R v Ministry of Agriculture, Fisheries and Food, ex parte St Cleres Hall Farm and others

Milk quota allocation — SLOM II scheme — Quotas initially granted to applicant milk producers — Quotas withdrawn by MAFF — High Court holding that MAFF acted lawfully in so doing — Applicants did not comply with rules for producers operating in partnership to obtain quotas — MAFF empowered to withdraw quotas — Applications for judicial review of withdrawal dismissedThese were applications for judicial review made by eight farmers. They challenged a decision by MAFF to withdraw their milk quota allocation and their entitlement to compensation from the EC. The case concerned the SLOM II scheme under which payments were made to milk producers who refrained from milk production for a period of four or five years. In 1991 the applicants applied in their own names for a SLOM II quota which was provisionally granted to them. Following legal advice in June 1992 they all entered into partnerships (“the SLOM partnerships”) with other farmers to enable them to recommence milk production against the quotas. They were all granted definitive quotas and were offered large sums of money as compensation which they accepted in each case. On June 21 1994 without, as the applicants contended, any warning or consultation, MAFF announced their decision to withdraw the quotas and the entitlement to compensation. The issue was whether MAFF acted lawfully in so doing. Held The applications were dismissed. 1. MAFF was the agent for the EC and was required to apply EC law in carrying out the Community’s agricultural policy. It was obliged to ensure that a scheme such as SLOM II was strictly interpreted and to disallow any benefits if the terms of the scheme were not adhered to. 2. The conditions which had to be met for the acquisition of an original SLOM quota were set out in EC Regulation 764/89. The regulation recited that SLOM producers might claim such quotas only if they complied with certain eligibility criteria, thus making it clear that they intended, and were really able, to resume milk production; and that the quantities granted were not intended to confer or induce an undue advantage but must in fact be produced by those to whom they were allocated. 3. To obtain a SLOM II quota there was no requirement for full-blooded merger. But it was necessary that there should be a pooling of assets and for those assets to contribute (to a significant, not a substantial) degree to the milk production of the partnership. 4. There was not in any of these eight cases a sufficient contribution by those assets. In particular, where neither the land nor the quotas were repooled, it was impossible to say that there had been a sufficient contribution. 5. The SLOM scheme was not intended to be or to permit an arrangement whereby a farmer, who already had a quota, would go into partnership with a SLOM farmer who was not engaged in farming with the result that the SLOM quota could be taken up and the excess quota sold or leased off. 6. Moreover, MAFF was empowered to act as it did, both by Community law and by UK regulations, which implemented it and it did not act unreasonably in so doing. It did not delay for any unreasonable time. There was a legal basis for the action it took and it acted reasonably. There was no error of law and its decision to act as it did could not be impugned as being irrational. Mark Brealey (instructed by Burges Salmon, of Bristol) appeared for the applicants; Peter Duffy (instructed by the solicitor to the Ministry of Agriculture, Fisheries & Food) appeared for MAFF.