Milk quota — Exceptional hardship — Construction of Dairy Produce Quotas Regulations 1984 — Applicants not producing milk in April 1984 — Whether exceptional hardship claim was limited to what had occurred during year April 1984 to March 1985 or unlimited in point of time — Wider interpretation accepted by judge
dairy farm was purchased in September 1983 — As they were not producing milk in
April 1984 they were not entitled to primary wholesale quota and they were not
entitled to secondary wholesale quota — They applied for relief under the
exceptional hardship provisions and received an award based on the number of
cows they had on their farm at March 31 1985 — Applicants’ contention was that
para 17(3)(a) and (5) of Schedule 2 to the regulations did not require the
tribunal to have regard to the year between April 1984 and March 1985 — The
contrary view put forward was that the regulations limited the tribunal’s
jurisdiction to the quota year April 1984 to March 1985 — In support of this
view it was pointed out that special claims cases and development claims were
geared to a particular year, that the interpretation of ‘wholesale quota’
related it to a quota year, and that generally it would be natural that the
exceptional hardship provisions should comply with the general intention of
limiting the quota system to a particular year
however, noted that the actual wording of para 17(3)(a) was very wide and that,
in contrast with the special cases, no time was mentioned; the provision was
not linked to a base year — There was good reason why an exceptional hardship
claim should be unlimited — The tribunal had, of course, a discretion and there
were other provisions in para 17(3) which might limit quite severely what a person
could obtain under such a claim — Having reread para 17(3) in the light of the
arguments, he concluded that it did not have the interpretation hitherto put on
it — The applicants’ contentions were well founded and the tribunal’s decision
to limit the quantification of the claim was mistaken
judgment delivered two days later, on November 25 1988, the judge gave his
reasons for deciding that, owing to the applicants’ undue delay in applying for
judicial review, he could not grant the relief sought by way of mandamus or
certiorari, despite the tribunal’s error — He did, however, decide that he
could make a declaration giving effect to his interpretation of the relevant
provisions of the 1984 regulations — The part of his judgment of November 25 explaining
his decision in this respect is set out at the end of the present report
Appeal on May 26 1989 upheld the judge’s view that to grant orders of mandamus
and certiorari would be detrimental to good administration
No cases are
referred to in this report.
This was an
application for judicial review of a decision of the Dairy Produce Quota
Tribunal for England and Wales. The applicants were A R and E E Caswell, who
were partners in a dairy farming enterprise at Pantdwyn Farm, St Clears, Dyfed,
South Wales. The applicants challenged a decision of the tribunal which limited
the quantity of their claim under the exceptional hardship provisions in the
Dairy Produce Quotas Regulations 1984.
R Gordon
(instructed by Dawson & Co) appeared on behalf of the applicants; G Pulman
(instructed by the Solicitor, Ministry of Agriculture, Fisheries and Food)
represented the respondent tribunal.
Giving
judgment, POPPLEWELL J said: This is an application to review a decision of the
Dairy Produce Quota Tribunal which was given on February 13 1985. It raises a
point of construction of the regulations, which are the Dairy Produce Quotas
Regulations 1984. They are of considerable importance, both to farmers who are
producing milk and to those who have to administer the quota system. It raises
a point which has not been authoritatively determined before. The matter has
been well argued before me. I have not reserved judgment because like all
construction points construing an Act it is very much one of first impression.
The facts are
not really in any dispute. They are these. The applicants are in partnership in
dairy farming. The farm with which this application is concerned is called
Pantdwfn. The farm was purchased in September 1983. It was a dairy farm. There
was a capital investment put into it.
The milk quota
system with which this case is concerned was first introduced in April 1984. It
was introduced as a result of the Directive from Europe, and in particular two
Council Regulations (EEC) Nos 856/84 and 857/84. In broad terms, the purpose of
it was to limit the amount of milk produced by farmers nationally and to impose
a levy on those where quotas were exceeded. Council Regulation (EEC) No 857/84
has the usual preamble. The parts which have been drawn to my attention are
these:
Whereas Article 5c of Regulation (EEC) No
804/68 instituted a levy payable by every producer or purchaser of milk or
other milk products on quantities exceeding an annual reference quantity . . .
The phrase
‘annual reference quantity’ in the European Directive is what we call
nationally ‘the quota’. The preamble goes on:
Whereas the reference quantity should be
fixed on the basis of the quantity which corresponds to the 1981 calendar year
already adopted . . .
It continues:
Whereas the scheme must, as a matter of
overwhelming public interest, enter into force on 2 April 1984; whereas to this
end, transitional measures must be adopted so that the levy due from 2 April
onwards can be collected reasonably promptly.
And then:
The Member States shall send annually to
the Commission before 1 January, but for the first time before 1 May 1984, a
list of regions with indication of the formula chosen for each of these.
Article 3
makes provision for a special reference quantity, which has been adopted in our
regulations. Article 4, which relates to special hardship, as it has been
adopted in our regulations, reads as follows:
1. In order
to complete the restructuring of milk production at national or regional level
or at the level of the collecting areas, the Member States may, in connection
with the application of formulas A and B . . . (c) grant producers
undertaking farming as their main occupation an additional reference quantity,
whether their herd fulfils the conditions set out in paragraph (b) or
not.
The applicants
in this case in April 1984 were not producing milk and were therefore not
entitled at this farm to make any claim to be allocated a primary wholesale
quota. It is not necessary to set out the complicated method by which that is
calculated. Nor were they entitled to a secondary wholesale quota. They
therefore applied for a claim under the exceptional hardship regulations. It is
clear from the award that was made that that award was based upon the number of
cows which the applicant would have on his farm at March 31 1985. It is with
reference to that cut-off date that this case is concerned. Putting it in
simple terms, is the exceptional hardship claim limited to what has occurred or
may occur during the year April 1984 to March 1985 or is it unlimited in time?
The
exceptional hardship claim is governed by para 17 in Schedule 2 to the
regulations. It reads in its material part as follows:
The Minister may make available from the
running regional wholesale reserve an exceptional hardship provision to be used
in satisfaction of exceptional hardship claims in accordance with the following
provisions of this paragraph . . .
(3) An exceptional hardship claim shall be a
claim by a person to whom Article 4(1)(c) of Council Regulation 857/84
(which deals with producers undertaking farming as their main occupation)
applies that —
(a) before 2nd April 1984 he has entered into, or
become obliged to enter into, a transaction or made an arrangement . . .
(ii) the reasonably expected outcome of which is a
level of wholesale delivery of dairy produce in respect of which, or a
substantial part of which, wholesale quota is not otherwise capable under these
regulations of being allocated to him.
That is the main part of para 17, but
there are other parts which are equally important, because the other parts, (b),
(c), (d) and (e) all follow that with the word ‘and’: (e)
reads: ‘it is fair and reasonable that he should be allocated wholesale quota
as a result of his exceptional hardship claim’.
Para 17(5)
reads:
The Tribunal shall determine for any
claimant who satisfies them of the matters referred to in subparagraph (3) his
gross additional wholesale quota (including cumulative quarterly wholesale
quotas), being the quantity of dairy produce which the Tribunal determines is
justified by his exceptional hardship claim.
The rival
contentions are put very simply. The applicant says that para 17(3)(a)
and (5) do not require the tribunal to have regard simply to the year between
April 1984 and March 1985. The argument on the other hand is that the
regulations are both intended to, and do in fact, limit the tribunal’s
jurisdiction to the quota year April 1984 to March 1985.
The other
parts of the regulations to which my attention has been drawn and which are
relevant are these. It is open to a producer who has a primary wholesale quota
to apply under what is called a special case. He may do it in one of two ways.
He may get the base year altered so that he can go back a year or two, if the
year which was relied on was not representative, or he may make a development
claim. The special case, it is clear from the regulations, is governed by the
quota year.
Para 7 in the
Second Schedule, Part 1, deals with special case claims. Para 7 makes it clear
that an applicant for primary wholesale quota may submit a special case claim.
Para 8 reads as follows:
(1) Each special case claim shall be examined by
the Minister who shall accept or reject it in accordance with the following
provisions of this paragraph.
(2) Each special case claim shall be accepted by
the Minister only if — (a) it is a base year revision claim, a
development claim or both . . .
(3) A base year revision claim shall be accepted
by the Minister only if it contains the following particulars from the
applicant —
(a) the alternative base year chosen by him.
It goes on dealing with the base year
calculation.
The
development claim is governed by subpara (4) of para 8:
A development claim shall be accepted by
the Minister only if it contains the following particulars from the applicant .
. .
What is important about the development
claim is the interpretation of development which is contained in the
interpretation part of the regulations at Regulation 2:
‘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
. . .
It is obviously geared to the year ending
March 31 1985.
It will be
observed that the para dealing with exceptional hardship does not have any
reference to the time at which the reasonable outcome is to be considered. It
is clear that in order that the minister can allocate the quotas in accordance
with the council’s regulations, a temporal period has to be considered. The
quotas are allocated on an annual basis. It is clear from the regulations as a
whole that the application of the quotas is to be done on an annual basis,
having regard to the fact that the quotas are granted on an annual basis and
the method of applying the distribution has to be on an annual basis.
Mr Pulman says
that the obvious intention of this regulation in respect of exceptional
hardship has to be likewise on an annual basis, otherwise it will give rise to
a very great number of difficulties which he outlined.
When one looks
at the first part of para 17(3)(a), the phrase ‘before 2nd April 1984 he
has entered into, or become obliged to enter into, a transaction or made an
arrangement’, it is obvious that those words are very wide. It is equally
obvious that they have no limitation in time as to when the arrangement is to
come into force. With regard to the phrase ‘become obliged to enter into, a
transaction’ the obligation has to have occurred before April 2, but the effect
of the transaction or the arrangement is not governed in time at all. ‘The
reasonably expected outcome of which’ is also unlimited in time. The point
which Mr Gordon makes, and which is evident from the regulations themselves, is
that whereas in the special cases everything is linked to the base year, both
in the base year revision and in the development claim, there is no such
provision in this part of the regulation.
However, Mr
Pulman draws my attention to para 17(3) (e): ‘it is fair and reasonable
that he should be allocated wholesale quota as a result of his exceptional
hardship claim’ and to para 17(5): ‘The Tribunal shall determine for any
claimant who satisfies them of the matters referred to in subparagraph (3) his
gross additional wholesale quota . . .’. Mr Pulman says, have a look at the
interpretation section of the regulations themselves as to what ‘wholesale
quota’ means.
‘Wholesale quota’ means — (a)
the quantity of dairy produce which may be delivered by wholesale delivery,
from a holding in a region in which Formula A is implemented, in a quota year
without the producer in occupation of that holding being liable to pay levy.
Therefore, says Mr Pulman, both in
relation to 17(3)(e) and (5), there is reference to a period of time,
namely, a quota year. Although he concedes that 17(3)(a) is not drafted
in the same way as the special case claim, and it would have been easy for it
so to have been done, (e) and (5) make it clear, if it is not otherwise
clear, that there is a limitation of time, namely, the quota year.
The
interpretation of ‘wholesale quota’ does not, like the interpretation of
‘development quantity’, relate to a particular quota year, nor to the first
quota year. It refers to ‘a quota year’.
It is further
said that it was plainly intended that the exceptional hardship regulation
should comply with the general intention of limiting the operation of the quota
system to a quota year. But I have come to the clear conclusion that, whatever
may have been the intention, it has not been drafted in that way. Indeed I have
some doubt whether it was intended to be drafted that way, because this was an
exceptional hardship claim; that is to say, it was to be exceptional. There is
good reason why an exceptional hardship claim should be unlimited. There is, of
course, a discretion for the tribunal as to what in fact is awarded under this
scheme. The other provisions of para 17(3) may limit quite severely what
somebody can obtain under an exceptional hardship claim. But it seems to me,
both on reading it for the first time, having heard argument about it and
having reread it, that 17(3)(a) is very wide and does not have the
interpretation which hitherto has been put upon it. Nor am I persuaded that the
interpretation to be given to (e) and to (5), in relation to the phrase
‘wholesale quota’, supports the argument put forward by the minister.
Finally, Mr
Pulman says that if one looks at para 17(5), what the tribunal has to determine
‘is justified by his exceptional hardship claim’. That must mean that it is
justified by the evidence before us now and leading up to the end of the year,
and not what may be
para 17(3)(a)(ii) is limited in that way.
Accordingly, I
have come to the conclusion that the contentions which the applicants make are
well founded, and that the decision of the tribunal to limit the quantification
of this claim to the period ending March 1985 was a mistaken one.
Editor’s note: The following is the part
of the separate judgment delivered by Popplewell J on November 25 1988 which
gives his reasons for restricting to a declaration the relief allowed to the
applicants in the present case. The earlier part of that judgment (not
reproduced) discusses the wording of RSC Ord 53, r4, section 31 of the Supreme
Court Act 1981 and a number of authorities on the effect of delay in applying
for judicial review. It also discusses factors influencing the exercise of the
judge’s discretion.
POPPLEWELL J:
I now have to consider what I should do as a result of the two decisions to
which I have come. The relief which was sought in this case was certiorari to
quash the said decision; alternatively, a direction requiring the tribunal to
reconsider the applicant’s application for wholesale quota or, alternatively,
mandamus or, alternatively, a declaration.
By reason of
the original decision to which I came, it looked as though the applicant might
be entitled to relief. By reason of the second decision to which I have come, I
have decided that the applicant is not entitled by reason of delay to relief
which would be detrimental to good administration. Ord 53, r1(1) sets out that
an application for an order of mandamus, prohibition or certiorari or an
injunction shall be made by way of application for judicial review. Ord 53,
r1(2) reads:
An
application for a declaration or injunction may be made by way of an
application for judicial view, and on such an application the court may grant
the declaration or injunction claimed if it considers that having regard to —
(a) the nature of the matters in respect of which
relief may be granted by way of an order of mandamus, prohibition or
certiorari.
(b) the nature of the persons and bodies against
whom relief may be granted by way of such an order, and
(c) all the circumstances of the case, it would
be just and convenient for the declaration or injunction to be granted on an
application for judicial review.
It seems to me
that orders of mandamus or certiorari should not be granted because of the
effect on good administration. However, having given a judgment interpreting a
regulation, and provided it is not a detriment to good administration, it seems
to me that I should give effect to that judgment. The just and convenient way
for that to be done is by making a declaration giving effect to my
interpretation of the regulation and saying that the tribunal’s interpretation
was wrong. As a matter of commonsense, that is how I should proceed. I am
fortified by the wording, by which I am governed, of Ord 53, r1. I can see no
injustice or inconvenience in making a declaration under Ord 53, r1 and that is
what I propose to do.
There was
no order for costs except for legal aid taxation of the applicants’ costs.
The Court of Appeal on May 26 1989
dismissed an appeal from the decision of Popplewell J and upheld his view that
to grant orders of mandamus and certiorari would be detrimental to good
administration. The court was influenced by evidence from the Ministry of
Agriculture, Fisheries and Food that if a number of unsuccessful applicants for
quota were now to apply for judicial review it would mean reopening each of the
years 1984-88. Further, if the Caswells’ application were allowed and others
were refused on the ground that it was now too late to apply for judicial
review, the Caswells would have a substantial unfair advantage over many others
in a similar position. The Court of Appeal discussed the conflict between
section 31 of the Supreme Court Act 1981 and RSC Ord 53, r4 in regard to undue
delay and drew attention to the need for the confusion to be remedied by
Parliament or the Rules Committee.
