. The second is more particular and concerns the application of that overall approach in the particular context of the fact that the defendant in this case is a public authority. I will turn shortly to a consideration of each of those questions in order. However, the fact that the defendant in this case is a public authority leads to one further general observation.
11.8 I have already sought to identify why it might be said that the question of finding an appropriate means of imposing a limit on the scope of the law of negligence has proved problematic. However, there is, at least potentially, a second aspect of that general problem which comes into focus in the circumstances of this case. The general problem stems from the fact that the range of consequences of any individual act can potentially be so extensive that some limitation must be placed, however difficult it may be to define that limitation. The second issue is that there may be particular circumstances where there is an additional reason for not imposing potential liability, being that there are important countervailing factors of policy which lean against the creation of the prospect of liability in certain types of cases. The undesirability of causing disproportionate interference in the orderly operation of public (and indeed at least arguably certain important private) functions can be an important factor which must be taken into account. If judgements require to be made with a backward glance towards the risk of being sued for negligence then the judgement-making process may be impaired to the detriment of all. There is at least an argument that this may provide, in certain cases, a justification for excluding liability when it might otherwise arise. Against that very general background, I turn first to the question of the limits of the duty of care.
12. The Limits of the Duty of Care
12.1 It might be said that the first occasion on which there was an attempt to develop the general principle behind the disparate case law on the question of a duty of care was in Donoghue v. Stevenson [1932] AC 562. In Lord Atkin’s famous speech in that case he made the point, which I have already sought to address in this judgment, that in the practical world there cannot be given a right “to every person injured”… “to demand relief”. Lord Atkin then went on to establish the so-called neighbour principle by which he meant that a duty of care was owed to “persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question”.
12.2 The next major development can probably be said to have occurred in Anns v. Merton London Borough Council [1978] AC 728, which reaffirmed the proximity or neighbourhood principle but also added a second question which required the Court to consider whether there were any reasons which ought to negative or to limit the scope of the duty or the class of persons to whom it is owed or the damages to which a breach of it might give rise. While Anns was applied in this jurisdiction, Keane C.J., in Glencar expressed the view that it was not clear that there had been an unqualified endorsement of Anns. In Glencar, this Court considered the further development of the law in the United Kingdom which is found in Caparo Industries plc v. Dickman [1990] 2 AC 605. In that case, the two-step approach adopted in Anns, being proximity and an analysis of whether there were countervailing requirements, was replaced by at least three steps, being forseeability of damage, proximity, and the fairness, justice and reasonableness of imposing a duty of care. I will briefly return to the question of whether there may, in fact, be four steps. What Keane C.J. suggested in Glencar was that there is a further requirement that, in all the circumstances, “it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff”.
12.3 It might, however, be said that part of the problem encountered in attempting to identify a general principle has been that the principles have been expressed in such very general terms that it may be very difficult to identify, with any real level of precision, how those principles are to work in practice. It is easy to see that there may be a limit to the duty of care created by proximity or neighbourhood. It is said that it relates to those who one might reasonably have had in one’s contemplation. But just where that boundary might lie in practice can be hugely debateable. Likewise, it is easy to say that there should be a limit on a duty of care by reference to the requirement that it be “just and reasonable” that the duty be imposed. But where does it stop being just or reasonable in practice to impose the limit?
12.4 There has been, at least to some extent, what has been described by academic commentators as an incremental or gradualist approach to defining the boundaries of the duty of care by reference to the evolution of the existing circumstances in which a duty of care has been found to exist and by reference to its application by analogy to new circumstances.
12.5 It may well be that Keane C.J. in Glencar identified four matters that required to be considered, being forseeability, proximity, the presence of countervailing public policy considerations and the justice and reasonableness of imposing a duty of care. Be that as it may, it may not be necessary, for the purposes of this case, to attempt, yet again, to identify whether it is possible to identify any overarching principle for placing a boundary on the duty of care which does not run the risk of being open to criticisms such as creating a test which was “slippery” (see Stovin v. Wyse [1996] AC 923) or “will o’ the wisp” (see Caparo Industries v. Dickman [1990] 2 AC 605). But at least that debate forms the backdrop to what is the important issue which must be addressed in this case which concerns the extent to which public authorities may be held to owe a duty of care. Before turning to that specific question, it is appropriate to briefly deal with how the jurisprudence of the European Court of Human Rights (“ECHR”) has dealt with questions concerning the exclusion of state or public authority liability in the context of the common law duty of care.
13. The Convention on Human Rights
13.1 In this context, the first significant case which arose before the ECHR was Osman v. United Kingdom [1999] 1 FLR 193. However, the ECHR returned to the matter in Z v. United Kingdom (2002) 34 EHRR 3, in which the Court accepted that it may not have properly understood the relevant principles of the common law when giving judgment in Osman. The House of Lords, in the underlying proceedings which gave rise to Z, being X v. Bedfordshire County Council [1995] 2 AC 633, had struck out a negligence action against a local authority for failure to prevent abuse of children. It was held that an action of that type failed the ‘fair and reasonable’ requirement specified in Caparo. In Z, the ECHR accepted that the development of the law concerning the duty of care which stems from Caparo involved the application of what it described as the ‘fair, just and reasonable criterion’ as an intrinsic element of the duty of care. On that basis, the ECHR accepted that the law did not “disclose the operation of an immunity”. On that basis, the Court concluded:-
“In the present case, the Court is led to the conclusion that the inability of the applicants to sue the local authority flowed not from an immunity but from the applicable principles governing the substantive right of action in domestic law”.
13.2 It is, however, clear that the existence of an immunity rather than the possibility that, on proper analysis, a particular type of cause of action may fail because of the absence of the fair and reasonable test, might well have given rise to concerns as to compatibility with the European Convention on Human Rights. Those authorities seem to me to at least have the capacity to inform the proper approach to considering whether state or public authorities can properly be excluded from liability.
14. The Position of State or Public Authorities
14.1 It must be recalled that one of the more significant trends in many areas of law in relatively recent times has been an extension of the circumstances in which the State itself or its agencies or public bodies can be exposed to legitimate legal action. It is, of course, the case that very many actions taken by public authorities have a real and substantial effect either on the population generally or on particular sectors or sections who may be affected by relevant decision making. Almost any policy decision will have an effect, whether positive or negative, on some group of persons. However, as the authors of McMahon and Binchy, The Law of Torts, 4th Ed., (Dublin, 2013) point out at para. 6.78 “If a duty of care were too easily imposed on public authorities towards all of those affected by their acts, choices and omissions, in some instances the authorities would be hamstrung, unable to discharge their functions with any confidence or creativity.”
14.2 Precisely for that reason, courts have frequently found either that there was insufficient proximity between a public decision or action and a particular consequence or have held that there were sufficient countervailing factors which made it inappropriate to impose a duty of care on a public authority in particular circumstances.
14.3 However, in my view, courts should be careful not to be overprotective of public authorities. In one of the majority judgments in this case, MacMenamin J. makes a point similar to that identified by McMahon and Binchy in the paragraph from Law of Torts just cited. I do not disagree with the suggestion that courts, in defining the duty of care to be imposed on public authorities, need to exercise care to ensure that the proper exercise of public power in the public interest is not stifled. Likewise, I do not disagree that courts, in considering any possible expansion of the law concerning the duty of care, need to be cautious and adopt an incremental approach so as to minimise the risk of unintended consequences. However, it seems to me that those concerns can be addressed within the confines of the third criterion identified in Glencar. What leans against the imposition of a duty of care in certain cases involving public authorities is the countervailing factor derived from the fact that the actions of the public authority concerned may involve questions of policy, discretion or adjudication which are to be determined in the public interest and whose exercise in that manner should not be stifled.
14.4 However, it does not seem to me to follow that every act or omission of a public authority which takes place in the course of the exercise of public power can necessarily be properly characterised as involving the determination of policy, the exercise of a discretion or an adjudicative power. Within the overall context of the exercise of public power, certain actions are purely administrative. The consequences of extending a duty of care in respect of those purely administrative actions may well be far removed from the consequences of extending a duty of care to decisions involving policy, discretion or an adjudicative role. It follows that the weight to be attached, as a countervailing factor, against imposing a duty of care in respect of such purely administrative actions must be much less. It further follows that there must be cases where, therefore, appropriate scrutiny must lead to the view that there would not be a sufficient countervailing factor to justify excluding a duty of care, on a proportionate basis, in respect of such purely administrative acts.
14.5 Why, without good reason and the presence of an appropriate countervailing factor, should public authorities not be liable for the consequences of their actions in exactly the same way as anyone else? It may well be that, in practice, it will be a lot more likely that an appropriate countervailing factor will be found to be present in the actions of public authorities precisely because of the public nature of the functions to which those actions relate. But in the light of the need to guard against giving the State an immunity or, indeed, excessive protection, it seems to me that it is appropriate that a court carefully scrutinise any restriction sought to be imposed on the potential liability of a public authority to ensure that it is justified and proportionate in the light of the public interest sought to be protected. That is not to say that, after appropriate scrutiny, there may well be an entirely appropriate basis, stemming from the public nature of the activity concerned, which would justify treating a public authority differently from a private person. But the Court should scrutinise the circumstances of the case to satisfy itself that there truly are countervailing public interest factors sufficient to provide a legitimate basis for excluding a duty of care which might otherwise arise.
14.6 The fact that, as in Glencar, the public authority was carrying out a function designed for the public benefit (in that case the adoption of a development plan) may very well provide such a justification which would withstand scrutiny. Likewise, the position of adjudicative bodies which was considered in Beatty v. Rent Tribunal [2006] 2 IR 191, may provide an appropriate justification. Other examples could readily be given.
14.7 It must, in that context, be recognised that the sort of actions or functions frequently carried out by public bodies or officials may differ very significantly both in their nature and as to their effect from actions or functions carried out by private persons or bodies. It is inevitable, therefore, that whatever general approach is adopted for the purposes of defining the limits of the duty of care, the application of that general approach in practise is likely to differ as between public and private persons or bodies at least when public entities are carrying out functions which are peculiarly within the public domain.
14.8 I note this last qualification because, of course, sometimes a public official may simply be doing something which could just as easily be done in a private context. A statutory body charged with, for example, establishing a utilities network (such as electricity) could hardly expect to have a different standard or duty of care applied to it when constructing safe power lines than that which might apply to a private electrical contractor doing much the same thing. A public official who happens to drive a car in the course of their public duties could not (except in very unusual circumstances) expect to be assessed on any different basis to any other road user just because they happen to be driving about in the course of their official business.
14.9 But there are functions which public authorities carry out which have no easy parallel in the private sphere.
14.10 Returning to Glencar, it does not seem to me that the application of the principles of proximity and forseeability in a relatively even-handed way as and between public and private persons or bodies should, at least in the vast majority of cases, cause too much difficulty. Persons or bodies carrying out public functions should be entitled to the same, but no more, limitations on the duty of care applied to them deriving from the exclusion of liability in respect of consequences for a lack of care which might not be regarded as foreseeable or which might be regarded as excessively remote. Where those boundaries might lie in an individual case may, of course, be subject to legitimate, and sometimes difficult, debate. But those difficulties can arise just as much in the application of those principles in unusual situations arising in a purely private context.
14.11 It is in the context of the third criterion, being the question of the presence of a sufficient countervailing policy or public interest factor, that a legitimate distinction between the public and private spheres is most likely to arise. It is not that that principle may not apply in the context of a purely private relationship between plaintiff and defendant. It is just that the sort of countervailing policy or public interest factors whose proper application may lead to the exclusion of a duty of care may more commonly arise in the public sphere and may, therefore, lead more frequently, on their proper application, to an exclusion of liability in that sphere.
14.12 Finally, although it is unnecessary for the purposes of this case to reach any concluded view of the question, it is at least open to argument that the possible fourth criterion mentioned in Glencar (being that it must be just and equitable to impose liability) does not really add very much to the overall picture. If there is a situation of reasonable proximity between the parties and if the loss arising is foreseeable and if there are no countervailing policy factors which would warrant excluding liability, it must be asked whether there could often be a basis for saying that it would nonetheless be in accordance with justice and equity to decline to impose a duty of care.
14.13 I should also express my agreement, at least in general terms, with one of the observations made by Charleton J. in the course of his judgment in this case. There is, as Charleton J. points out, a risk that an excessive expansion of the law of negligence may come to, as it were, “swamp” other torts. It would make a nonsense of the carefully worked-out parameters of various other torts if a party were to find it easy to get around those parameters established in case law for the boundaries of the tort in question by simply bringing a claim in negligence. However, it seems to me that there is a solution to that problem. It must be assumed that there are legitimate policy factors which inform the parameters of all torts. The fact that the courts have defined the limits of the tort of misfeasance in public office in a particular way must be taken to stem from an analysis of the competing entitlements of those affected by the wrongful acts of public officials or bodies when exercising legal powers, on the one hand, and the need to ensure that such legal powers can be reasonably exercised for the public good, on the other. Torts such as misfeasance in public office have their boundaries and limitations precisely because, over the years, courts have come to the view that balancing factors, such as those which I have identified, require that liability be confined within the boundaries of the tort as thus defined. That analysis clearly gives rise to what might, in the context of the jurisprudence on the scope of the duty of care, be said to amount to a “countervailing factor”. If there is a good reason, in accordance with existing jurisprudence in respect of another tort, for limiting the scope of that tort in a particular way, then there would equally be likely to be a similar good reason or countervailing factor which would limit the duty of care in a similar way.
14.14 When analysed in that way, it does not seem to me to be likely that negligence could readily be used to get round the limitations which the law has carefully put in place in respect of other torts, for those very limitations themselves derive from an assessment of countervailing factors which would need to be taken into account in assessing the duty of care.
14.15 I should say in passing that I agree with MacMenamin J. that it is difficult to characterise with any precision the legal basis on which the plaintiffs succeeded in Duff v. Minister for Agriculture (No.2) [1997] 2 I.R. 22. It is true that the decision of this Court in that case has been the subject of academic commentary and discussion in subsequent cases which, it might be fairly surmised, suggest that the decision is something of an outlier. I agree that it cannot be taken to be an approval for the concept of operational negligence (a concept to which I will return in the course of this judgment).
14.16 This much can, however, be said. Duff is a case where liability was placed on a State authority (the Minister in that case) in circumstances where the Minister in question had, because of a mistaken view of the law, put himself in a position where he could no longer deal appropriately with the dairy farmers who had lost out on milk quota. The Minister had allocated Ireland’s national quota without making provision for those who had availed of other schemes put in place by the same Minister which had encouraged them to invest in dairy farming in a manner which led to significant loss when it proved impossible to allocate sufficient quota to them. The Minister’s difficulty did not concern a policy decision as to the allocation of the national milk quota as such, for it would have been very difficult to see how any liability could have been imposed for such a pure policy decision. Rather, the Minister’s liability stemmed from dealing with the national quota on the basis of a mistaken view of the law which put him in a position where he was no longer, as a matter of EU law, able to accommodate the plaintiffs. There are, at least, some parallels between the circumstances which underlay the claims in Duff and those which underlie the claim in this case. That being said, the undoubted difficulty with characterising the precise legal basis on which it can confidently be suggested that a majority of this Court found in favour of the plaintiffs leads me to the view, in common with MacMenamin J., that it is difficult to derive great assistance from Duff in resolving the undoubtedly difficult issues which arise in this case.
14.17 I would conclude this section by simply reiterating that a court should be careful, in applying the basic requirements of proximity, forseeability and absence of countervailing policy factors not to do so in a way which excludes liability on the part of state authorities in an unjustifiable and disproportionate way which operated on a materially more generous basis than that which would be applied in the private sphere.
15. Application of Principles
15.1 It is important to start by attempting to identify precisely what it is that it might be said that the Minister did wrong. I have already set out the reasons why the Minister was obliged, as a matter of European law, not to permit the continuance of Cromane’s activities until there had been an appropriate assessment which justified giving any necessary permission. Therefore, there could not have been a duty, as such, to refrain from closing the harbour until an appropriate assessment had been carried out. The Minister had no legal power, as a matter of European law, to open the harbour in the circumstances which had arisen. To the extent that the harbour could be opened, it was only permissible in accordance with the interim measures agreed with the European Commission. Any wider permission given by the Minister either to Cromane, or, indeed, anyone else, would have been a breach of European law.
15.2 It is for that reason that I do not consider that the issue raised by both MacMenamin and Charleton JJ. in their judgments in this case concerning the question of whether it is permissible to seek, as it were, to go behind the relevant statutory instruments without first considering whether they can be quashed, properly arises. In the circumstances which had arisen by 2008 to 2010 there could have been no legitimate basis for quashing those statutory instruments, for the Minister was obliged, as a matter of European law, to take the position which he did. In passing, I should note that if I had considered the issue of the continuing validity of the statutory instruments to be relevant, it would have been necessary to have regard to cases both from this jurisdiction (such as the judgment of Henchy J. in Burke v. Minister for Labour [1979] I.R. 354) and the United Kingdom (see the judgment of Lord Sumption in Bank Mallat v. H.M. Treasury (No. 2) [2014] AC 700) which undoubtedly seek to distinguish between secondary legislation of general application and measures which, although secondary legislation in form, amount in substance to an individual decision relating to permissions and the like. While the issues which required to be determined in those cases differ materially from the issue which might have arisen in this case, and while, therefore, those cases are undoubtedly not directly on point, nonetheless the fact that courts have consistently regarded individual decisions which are taken in the form of a statutory instrument in a different light from secondary legislation of general application might well have affected the proper analysis of the approach to the statutory instruments in this case had I considered that such an analysis required to be conducted for a proper resolution of the case.
15.3 In those circumstances, it seems to me that the real question is as to whether the Minister might be said to have owed a duty of care which required him to ensure that an appropriate assessment was carried out at an earlier stage. There are a number of issues which might arise in relation to such a contention, not least the question of whether loss might have occurred in any event but only in a different year. It will be necessary to return to some of those questions in due course. But for present purposes, in attempting to identify whether there is a duty of care at all, I will assume that any such problems might be overcome. The question which arises in relation to the duty of care is as to whether it can be said that the Minister owed a duty of care to put himself into a position where it would be possible, as a result of the assembling of sufficient necessary data, for him to carry out an appropriate assessment so as to consider whether it would be lawful to permit the continuance of Cromane’s activities and to do so at a time which would, had the relevant assessment led to the appropriate conclusion, have allowed those activities to continue uninterrupted. We know, of course, why the Minister did not procure the carrying out of the necessary scientific work. The Minister had a mistaken view of the law under which it was felt that it was permissible to allow traditional activities to continue. On that basis, the necessary underlying scientific work which would have allowed for an appropriate assessment had not been carried out. However, we know that, when an appropriate assessment was ultimately carried out, it did prove possible to meet the standard required and to permit a recommencement of Cromane’s activities. It seems clear, therefore, as a fact, that had an appropriate assessment been carried out at a much earlier stage, permission could and would have been given for the continuance of the relevant activities.
15.4 The real question on the duty of care, therefore, comes down to this. In the light of developments in European law, did the Minister owe a duty of care to those who, to his knowledge (and up to then with his permission), were carrying out activities in protected areas, to ensure that he had appropriate survey(s) and other scientific evidence available to enable a decision to be made for the purposes of considering whether to permit the continuance of traditional activities and, should appropriate evidence be found to be present, to allow those activities to be authorised?
15.5 Put in that way, the potential duty of care certainly meets the test of forseeability. It was clearly foreseeable that the absence of sufficient scientific information would not allow an appropriate assessment to be carried out and that there would be likely to be a consequential interruption in the ability of those engaged in traditional activities to continue with their business. Also those persons are a relatively finite group. They are those who were engaged in such activities, in the various areas in the country which were to, or were likely to, have special protected status conferred on them. Furthermore, as pointed out elsewhere in this judgment, some comfort had been given to those carrying out such activities. They were, therefore, reasonably in the Minister’s contemplation. In my view the proximity test is, therefore, likewise met.
15.6 For the reasons which I have already sought to analyse, it seems to me that the proper way to approach the question as to whether a public authority, such as the Minister, may then have a duty of care imposed is to first consider whether a duty of care would be imposed on a private individual in an analogous circumstance and then to consider whether there is any sufficient countervailing factor which could provide a proportionate basis for not imposing a like duty on a public authority.
15.7 It is important to emphasise that the question which is now being addressed is as to whether a duty of care, in the narrow sense in which I have sought to define it earlier in this judgment, can properly be said to arise in the circumstances of this case. The question is not, as it was in Glencar, as to whether a public authority owes a duty of care in relation to implementing a public duty such as the formulation of a development plan in (as was the case in Glencar) or in making an actual decision on whether, as a result of an appropriate assessment, it is permissible to allow activity in a protected area, such as might have arisen in other circumstances connected with this case. Rather, the question is whether a duty of care exists to ensure that the Minister is put in a position to make a proper legal decision in the first place.
15.8 The underlying facts, as found by the trial judge, are these. First, the Minister was well aware, through his officials, that there were traditional activities of a commercial variety being carried on by various operators including Cromane. Second, the Minister was clearly aware, in the light of the indication given that it was not envisaged that those traditional activities would be affected by designation, that there was a potential issue which might arise concerning whether the business and property interests of those carrying on such traditional activities might be interfered with. The Minister was, therefore, fully aware that any failure to place himself in a position to make a sustainable decision, one way or the other, on whether to allow such activities to continue had the potential to have a significant effect on those carrying on such activities. In my view a private party, placed in as analogous a position as it might be possible to envisage, would undoubtedly have a duty of care to those who were likely to be foreseeably and proximately affected by their activities. They are persons who ought reasonably to have been in contemplation.
15.9 It is also of particular importance to recall that the issue which was ultimately determined by the ECJ in Commission v. Ireland had been brewing for some time. Doubtless the Minister took advice on the matter and doubtless there were arguments both ways as to whether the position adopted by the Commission, on the one hand, and Ireland, on the other, were correct as a matter of European law. However, it must or should at least have been clear to the Minister for some significant period of time prior to the decision of the ECJ that there was a risk that the view expressed by the Commission would be found to be correct and that, if that should prove to be the case, an immediate problem would be posed arising from the absence of any sufficient scientific analysis to enable permissions to be granted. It follows that, at least from the time when the prospect of proceedings against Ireland being taken by the Commission were first mooted, it was clearly foreseeable that, in the event that the Commission were proved to be right, a small and defined group of operators (being those who were carrying out traditional activities in protected areas) would suffer losses by temporary closure even if it should ultimately prove possible, after an appropriate assessment, to permit the recommencement of those traditional activities.
15.10 I do not consider that the fact that there may be a number of persons in a particular category necessarily affects the application of the proximity test. The pedestrians who may be said to be within the proximate and foreseeable duty of care of a motorist driving down a busy city street may be quite numerous. But they are clearly defined. They are the people whom one might reasonably expect could be injured in the event that the motorist drives negligently. Likewise, the people who might suffer from a failure on the part of the Minister to put himself in a position to make a sustainable decision on whether traditional activities could, as a matter of European law, continue, were equally clearly defined and were, as it happened, at least to a very large extent, actually known to the Minister or officials in his department.
15.11 To say, therefore, that the forseeability and proximity tests are not met in the circumstances of this case would, in my view, be to afford the State a degree of immunity or exclusion which would not be afforded in a comparable private situation. For the reasons which I have already sought to analyse I would, therefore, regard such an approach as inappropriate and would find that the forseeability and proximity tests are met on the facts of this case.
15.12 It is next necessary to consider whether there is any good reason why the fact that a public authority was concerned should lead to finding that there is a countervailing policy factor of sufficient weight to justify the exclusion of a duty of care. It is important to note that the duty of care which I have characterised does not involve any policy or discretionary considerations or adjudicative roles. It is not concerned with the allocation of resources or the making of statutory decisions. Rather, it is a duty to take reasonable steps to ensure that the Minister would be in a proper position to make a decision under European law and any relevant Irish measures.
15.13 In the light of that analysis, I should turn first to a general observation about some of the criticism which MacMenamin J. directs towards the judgment of the trial judge. I do not necessarily disagree with much of that criticism. There may well have been a lack of clarity as to the precise duty of care or negligence which led the trial judge to find in favour of Cromane. There may, to an extent, have been occasions where concepts more appropriate to legitimate expectation claims strayed into an analysis of the claim in negligence. I should not, therefore, be taken as being in full agreement with the reasoning of the trial judge as to the manner in which he found that there was a duty of care and that it had been breached. This judgment is, however, concerned with identifying whether it is appropriate to impose the rather specific duty of care which I have sought to identify. That duty of care did not extend over any prolonged timeframe for it commenced when the Commission formally took the position that Ireland was in breach of its obligations under European environmental law. The comments of MacMenamin J. concerning the lengthy time span over which it would be necessary to review the acts of the Minister and, indeed, the fear of hindsight creeping in to a post hoc analysis of the actions of the Minister seem to me to have little application in assessing a duty of care of the precise type which I have identified.
15.14 As a preliminary to the commencement of proceedings against Ireland, the Commission was, of course, required to furnish a reasoned opinion as to why it was said that Ireland was in breach of its obligations. As appears from the judgment of the ECJ, there was a range of issues raised by the Commission concerning Ireland’s compliance with the directives in question. There was, as is usual practice, correspondence which predated the reasoned opinion. Given the range of issues, a number of reasoned opinions were, in fact, sent by the Commission to Ireland with the latest of same being dated the 11th July, 2003. From that time onwards it must at least have been clear to the Minister that the Commission had not been persuaded by Ireland’s arguments and was of the view that Ireland was in breach of a range of obligations including the one concerning appropriate assessment which is at the heart of this case.
15.15 The Commission is not, of course, always right in such matters. Any Member State who disagrees is free to argue their case before the Court of Justice. But a reasoned opinion from the Commission is not in the same category as speculation or even an allegation by a private individual. It represents the considered view of the body which, under the Union treaties, is charged, amongst other things, with ensuring that Union law is properly transposed and implemented in Member States. The duty of care which I suggest requires to be analysed is, therefore, one which arises in a specific timeframe and operates against the backdrop of a formal contention on the part of the Commission that an appropriate assessment (requiring, necessarily, appropriate scientific data) would be required to allow for the continuance of traditional activities.
15.16 On the same topic, I should also add that I do not necessarily disagree with MacMenamin J. that a specific duty of care might not be said to have arisen in relation to the actions of the Minister in the period after the judgment of the ECJ in Commission v. Ireland. Clearly, in the situation which had by then arisen, Ireland was on the back foot and it was, doubtless, necessary to make many decisions concerning the allocation of resources necessary to allow an appropriate assessment to be carried out. However, given that I have, for reasons already advanced in this judgment, taken the view that Cromane’s claim in respect of the 2010 season cannot be sustained in any event, it does not seem to me that questions about the actions taken by the Minister between 2008 and 2010 arise at all and, therefore, the question of whether the Minister might have owed a duty of care during that period does not seem to me to be relevant.
15.17 That leads to a consideration of what, in my view, is the central issue concerning liability for negligence in this case, which is an issue on which I must, respectfully, disagree with the majority. I should emphasise that, for reasons which I will set out, I do not think it is either necessary or appropriate for this Court in these proceedings to determine whether the concept of operational negligence which has developed in the United Kingdom and has been applied in some circumstances in other common law countries forms part of the law of Ireland. However, it is necessary to at least commence any proper analysis by a consideration of that concept.
15.18 A distinction in the law of the United Kingdom between operational negligence (for which the State may be liable) and decisions made by the State involving policy matters (for which liability may not be imposed) was initially developed in the House of Lords in Dorset Yacht Co Ltd v. Home Office [1970] AC 1004 and Anns v. Merton LBC [1978] AC 728, in the latter of which cases Lord Wilberforce sought to distinguish between policy and operational decisions. Later, in Rowling v. Takaro Properties Ltd. [1988] AC 473, Lord Keith, considering the justiciability of policy decisions, stated that policy decisions were “unsuitable for judicial resolution, of which notable examples are discretionary decisions on the allocation of scarce resources or the distribution of risks.”
15.19 However, the leading authority on the circumstances in which the discretionary nature of public decision-making may preclude the existence of a duty of care is the decision of the House of Lords in X (Minors) v. Bedfordshire CC [1995] 2 AC 633. In Bedfordshire, Lord Browne-Wilkinson stated that the first consideration must be “is the negligence relied upon negligence in the exercise of a statutory discretion involving policy considerations: if so the claim will pro tanto fail as being non-justiciable.” A second question set out by Lord Browne-Wilkinson in this context was “were the acts alleged to give rise to the cause of action within the ambit of the discretion conferred on the local authority?” In order so to determine, a court would have to consider whether the decision was “so unreasonable that no reasonable authority could have made it.” However, this latter aspect of the test has been criticised for purporting to introduce a reasonableness test in relation to whether a duty was owed, rather than forming part of a consideration of any applicable standard of care. The authors of Clerk and Lindsell on Torts (21st Ed., 2014), at para. 14-08, suggest that it is arguable that the test did not form part of the ratio in Bedfordshire at all since, as was pointed out by Lord Hutton in Barrett v. Enfield LBC [2001] 2 AC 550, the claims in Bedfordshire were ultimately struck out on grounds of justice and reasonableness and not ambit of discretion, and therefore Lord Browne-Wilkinson’s speech did not preclude a ruling that a duty could be owed even if the decisions were within the ambit of discretion.
15.20 Further differences emerged in Phelps v. Hillingdon LBC [2001] 2 AC 619 where Lord Slynn stated that the fact that the acts in question were “carried out within the ambit of a statutory discretion is not in itself a reason why it should be held that no claim in negligence can be brought.”
15.21 In the more recent case of Connor v. Surrey County Council [2011] QB 429, Laws L.J., on reviewing the authorities, summarised the relevant principles as follows at para. 103:
“(1) Where it is sought to impugn, as the cause of the injury, a pure choice of policy under a statute which provides for such a choice to be made, the court will not ascribe a duty of care to the policy-maker. So much is owed to the authority of Parliament and in that sense to the rule of law. (2) If a decision, albeit a choice of policy, is so unreasonable that it cannot be said to have been taken under the statute, it will (for the purpose of the law of negligence) lose the protection of the statute. While this must, I think, point to the same kind of case as does the Wednesbury rule [1948] 1 KB 223 (since only a Wednesbury perverse decision will be out with the statute), Wednesbury is not made a touchstone of liability for negligence in such cases: the immunity arising in (1) is lost, but the claimant must still show a self-standing case for the imposition of a duty of care along Caparo lines and he may be unable to do so. (3) There will be a mix of cases involving policy and practice, or operations, where the court's conclusion as to duty of care will be sensitive to the particular facts:
‘the greater the element of policy involved, the wider the area of discretion accorded, the more likely it is that the matter is not justiciable so that no action in negligence can be brought’: per Lord Slynn, in Barrett's case [2001] 2 AC 550 , 571.”
15.22 It is clear that the trial judge in this case was satisfied to apply the concept of operational negligence and was also satisfied that it had been established that operational negligence occurred. It is also clear that while, as noted above, the concept has been accepted to an extent in the United Kingdom, it has been the subject of some academic commentary (not all favourable) and criticism from the courts of other common law jurisdictions. Part of that criticism stems from the fact that many decisions may, in reality, involve a mixture of policy questions and operational matters.
15.23 The authors of Charlesworth and Percy on Negligence, 13th ed., (London, 2014) at para. 2-307 described the commentary and criticism in the following terms:-
"A distinction between policy matters and operational matters was initially developed in the House of Lords, and was then taken up in Canada, New Zealand, and (to a limited extent) Australia. But doubts also were expressed, with the distinction being described as 'difficult' and 'unhelpful'. The core objection, articulated in the US Supreme Court in US v Gaubert [111 S Ct 1267 (1991)], is that discretionary acts involving choice or judgment are not concerned exclusively with policy-making or planning functions, and that day-to-day decisions regularly require judgment as to which of a permissible range of courses is the wisest. As was pointed out by Lord Hoffman in Stovin v Wise, virtually any activity by a public body involves making decisions about priorities and resources. The policy/operational distinction did not provide a reliable guide as to where a dividing line ought to be drawn."
The description of the doctrine as “difficult” or “unhelpful” come from the Australian decisions in Pyrenees Shire Council v. Day (1998) 192 C.L.R. 330 and Romeo v Conservation Commission of the Northern Territory (1998) 192 C.L.R. 431.
15.24 However, it does not seem to me to be necessary, for the purposes of this case, to enter into a detailed consideration of the applicability or otherwise of the law on operational negligence in this jurisdiction and, indeed, if it be applicable, what its boundaries are. It seems to me that the question which arises can properly be addressed within the confines of the “countervailing policy factor” aspect of the test identified by this Court in Glencar. As noted earlier, that factor may, in practise, be more likely to exclude a duty of care in cases involving the State. That factor will be particularly present where the action that is being taken by the State or its agencies or officers involves policy, discretion or adjudication to a significant and material extent. The reason for that is obvious. It is inevitable that policy choices involve benefits (or at least less harm) for some, and harm (or at least less benefit) for others. The consequences of making a particular choice may well be foreseeable. The persons who may benefit or lose may be readily identifiable. But the making of policy choices and their implementation are at the very heart of democratic government. To limit the proper working of the democratic process in making those policy choices by imposing a duty of care would endanger proper policy making and would, in all likelihood, prove almost impossible to operate in practise. Those who suffer as a result of a policy choice would doubtless always complain that it was made without sufficient care or regard for their interests. But by what standard of care is the judgment which led to the relevant policy choice being adopted to be assessed? There are, therefore, very sound reasons why courts would strongly lean in favour of excluding a duty of care under the “countervailing policy” leg of the test identified in Glencar where, to any significant extent, a relevant public decision or action can be said to be materially influenced by policy or discretionary considerations.
15.25 Likewise, the nature of other public roles, such as adjudication on legal obligations or benefits, may provide a basis for identifying a sufficient countervailing factor which may lean against the imposition of a duty of care. Those who are charged with adjudicating must, in the public interest, be free to carry out their task without having to keep a close eye on a possible claim in negligence, for to do otherwise would undoubtedly impermissibly skew the adjudication process.
15.26 But there are some public decisions or actions which do not involve any significant policy, discretion or adjudication element at all. This may be so even though the scheme or statutory structure within which the particular activity takes place may itself involve questions of policy. A very good recent example can be found in the decision of this Court (Laffoy J.) in Minister for Communications, Marine and Natural Resources v. Figary Water Sports Development Company Ltd. [2015] IESC 74. One aspect of that case involved a claim that the State was liable for the way in which it had administered a claim for a grant. Obviously there might well have been many questions of policy involved in a decision as to whether to grant aid in the circumstances of the case. The scheme involved did not confer an absolute entitlement to aid in any particular circumstances. However, the relevant agency failed to progress the claim in a proper manner such that the plaintiff lost out on any chance of securing grant aid. Laffoy J., writing for this Court, held that the State was, in those circumstances, liable for the loss of chance even though the Court significantly differed from the view taken by the High Court as to the proper approach to the calculation of damages.
15.27 The lack of care on the part of the State identified in Figary did not involve any material question of policy. It simply related to the administration of a scheme even though the scheme itself was, of course, heavily influenced by policy. Figary is, in my view, an example of the fact that the countervailing policy limb of the Glencar test will be much less likely to avail the State as a defence where the lack of care alleged does not involve, to a material extent, questions of policy and discretion or, indeed, as in Beatty, questions of adjudication.
15.28 If it was said that the Minister, in the circumstances of this case, had, by reason of a lack of care, come to a wrong decision concerning the actual grant of a licence or permission then very different considerations might well apply.
15.29 However, the duty of care asserted in this case is one which is confined to a matter which lies well to the implementation or administrative rather than policy or discretion end of the spectrum. It is said that due to a mistake of law on the part of the Minister (even after what transpired to be the correct view of the law was formally identified to the Minister by the European Commission), no steps were taken to ensure that scientific and other information and data was available to enable an appropriate assessment to be carried out. This is not an issue which is even a mixed question of administration and policy. If, for example, the Minister had put in place measures to acquire some level of scientific information but it had been found by the courts, whether in this jurisdiction or in Europe, that the Minister was mistaken as to the level of information which was necessary to make an appropriate assessment, then there might be questions as to whether a duty of care extended to the decision as to the precise type of information to be collated.
15.30 Likewise, if the Minister had to make a policy decision as to how to allocate resources and thus prioritised the collection of scientific information and data in some areas over others, it might be appropriate to characterise such a determination by the Minister as being towards the policy end of the spectrum. I accept that the boundary between purely administrative matters and matters which may amount to a mixed question of policy or discretion and implementation or administration may not always be very easy to define. But in this case I am satisfied that the allegation of negligence falls squarely on the administrative side of that boundary. There was no question of policy which impacted on the Minister’s decision. The Minister simply got it wrong in taking the view that traditional activities could be authorised to continue without an appropriate assessment.
15.31 In particular, the Minister got it wrong by failing to put in place measures to secure the appropriate scientific data to enable an appropriate assessment to be carried out long after it had become clear, by reason of the position adopted by the Commission, that there was, to put it at its mildest, a significant doubt as to whether the Minister’s position was correct.
15.32 The failure of the Minister was in omitting to take any steps towards assembling the necessary scientific data to allow an appropriate assessment to be carried out at least after his position had been significantly questioned by the Commission. A similar failure by a private individual in an analogous situation would, in my view, be likely to lead to the Court imposing a duty of care and finding that private individual negligent in failing to comply with the duty of care in question. I can see no sufficient countervailing factor to suggest that a state or public authority, in the circumstances of this case, should be any the less liable.
15.33 On that basis, I cannot agree with the conclusions of the majority. MacMenamin J. speaks of the balancing exercise which the Minister felt called upon to perform. On that basis it is suggested that the fallacy in Cromane’s case is to seek to isolate a private duty from the over-arching public or State duty which the Minister owed. However, it seems to me that the duty of care which I suggest should be held to lie on the Minister does not derive from any balancing exercise at all and does not involve any aspect of the undoubted over-arching public duty which the Minister was obliged to perform. Against what can it be said that the Minister was balancing when he decided not to assemble the necessary scientific information and data (despite the Commission’s reasoned opinion) prior to the decision of the ECJ? What over-arching public duty would have been in any way impaired by the collection of such data? There is no evidence to suggest that the failure to assemble the necessary data was based on any decision involving policy, discretion or adjudication.
15.34 Because, for the reasons already identified, I do not think it is either necessary or desirable in the context of this case to come to a concluded view as to whether operational negligence, in the sense in which that concept has developed in the courts of the United Kingdom, forms part of the law of tort in this jurisdiction, I will not use that term. However, it seems to me that it is possible for a state authority to be liable in respect of the tort of negligence when, in respect of a purely administrative part of its function not involving, to any material extent, questions of policy, discretion or the like, it is in breach of a duty of care in accordance with Glencar principles to a person to whom that duty is owed. Where such negligence is alleged, the important countervailing factor which often operates to the exclusion of a duty of care in cases involving policy, discretion or adjudication will be missing, and will provide no sufficient and proportionate justification for the exclusion of a liability which might otherwise be said to arise in the event that the tests of forseeability and proximity were met.
15.35 For the reasons already advanced, I do not consider that the failure of the Minister to collect the appropriate data in this case involved any question of policy, discretion or adjudication. Subject to one final factor to which I will shortly turn, it seems to me to follow that it is appropriate to impose a duty of care on the Minister such as that which I have sought to identify and to find that the Minister was in breach of that duty of care even though my reasons for coming to that conclusion may differ somewhat from those of the trial judge. Before touching on that final factor, I should briefly comment on the views expressed by MacMenamin J. concerning the applicability of constitutional issues to the analysis in this case.
15.36 The concern which MacMenamin J. expresses is that the creation or recognition of a species of negligence in the form of operational negligence might trench on the constitutional role of the executive. There may well be issues which could arise under that heading in the event that the courts in this jurisdiction were to consider a concept of operational negligence which closely modelled itself on the United Kingdom jurisprudence. However, the form of administrative negligence which I have sought to identify is precisely defined by reference to situations where there is no material or significant element of policy, discretion or adjudication. In those circumstances, it does not seem to me that the constitutional concerns expressed by MacMenamin J. affect the conclusions which I have reached.
15.37 One final factor needs to be assessed. It is, of course, the case that the Minister was under no absolute obligation to grant any particular licences or permissions. In such a case there will almost always be significant questions of policy involved in the decision of whether to grant or refuse. In many such cases, a duty of care will not arise precisely because of the third limb of the Glencar test. However, the situation which arises in this case is different. First, these were traditional activities which provided many of those concerned with their livelihoods. The Minister had at least gone so far as to provide some comfort to those involved in such traditional activities to the effect that it was not envisaged that those activities would be impaired by the creation of protected areas for the purposes of EU environmental law. While that comfort cannot, for the reasons already identified, give rise to a legitimate expectation, it does, in my view, give rise to at least a duty on the part of the Minister to put in place any reasonable measures necessary to enable the Minister properly to consider whether it was appropriate to grant any particular licence or permission. In circumstances where significant doubt had arisen, as a result of the position adopted by the Commission, as to whether the Minister could continue to grant licences or permissions in the absence of having sufficient scientific data to carry out an appropriate assessment for the purposes of EU environmental legislation, it seems to me that the Minister owed a duty of care to put in place measures to ensure that an appropriate assessment could be carried out. It is that failure which it seems to me has been established in this case.
15.38 While the duty of care which I have identified as having been breached may differ slightly from the duty of care identified by the trial judge, I am not satisfied that there is any material difference in substance. At para. 15.7 of his judgment, Hanna J. identified the question as being as to “whether a duty of care exists to ensure that the Minister is put in a position to make a proper legal decision in the first place”. Likewise, the case made by Cromane both in its amended statement of claim and in its written submissions before the High Court suggested that the appropriate studies “should have been available well before this period of time, and it was as a result of the failure of the Minister to have this relevant information that he was so poorly equipped to reopen the Cromane Harbour [sic] for mussel fishing any sooner than he did...” (see para. 8 of the submissions). I am, therefore satisfied that the duty of care which I have found to be breached comes within the scope of the case made by Cromane in the High Court and, indeed, the findings of the trial judge.
15.39 I would, therefore, uphold the decision of the trial judge that there was a duty of care on the Minister in the narrow circumstances in which I have defined it in the course of this judgment and that there was a breach of that duty of care. Before going on to the question of the calculation of damages there are two further points which arise. The first concerns the argument that the loss would have arisen anyway, and the second concerns the distinct legal personalities of Cromane and O’Sullivan McCarthy respectively. I now turn to those issues.
16. Would the Loss have occurred anyway?
16.1 The argument under this heading is to the effect that it was likely that some period would have been lost in any event in the light of the developments in European law which were to the effect that an appropriate assessment had to be carried out in order for traditional activities to continue in protected areas. For the reasons already analysed there is no doubt but that, as a matter of European law, traditional activities could not have been continued without an appropriate assessment. The real issue of causation which arises, therefore, is as to whether there is any causal link between the Minister’s breach of duty of care and loss. The reason why it might be said that there is no such causal link is because it might be argued that, once European law changed, an appropriate assessment would have to have occurred at some stage. On that basis it might be said that it followed that the necessary scientific inquiry would have to have been made in order for an appropriate assessment to have been carried out. It might further be argued that, during the course of assembling the necessary data, there would inevitably have been a period during which lawful production would not have been possible in the harbour. On that basis it might finally be argued that the only consequence caused by the Minister’s breach of duty of care might be said to have been that the harbour was closed in 2008 rather than some earlier year (for the reasons already addressed I am not satisfied that the question of closure in 2010 can really be sustained).
16.2 However, on the basis of the findings of the trial judge, which findings were supported by evidence, it seems clear that, had the Minister arranged for the collection of the appropriate scientific data at least as early as the time when the Commission challenged the Minister’s view as to whether traditional activities could be continued without an appropriate assessment, the assessment required as a matter of EU law could have been completed within a timeframe which would not have led to any cessation of business. Given the events which have happened, we know that it proved possible lawfully to permit the relevant activities to continue once the appropriate assessment had been carried out. It follows that there is no reason to believe that, had the appropriate assessment been carried out in a timely fashion, a similar decision would not then also have been made thus leading to no cessation of business. It follows that there is a direct causal link between the failure of the Minister to assemble the necessary scientific data and carry out an appropriate assessment at least soon as the Commission’s position became clear and the inability of O’Sullivan McCarthy to carry on their activities at least during the 2008 season.
17. The Position of Cromane
17.1 The argument here suggests that Cromane was not directly affected by the negligence of the Minister. In that sense, a distinction is made between the positions of O’Sullivan McCarthy, who are the party directly affected by the Minister’s actions, and that of Cromane, who are only indirectly affected by reason of being downstream purchasers from O’Sullivan McCarthy. It is, of course, the case that there are close connections between the two companies involving common shareholders and directors. They also have a very close business relationship. But they are separate legal entities.
17.2 The argument put forward on behalf of the State suggests that there is no reason in principle to distinguish between Cromane, as a downstream purchaser from O'Sullivan McCarthy, and any other wholesaler, transporter or retailer who might have been involved in the overall business which operated downstream to the mussel harvesting business of O’Sullivan McCarthy. If, for example, there were a local supermarket which could establish that it suffered loss because it had to purchase supplies on a less commercially attractive basis because of the effect on O’Sullivan McCarthy’s mussel harvesting business, why should such a commercial entity not be regarded in the same light as Cromane?
17.3 In my view, that argument is well made. Persons choose to conduct their business as individuals or corporate entities for a whole range of reasons. When choosing to conduct business as a corporate entity, persons may choose to operate as a single company, or a number of companies which form part of a formal group or, as here, by entirely separate legal entities. There is a whole range of legal and fiscal consequences for those decisions. Sometimes they may happen to benefit parties. Sometimes they may not. But they are decisions made by those involved in the economic activity themselves. They must live with the consequences, both good and bad.
17.4 It does not seem to me that the fact that an entirely separate company with an entirely separate legal personality happens to have common directors and shareholders takes away from the fact that Cromane, as a downstream purchaser from O’Sullivan McCarthy, cannot be said to be in any different position, as a matter of principle and as a matter of law, from any other downstream purchaser. Such downstream knock-on effects do not, in my judgment, meet the proximity test identified as far back as Donoghue v. Stephenson and reiterated in Glencar. In my view, the trial judge was incorrect to allow the claim attributable to Cromane.
18. Damages
18.1 The first point to be made is that the scope of damages is, of course, significantly limited by reason of the limitations on liability which have already been analysed in this judgment. The trial judge distinguished between the damages attributable to Cromane, on the one hand, and O’Sullivan McCarthy on the other hand. On that basis, there would be no difficulty in removing from the equation those damages attributable to Cromane on the basis of my view that the State does not have any liability to Cromane itself.
18.2 However, even so far as O’Sullivan McCarthy is concerned, it is clear that the damages now must exclude those losses said to be attributable to the 2010 season, again for the reasons already indentified in this judgment. But apart altogether from that, the State made further arguments concerning the calculation of the damages which the trial judge awarded to O’Sullivan McCarthy. The State was critical of the acceptance by the trial judge of the evidence of the plaintiff’s expert, Mr. Wynne, on a number of bases. First, it is said that Mr. Wynne based his figures on revenue in the three years prior to the year of assessment which, it was argued, removed the undoubted variation in price during those years from the equation. There was evidence that the market price was not stable during that period and that it had decreased from €1,518 per tonne in 2006 to €698 per tonne in 2010. On the other hand, Cromane drew attention to the fact that the price for 2008 (which is, after all, the only year in respect of which damages are now to be calculated) was somewhat higher than average.
18.3 The State also drew attention to the fact that the accounts for 2010 (which would reflect mussel seed obtained in 2008 and harvested in 2010) showed no sales of mussels in the year in question. However, those accounts show expenditure of €68,027 on mussel seed purchases in 2008. This, according to the State, is a matter of “serious concern” for two reasons. First, the State suggests that the trial judge did not rule on this matter which it is said was a “significant issue in controversy relating to the quantification of damage.” Second, the State suggests that the explanations given by the expert, Mr. Wynne, and Mr. O’Sullivan of O’Sullivan McCarthy differed in regard to the purpose of that expenditure. For example, it is said that Mr. Wynne appears to have attributed the 2008 expenditure to the purchase of mussel seed from local fisherman. In contrast to that evidence, Mr. O’Sullivan attributed €13,000 of the expenditure to the purchase of mussel seed while the explanation for the balance of the expenditure, which the State described as “incomprehensible”, involved a complex barter system involving an exchange of grown mussels for work done by other fishermen who, it is said, did not appear as employees or service providers to either Cromane or O’Sullivan McCarthy in the accounts furnished to the Court. The State argued, in their submissions, that Mr. Wynne and Mr. O’Sullivan gave “starkly different explanations for the expenditure.” Further points, which it is not necessary to go into in detail about at this stage, were also made.
18.4 It is also necessary at this point to mention the fact that Cromane also cross-appealed on the basis that the damages awarded by the trial judge were ultimately inconsistent with the specific findings which the trial judge made deriving from the evidence presented in relation to those damages.
18.5 Without reaching a definitive view in respect of each of the points raised, I am satisfied that the difficulty with the evidence and figures would make it impossible for this Court to put itself in a position where it could conduct a fair and just calculation of the damages properly attributable to O’Sullivan McCarthy arising out of the closure of the harbour in 2008. To attempt that exercise would involve the Court in excessive speculation which might end up being unfair to one or other party. In the circumstances, it seems to me that the proper course of action to adopt would be to remit the question of damages back to the High Court but, in so doing, to direct that the damages to be assessed must be confined to those arising out of the closure of the harbour in 2008 and must be confined to losses suffered by O’Sullivan McCarthy.
18.6 On that basis, I would remit the question of the calculation of O’Sullivan McCarthy’s damages back to the High Court. It follows that the cross appeal should not be allowed as all issues of calculation not dealt with in this judgment should arise on the remittal.
19. Conclusions
19.1 I would allow the appeal in respect of legitimate expectation, allow the appeal in respect of negligence relating to Cromane, but dismiss the appeal in respect of liability for negligence in respect of O’Sullivan McCarthy. I would allow the appeal in respect of the quantum of damages in relation to O’Sullivan McCarthy and remit that question to the High Court. I would also dismiss the cross appeal by Cromane, as the quantification of damages should, in my view, be addressed on the remittal.
19.2 So far as the quantification of damages in respect of O’Sullivan McCarthy are concerned, I would confine the assessment of those damages by the High Court, when the case is remitted back, to an assessment of losses attributable to the inability of O’Sullivan McCarthy to do business in the 2008 season only. I would exclude from the calculation of such damages any losses alleged to be attributable to the 2010 season.
