Wren & Others v Department of The Environment and Another
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE COOKE |
| Judgment Date | 14 November 2002 |
| Neutral Citation | [2002] EWHC 2667 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ/0006736 |
| Date | 14 November 2002 |
[2002] EWHC 2667 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Royal Courts of Justice
The Strand
London WC2A 2LL
Mr Justice Cooke
Case No: HQ/0006736
MR C LEWIS (instructed by Taylor Lessing) appeared for the Claimants
MR P ROTH Q.C. and MS R HAYNES appeared for the Defendant
Thursday, 14th November 2002
Introduction
1.1 This judgment is given following the hearing of five lead cases in group litigation, relating to compensatory payments under EEC Council Regulation 1765/92 of 30 th June 1992, which is referred to as the Basic Regulation, and which established a system for the support of producers of certain arable crops, including set-aside payments. Under the terms of section 2.1 of the European Communities Act 1972, and Article 249 of the Treaty establishing the community, this, and the other regulations to which this judgment refers are binding, directly applicable, and of legal effect in the UK. I was told that the group litigation involves some 85 cases, and the issues raised here may affect as many as 1,000 other farmers.
1.2 The scheme is known as the Arable Area Payment Scheme, AAPS. The objective of the system as described in the statement of Mr Kuyk of DEFRA, and as set out in the preamble to the regulation is to ensure a better market balance by approximating community prices for certain arable crops to the prices of the world market, and to compensate producers of arable crops for the loss of income resulting from reduction in agricultural support prices imposed by the European community, in order to bring them closer in line with those world market prices. Compensation is payable in respect of land on which arable crops are grown and land which has been "set aside," in accordance with the terms of Article 7 of that regulation.
1.3 In each of these lead cases, but in circumstances differing one from the other, the Claimants seek compensation or damages in respect of the failure of the Ministry of Agriculture, Fisheries and Food or its successor, the Department of the Environment, Food and Rural Affairs, or in the case of Welsh Claimants, the Secretary of State for Wales —to whom (as nothing turns on the identity of the relevant Defendant) I shall refer in this judgment collectively as "the Department" or "the Defendants" —to make compensation payments claimed to be due under the basic regulation in respect of land, which has been allegedly temporarily used to grow grass, which was then cut and used for silage or hay. The land was then left unused following such cutting and baling, giving rise, it is claimed, to entitlement to have the land treated as "set aside" for the purpose of assessing compensation payments.
1.4 It is accepted by the Department that its liability, if any, to make payments, would constitute a statutory debt, and that interest would be payable in respect of such debt under the provisions of the Supreme Court Act.
1.5 The critical provision for present purposes in deciding whether any payment is due is Article 2 of what is known as the Implementing Regulation, which is set out later in this judgment.
1.6 In the year 2000 the regulations were —I am told —amended, so that the issues raised here affect only past liability and past payments.
The scheme
The legislative background to the relevant provisions is laid out at paragraphs 3–19 of the judgment of the European Court of Justice in case C372/98R v. Ministry of Agriculture, Fisheries and Food, ex-parte J H Cooke & Sons, but the scheme can be described as follows. Whereas under the old pre-1992 system, arable prices were supported in the community, which led to over production and the creation of surpluses, commonly known as "mountains," the 1992 reforms sought to remedy this by reducing the supported prices to approximate to world prices, and to compensate farmers for this reduction whilst requiring them to reduce their production by setting aside land previously subject to arable farming.
2.1 Article 2 of the Basic Regulation provides for compensatory payments to producers of arable crops under the conditions prescribed. Only those crops listed in Annex 1 to the regulation are arable crops for the purposes of compensation scheme. Grass is not included in the list in Annex 1, which covers cereal crops, oil seeds and protein crops.
2.2 Article 2.2 provides that payment is to be fixed on a per hectare basis, and regionally differentiated. It provides that "the compensatory payment is [to be] granted for the area which is down to arable crops, or subject to "set aside" in accordance with Article 7 of this Regulation."
2.3 Article 2.5 deals with the general scheme and the simplified scheme, the latter being open only to small producers. So far as the former is concerned, with which all the cases here are concerned, "Producers applying for the compensatory payment… shall be subject to an obligation to "set aside" part of the land of their holding from production, and shall receive a compensation for this obligation." By Article 7 the obligation was to "set aside" a fixed percentage of the land farmed, and for sowings in the 1993 to 1994 marketing year, running from 1 st July 1993 to 30 th June 1994, the level was fixed at 15 percent. For sowings in the equivalent marketing year for 1996 to 1997 the figure was 5 percent. For land sown with arable crops for which compensation is claimed, such sowing had to be done prior to 15 th May, the day set in the United Kingdom for applications for compensation to be made.
2.4 "Set aside" declarations and crop declarations were to be made with the application for compensation or aid, or to comprise part of it. Different rates of compensation applied for different arable crops, and a special rate applied to land "set aside."
The purpose of the "set aside" provisions was to prevent land which could otherwise be in arable production from being used for such a purpose —hence the obligation to "set aside" a proportion of land if compensation payments were to be claimed.
3.1 By Article 3.2 of the Implementing Regulation to which I refer below, such "set aside" land is not to be used for production for human or animal consumption, but by the terms of Article 7.4 it can be used for the provision of materials for the manufacture within the community, of products not primarily intended for such consumption, subject to effective control systems.
3.2 Recital 3 of the Implementing Regulation states that the minimum period of "set aside" possible is that of the growing cycle of the arable crops in question, save in special circumstances, and Article 3 of that regulation requires that the land be "set aside" for a period commencing on 15 th January at the latest, and ending on 31 st August at the earliest. I was told that some of the arable crops in Annex 1 to the Basic Regulation would be harvested after the latter date in some parts of the United Kingdom, but in the northern hemisphere the growing cycle of all those crops could not be completed outside it. The "set aside" land must be cared for so as to maintain good cropping conditions, and cannot be put to any lucrative use incompatible with the growing of an arable crop.
Commission Regulation 762/94 as amended, known as the Implementing Regulation, sets out detailed rules for the application of the Basic Regulation with regard to "set aside" schemes. Article 2.5 of the Implementing Regulation provides that "Without prejudice to Article 7.4 of the Basic Regulation, "set aside" means the leaving fallow of an area which has been cultivated in the previous year with a view to harvest." This is the wording upon which all the arguments turn in these lead cases, and upon which attention has therefore focussed. [As mentioned above Article 7.4 provides that land "set aside" may be used for the provision of materials within the Community of products not primarily intended for human or animal consumption, provided that effective control systems are applied.]
Article 9 of the Basic Regulation provides that applications for compensation and for fulfilling "set aside" obligations may not be made in respect of land which was under permanent pasture, permanent crops, forest or non-agricultural use on 31 st December 1992, but there is otherwise no express exclusion of land which has been cultivated with a view to harvest, whether by reference to the nature of the crop being harvested or otherwise. The land must however have been farmed by the applicant for payment during the prior two years save in special cases.
Article 7 of the Implementing Regulation provides that if the declared "set aside" area is smaller than the prescribed percentage of land declared for arable crops, the area of arable crops eligible for compensation is reduced on a pro-rata basis. In detailed rules, introduced in Regulation 3887/92 for applying the Integrated Administration and Control System, [IACS] which provided for monitoring and sanctions for wrong applications, Article 9, as amended subsequently, provided that if the area declared in an application for compensation was found to be overstated, the area actually found on inspection should be used for calculation of the compensation due. However, except in cases of force majeure, the area actually determined on such inspection was to be reduced for compensation purposes, by twice the difference found between it and the declared area, if the difference was more than 3 percent and less than 20 percent of the area actually determined. Furthermore, if the difference was more than 20 percent of the determined area no compensation was to be granted at all. These mechanisms were to be applied separately in relation...
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