Surrender of farm tenancy — Change of occupation — Apportionment of quota among interested parties — Whether arbitrator having jurisdiction to make award — Arbitrator concluding that he had jurisdiction and making award — County court dismissing appeal against that decision — Court of Appeal upholding that dismissal
Prior to March 1 1990 H was the tenant of Lower Moddershall Farm, Stone, Staffordshire. The landlords were the county council. On March 20 1989 H gave 12-months notice terminating his tenancy. At that time the farm was being run by H, his wife and son. Their milk quota was registered at the farm. On February 27 1990 the son and his wife purchased Hollybank Farm. On March 1 1990 H and his wife retired and a partnership was formed between the son and his wife (“the applicants”). They transferred the dairy herd from Lower Moddershall Farm to Hollybank Farm. At the end of March in conformity with the notice given by H, Lower Moddershall Farm was surrendered to the council. The applicants claimed that the effect of those events was that the council were expropriated from having any interest in the milk quota.
Following the termination of the lease the Ministry of Agriculture Fisheries and Food applied for an arbitration under regulation 10(b) of the Dairy Produce Quotas Regulations 1989 to determine the apportionment of quota between the council, H, his wife and the applicants. The applicants challenged the jurisdiction of the arbitrator on the ground that the arbitration provisions contained in the 1989 regulations were not triggered. Regulation 9(1) provided for the transfer of a quota when any holding was “sold, leased or transferred by inheritance”. Where there was such a transfer, regulation 9(5) provided for apportionment in accordance with regulation 10, which in turn provided that where there was no agreement, there should be an arbitration in accordance with Schedules 4 and 6. There was no transfer of a holding which triggered off any aspect of the 1989 regulations which would entitle the arbitrator to act and to make the award. However, the arbitrator concluded that he had jurisdiction to hear the matter and made an award. The county court dismissed an appeal against that decision, but the applicants appealed.
Held The appeal was dismissed.
1. The partial “transfers” of a holding that gave rise to the need for apportionment were those in which part of a holding was “sold, leased transferred by inheritance” (article 7(2) of EC Commission Regulation 1546/88); and “other cases of transfer which have comparable legal effects as far as producers are concerned” (article 7(3) of EC Commission Regulation 1546/88).
2. A transfer would have “comparable legal effects” whenever property was transferred from one party to another. In particular the legal effect of a surrender of a lease must be seen as essentially the same as that of its grant: see Wachauf v Federal Republic of Germany (Case No 5/88) [1989] ECR 2609.
3. The surrender of H’s lease on March 25 1990 was an event which constituted the transfer of part of a holding.
4. Moreover, on March 1 and 2 1990 there was no transfer of title to the land, but on each occasion there was a change of occupation of part of the holding. When the regulations talked of transfers it was plainly in terms of occupation and not legal title. Thus, the changes of occupation were sufficient to give the arbitrator jurisdiction.
5. The fact that the two partnerships had a common member could not alter the fact that they were distinct.
Arthur Stuttard (instructed by Eric Whitehead & Co, Stoke on Trent) appeared for the appellants; David Anderson (instructed by Walker Smith & Way, of Chester) appeared for the council.
