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Judgment Title: Rafferty -v- Minister for Agriculture, Food and Rural Development & ors Neutral Citation: [2014 IESC 61 Supreme Court Record Number: 423 & 425/08 High Court Record Number: 2001 18343 P Date of Delivery: 07/11/2014 Court: Supreme Court Composition of Court: Denham C.J., Murray J., Hardiman J., O'Donnell Donal J., McKechnie J. Judgment by: O'Donnell Donal J. Status of Judgment: Approved
Outcome: Allow And Set Aside | ||||||||||||||||||||
THE SUPREME COURT Appeal No. 423/2008 Denham C.J. Murray J. Hardiman J. O’Donnell J. McKechnie J.
Brendan Rafferty Plaintiff/Appellant and
Minister for Agriculture, Food and Rural Development, Ireland and The Attorney General Defendants/Respondents Judgment delivered on the 7th day of November, 2014, by Denham C.J. 1. At issue on this appeal is the interpretation of the word “compensation” in s. 17 of the Diseases of Animals Act, 1966, as amended. In analysing the meaning of the word there is a factual, pleading, statutory and constitutional background to consider. 2. This appeal has been brought by Brendan Rafferty, the plaintiff/appellant, referred to as “the appellant”, from the judgment of the High Court (McGovern J.), delivered on the 31st October, 2008, and the order of the 13th November, 2008, where the appellant’s action was dismissed. 3. The High Court also determined that there be no order as to costs. The Minister for Agriculture, Food and Rural Development, Ireland and the Attorney General, the defendants/respondents, referred to collectively as “the respondents”, have cross appealed against the refusal of the respondents’ application for costs and they seek an order for costs against the appellant. 4. In his pleadings, the appellant sought to be compensated for all losses resulting from a compulsory depopulation of his stock pursuant to the provisions of the Diseases of Animals Act, 1966, as amended, referred to as “the Act of 1966”, after an outbreak of Foot-and-Mouth disease on the Cooley Peninsula in the spring of 2001. The appellant sought compensation in accordance with s. 17 of the Act of 1966, for financial loss and damage, including consequential loss and damage associated with the cull of his sheep. 5. The appellant also sought, inter alia, damages for an unjust attack on constitutionally protected property rights; damages for failure to vindicate constitutionally protected rights; damages for breach of duty (including statutory duty and constitutional duty) and contractual duty; damages for emotional loss, stress, anxiety, and mental suffering. 6. The appellant sought a declaration that s. 17 of the Act of 1966 requires that he be fully compensated for all loss resulting from a depopulation of his stock. 7. The appellant also sought a declaration that the compulsory depopulation of his flock was an attack on his rights as protected by Articles 40.3 and 43 of the Constitution; a declaration that insofar as the Act of 1966 permits depopulation of animals in the absence of full compensation for all loss associated therewith, that the said Act is unconstitutional for breach of Articles 40.3 and 43 of the Constitution; a declaration that the appellant had a legitimate expectation to full compensation arising from the loss sustained as a consequence of the compulsory depopulation of his herd for the common good. Background 9. On or about the 28th February, 2001, an outbreak of Foot-and-Mouth Disease, which is a scheduled disease under the Act of 1966, was confirmed on the Cooley Peninsula, County Louth. The Cooley Peninsula was designated an exclusion zone, with animal restrictions and disease prevention measures put in place by the first named respondent, referred to as “the Minister”. On about the 22nd March, 2001, a cull of the sheep on the Cooley Peninsula was announced, and this commenced on the 23rd March, 2001. 10. Assurances were given as to compensation for the cull. The appellant’s sheep, which were not infected, were culled to prevent the spread of the disease. 11. The appellant received compensation following the cull of his sheep, but it was submitted that it fell far short of the actual loss and damages sustained by the appellant as a result of the cull. The High Court Judgment Market Value
14. The High Court accepted evidence that the appellant (and Mr. Elmore) suffered losses going beyond mere market value. The learned High Court judge held:-
16. Mr. Rafferty accepted, in evidence, that within six and a half months of buying in a significant number of animals in 2000 (the year before the cull), he was able to get those animals up to the same fertility rate as the sheep which he already had. While I am satisfied that the replacement of his entire flock would have resulted in a delay in achieving the same rates of prolificacy and other desirable traits, the evidence suggests that Mr. Rafferty would, in time, have been able to do this. Mr. J.P. Hanrahan, who is head of the Sheep Production Department of Teagasc, furnished to the Court a report on the claims of each of the plaintiffs, and he also gave evidence. The records of Mr. Rafferty show that he bought 210 hoggetts in 2000, which was before the cull, and he claimed to have achieved more or less the same productivity from those hoggetts as he had from the stock which he already had on hand. Mr. Hanrahan found it difficult to accept that evidence from a scientific point of view and from his considerable experience. He said he would have ‘very substantial doubt about that evidence and described it as improbable. He did, however, accept that it would have taken Mr. Rafferty some time to get back to the same weaning rate for his lambs as existed prior to the cull. It could take him up to six years to do so if he was unable to purchase Belclare crossbred sheep. Mr. Hanrahan was of the view that he would have been able to get such animals and that would have accelerated the prolificacy rates of the flock. I accept Mr. Hanrahan’s evidence on these matters. Mr. Rafferty’s situation is somewhat complicated by the fact that he has now gone into other areas of farming and has expanded his cereal production. I accept his evidence that he suffered losses going beyond mere market value. In the case of Mr. Elmore, he gave evidence that he bought in sheep in October 2001, and had some problems when he put them out on the mountain in spring 2003. But he accepted that by 2005, matters had greatly improved and that he got back to his pre-cull position, more or less, over a five or six year period following the cull. Undoubtedly, he had additional trouble in herding his flock until they became hefted to the commonage. Mr. Hanrahan accepted that this would have been the case. So Mr. Elmore also suffered losses going beyond the market value of his animals.” 15. The High Court noted that there was no dispute between the parties that s. 17(2) of the Act of 1966 required the Minister to compensate farmers whose animals are slaughtered pursuant to s. 17(1) of the Act of 1966. 16. The High Court considered what was meant by the term “compensation” under the scheme and held:-
18. The High Court held that nothing in the Act of 1966 suggested that it was the intention of the legislature that compensation should include consequential loss. Constitutionality of the Act of 1966 20. The High Court stated that it was clear from the evidence that the appellant was compensated by reference to the market value of the animals, and that while the High Court held that the appellant received compensation somewhat in excess of the market value, it was that yardstick which was used in arriving at the valuation. The learned trial judge then considered whether this approach was constitutional. 21. The High Court considered the principle of proportionality. The learned High Court judge stated that he had been asked to consider whether or not the compensation paid to the appellant was an interference with his property rights and whether it constituted an unjust attack on those rights. 22. The learned High Court judge held:-
39. It seems to me that the Courts should draw a distinction between compensation based on a finding of fault, and a scheme of compensation to ameliorate hardship, in the absence of fault. While restitutio in integrum may be the yardstick for the former, the authorities opened to me clearly establish that this is not the criterion to be used for compensation for loss of property compulsorily taken for the public good. The plaintiffs have not made out any case to the effect that the defendants acted mala fides or that the scheme put in place was irrational. What they have sought to prove is that the compensation which they received, if it is market value, is not sufficient, and that they are entitled to full consequential loss. For the reasons set out above, having reviewed the authorities on this matter and considered the submissions on behalf of both parties, I do not accept the plaintiffs’ argument on this point. 40. There was some disagreement among the expert witnesses as to the measure of the losses suffered by each of the plaintiffs. I have already stated my view that the plaintiffs have each suffered losses going beyond mere market value of their animals. But in view of my conclusions on the compensation which has been awarded and the legitimacy of the scheme, it is not necessary for me to resolve any conflict between the witnesses on that issue. 41. I find that the plaintiffs have not established that the scheme of compensation was unjust or unlawful and I also find that the impugned provisions of the Diseases of Animals Act 1966, are not repugnant to the Constitution and I also hold that there has been no unjust attack on the property rights of the plaintiffs in this case. The plaintiffs’ claims are, therefore, dismissed.” 23. The appellant filed 17 specific grounds of appeal, as follows:-
(2) The High Court erred in law and/or in mixed questions of law and fact in determining that the appellants had not established that the scheme of compensation was unjust or unlawful in circumstances where, inter alia:- (a) the High Court concluded that as there was no appeal under the valuation process which was, in fact, put in place by the Minister, the Court had jurisdiction "to look behind the compensation actually awarded and to determine whether it was fair and reasonable, and also whether it could only be fair and reasonable if it included consequential loss or something more than market value" (paragraph 22 of the judgment); (b) the High Court determined and/or found as a fact that the appellants suffered losses going beyond the mere market value of the animals culled (paragraph 16 of the judgment); (c) the High Court determined and/or found as a fact that, prior to the cull, the appellant had "carefully selected rams for different traits and bred them with his ewes" and that by observing the instincts of the sheep, he was able to pick out desirable traits, such as the maternal instincts of ewes and prolificacy (paragraph 10 of the judgment); (d) the High Court determined and/or found as a fact that, prior to the cull, the appellant had, through careful selection, achieved high weaning percentages approaching 1.8 lambs and the High Court found as a fact that this was "exceptional" (paragraph 10 of the judgment); (e) the High Court found as a fact and/or expressed itself satisfied that "the replacement of the appellant’s entire flock would have resulted in a delay in achieving the same rates of prolificacy and other desirable traits" (paragraph 16 of the judgment); (f) the High Court determined and/or found as a fact that, prior to the cull, the flock of sheep belonging to Mr. Elmore, was "hefted" (paragraph 13 of the judgment); (g) the High Court determined and/or found as a fact inter alia that Mr. Elmore, "[u]ndoubtedly" had "additional trouble in herding his [replacement] flock until they became hefted to the commonage" (paragraph 16 of the judgment); (h) the High Court expressly conceded that the compensation paid (by reference to “market value”) “may not have taken into account intrinsic value such as hefting and other desirable traits” (paragraph 14 of the judgment); (i) the High Court determined and/or found as a fact that, on the evidence, the appellant and Mr. Elmore "have not been fully compensated by the compensation which has been given to them, whether that compensation is market value or, as I have held, something in excess of that" (paragraph 38 of the judgment);
(j) it was accepted by the respondents during the hearing that there was no wrongdoing on the part of the appellant and Mr. Elmore and that their animals were healthy and free from disease at the time of the cull; and (k) it was common case that the appellant’s animals were expropriated and culled in the interest of the common good. (3) The High Court erred in law and/or in mixed questions of law and fact in its interpretation of the meaning of ‘compensation’ in the Diseases of Animals Act, 1966, and in particular, in determining that it could ‘find nothing in the Diseases of Animals Act 1966, which suggests that it was the intention of the legislature that compensation should include consequential loss’ and that it did not seem to be necessary that it would include such loss to make sense of the legislation in circumstances where inter alia: (a) the High Court determined and/or found as a fact that the term is not defined in the Act; (b) the High Court held that the purposive rule of statutory interpretation cannot be used unless there is some ambiguity as to the meaning of the statutory provision; (c) the High Court concluded that there is some ambiguity in the Act insofar as ‘compensation’ is not defined in a manner which would indicate the extent of the compensation to be awarded (paragraph 22 of the judgment); (d) there is nothing on the face of s. 17 of the Diseases of Animals Act, 1966, that would limit the compensation to be awarded in respect of the depopulation of the appellants' flocks to the market value of the animal; (e) the High Court determined that s. 58 of the Diseases of Animals Act, 1966 gives the Minister power to “make regulations as to how compensation should be assessed and how disagreements between the farmers and the assessor as to valuation should be dealt with” (paragraph 22 of the judgment); (f) it was established during the hearing that express and detailed provision is made for the payment of compensation for consequential losses in respect of schemes operated by the Minister (whether pursuant to s. 58 of the Diseases of Animals Act, 1966 or as non-statutory schemes) regarding other animal diseases (namely, Bovine Tuberculosis and Brucellosis Scrapie) and such schemes also concern animals taken under section 17 of the Diseases of Animals Act, 1966; and (g) it is common case that the appellant and Mr. Elmore's flocks were depopulated by the State pursuant to s. 17 of the Diseases of Animals Act, 1966. (4) The High Court erred in law and/or in mixed questions of law and fact in seeking to distinguish between and in placing reliance upon the differences between the animal diseases in respect of which the State makes provision for compensation for consequential losses on the one hand (Bovine Tuberculosis and Brucellosis and Scrapie) and Foot and Mouth disease on the other in circumstances where, inter alia: (a) any difference between the animal diseases is not relevant to the broader issue of statutory interpretation before the High Court, namely, the determination of the definition of ‘compensation’ within the meaning of s. 17 of the Diseases of Animals Act, 1966; (b) it is not necessary for the appellants to bring themselves within the terms of the schemes regarding Bovine Tuberculosis and Brucellosis or Scrapie in order to qualify for compensation for consequential losses; (c) the High Court failed to have any or any adequate regard for the fact that these schemes (whether introduced and operated pursuant to s. 58 of the Diseases of Animals Act, 1966 or as non-statutory schemes) make provision for compensation in respect of consequential losses in respect of animals taken under s. 17 of the Diseases of Animals Act, 1966; and (d) it is common case that the appellant and Mr. Elmore’s flocks were depopulated by the State pursuant to s.17 of the Diseases of Animals Act, 1966. (5) The High Court erred in law and/or in mixed questions of law and fact in determining that the impugned provisions of the Diseases of Animals Act, 1966, as interpreted by the High Court, are not repugnant to the Constitution, in circumstances where inter alia:- (a) the High Court determined and/or found as a fact that the appellant and Mr. Elmore suffered losses going beyond the mere market value of the animals culled; (b) the Court held that the purposive rule of statutory interpretation cannot be used unless there is some ambiguity as to the meaning of the statutory provision; (c) the Court concluded that there is “some ambiguity in the Act insofar as ‘compensation’ is not defined in a manner which would indicate the extent of the compensation to be awarded” (paragraph 22 of the judgment); (d) the Court conceded that the appellant’s argument that he should be entitled to compensation for all losses (including consequential loss) as a quid pro quo for giving up this healthy flock to be slaughtered to protect the national interest was ‘an attractive argument and one which, on the face of it, seems hard to resist’ (paragraph 26 of the judgment); and (e) the interests relied upon and the examples cited by the High Court in its judgment (in particular, in paragraphs 26 and 38 thereof) are inadequate to justify the failure to compensate the appellant and Mr. Elmore for all of their losses (including consequential losses) sustained through the expropriation by the State of their property, in circumstances where it is common case that the appellants were innocent of wrongdoing, their animals were healthy at the time of the cull and the expropriation took place in the interest of the common good. (6) The High Court erred in law and/or in mixed questions of law and fact in determining that there had been no unjust attack on the property rights of the appellant and Mr. Elmore and, in particular, in failing to accept the appellant’s argument that the State, when it expropriates property from an individual (innocent of wrongdoing) in the public interest, is obliged to restore that individual to the status quo ante and to compensate the individual for his/her losses (including consequential losses) as if the taking of the property had never occurred. (7) The High Court erred in law and/or in mixed questions of law and fact in determining that the respondents' approach of compensating the appellant and Mr. Elmore for the destruction of their flocks by reference to the market value of their animals was constitutionally permissible having regard, inter alia, to the fact that: (a) the High Court determined and/or found as a fact that the appellant and Mr. Elmore suffered losses going beyond the mere market value of the animals culled; (b) the High Court expressly conceded that the ‘market value’ (understood as the replacement cost of an individual sheep) ‘may not have taken into account intrinsic values such as hefting and other desirable traits’ (paragraph 14 of the judgment); (c) it was accepted by the respondents during the hearing that there was no wrongdoing on the part of the appellant and Mr. Elmore and that their animals were healthy and free from disease at the time of the cull; (d) it was common case that the appellant’s and Mr. Elmore’s animals were expropriated and culled in the interest of the common good; (e) the appellant’s and Mr. Elmore’s cases involve not merely an interference with the Appellants' property rights but the destruction of their very subject matter and the concomitant and immediate loss of their livelihood and income stream in the interests of the common good; (f) the proper application of the presumption of constitutionality to the impugned provisions of the Diseases of Animals Act, 1966, as amended, required the payment of full compensation to the appellant or restitutio in integram. (8) The High Court erred in law and/or in mixed questions of law and fact in justifying the absence of full compensation (including compensation for consequential losses) for the appellant in respect of the destruction of his animals by reference to the alleged absence of compensation for other persons affected by the Foot and Mouth outbreak and in citing the alleged absence of compensation for persons in the tourist industry (paragraph 26 of the judgment), in particular having regard to: (a) the absence of any evidence to this effect adduced during the hearing; (b) the failure of such analogy to take any or any adequate account, inter alia, of the significant distinction between the situations of the appellant and Mr. Elmore and hoteliers, namely, the fact that the entirety of the appellants' flocks (supporting their livelihood as sheep farmers) were destroyed by the State in the national interest in the absence of any wrongdoing on the part of the appellants and in circumstances where their animals were healthy at the time of the cull, whereas the hoteliers' hotels (and means of business) were not similarly destroyed; and (c) the fact that the appellant’s and Mr. Elmore’s cases involve not merely an interference with their property rights but the destruction of-their very subject-matter and the concomitant and immediate loss of their livelihood and income stream in the interests of the common good. (9) The learned trial judge erred in law and/or in mixed questions of law and fact in failing to recognize or acknowledge that where the property of an individual innocent of wrongdoing is expropriated and destroyed by the State in the interests of the common good, compensation at a level in excess of market value (and encompassing compensation in respect of consequential losses) is constitutionally required. (10) The High Court erred in law and/or in mixed questions of law and fact in justifying the absence of full compensation (including compensation for consequential losses) for the appellant and Mr. Elmore in respect of the destruction of their animals by reference to the asserted limits on the obligations of the State to ameliorate the effects of natural disasters consistent with available resources, inter alia, having regard to the inapposite nature of this analogy and, in particular, the fact that the expropriation of their healthy flocks and their slaughter in the interest of the common good was a prophylactic measure designed to avoid a disaster as opposed to ameliorating the effects of a natural disaster (paragraph 38 of the judgment). (11) The High Court erred in law and/or in mixed questions of law and fact in justifying the absence of full compensation (including compensation for consequential losses) for the appellant and Mr. Elmore in respect of the destruction of their animals by reference to the ‘enormous implications for the Exchequer’ and the asserted ‘serious and disproportionate burden on the taxpayer’ (paragraph 38 of the judgment). (12) The High Court erred in law and/or in mixed questions of law and fact in defining the obligation of the State, in providing compensation, as the obligation ‘to provide a scheme which is fair and reasonable and proportionate to the situation’ (paragraph 26 of the judgment) and in failing to have regard, when defining the State's obligation in providing compensation, to the property rights of the appellant under the Constitution of Ireland and/or the European Convention for the Protection of Human Rights and Fundamental Freedoms. (13) The High Court erred in law and/or in mixed questions of law and fact in taking into account, for the purposes of determining the proportionality of the measures taken by the State and the scheme of compensation in fact operated, the assertion that "there are many other people who suffered financial losses as a result of the outbreak of Foot and Mouth disease for whom there was no scheme of compensation" (paragraph 38 of the judgment). (14) The High Court erred in law and/or in mixed questions of law and fact in concluding that, where the property of a person innocent of wrongdoing (such as the appellant) is compulsorily acquired and destroyed by the State in the interests of the common good, the purpose of a scheme of compensation put in place by the State is ‘to minimize the hardship suffered by those sheep farmers who, in this case, had to permit their flocks to be culled’ and, in particular, in failing to have or any adequate regard for the appellants' property rights under the Constitution of Ireland and the European Convention for the Protection of Human Rights and Fundamental Freedoms and the requirements of constitutionally just compensation. (15) The High Court erred in law and/or in mixed questions of law and fact in its application of the presumption of constitutionality to the impugned provisions of the Diseases of Animals Act, 1966, as amended and to the appellant’s claim in circumstances where, inter alia:- (a) the statutory obligation to compensate the appellant pursuant to s.17 of the Diseases of Animals Act, 1966, as amended, must be, understood in the light of constitutional rights and principles; and (b) the proper application of the presumption of constitutionality to the impugned provisions of the Diseases of Animals Act, 1966, as amended, requires the payment of full compensation to the appellant and Mr. Elmore or restitutio in integram. (16) The High Court erred in law and/or in mixed questions of law and fact in, inter alia:- (a) concluding that while compensation by way of restitutio in integram "may be the yardstick for compensation based on a finding of fault, it is not the criterion to the used for compensation for loss of property compulsorily taken for the public good, in the absence of fault" (paragraph 39 of the judgment); and (b) concluding that as the appellant and Mr. Elmore had ‘not made out any case to the effect that the respondents acted mala fides or that the scheme put in place was irrational’, the appellant was not entitled to compensation based on restitutio in integram (paragraph 40 of the judgment). (17) Without prejudice to the foregoing grounds, the High Court erred in law and/or in mixed questions of law and fact in dismissing the appellant’s claims in circumstances where, inter alia: (a) the said order breaches, and/or is invalid having regard to the provisions of the Constitution of Ireland and, in particular, the provisions which protect the constitutional right to property and the right to earn a livelihood; (b) the said order is incompatible with the provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms (and, in particular, the provisions of the First Protocol thereto which protect the right to property) and/or fails to comply with the requirements of the European Convention on Human Rights Act, 2003; (c) Section 17 of the Diseases of Animals Act, 1966, when construed properly in accordance with, inter alia, the provisions of the Constitution and/or the European Convention for, the Protection of Human Rights and Fundamental Freedoms, does not provide any basis for the said orders or any part thereof; (d) Section 17 of the Diseases of Animals Act, 1966, when construed properly in accordance with, inter alia, the provisions of the Constitution and/or the European Convention for the Protection of Human Rights and Fundamental Freedoms, requires the payment of compensation for all of the losses suffered by the appellant as a result of the expropriation and destruction by the State of their healthy animals in the interest of the common good; (e) the High Court accepted in its judgment that both the appellant and Mr. Elmore suffered losses going beyond mere market value (paragraphs 16 and 38 of the judgment); (f) the interests relied upon and the examples cited by the High Court in its judgment (in particular, in paragraphs 26 and 38 thereof) are inadequate to justify the failure to compensate the appellant and Mr. Elmore for all of their losses (including consequential losses) sustained through the expropriation by the State of their property in circumstances where it is common case that the appellant and Mr. Elmore were innocent of wrongdoing, their animals were healthy at the time of the cull and the expropriation took place in the interest of the common good. 24. Oral and written submissions were received from both parties. Issue Statutory Law
( b ) any animals or poultry which are or have been in the same field, shed or other place, or in the same herd or flock or otherwise in contact with animals or birds so affected or suspected of being so affected, or which appear to the Minister to have been in any way exposed to the infection concerned, and (c) any animals or poultry within an area which in the opinion of the Minister sufficiently defines an area where a risk of infection exists. (3) The Minister may reserve for observation, treatment or testing, an animal or bird liable to be slaughtered under this section but subject to payment of compensation by the Minister as in the case of actual slaughter.” [Emphasis added] Foot-and-Mouth Disease Order, 1956
30. The Order of 1956 was confirmed by s. 4 of the Diseases of Animals (Amendment) Act, 2001. 31. No argument was raised as to the validity of the scheme being operated on foot of the Order of 1956. Compensation 33. The 8th Edition of the Concise Oxford Dictionary, defines “compensation” as:-
b. the process of being compensated 2 something, especially money, given as a recompense. …”
Statute and Statutory Instrument 38. Under s. 18 of the Act of 1966 where an animal has been slaughtered under the Act at the direction of the Minister, the carcase of the animal shall belong to the Minister and shall be disposed of at the direction of the Minister. Section 18(2) of the Act of 1966 provides:-
40. Thus, the question which has to be addressed is: what does s. 17(2) of the Act of 1966 mean? The terms of s. 17(2) are ambiguous, and this ambiguity continues to exist when s. 22 of the Order of 1956 is considered. Also, s. 17(2) states merely that the Minister shall pay compensation for animals which have been slaughtered under the section. There are no parameters given as to the compensation. There is no section setting out a policy reason, explanation or balancing exercise as to the compensation to be paid. The High Court determined that s. 17(2) of the Act of 1966 meant that the compensation was the market value of the animals slaughtered. However, the section is capable of a broader meaning as to “compensation” than that given to it by the High Court. 41. In analysing the term “compensation” provided in the statute, where property has been seized by the State, fundamental constitutional principles have to be borne in mind. Issues such as whether a seizure constitutes an “unjust attack” on property rights form part of the analysis. This approach may be seen in the jurisprudence of this Court in construing legislation. 42. In Dublin Corporation v. Underwood [1997] 1 I.R. 69, the issue for determination was whether the owner of compulsorily acquired property which is not occupied by him, but held as an investment, was entitled to recover his re-investment costs from the acquiring authority as part of his compensation. The issue was determined in this Court, as a matter of principle. Keane J. held at p. 129:-
44. Dreher v. Irish Land Commission [1984] I.L.R.M. 94, is a case which was decided on its own facts. However, there is a clear statement of principle in relation to Articles 40 and 43 of the Constitution, where Walsh J. stated at p. 96:-
45. A person who has been compulsorily deprived of his or her property or property interests by the State is entitled, in principle, having regard to the constitutional protection of property rights from unjust attack, to compensation for the total loss caused or resulting as a consequence of compulsory deprivation of those interests. As the case law of this Court, including those cited above, indicates there are circumstances in which it may be, for legitimate reasons, constitutionally permissible to limit the compensation to an amount less than the total loss including consequential loss. Any such exception would be subject to strict scrutiny by the courts as to the legitimacy of the grounds limiting full compensation for loss actually sustained, and subject also to the principle of proportionality. In this case there is nothing in the relevant legislation, and it has not been otherwise argued on behalf of the Minister, that any exception to the payment of total loss arises for consideration in this case. Accordingly, the Court was not required to examine any such considerations in this case. 46. The term “compensation” in its natural and ordinary meaning is payment for total loss. Thus, in this case the State elected to pay “compensation”, which encompasses payment for the total loss, and therefore must include consequential loss to the appellant’s business. That is the basis on which the Court must approach the issue concerning compensation in this case. Any other approach, in light of the circumstances in this case, as outlined above, would constitute an unjust attack on the appellant’s property rights. 47. Consequently, for the reasons given, I would allow the appeal. I would make a declaration that the appellant is entitled to damages by way of compensation in accordance with s. 17(2) of the Act of 1966 for financial loss and damage, including consequential loss and damage associated with the cull of his sheep. I would remit the matter to the High Court for the assessment of the appellant’s “total loss”, including consequential loss. That means not simply the market value of the individual carcasses, but also the consequential loss to his business due to the fact that this was not equivalent to the sale of sheep stock in the ordinary course of business but rather a sudden and total loss of stock. As a consequence, the appellant’s business was brought to a sudden halt, he would have had to restock and get his business back up and running again. The compensation which he received for the carcasses would have to be taken into account, including, if it is so established, any excessive market value compensation for that. Equally relevant would be the appellant’s duty to mitigate any loss. Addendum
Judgment of O’Donnell J. delivered on the 7th of November 2014.
1. I agree with the judgment delivered by the Chief Justice in this matter and wish only to add some matters by way of observation. 2. The outbreak of foot and mouth disease first at Maigh, County Armagh, on the 1st of March 2001, and then in a sheep flock at Proleek near Jenkinstown in County Louth, was an extremely serious development for the cattle and sheep industries in Ireland, north and south, but it was a particular catastrophe for the sheep farmers of the Cooley Peninsula of County Louth who were most obviously and directly at risk of the spread of the disease. Accordingly, I agree with the observations of the High Court Judge that this case contains elements of compulsory acquisition of property, and a form of disaster relief. I also agree with the Chief Justice that no issue arises in this case as to whether, and if so, in what circumstances, legislation may properly provide for compensation other than the market value when a property right is being acquired, or conceivably destroyed, by the State. That was not argued in this case. 3. Difficult legal and conceptual issues arise when the State acquires property, or as here requires the destruction of property, for a legitimate public interest. But the difficulty here is compounded by what is in my view, a wholly inadequate and confusing statutory regime. While it is now perhaps a matter of historical interest only, there must be some doubt as to the course taken by successive ministers and advisors, who did not establish a scheme under s. 58 of the Disease of Animals Act 1966 (“the Act of 1966”), and sought instead to continue to operate the regime created by the Foot and Mouth Disease Order 1956 (S.I. No. 324/1956 (“the 1956 Order”)). The position is in my view only complicated by the procedure of confirming the 1956 Order by the provisions of s. 4 of the Disease of Animals (Amendment) Act 2001 (“the 2001 Act”). If it was thought that the type of scheme envisaged under s. 58 was too cumbersome and expensive (as appears to have been suggested in argument in Rooney v. Minister for Agriculture and Food [1991] 2 I.R. 539) then the solution was to amend the Act to make provision for a more efficient and less costly scheme. But a comprehensive and detailed scheme is important both from a practical and legal point of view. The provisions of the Acquisition of Land (Assessment of Compensation) Act 1919 are well known, and have been the subject of very considerable litigation, but they are an illustration of a pre-constitutional attempt to provide relatively detailed guidance on the approach to be taken to the assessment of compensation. The effect of the non-operation of s. 58 of the 1966 Act, the adoption of s. 22 of the 1956 Order, and the confirmation of the 1956 Order by the 2001 Act, is not only complex from a legal point of view, but it has what must be the surely undesirable result that the assessment of compensation for a complex task, is made to depend on one not very informative sentence:
4. The claim for compensation made in this case was ambitious. It is also clear from the findings of the trial judge that the assessment of compensation in respect of the animals themselves, by Mr Mulvihill, was on any view generous. I agree however with the Chief Justice that the fact that the trial judge found that the plaintiffs had not been fully compensated under certain headings of law (and in particular, for consequential loss) means that the issue must return to the High Court even if in the light of those findings of the trial judge, the final amount may be little different. In that regard, I agree that compensation must be taken to mean total loss, and that that total loss is to be assessed by market value. While market value as a concept may provide an element of certainty and definition at a legal level, it itself is not an easy concept to apply in fact, where there is no market functioning at the relevant time. Quite different figures may be arrived at in fact, depending on the date of the valuation and the assumptions that are to be made. This indeed is why the law in relation to compulsory acquisition of property goes to some length to identify the date of acquisition and the assumptions upon which any such valuation is to be made. The date of valuation and the assumptions if any upon which it is made are particularly important where as here the market for the item being acquired by the State, or required to be destroyed by the State, is likely to be affected by the event giving rise to the acquisition, and which is not caused by the State or any agency for which it is responsible. 5. It might be said that it would not be wise or fair, and arguably would not be “compensation” under s.17 of the 1966 Act, if the State were to take advantage of a catastrophic drop in price caused by an outbreak of disease, and also possibly the effect of restrictions of movement imposed by the State authorities introduced to make more difficult the transmission of disease (and which restrictions themselves might not be compensatable), to fix an acquisition price at the lowest value in a market cycle especially where the acquisition and destruction of the property was designed to protect the industry, and economy, more generally. However, that has not been suggested in this case, either as a matter of law or fact. But I do not see any reason in principle, and still less in the terms of s. 17 of the 1966 Act, and Article 22 of the 1956 Order, which requires a valuer to assess compensation here on the assumption that the foot and mouth outbreak in Co. Armagh and North Co. Louth had not occurred or (which would amount to the same thing), to value the loss at a point in the market before the outbreak.
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