ECtHR: Irish Government did not violate property rights of mussels company

About this case:

• Judgment:
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The case was brought by O’Sullivan McCarthy Mussel Development Ltd, a company based in Killorglin which cultivates mussels in Castlemaine harbour, which involves fishing for mussel seeds (immature mussels) and cultivating them for two years.

The company’s commercial activities are conducted subject to the conditions set down by the competent minister each year when issuing, among other things, the mussel seed authorisation.

In December 2007, the Court of Justice of the European Union (CJEU) found that Ireland had failed to fulfil its obligations under two EU environmental directives by failing to carry out assessments of the impact of aquaculture in areas designated for the protection of natural habitats and birds. As part of its steps to comply with that court’s judgment, the Government temporarily prohibited mussel seed fishing in the harbour in the 2008 season pending negotiations with the European Commission regarding compliance with the judgment and, in that context, the completion of the necessary assessments.

The company alleges that it suffered a significant loss of profits owing to those temporary restrictions. It also referred to the fact that it had bought a new boat for €1 million immediately before they came into effect. The company and another local operator brought a domestic compensation claim against the Government in February 2009, which was upheld by the High Court in a judgment of 31 May 2013, awarding damages to the applicant company for its losses.

However, in February 2016 the Supreme Court upheld an appeal by the State, unanimously overturning the High Court’s ruling that the company had had a legitimate expectation of being able to operate its business as planned and overturning, by a majority, the lower court’s decision that the State had shown “operational negligence”.

The applicant company complained under Article 1 of Protocol No. 1 (protection of property) and Article 8 (right to respect for private and family life) of the impact on its right to earn a livelihood owing to the temporary prohibition on mussel seed fishing in 2008. It also complained under Article 6 § 1 (right to a fair hearing within a reasonable time) about the length of the domestic compensation proceedings and under Article 13 (right to an effective remedy) in conjunction with Article 1 of Protocol No. 1 in relation to the alleged absence of an effective domestic remedy.

The application was lodged with the ECtHR on 25 July 2016 and the seven-judge chamber handed down its judgment today.

The Court noted that the applicant company’s operations were subject to strict regulation, and that the Supreme Court had ruled that the company had had no legal basis for a legitimate expectation to be able to operate as usual in 2008 after the EU Court’s decision.

The company, as a commercial operator, had to be aware of the relevant legal provisions to which its licence was subject and should have been aware, at least from the CJEU’s judgment in 2007 or even during the infringement proceedings brought by the European Commission in 2004, that there could be some disruption to its operations. Despite this risk, it had bought a new boat in May 2008.

The Court took note of disagreements between the Government and the company about the loss of profit and whether it had been possible to avoid or mitigate it. On the evidence available it could not establish for sure that the 2010 profit loss was the inevitable and immitigable result of the temporary closure of the harbour.

Overall, the Court took account of the fact that the company did not have to cease all of its operations in 2008 and was able to resume them in full in 2009. The State had treated Castlemaine harbour as a priority, using it as a pilot case to negotiate interim measures that were accepted by the European Commission and subsequently applied at other sites. It was the only affected sea-based site that was permitted to reopen for mussel seed fishing in 2008 when full compliance with the CJEU judgment and relevant directives had not yet been achieved.

The Court also considered the environmental protection objectives with which the temporary restriction sought to comply, the strength of the general interest involved for the community and the need for the State to comply with its obligations under EU environmental law.

In addition, the Government had faced a major task: one Supreme Court judge had mentioned that the assessment obligation extended to 140 sites where various traditional activities were being carried out in breach of EU law, including about 40 sea-based sites. The scale of the compliance task meant the State enjoyed wide discretion regarding how best to comply. The restriction complained of had been temporary and had related to only part of the applicant’s commercial operations and in 2009 it was able to resume its usual level of business activity.

The Court came to the conclusion that the company had not suffered an excessive individual burden and that the State had not failed in its efforts to find a fair balance between the general interests of the community and the protection of individual rights. For those reasons there had been no violation of Article 1 of Protocol No. 1.

In coming to this conclusion, the Court rejected the Government’s argument that it had to be presumed that Ireland had complied with the Convention because the interference complained of was the result of its obligation to fulfil an EU legal requirement. The Government cited the Bosphorus case-law of “equivalent protection” (Bosphorus Hava Yollari Turizm ve Ticaret Anonim Şirketi v. Ireland). The Court observed that such a presumption was only applicable when there was no margin of manoeuvre for the EU Member State in question.

The Court found that although the overall duration of the proceedings had been lengthy, there was no sign of any substantial delay on the part of the domestic courts. The case was factually and legally complex and had raised a number of important and novel legal issues. As the length of the proceedings could not be regarded as excessive in the light of the circumstances, there had been no violation of Article 6 § 1.

It also rejected as inadmissible a complaint by the company regarding the alleged lack of an effective remedy under Article 13. The company had not explained in what way the various remedies referred to by the Supreme Court and the Government would not have been effective.