The First Hall of the Civil Court, presided over by Madame Justice Jacqueline Padovani Grima, on July 30, 2015, in the case ‘AJD Tuna Ltd v Director of Agriculture and Fisheries and the Attorney General’, held, among other things, that the fact that three years after its issuance, European Regulation 530/2008 was declared partially null, did not render the director responsible for damages.
AJD Tuna Ltd operated tuna rearing according to law in Maltese waters. It farmed blue fin tuna caught by member states of the International Convention for the Conservation of Atlantic Tuna (ICCAT), which tuna was purchased by the company each year for rearing and fattening.
The company claimed that the Director of Agriculture and Fisheries prevented it from acquiring tuna up to their permit and annual quota, on grounds of the European Regulation No. 530/2008, and that this was seriously prejudicial to them.
Under this regulation, Malta as a member state was obliged to prevent the company from acquiring tuna. Regulation 530/2008 prohibited the fishing of tuna and keeping tuna in cages for rearing or for transport to waters or ports in Greece, France, Italy, Cyprus and Malta with effect from June 16, 2008, while this ban came into effect for Spain in June 23, 2008.
The regulation was later declared by the European Court to be partially null and void insofar as it gave special treatment to Spain.
The company claimed that the director’s action was illegal and abusive and that the company suffered serious damage.
Faced with this situation, the company proceeded to file legal proceedings against the Director of Fisheries and Agriculture and the Attorney General, requesting the court:
• to declare the act of the director to be illegal and abusive; and
• to declare that the director caused them damages.
The Attorney General disputed being the legitimate defendant in these proceedings.
The director, in reply, denied acting abusively. He said that he acted according to Regulation 530/2008. In addition, the director maintained that he was not responsible for the damages, allegedly suffered by the company.
The court considered that in this case the director was the legitimate defendant and that the Attorney General’s presence was not necessary.
The issue which had to be determined by the court was whether the director was liable to damages suffered by the company, for acting pursuant to Regulation 530/2008.
The director did not act in bad faith. He was not negligent. He did not act ultra vires
Regulation 530/2008 was deemed to have direct effect: vertical effect between the State and the individual as well as horizontal effect between individuals.
A member state was declared liable for failing to implement a directive and was obliged to compensate an individual for damages, provided three elements existed:
1. The directive had to grant rights to the individual;
2. The rights were clearly established under the directive itself; and
3. There was a connection between the failure of the member state and the damages suffered by the individual. (‘Frankovich and others v Italian Republic’ – joined cases C6/90 and C-9/90.)
Reference was made to ‘Brasserie du Pecheur SA v Federal Republic of Germany’ and ‘The Queen v Secretary of State for Transport’ (joined cased C-48/93 and C48/93) dated March 5, 1996, where the European Court of Justice enunciated several principles regarding member states’ responsibility for damages in the context where EU directives were not transposed into national law:
“55. As to the second condition, as regards both Community liability under Article 215 and member state liability for breaches of community law, the decisive test for finding that a breach of community law is sufficiently serious is whether the member state or the community institution manifestly and gravely disregarded its limits on its discretion.
“56. The factors which the competent court may take into consideration include the clarity and precision of the rule breached, the measure of discretion left by that rule to the national or community authorities, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, the fact that the position taken by a community institution may have contributed towards the omission, and the adoption or retention of national measures for practices contrary to community law.”
The court said that a clear distinction had to be made whether or not the impugned act was an exercise of discretionary power or an obligation imposed upon the State. If the State could use its independent discretionary powers, these acts remained subject fully to the rights under the European Convention and the scrutiny of the European Institution: ‘The Queen v Secretary of State for the Home Department, ex-parte Eleonora Ivanova Kondova C-235/99.’
There was no doubt that regulation 530/2008 had a direct effect and that the director had no legal basis to act differently. In fact, the failure to implement the regulation meant that Malta, as a member state, violated its duty under the treaty.
Regulation 530/2008 was not annulled altogether. In the Bosptiorus Hava case, the European Court was of the opinion that action by member states to comply with its legal obligations under the treaty was justified:
“As long as the relevant organisation is considered to protect fundamental rights, as regards both the substantive guarantees offered and the mechanism controlling their observance, in a manner which can be considered at least equivalent to that for which the convention provided (Ibid para. 155).
“156. If such equivalent protection is considered to be provided by the organisation, the presumption will be that a State had not departed from the requirements of the convention when it does no more than implement legal obligations flowing from its membership of the organisation.”
The court felt that there existed the equivalence or the comparable protection in the ‘organisation’ which issued regulation 530/2008. The presumption, therefore, was that Malta did not depart from the requisites of the convention.
In ‘HNL v Council and Commission’, it was held that the European Commission and the State should not be held responsible for damages, if a regulation was declared null.
The court ruled that, in cases of strict compliance with a regulation (having direct effect), it had to result that the violation was sufficiently serious; in the sense that the Commission had not manifestly and gravely disregarded its discretion.
The court had to also consider the factors in the Barasserie du Pacheur case.
In this case the court was of the opinion that the violation was serious but not sufficiently serious.
The purpose of regulation 530/2008 was good and beneficial to the preservation of tuna as a species, save for the favourable treatment given to Spain.
Regulation 530/2008 gave no discretion to the director and the damages caused to the company were involuntary. It imposed a total ban on tuna fishing as well as a ban to keep tuna in cages for rearing in seas or ports indicated in the regulation and the director was obliged to abide by the regulation.
The court said that the director did not act in bad faith. He was not negligent. He did not act ultra vires.
It maintained that the director acted in compliance with the regulation according to Malta’s obligation.
The fact that three years after the regulation was issued, it was declared partially null, did not render the director to be responsible for damages.
For these reasons, on July 30, 2015, the First Hall of the Civil Court gave judgment by dismissing the company’s requests and by upholding the pleas of the defendant director.
Dr Karl Grech Orr is a partnerat Ganado Advocates.