Milk quota — Special case claim for secondary wholesale quota — Application for judicial review — Tribunal wrong in refusing to allow amendment in regard to specified quantity claimed — Dairy Produce Quotas Regulations 1984 — Applicants had obtained official approval for an increase of milk production from the three farms which they farmed in partnership — On one of the farms the preparatory work was not completed by the end of March 1984, after which the 1984 regulations came into force, so that in 1983 there was no milk production from that particular farm — Unfortunately, the applicants put in separate applications for each of the three farms, instead of a composite application for all three (which constituted a single holding in the EEC sense) — In so doing they left blank the entry for a specific litreage claim in the case of the farm with no 1983 production instead of inserting an estimated future production figure — When the matter came before the tribunal on this occasion the tribunal correctly treated the three farms as constituting a single holding for the purpose of quota, but they treated the claim as a composite one for the total of the amounts claimed in respect of the two farms which had been producing milk in 1983 — When the applicants’ counsel sought leave to amend the figures to take account of the third farm the tribunal adopted a rigid attitude — They referred to paras 7, 8 and 10 of Schedule 2 to the 1984 UK regulations — The regulations required the amount of a secondary quota claim to be specified in the application and in the tribunal’s opinion no such claim could be considered unless the quantity claimed was specified; there was no power to amend
rejected the tribunal’s interpretation as unduly restrictive — The requirement
of ‘specification’ had in fact been complied with, as at all stages the
application was in respect of the composite holding of the three farms — At the
initial stage the minister had accepted the forms specifying the wholesale
quota claim covering the three farms — The blank or nil claim in respect of the
one farm was an error which was capable of amendment — It was accepted that
amendment was possible at local panel level and it would be curious if it were
barred at tribunal level — It would also be contrary to the general principles
governing the discretion to amend in the case of other kinds of tribunals and
courts — In the light of this decision the applicants’ alternative exceptional
hardship claim did not arise, although the judge, obiter, expressed some doubt
about it — Application for judicial review granted
The following
case is referred to in this report.
Cockling v Sandhurst (Stationers) Ltd [1974] ICR 650; [1975] ITR 6
This was an
application for judicial review by S Dimelow Farms challenging a decision of
the Dairy Produce Quota Tribunal for England and Wales in relation to secondary
wholesale quota for three farms, Woodhouse, New Hall and Chorlton Old Hall, on
the borders of Cheshire and Shropshire
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, MACPHERSON J said: Since I do not believe in unnecessary suspense I
indicate at once that this application succeeds.
The applicants
are a partnership of dairy farmers who farm on the borders of Cheshire and
Shropshire. They have three farms called Woodhouse, New Hall and Chorlton Old
Hall, and they sell milk wholesale to the Milk Marketing Board.
On July 28
1978 the applicants obtained approval of a development plan for a maximum of
six years from the Ministry of Agriculture, Fisheries and Food to increase
their milk production under the ministry’s development scheme. Their intention
was to aim for milk production units on each farm of about 100 cows. The work
at Chorlton Old Hall was not completed by the end of March 1984, after which
the Dairy Produce Quotas Regulations 1984 (SI 1984 no 1047) (the regulations)
came into force.
In pursuance
of those regulations the applicants were allocated primary wholesale quota of
897,527 litres, which was necessarily calculated on the applicants’ sales of
milk from New Hall and
This case
concerns the applicants’ additional claim for ‘secondary wholesale quota’. Such
a claim is a ‘special case claim’ based upon article 3(1) of Council
Regulations (EEC) 857/84 and determined in accordance with the provisions of
paras 8-10 of Schedule 2 to the 1984 UK regulations. Alternatively, the
applicants say that they should be awarded quota under an exceptional hardship
claim in accordance with para 17 of Schedule 2 to these regulations.
Not only do
the applicants have the misfortune to have to grapple with the quota scheme but
also they are becoming familiar with the processes of judicial review, because
their application for secondary wholesale quota first went to the tribunal on
May 15 1985. The tribunal held that the applicants were not entitled to any
secondary quota whatsoever. For reasons which need not be explored, but which
appear in the case papers, the Divisional Court quashed the decision, by
consent of both parties. I recall, perhaps subliminally, being party to that decision
with May LJ.
And so the
matter came before Lord Grantchester and his colleagues on July 24 1987. The
tribunal’s decision was given on September 7 1987. It is unnecessary to refer
in detail to the decision, since again it is among our papers. But the result
was that the tribunal determined the applicants’ entitlement to be 254,607
litres. That award was given on the development claim and the tribunal declined
to award any additional quota on the exceptional hardship claim.
It can be seen
from the award (which admirably summarises the facts and the issues of the
case) that the tribunal expressly stated that the quantity of dairy produce
justified by the applicants’ development claims was considerably in excess of
254,607 litres. And (at para 18) the tribunal indicated that they would have
computed the relevant quantity by reference to an increase in the farm’s herd
of 101 cows (presumably the Chorlton Old Hall animals), taking account of such
deductions as are required by the regulations.
The obstacle
to such an increased award was the applicants’ own claim on application forms
(MSL2), coupled with the tribunal’s interpretation and reference particularly
to para 10 of Schedule 2 to the regulations.
Unfortunately,
but in my judgment wholly understandably, the applicants themselves put in
separate applications for each farm. In respect of the milk producing farms
they set out specific claims for 143,783 litres of quota (Woodhouse) and
108,824 litres of quota (New Hall). For Chorlton Old Hall they left the claim
paragraph blank. The tribunal themselves said that ‘the Firm erroneously
completed and submitted three such forms’. And this was not noticed until
October 1984 because two of the applications went to different local panels and
the application relating to Chorlton Old Hall was referred to the tribunal as
an exceptional hardship case. Eventually they were collected together and came
before the tribunal at the same time, and Mr Gordon rightly submitted to the
tribunal that the farms should be regarded as one holding for the purpose of
the regulations. Logically therefore, in my judgment, the claim was a composite
one for 254,607 litres. And so the tribunal regarded it.
At the start
of the tribunal inquiry Mr Gordon orally sought an allocation of 483,678
litres, and later on, in his closing address, he increased the claim orally to
626,278 litres. I am told that the lesser of these claims is probably near the
figure which the tribunal might have assessed as justifiable, had it originally
been specified in the MSL2 application forms. But the tribunal referred to para
10 of Schedule 2 and would not look at the increased claim. The matter is
succinctly set out in para 16 of the tribunal’s decision as follows:
Paragraph
10(1) of the Second Schedule to the United Kingdom Regulations states that the
secondary wholesale quota of each 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),
or (b) his secondary quota claim — whichever is the less’. In our view, such
reference to ‘secondary quota claim’ is a reference to the amount required to
be specified by him in his application by reason of para 8(4)(d) of such
Second Schedule. In our opinion, no secondary quota claim can be considered
unless the applicant has specified the quantity which he claims; and Parliament
has decreed that he cannot receive an allocation in excess thereof. We do not
accept Mr Gordon’s submissions to the contrary or his submission that we have
power to amend, or to direct an amendment to an application form for quota once
duly submitted.
The question
for my decision is whether the tribunal were right to restrict the claim to
that specified in the MSL2 forms, and whether or not there was power to allow
an amendment. If there was power to amend, it is accepted in this particular
case that the matter should not be returned to the tribunal in order to ask the
tribunal to consider whether in their discretion an amendment should follow.
The respondents accept, simply in this case, that amendment should be allowed
if it was within the tribunal’s power, and the necessary calculation of
increased quota will be equivalent to that which the tribunal would have
awarded. I have no doubt that the parties’ advisers will resolve the
mathematical wrangling without the need to return this case to a busy tribunal.
Mr Pulman’s
argument is short and direct. He says that paras 7 and 8 of Schedule 2 require
each special case claim submitted to the minister for his examination to be
strictly in accordance with those paras. Para 8(4) requires a development claim
to be accepted by the minister ‘only if it contains the following particulars
from the applicant’.
There follow
certain irrelevant matters and I read subparagraph 8(4)(d), which
states: ‘his secondary wholesale claim, being a specified quantity of dairy
produce . . .’.
Mr Pulman says
that the nil return or nil claim for Chorlton Old Hall cannot be remedied. No
claim was specified, and no claim can be considered other than the total of
254,607 litres claimed in respect of the other two farms.
In my
judgment, however, the requirement of ‘specification’ was complied with by the
applicants, since it must have been right at all stages to consider the
application as one application for one composite holding. And the stage at
which this requirement bites is the stage of examination and acceptance or rejection
of the claim as such by the minister (see para 8(1)). Taken together the forms
did specify the secondary wholesale quota claim as it was then and the minister
accepted them together. Otherwise, as Mr Gordon points out, the minister would
have had to reject the individual claim for Chorlton Old Hall, since by itself
it did not specify a claim. And, dealt with separately, that farm’s individual
claim would have been allowed to be increased on its way through the system, as
I indicate later in this judgment.
The matter
did, however, go to the local panels, as I have indicated, and reached the
tribunal in the manner already referred to.
Apart from and
together with his first argument Mr Pulman relies strongly upon the wording of
para 10.
He says that
the tribunal have to consider two matters. First, what they consider to be
justified by the special claim. Second, what the applicant has asked for. He
says that the tribunal and the court must give full meaning to the statutory
instrument’s words. And he says that it would defeat the purposes of para 10
should any amendment or alteration of the claim be allowed at tribunal level.
It is, says Mr Pulman, for the applicant to say how much he is asking for and
to say it at the time when he asks for it and not to depart from that request.
It is not open to him to make what may be an opportunist amendment and it is
unfair to farmers who do a good job in estimating their claims to allow a blank
to be filled in later or to allow amendment of any claim, and above all a blank
claim. This would, says Mr Pulman, give these applicants an unjust advantage
and would render nugatory the final words of the paragraph, ‘whichever is the
less’.
I am
unconvinced by these arguments, and for the following reasons.
1 It is perfectly plain that the Chorlton Old
Farm blank or nil claim was an error on the applicants’ part. They failed to
realise that they should have estimated the future production of their farm
rather than use the calculation on the base year, which was necessarily nil in
the case of that farm at the time when the form was filled in.
2 If no amendment of the total claim is
allowable in any circumstances this would, in my judgment, lead to injustice to
the applicants. Everybody accepts that they were in error, and that their own
figure unamended is less than the tribunal would consider justifiable. I see no
justice in forcing them to limit their claim to that originally claimed total
figure. And I do not believe that, for example, a jury of dairy farmers would
cry ‘foul’ should the question of amendment in this case be judged by them.
3 It is accepted that at local panel level
amendment is permissible. Following para 8 of Schedule 5 to the regulations
there is detailed guidance given to those panels. Both in reaching decisions on
review of rejection of a special case by the minister (para 19(2), p 188), and
in reaching decisions on further examination of a special case claim (para 23,
p 189) there is express guidance that the local panel should require or allow a
claimant to amend. In this case para 20(3) is relevant, and it reads as
follows:
The
appropriate Local Panel shall allow a claimant to amend the amount of his claim
for Secondary Direct Sales Quota or Secondary Wholesale Quota where the
claimant has made a mistake or error (howsoever occurring) in calculating his
claim for Secondary Direct Sales Quota or Secondary Wholesale Quota for the
purpose of the United Kingdom Regulations or in entering the amount of his
special case claim for such Quota in any form or document submitted by him or
on his behalf.
It is, in my
judgment, unarguable that para 20(3) would have allowed amendment at local
panel level in the present case. Either there was an error of calculation or
there was an error in entering the amount of the special case claim in the
combined MSL2 application forms submitted on the applicants’ behalf.
I turn then to
the paragraph governing the local panels in cases referred to them, and I find
para 9 of Schedule 2, which reads as follows:
(1) The following provisions of this paragraph
shall relate to special case claims reserved for further examination.
(2) The further examination body shall consider
each special case claim and shall, in respect of each special case claim,
determine an estimate of secondary wholesale quota of each applicant.
(3) The estimate of secondary wholesale quota of
each applicant shall be — (a) such quantity of dairy produce (if any) as
is considered by the further examination body to be justified by his special
case claim, or (b) his secondary wholesale quota claim — whichever is
the less.
If therefore
his amendment is allowable at that level I am convinced that it cannot be
barred or forbidden at tribunal level on the basis that para 10 and in
particular the words ‘whichever is the less’ would then be rendered nugatory.
It is apparent
from my reading of para 9 that the wording of that paragraph is identical with
the paragraph which refers to the tribunal.
4 There is no express guidance in cases such as
the instant one, because there is no provision for such guidance to be given by
Schedule 5. But in the parallel cases involving direct sale quota there is
guidance to tribunals (p 148 et seq). And it seems to me significant
that again that guidance expressly requires tribunals to allow claimants to
amend the amount of their claims in exactly the same way as local panels are
required to allow amendment in special case claims. Para 26 of that guidance is
the relevant paragraph and the wording follows that already referred to.
5 I am convinced that this case should be no
different from other claims, in courts or before tribunals, and that amendment
was permissible and within the tribunal’s powers. Subject of course to the
exercise of the discretion of the tribunal as to whether or not amendments
should be allowed. Thus bad faith amendments could be excluded. Each case will
depend upon its own facts. And I do not believe that there is any risk of the
dreaded floodgates opening and multifarious problems arising.
The
alternative could be that ‘fly’ claimants would always pitch their claims too
high, resulting in unrealistic claims and more work for all those involved,
while those who made a mistake would be penalised unfairly. Furthermore,
anybody’s experience in court will be that where unrealistic and inflated
claims are made the tribunal or court involved looks warily at the
justification of the claim in general terms.
In this
context I refer, of course, to general principles as to amendment, and am
assisted to some extent also by the case to which I was referred, Cocking
v Sandhurst (Stationers) Ltd [1974] ICR 650.
I add that I
am comforted in this decision by the knowledge that the result will be that the
applicants receive that quota which the tribunal thought to be justifiable. And
by the fact that the increased claim was before the tribunal at the start of
their consideration of this case and was the result not of an opportunist
application but of Mr Gordon’s advice and approach upon realisation of the
applicants’ erroneously based claim.
As to the
exceptional hardship claim, I simply say that it does not now arise. But I am
bound to say that in itself it could well have been difficult to sustain,
simply because the wholesale quota was capable of being allocated under the
regulations but (if the applicants had been unsuccessful) would not have been
allocated because of their own miscalculation or error in making their claim.
However, I do not rule upon this aspect of the matter and anything I say is obiter
dictum in any event. If the matter goes elsewhere the argument will still
be available to the applicants.
Quota is of
course saleable. The applicants have already bought extra quota. But by placing
them in the position in which, in my judgment, they should have been, they will
be able presumably to sell on some of their surplus quota. I see no criticism
or unfairness to anybody in this aspect of the case.
In my
judgment, the initial specification in this case complied with the relevant
regulations 7 and 8. Amendment in this case because of error or mistake was
within the tribunal’s powers and should have been allowed. The application
succeeds. I will now be open to argument as to the relief to be allowed and any
other consequential matters.
The
application was granted with costs; consequential orders for certiorari and a
declaration were made.
