Supreme Court: State’s incorrect interpretation of EU law not so inexcusable to justify damages

The Supreme Court has upheld a finding of the Court of Appeal which overturned an award of almost €130,000 in a case which arose due to the State’s incorrect interpretation of EU law.

Accepting that the man at the centre of the proceedings had suffered because of the error, Ms Justice Iseult O’Malley stated that the error on the part of the State authorities was not so “grave and manifest” or “inexcusable” to justify an award of damages.

Background

Mr Ewaen Fred Ogieriakhi had been dismissed by An Post in 2007, following the incorrect interpretation of EU law, which in turn led to him not having a valid permit to work in the state.

In the High Court, Mr Ogieriakhi was awarded nearly €130,000 for breach of his rights under EU law, and for damage to his reputation under domestic law. In February 2016, the Court of Appeal overturned the award of damages, and this decision was unanimously upheld by the five-judge Supreme Court.

EU Law

The issue of liability in damages fell to be considered by reference to the criteria set out in Brasserie du Pêcheur and Factortame; as such it is not sufficient for an aggrieved person to establish as a fact that the State misunderstood or misapplied a provision of EU law and that he or she suffered loss as a result.

Mr Ogieriakhi’s application to the Minister in March 2007 raised two significant problems:

  1. Mr Ogieriakhi’s wife had left the State in December 2004. Under the then-current regime, Mr Ogieriakhi had no further right of residence, and he was refused an extension of leave to reside in 2005. That gave rise to a question whether it was possible for him, as a person whose presence was not authorised at the time, to acquire rights on the coming into force of the new Directive and domestic regulations in 2006.
  2. Mr Ogieriakhi and his wife had, as a matter of fact, separated and were not living together before she left. That raised the question whether he could be said, as a matter of law, to have been legally residing with her either before or after her departure.

The decision of the Minister for Justice and Equality in September 2007, was that Mr Ogieriakhi’s right to residence depended on the ongoing exercise of EU rights by his wife.

Justice O’Malley was satisfied that both issues gave rise to complex considerations that were not expressly covered by the terms of the Directive.

While the rulings of the CJEU in Lassal and in this case, were clearly determinative of the issues – Justice O’Malley held that it could not be said that the answers to the questions were obvious, or that the Directive was so clear and precise as to render the error on the part of the State authorities “grave and manifest” or “inexcusable”.

Furthermore, the Commission, in its correspondence and its communication to the Parliament, appeared to have taken the position at least at some stage that, if the facts of the case were as they ultimately turned out to be, Mr Ogieriakhi did not have a valid claim.

Therefore, the criteria for liability for Francovich damages were not satisfied and the High Court judge was incorrect in this respect.

In the circumstances, Justice O’Malley was satisfied that the Court of Appeal was right to hold that this award of €107,905 for loss of earnings in respect of the breach of Mr Ogieriakhi’s rights under EU law could not stand.

Domestic Law

Justice O’Malley then considered whether domestic law could grant the remedy of damages for a loss brought about by a breach of EU law on the part of the State.

The issue arose because part of the reasoning of the Court of Appeal in relation to the High Court award of damages for injury to reputation was that no such award could be made where the cause of action arose purely in the context of EU law.

Justice O’Malley agreed with the conclusion of the Court of Appeal, but noted that there would arguably be no objection to an award in this case if, for instance, the employer had in fact dismissed Mr Ogieriakhi in a manner that wrongfully damaged his reputation.

The sole reason for the loss of Mr Ogieriakhi’s employment was the incorrect interpretation of EU law by the Minister; therefore Justice O’Malley was satisfied that there was no free-standing right to damages under national law where the Francovich criteria were not satisfied, in circumstances where the wrong done was a wrong under EU law.

Conclusion

The right to damages as a remedy for breach of European Union law required Mr Ogieriakhi to demonstrate, not just that an error of law caused his loss, but that the error of law concerned was inexcusable.

Dismissing the appeal, Justice O’Malley held that there was not an inexcusable error of law, and that no right of his under the national legal order was infringed such as to give rise to a right to damages.

  • by Seosamh Gráinséir for Irish Legal News