Minister for Communications Marine and Natural Resources v Figary Water Sports Development Company Ltd

Factual and Procedural Background

The Appellant granted a 99-year foreshore lease to the Respondent in 1993 for the development of a marina. Disputes arose over non-payment of rent and alleged breaches of lease covenants. In 1998 the Appellant served a forfeiture notice. High Court proceedings commenced in 2005 seeking, in the alternative, specific performance of the Respondent’s obligations or possession of the foreshore. The Respondent counter-claimed for injunctions and damages, including damages for an alleged failure by the Appellant (acting as implementing agent for an EU funding scheme) to progress the Respondent’s grant application.

After a 16-day High Court trial Judge [Last Name] delivered two judgments: [2010] IEHC 541 (liability) and [2012] IEHC 601 (relief). The Appellant obtained judgment for rent arrears but was refused possession; the Respondent obtained €2.045 million damages for breach of statutory duty. The Appellant appealed those parts of the order.

Legal Issues Presented

1. Whether the 1998 forfeiture notice had been waived or abandoned, thereby precluding the Appellant from obtaining possession for breach of covenant.
2. Whether the Appellant could obtain possession under section 52 of Deasy’s Act on the ground that a year’s rent was in arrears.
3. Whether the Appellant was liable in damages for unreasonable withholding of consents (sand removal and performance bond) under the lease.
4. Whether the Appellant was liable in damages for breach of statutory duty under EU law for failing to forward the Respondent’s Interreg IIIA grant application to the Steering Committee.
5. The proper measure of any damages for loss of chance and for loss of profits.

Arguments of the Parties

Appellant's Arguments

• The forfeiture notice remained valid; later correspondence did not waive it and relief against forfeiture should have been refused.
• The trial judge erred in granting relief under Deasy’s Act without requiring full compliance with lease covenants.
• Consents for sand removal and bonding were reasonably withheld in the public interest and in accordance with statutory duties over the foreshore.
• Article 34 of Regulation 1260/1999 imposed public-facing duties, not individual rights; therefore no Francovich liability lay for failure to progress the grant application.
• In any event the Respondent had not proved entitlement to the amounts awarded; the grant request was €2.46 million inclusive of State co-funding, not €3.09 million.

Respondent's Arguments

• The forfeiture notice was abandoned by written agreement in May 2000 when the Appellant confirmed the lease was “active”.
• Section 52 of Deasy’s Act permits equitable relief; arrears could be cleared and possession should be refused.
• The Appellant unreasonably obstructed sand disposal and bonding, breaching implied covenants not to derogate from the grant.
• The Interreg framework, comprising Regulation 1260/1999, Commission Guidelines and national instruments, imposed a clear duty on the Appellant (as implementing agent) to forward completed applications; breach engaged Francovich/Brasserie du Pêcheur liability.
• Damages should cover loss of chance of obtaining the full grant and consequent lost profits from an expanded marina.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge [Last Name] first examined the forfeiture notice. Correspondence in May 2000 confirmed the lease was “active”; this amounted to an express waiver. Since the lease had not been determined, statutory relief against forfeiture under the Conveyancing Act 1881 was unnecessary. The Appellant nevertheless proved over one year’s rent was in arrears, so section 52 of Deasy’s Act was engaged. Equity required refusal of possession if the Respondent paid all arrears (including pre-limitation rent), statutory interest and measured costs.

Unreasonable-consent allegations (sand removal and bond) were upheld but produced no damages; they did not alter the possession analysis.

On the EU funding issue the Court reviewed Regulation 1260/1999, Commission Guidelines, the Operational Programme, Programme Complement and Procedures Manual. These instruments created a mandatory duty on the implementing agent (the Appellant’s department) to forward eligible applications to the Steering Committee. By withholding the Respondent’s amended application the Appellant breached a rule intended to benefit a defined class—applicants to Interreg IIIA. Applying Francovich/Brasserie the Court found: (1) a right was conferred; (2) the breach was serious— the department had no discretion; (3) direct causation existed because funding windows later closed.

Damages were reassessed. The High Court had assumed a €3.09 million grant and a 50 % chance of success. The Supreme Court corrected the grant figure to €2.46 million (inclusive of State co-funding), acknowledged significant evidential gaps, and held a realistic success band was €0.8-€1 million. Using a 50 % probability, loss of chance was fixed at €450,000. The claim for future trading profits failed for want of proof; evidential deficiencies made projections speculative.

Holding and Implications

Orders: The Appellant is refused possession provided the Respondent pays all arrears (including out-of-time rent), 8 % statutory interest on non-barred arrears, and section 52 costs within a court-specified period. The forfeiture notice cannot be relied upon. The Respondent is awarded €450,000 damages for loss of chance arising from the EU funding breach; no damages are awarded for alleged future profits. Mutual monetary liabilities are to be set off.

Implications: The decision reinforces that:

• Written conduct can waive a forfeiture notice, even after serious breaches, and equitable relief remains available under Deasy’s Act.
• Implementing agents for EU structural funds owe actionable duties to applicants; failure to follow prescribed selection procedures can yield Francovich damages.
• Courts will scrutinise claimed “loss of chance” rigorously; deficient evidential bases will limit awards.
• No new precedent was set on assessing lost future profits; rather, the case applies existing principles to circumscribe speculative claims.