Milk Quotas — Judicial review of decision of Dairy Produce Quota Tribunal for England and Wales — Dairy farmer’s challenge to tribunal’s determination of secondary wholesale quota pursuant to a development claim — Investment by dairy farmer in order to achieve a substantially higher average quantity of milk production — Tribunal had rejected applicant’s appeal from decision of local panel — The local panel and the tribunal concluded that the applicant (who had a primary quota of 217,204 litres, based on an annualised quantity of 238,686 litres notionally produced by his cows) should be allowed a secondary wholesale quota claim to the extent of 41,132 litres, which had been calculated on the basis of an increase of 13 milking cows yielding 5,000 litres per cow — The applicant complained of the finding that there would be only 13 extra cows — It was common ground that at the end of the development there would be a total of 60 milking cows — The tribunal’s finding implied that there were 47 milking cows during the base period — This was disputed by the applicant, who gave evidence to the tribunal that there were only 34 such cows during that period — The tribunal had apparently arrived at this result by taking the annualised figure of 238,686 litres, based on the quantity of milk notionally produced by his cows, and dividing it by a notional yield of 5,000 litres per cow — In doing so the tribunal had applied a general guidance instruction issued to local panels that, in default of satisfactory evidence to the contrary, they could assume a standard yield per cow of 5,000 litres — The applicant challenged both the validity of this application and the absence in the tribunal’s statement of reasons of any indication as to how they had arrived at the figure of 13 additional dairy cows — An affidavit by the chairman of the tribunal (read by the court without pronouncing on its admissibility) said that ‘we therefore adopted the figure of 5,000 litres per cow pursuant to the General Guidance’ — Held that the tribunal’s determination indicated a use of the 5,000 litres standard for a purpose for which it was not intended and it suggested that the tribunal considered that they were bound to adopt the figure of 5,000 litres if they did not accept the applicant’s evidence — The tribunal’s reasons were not adequate and it was possible that if they had been adequately expressed they would have exposed an error of law — Decision of tribunal quashed
No cases are
referred to in this report.
This was an
application for judicial review by Michael Ewart Davies, a dairy farmer, in
order to challenge a decision of the Dairy Produce Quota Tribunal for England
and Wales on the applicant’s development claim for secondary wholesale quota.
This was a special case claim submitted by the applicant in respect of capital
investment calculated to produce a substantial increase in milk production. The
tribunal had rejected the applicant’s appeal from a local panel who had
estimated that the planned investment would result in an increase of milk production
equal to that of 13 milking cows.
M Jarman
(instructed by Allan Jay & Co, agents for Ungoed-Thomas & King, of
Carmarthen) appeared on behalf of the applicant; M Kent (instructed by
Solicitor to the Ministry of Agriculture, Fisheries & Food) represented the
respondent tribunal.
Giving
judgment, SCHIEMANN J said: Mr Davies is a dairy farmer in Wales. This case
arises out of the impact of the Common Agricultural Policy of the European
Communities upon Mr Davies. Mr Davies applies for judicial review of a decision
dated January 10 1985 of the Dairy Produce Quota Tribunal for England and
Wales. That tribunal was set up by virtue of the provisions of the Dairy
Produce Quotas Regulations of 1984 (SI 1984 No 1047)*, which were made under
section 2 of the European Communities Act 1972. The same regulations also set
up local panels to one of which I shall make reference hereafter.
* Editor’s
note: The 1984 regulations, referred to in the judgment, were revoked by the
Dairy Produce Quotas Regulations 1986 (SI 1986 No 470).
These
regulations implement regulations made by the Council of the European
Communities. By virtue of the Community legislation, a levy is charged on dairy
produce delivered by a farmer unless the quantity is within a quota established
under the regulations. We are concerned here with Schedule 2 to the
regulations, which deals with wholesale quotas. There is an automatic
entitlement on the basis of wholesale deliveries in 1983, with provisions to
cover those who started wholesale deliveries after January 1 1983. This
automatic entitlement is called the primary quota. There is also an entitlement
to a secondary quota on the basis of a special case claim accepted by the
bodies set up to decide such claims. The panel and the tribunal were such
bodies.
The
applicant’s claim for a primary quota took a base period in February and March
of 1984. No problem arises in relation to this. It was based on an annualised
quantity of milk, notionally produced by his cows, of 238,686 litres. But
because Mr Davies’ herd was increasing at the relevant period, he also made a
special case claim under para 7 of the Schedule. It was a development claim,
namely, a special case claim, submitted by a producer in respect of investments
of a capital nature on his holding, calculated to achieve a substantially
higher average monthly quantity of milk production. That definition is taken
from the interpretation paragraph of the regulations, para 2. It seems that
that development claim was rejected by the minister. The applicant asked for a
review by the panel. The panel reserved the claim for further examination. In
due course, the panel determined, pursuant to para 9, subparas (2) and (3) of
the regulations, an estimate of secondary wholesale quota which was such
quantity of dairy produce as was considered by the panel to be justified by the
applicant’s special case claim. Pursuant to para 9, subpara (4) of the
regulations, they notified the applicant as follows:
Your
application for secondary wholesale quota, on the basis of a development claim,
has been accepted. The estimate of secondary wholesale quota determined is
41,132 litres.
They then set
out a secondary quota calculation which I need not repeat, but a crucial
element of that is put as follows:
Number of
extra cows allowed — 13 x average yield of 5,000.
In their
reasons for decision, they said the following:
On the basis
of the information provided, the local panel decided that the investment
undertaken was consistent with a planned increase in milk production and they
therefore determined that it would be appropriate to allow a secondary
wholesale quota claim of 41,132 litres as above, which has been calculated by
reference to an increase of 13 milking cows based on an estimated yield of
5,000 per cow.
The applicant,
being dissatisfied with this notification, caused the tribunal to review that
notification. The relevant procedures are set out in Schedule 2, para 9(6),
para 10(1), and para 11(1). I ought to set those out. Para 9(6) reads:
Any applicant
on whom there is served a notification . . . may within 21 days of service of
that notification, by submitting to the Tribunal — (a) the notification, (b)
his representations in respect of the notification, and (c) a request that the
notification be reviewed — on a form to be provided on request by the Tribunal,
cause the Tribunal to review that notification.
Para 10 (1)
reads:
The Tribunal
shall determine the secondary wholesale quota of each applicant who has . . .
caused them to review a notification . . . and the secondary wholesale quota of
each such applicant shall be — (a) such quantity of dairy produce (if any) as
is considered by the Tribunal to be justified by his special case claim and his
representations referred to in paragraph 9(6)(b) . . .
Para 11 (1),
so far as presently relevant, reads as follows:
The Tribunal
shall send to the Minister in respect of each applicant in respect of whom they
. . . have acted (and shall copy to each such applicant) a notification of — .
. . (b) his secondary wholesale quota determined under paragraph 9 or 10 (1)
together with statements, in respect of secondary wholesale quota determined
under paragraph 10 (1), . . . and shall send to each applicant whose secondary
wholesale quota has been determined under paragraph 10 (1) to be nil or less
than his secondary wholesale quota claim a written statement of their reasons
for that determination.
It is apparent
and common ground that, in the circumstances of the present case, the applicant
was entitled to a written statement of the reasons of the tribunal for their
determination.
Before leaving
the regulations, I ought to turn to Schedule 5, para 8, which provides, so far
as presently relevant:
(1) . . . a
Dairy Produce Quota Tribunal may issue a written statement of general guidance
to local panels in its area in respect of the criteria to be used by those
panels in reaching any determination capable, under these regulations, of being
made by them. (2) If any guidance issued under sub-paragraph (1) is published
by the Dairy Produce Quota Tribunal in the Gazette the Dairy Produce Quota
Tribunal shall, in reviewing any determination of a local panel made in
accordance with that guidance, confirm that determination.
Looking at the
totality of matters, what these bodies — the panel and the tribunal — were
establishing was such quantity of dairy produce as was considered by that body
to be justified by the special case claim. The regulations are complex, but it
is common ground that what these bodies were looking for was what is known as
the development quantity. This is defined in the regulations as follows — I
quote from the ‘Interpretation’ paragraph, namely para 2 (1) —
‘development
quantity’ means the quantity of milk calculated, by reference to the increase
from a producer’s annualised quantity (that is to say his average monthly
quantity of milk production, in any base period applicable to him, multiplied
by 12) to the quantity of milk reasonably expected to be produced on his
holding in the first quota year, by taking, in respect of any expected
increased quantity — (a) in the band below 7.5 per cent of his annualised
quantity, nil, (b) in the band from 7.5 to 12.5 per cent of his annualised
quantity, half of the expected increased quantity in that band, and (c) in the
band above 12.5 per cent of his annualised quantity, the whole of the expected
increased quantity in that band.
Further help
is given in para 18 (4) of the guidance which was given by the tribunal
pursuant to Schedule 5, para 8. This subpara of the guidance, reads as follows:
The
development quantity should be so calculated by reference to the increased
number of milking cows which the claimant may reasonably be expected to have in
his herd as a result of the investment by March 31 1985, multiplied by the
expected annual yield per cow, notwithstanding that some of those cows could
not have been housed, fed or milked throughout the first quota year. For such
purpose, the local panel may assume in default of satisfactory evidence to the
contrary, a standard yield per cow of 5,000 litres. Satisfactory evidence
should be produced of the additional number of cows which are or are intended to
be housed, fed and milked as a direct consequence of the investment.
Thus, in
summary, what the panel and the tribunal had to do was, first, to establish the
annualised quantity. Second, they had to determine what increased number of
milking cows the claimant may reasonably expect to have in his herd as a result
of an investment by March 31 1985. I shall refer to these as the extra milking
cows. Third, they have to establish the expected annual yield from these extra
milking cows. I shall refer to this as the expected annual extra yield. If
there is no satisfactory evidence on this last point, then 5,000 litres per cow
can be taken. Fourth, of the expected annual extra yield, they should count
towards the development quantity the fractions set out in the definition of
‘development quantity’.
Turning from
that background to the present case, it is clear that both the panel and the
tribunal worked on the basis that the applicant would have 13 extra milking
cows as a result of his investment. They attributed 5,000 litres to each cow in
order to arrive at the expected annual extra yield. No complaint is now made as
to the use of the measure of 5,000 litres per cow, but complaint is made of the
finding that there would be only 13 extra milking cows. The tribunal found that
at the end of the day, there would be 60 milking cows. There is no dispute as
to this. The dispute really is as to how many milking cows there were during
the base period. It is implicit in the tribunal’s finding that there were 47.
The applicant submits that that finding is so perverse as to justify quashing
the decision. Alternatively, he says that the decision ought to be quashed
because the tribunal has failed to comply with para 11 of the Second Schedule
to the regulations, because the document now challenged cannot fairly be
described as a statement of their reasons for the determination.
Let us look at
that document. The decision letter now challenged reads as follows:
The Tribunal
rejects this appeal and confirms the estimation of the local panel of this
secondary quota claim at 41,132 litres. REASONS. 1. The Appellant has been
allocated a Primary Quota of 217,204 litres based on estimated production for
1984. 2. The Appellant seeks a Secondary Quota of 133,511 litres under a
development claim based on the investments mentioned in his application form
for quota. 3. The local panel estimated the quantity of dairy produce justified
by such Secondary Quota claim was 41,132 litres on the grounds that the
investment undertaken was consistent with a planned increase in milk production
of 13 milking cows at an estimated yield of 5,000 litres per cow. 4. On the
evidence provided, the Tribunal accepts that the investments were commensurate
with a declared intention within the FHD plan to increase the herd to 60 cows
by March 31 1985, and confirms the estimation on the basis of an additional 13
dairy cows at an average yield per cow of 5,000 litres, banded as required by
the regulations.
There is no
indication there as to how the tribunal arrived at the figure of 13 additional
dairy cows. Nor was there any indication in the local panel’s decision. The
applicant had, in fact, guessed what had happened. The local panel had taken
the annualised quantity of 238,836 litres and had divided it by a notional yield
of 5,000 litres per cow. The panel adduced that there must have been 47 cows
there during the base period.
The applicant
pointed this out to the tribunal in his grounds for requesting a review. A good
deal of the evidence he produced before the tribunal was directed to showing
that there were only 34 cows there during the base period. Yet, notwithstanding
that evidence and those submissions, all he received by way of reasons was the
document which I have read. I do not regard this as a proper giving of reasons.
Reasons must deal, in broad terms, with the evidence and contentions advanced.
What is required will vary from case to case, but what we have here is not
enough for this case.
Perhaps seeing
some force in the applicant’s argument, the respondents filed in these
proceedings an affidavit by a Mr Saunders. He was the chairman of the tribunal
in question, although I note that he does not say that he has the authority of
the other members to swear that affidavit on their behalf.
A statutory
duty to give reasons cannot be discharged by affidavit in subsequent
proceedings. But, it is said by the respondents, the content of this affidavit
is something I can take into account in exercising my discretion as to whether
to grant relief. I am prepared to assume, for the purpose of this decision,
that that is correct.
The substance
of the affidavit is that the tribunal did not believe the applicant’s evidence
that he only had an average of 34 cows during the base period, because, in the
tribunal’s view, so few cows could not possibly produce the milk which the
applicant said had been produced during that base period. Given that they
accepted the applicant’s figures of what had been produced during the base
period, and the annualised figure derived therefrom, and given that they were
unable to accept that this could have been achieved by 34 cows, they then
applied their mind to the question of how many cows would produce such an
annualised figure. They used the figure of 5,000 litres per cow from para 18
(4) of the guidance which I have read. They arrived at the figure of 47 cows.
The applicant
submits that this is using the 5,000 litres standard for
I understand it, by Mr Kent for the respondents. But Mr Kent submits that given
that the tribunal and the panel have some expertise, and given that they did
not believe the applicant, there is nothing to prevent them from using the
figure of 5,000 litres per cow as a guide if they thought that this was right.
I would not quarrel with this approach if that is what the tribunal had done
and had said that they had done in their reasons. However, in the present case,
first, the reasons do not say this and, second, Mr Saunders’ affidavit says:
We therefore
adopted the figure of 5,000 litres per cow pursuant to the General Guidance.
It will be
remembered that, pursuant to para 8 of Schedule 5 to the regulations, the
guidance is mandatory. In my judgment, there is a real risk here that the
tribunal thought they were bound to adopt the figure of 5,000 litres for
present purposes if they did not believe the appellant. That is not so. In the
circumstances, I propose to quash the decision on the basis that reasons were
not adequately given and that it is possible that had they been adequately
given they would have exposed an error in law.
The
tribunal’s decision was quashed and the case remitted for reconsideration, in
the light of the judgment, by another tribunal.
