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: | 11/07/2014 |
Court: | Supreme Court |
Composition of Court: | Denham C.J., Murray J., Hardiman J., O'Donnell Donal J., McKechnie J. |
Judgment by: | Denham C.J. |
Status: | Approved |
Result: | Allow And Set Aside |
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| Judgments by | Link to Judgment | Concurring | Denham C.J. | | Murray J., Hardiman J., McKechnie J. | O'Donnell Donal J. | | | |
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THE SUPREME COURTAppeal No. 423/2008
Denham C.J.
Murray J.
Hardiman J.
O’Donnell J.
McKechnie J.
Brendan Rafferty
Plaintiff/Appellant
and
The 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
8. The appellant is a sheep and tillage farmer with approximately 170 acres under grassland to cater for his sheep enterprise. The appellant claimed that prior to 2001 he had a modern sheep farm, with sheep housing of recent construction. He had weaning percentages of 178% in 1999 and 2000. He was rapidly expanding the farm and had extended his ewe numbers from 200 to 695 between the years 1998 and 2001.
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
12. In a judgment on the 31st October, 2008, the High Court made a decision both on the claim of the appellant and on the claim of John Elmore. It has been agreed that the decision on the appellant’s appeal will also govern the case of Elmore v. Minister for Agriculture, Food and Rural Development, Ireland and the Attorney General [2008] IEHC 344.
Market Value
13. On the issue of the compensation paid, the High Court held that the appellant (and Mr. Elmore) were paid significantly more than the strict market value of the culled sheep. The learned High Court judge held:-
“14. I am satisfied from the evidence given in this case that the plaintiffs were paid somewhat in excess of the market value of their animals. What I mean by this is that the price given for each animal was more than they had to pay at market to replace those sheep. Mr. Rafferty’s sheep were valued having regard to the quality of the animal itself and not taking into consideration whether they had lambed or not. When Mr. Rafferty went out to buy stock to replace his flock, in the autumn of 2001, he paid an average price of €89 per animal. In the case of Mr. Elemore’s flock, each animal was valued individually. The valuer did not differentiate between a ewe with a lamb at foot but each animal received an assigned value. Dr. Bielenberg stated that an appropriate figure for ewes with lambs at foot was IR£218.15 and IR£175 for dry hoggetts. For the reasons set out below, I do not accept that this evidence is an accurate reflection of the market value of the animals. Mr. Elmore received an average value per ewe and lamb of IR£165 or €210.62. In October 2001, Mr. Elmore bought twenty hoggetts at a price of €88.88 each and thirty-nine hoggetts at a price of €49.52 each. He bought a ram for €380.92. He agreed that the average spent on animals, including the ram, would have been €67.87, which was the market price at the time. In the course of examination in chief and cross-examination, figures were discussed on the basis that they were in Irish Pounds or in Euro, and there was, from time to time, some confusion about which currency was being used to express the sums in question. This was understandable because the cull took place in the spring of 2001, and it was later in the same year that the plaintiffs purchased stock to replace their flocks. The Euro exchange rate had been fixed on 1st January, 1999, and the currency became legal tender in the State from 1st January, 2002. To some extent, the confusion was corrected by Mr. McDonagh S.C. in his cross-examination of Mr. Rafferty, when he made it clear that figures which had been expressed in Euro should have been in Irish Pounds (Transcript, Book 2, page 156, line 26-28). Mr. Rafferty gave evidence that when he went out to replace his stock in the autumn of 2001, he paid an average price of €89.00 per animal. If he had intended to say IR£89, that would represent approximately €113.00. We know that for 327 ewes, he was given compensation at the rate of IR£160 (€203.16), 110 ewes at IR£150 (after revaluation) (€190.46) another 81 ewes were given the same valuation, and 285 lambs were valued at IR£60 (€76.18). 154 lambs were given a valuation of IR£40 (€50.79) and 29 lambs that had been given a valuation of IR£35 were increased to IR£40. His eleven rams were valued at IR£400 each (€507.90). While there may have been some confusion from time to time in the use of Euro instead of Irish Pounds, the evidence quite clearly establishes that the compensation offered to Mr. Rafferty was significantly in excess of the market value when he went to replace the sheep. The same can be said of Mr. Elmore’s claim. The market value may not have taken into account intrinsic values such as hefting and other desirable traits, but I am quite satisfied on the evidence that each of the plaintiffs was paid significantly more than the strict market value of their animals by way of compensation.”
Losses beyond 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:-
“15. Mr. Mulvihill was appointed by the first named defendant to value the plaintiffs’ animals. Mr. Sean Cadden, an agricultural advisor, called to give evidence on behalf of the plaintiffs, said that Mr. Mulvihill was a reputable valuer and he stated that the Department acted reasonably in appointing an independent valuer. He also informed the Court that it was reasonable for the valuer to arrive at one single figure to value each type of sheep, rather than ascribing a different value to each animal.
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.”
“Compensation”
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:-
“22. Applying those principles, it seems to me 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. The 1966 Act provides that the Minister shall, subject to s. 58, pay compensation for animals which are slaughtered and s. 58(2) provides that the Minister may put in place a framework for regulating the making and determination of applications for and the mode of assessment and payment of compensation. But the Minister has not made an order envisaged by section 58 of the Act. However, the Minister has confirmed the order of 1956, which provides that the value of an animal or carcass slaughtered or destroyed shall, for the purpose of compensation, be ascertained by a person appointed by the Minister. It is clear that in this case, the Minister did appoint an expert to carry out the valuations of the sheep which were culled. The [respondents] argue that there is no conflict between regulation 22 and section 17 of the Act. It seems to me that this is correct. Section 58 of the Act 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. The section gives the Minister power to make orders in that regard, but it is not mandatory on him to do so. I accept the submission made on behalf of the plaintiffs that as there was no appeal under the valuation process which was, in fact, put in place by the Minister, that the court has 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.”
17. The appellant had argued that it must have been intended that more than mere market value would be given in compensation because, inter alia, under the TB Eradication Scheme and the Scrapie Scheme more than market value was payable.
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
19. The appellant argued in the High Court that as his sheep were not infected and were culled in the national interest, and in the absence of any wrongdoing he should not be at a loss because of the cull; and that he should be entitled to all losses of the cull.
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:-
“38. I accept, on the evidence, that in these cases, the plaintiffs 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. When calamities occur - whether they are natural disasters or outbreaks of disease in the human or animal population - it is inevitable that this will bring suffering and hardship on those who are affected. It is a matter for the State to take such steps as it can to ameliorate the effects of such calamites consistent with available resources. It is often in the nature of such events that the State cannot predict with any degree of certainly, how long the event will last or how many people may be affected by it. In a case such as this, the State was dealing with an outbreak of animal disease, which, fortunately, was kept in check by strict and drastic measures taken. However, at the time, there was no way of knowing that the disease would not break out again in another part of the country, and that further culling of animals would be required. If, as a matter of statutory provision or constitutional law, the State was obliged to compensate farmers by way of full consequential loss, this could have enormous implications for the Exchequer, and impose a serious and disproportionate burden on the taxpayer. The courts in this State, and the European Court of Human Rights, have held that if the measures taken are proportionate and amount to a reasonable delimitation of the plaintiff’s property rights, having regard to the exigencies of the common good, then such steps are permissible. The purpose of such a scheme is to minimise the hardship suffered by those sheep farmers who, in this case, had to permit their flocks to be culled. In looking at the proportionality of the measures taken, one is entitled to consider 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. And, it must at all times be remembered, that there is a presumption of constitutionality in favour of the legislation being challenged. It is the plaintiffs who assume the burden of proving that the measure of compensation provided for in the Diseases of Animals Act, is such as to constitute an unjust attack on their property rights, thereby making those provisions repugnant to the Constitution.
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.”
Notice of Appeal
23. The appellant filed 17 specific grounds of appeal, as follows:-
(1) The High Court erred in law and/or in mixed questions of law and fact in granting the said orders.
(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.
Submissions
24. Oral and written submissions were received from both parties.
Issue
25. At issue on this appeal is the interpretation of the term “compensation” in the Act of 1966.
Statutory Law
26. Section 17 of the Act of 1966, as amended by the Diseases of Animals (Amendment) Act 2001, provides:-
“(1) The Minister may cause to be slaughtered –
( a ) any animals or poultry affected with any Class A disease or suspected of being so affected, and
( 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.
(2) The Minister under this section shall, subject to section 58, pay compensation for animals and poultry (other than a dog or a cat affected or suspected of being affected with rabies) which have been slaughtered under this section or which have been directed. to be slaughtered but die before they can be slaughtered and also for carcases and eggs (other than eggs of pigeons, doves, peafowl, swans or birds of the species psittaciformes) which, consequent upon an outbreak or suspected outbreak of disease, have been destroyed on behalf of the Minister under this section.
(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]
27. Section 18 of the Act of 1966 provides that if the sum received by the Minister on the sale of a carcase under this section exceeds the amount paid by compensation to the owner of the animal slaughtered, the Minister shall pay the excess to the owner, after deducting reasonable expenses.
Foot-and-Mouth Disease Order, 1956
28. A compensation scheme under the Act of 1966 was implemented using the Foot- and-Mouth Disease Order, 1956, S.I. No. 324/1956. Section 22 of that Order provides:-
“Where an animal is slaughtered or a carcase destroyed by direction of the Minister under the Diseases of Animals Acts, 1894 to 1954, the value of the animal or carcase shall, for the purpose of compensation, be ascertained by a person appointed by the Minister in that behalf.”
29. The above s. 22 of the said Order of 1956 states that the value of the animal (or carcase) shall, for the purpose of calculating compensation, be ascertained by an appointed person. This, however, does not define compensation.
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
32. Thus, the core of the case is the issue of the meaning of the term “compensation”, which is not defined either in the Act of 1966 or in the Order of 1956.
33. The 8th Edition of the Concise Oxford Dictionary, defines “compensation” as:-
“1.a the act of compensating.
b. the process of being compensated
2 something, especially money, given as a recompense.
…”
34. Black’s Law Dictionary, (8th ed., Thomson West, 2004) defines “compensation” as:-
“A payment to make amends for loss or injury to person or property, or to compensate for some deprivation.”
35. In relation to the words “compensation and compulsory purchase” Black’s Law Dictionary states:-
“The compensation to which the owner in land is entitled where his land is compulsorily acquired; he is entitled to get for his land precisely what it is worth to him in money terms immediately before the acquisition and in deciding how much it is worth, both its advantages and disadvantages have to be taken into account.”
Black’s Law Dictionary refers to a number of Acts and cases in relation to types of compensation, including an arbitrator’s award of compensation. Reference is made to:-
“The assessment of compensation is in the nature of an award of damages for the expropriation of property against the wishes of the owner: Dublin Corporation v. Building and Allied Trade Union [1996 SC] 2 ILRM 547.”
36. In general, in referring to the word “compensation”, legal dictionaries cite specific statutes when giving a definition e.g. under the tax code, family law legislation, and employment legislation. Indeed, in Stroud’s Judicial Dictionary of Words and Phrases, (7th ed., Sweet and Maxwell, 2006) the term “compensation” is followed by many references, being subject specific. Thus, there is “compensation” in conditions of sale, “compensation” under the Vendor and Purchaser Act, “compensation” under the Lands Clauses Consolidation Act, 1845, “compensation” under the Merchant Shipping Act, 1876, “compensation” under Defence Acts, “compensation” for non-renewal of a licence, and many others. Therefore, analysing the term “compensation” may be very statute specific.
Statute and Statutory Instrument
37. In this case the Act of 1966 and the Order of 1956 do not define the term “compensation” or set out clear parameters for the payment of compensation. Under s. 17(2) of the Act of 1966 it is provided that the Minister shall pay compensation for animals which have been slaughtered under the section. The Minister may appoint a valuer.
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:-
“If, in any case, the sum received by the Minister on sale of a carcase under this section exceeds the amount paid for compensation to the owner of the animal or bird slaughtered, the Minister shall pay the excess to the owner, after deducting reasonable expenses.”
39. It was submitted on behalf of the respondents that the provisions of the Act of 1966 and the Order of 1956 meant that market value only would be paid for the animals. Section 18 of the Act of 1966 was called in aid of that argument.
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:-
“The matter, accordingly, must be decided by this Court, as it was in the High Court, as a matter of principle. In the High Court, Budd J., was of the view that the defendant was entitled to be compensated on the basis of equivalence and that he should neither more nor less than his total loss. That was also the view taken by Carroll J. and it is fully in accord with the statement of the law by Scott, L.J. in Horn v. Sunderland Corporation [1941] 2 K.B. 26. I am satisfied that Budd J. was correct in applying that principle in the present case. It would be patently unjust, in my view, for the dispossessed owner to receive less than the total loss which he has sustained as a result of the compulsory acquisition: such a construction of the relevant legislation would be almost impossible to reconcile with the constitutional prohibition of unjust attacks on the property rights of the citizens.”
43. The issue of property rights, and statutory terms enabling a planning authority to require, as a condition of planning permission, that the applicant enter into an agreement with the planning authority relating to affordable housing, was considered by the Court in In the matter of Article 26 of the Constitution and in the matter of Part V of the Planning and Development Bill, 1999 [2000] 2 I.R. 321. The Court held that the imposition of a condition on obtaining planning permission for development of land for residential purposes, whereby the owner was required to cede some part of the enhanced value of the land derived from its zoning for residential purposes and the grant of permission, with the object of providing affordable housing, was an objective of sufficient importance to warrant interference with a constitutionally protected right, and impaired that right as little as possible, and was proportionate to the objective.
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:-
“It does not necessarily follow that the market value of lands at any given time is the equivalent of just compensation as there may be circumstances where it could be considerably less than just compensation and others where it might in fact be greater than just compensation. The market value of any property whether it be land or chattels or bonds may be affected in one way or another by current economic trends or other transient conditions of society.”
Conclusion
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
48. Subsequent to these proceedings the Animal Health and Welfare Act 2013 was enacted which repealed the Diseases of Animals Act 1966 and the Diseases of Animals (Amendment) Act 2001. The 1956 Order was revoked by the Diseases of Animals Act 1966 (Foot-and-Mouth Disease Orders) (Revocation) Order 2013, S.I. No. 195 of 2013. Part 6 of the Act of 2013 now legislates for the destruction and disposal of animals. The issue of compensation is addressed in the said Act of 2013. However, it applies prospectively and so is not applicable to this appeal.