Two Co Louth sheep farmers have succeeded in their appeal to the Supreme Court for higher compensation for their flocks which were culled by the Department of Agriculture during the Foot and Mouth crisis of 2001.

The court accepted the appeal of Brendan Rafferty, and by extension John Elmore, against a decision of the High Court in 2008 which had the effect of limiting their compensation to market value and excluding compensation for consequential loss.

The farmer argued that when assurances were given before the cull, it must have been intended that more than mere market value would be given, the Supreme Court’s Justice Denham said in an information note, because under the TB Eradication Scheme and the Scrapie Scheme, more than market value was payable.

However, the High Court had decided that nothing in the Diseases of Animals Act 1966 suggested that compensation should include consequential loss.

The Supreme Court decided that at issue in this appeal was interpretation of the word “compensation”, as used in the Act. It found that there was ambiguity.

“There are no parameters given as to the compensation,” Justice Denham said. “There is no setting out of a policy reason, explanation or balancing exercise as to the compensation to be paid.”

The relevant section was capable of a broader meaning to “compensation” than was given to it by the High Court.

Concluding, Justice Denham said that a person who has been compulsorily deprived of property or property interests is entitled to compensation for total loss arising.

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, the note said.

Any such exception would be subject to strict scrutiny by the courts as to its legitimacy. But there are no such circumstances in this case, Justice Denham noted. Therefore, compensation must include consequential loss to the farmer’s business.

“That means not simply the market value of the individual carcases, 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.”

Justice Denham remitted the matter back to the High Court for assessment of the farmers’ total losses.

New Act

Justice Denham noted that the Diseases of Animals Act 1966 has now been repealed by the Animal Health and Welfare Act 2013. This Act now legislates for the destruction and disposal of animals and the issue of compensation is addressed.