O'Brien v Ireland

JudgeMr. Justice Murphy
Judgment Date01 January 1991
Neutral Citation1990 WJSC-HC 2431
CourtHigh Court
Docket NumberNo. 11786P/1989,[1989 No. 1786Pl
Date01 January 1991

1990 WJSC-HC 2431


No. 11786P/1989








Production - Control - Quotas - Entitlement - Voluntary cessation of milk production from 1979 to 1984 - Cessation pursuant to Community premium scheme - Applicant unable to produce milk in 1983 - ~Mulder~ applicant - Special conditions imposed on applicant - Provisional quota allocated to applicant - Whether applicant restricted to original holding as sole source of milk to fulfil quota - (1989/11786 P - Murphy J. - 18/1/90) - [1991] 2 I.R. 387 - [1990] ILRM 466

|O'Brien v. Ireland|



Milk - Production - Control - Quotas - Entitlement - Voluntary cessation of milk production from 1979 to 1984 - Cessation pursuant to Community premium scheme - Applicant unable to produce milk in 1983 - ~Mulder~ applicant - Special conditions imposed on applicant - Provisional quota allocated to applicant - Whether applicant restricted to original holding as sole source of milk to fulfil quota - Council Regulation 764/89/EEC, article 1(3) - (1989/11786 P - Murphy J. - 18/1/90) - [1991] 2 I.R. 387

|O'Brien v. Ireland|


Community law

Council regulation - Schematic approach - Non-discrimination - Proportionality - Legal certainty - (1989/11786 P - Murphy J. - 18/1/90) - [1991] 2 I.R. 387 - [1990] ILRM 466

|O'Brien v. Ireland|


Judgment of Mr. Justice Murphy delivered the 18th day of January 1990.


To comply with Article 3a of Regulation (EEC) Number 857/84 (the Quota Regulations) as inserted by Council Regulation EEC Number 764/89 (the Mulder Regulations) and thus convert a special reference quantity allocated provisionally to him on the 30th of August 1989 into a definitively allocated special reference quantity the Plaintiff must (among other things) deliver 31,842 gallons of milk in a continuous twelve month period ending not later than the 29th day of March 1991. The Plaintiff contends that he will have complied with the foregoing requirement if the requisite gallonage is produced on and delivered from any production unit operated by him located within the geographical territory of the Community. The Defendants dispute this contention and say that the relevant regulations require the milk to be produced on and delivered from that part of the lands under the control of the Plaintiff on the 18th of December 1979 (the date on which the Plaintiff's application for an non marketing premium was approved) and was still so controlled on the 27th October 1984 (the date on which expired the non-marketing period applicable to the Plaintiff).


No doubt this controversy is a matter of great interest to and fully understood by the farming community but it is of particular interest to some eighteen hundred farmers in Ireland who are usually categorized by reference to the name of a Dutch farmer called Mulder whose successful litigation before the European Court of Justice produced significant changes which were obviously of considerable benefit to many farmers throughout the Community.


There is no difference between the parties with regard to the facts of the case. Nor is there any dispute with regard to the relevant regulatory provisions. Moreover the Defendants did not challenge the well prepared and clearly made arguments on behalf of the Plaintiff as to the rules of construction applicable to the relevant regulations. At the end of the day the difference between the parties related to the word "holding" as used or implied in the regulations under consideration. Even then the dispute did not concern so much the meaning of this crucial word but the point in time at which effect should be given to it.


In 1979 the Plaintiff, Mr. O'Brien, owned and occupied a farm or farms comprising approximately 100 acres near Ballynalacken County Cork. He engaged extensively in milk production. On the 17th of May 1977 the Council of the European Communities made certain regulations (EEC number 1078/77) for the purpose of introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds. I will refer to these as the "Premium Regulations". The purpose of these regulations was to encourage the cessation of milk production or the marketing of milk and milk products. This aim was to be achieved by granting premiums to farmers who ceased to market milk and milk products or who converted their dairy herds to meat production. The scheme relating to the non-marketing of milk of which the Plaintiff availed entailed the producer giving certain undertakings which included an undertaking not to market milk during a period of five years beginning within the six months next following the date on which the application for the premium was approved. The premium itself was to be calculated by reference to the quantity of milk supplied by the producer during the 1976 calendar year. The amount of the premium was determined by reference to a percentage of the milk target price which percentage diminished in respect of the larger outputs. The original Premium Regulations provided that 50% of the premium should be paid during the first three months of the non-marketing period and that the balance should be paid in the third and fifth years of the period by two equal instalments of 25% of the premium provided that the recipient satisfied the competent authorities that he had complied with the undertakings given by him. The original premium regulations were subsequently amended so as to provide (among other things) that in place of the basis year of 1976 that the basis period should be the period of twelve calendar months next proceeding the date on which the application for the premium was lodged. The amended regulations also contained provisions for the adjustment of the quantity of milk delivered (and consequently the premium) where it appeared that the number of dairy cows kept on the holding as recorded on the date of approval of the application was less than the number appropriate for the quantity of milk in question.


The Plaintiff applied (presumably in the month of March 1979) to participate in the premium scheme introduced under the Premium Regulations as amended. His basis year was the twelve calendar months ending the 28th February 1979. His herd was inspected on the 17th of May 1979 and his application approved on the 19th December 1979. Subject to complying with the provisions of the scheme his premium was determined at a figure of £31,102.54 based on milk deliveries of 66,338 gallons. He was required in accordance with the regulations to commence his non-marketing period before the 30th of June 1980. In fact that period commenced on the 28th of October 1979 and was completed on the 27th of October 1984.


Mr. O'Brien was duly paid the said premium of £31,102.54 by the prescribed instalments and for his part complied with the undertakings given by him. During the non-marketing period he engaged in mixed farming. He did so with the assistance of his brother and nephew who farmed adjoining lands. This assistance was of particular importance to Mr. O'Brien as he was and is invalided to a significant extent.


From all of this it follows that Mr. O'Brien was not engaged in milk production during the calendar year 1983 but he was entitled to expect that he could return, without penalty, to milk production on the completion of the non- marketing period on the 27th of October 1984.


It may be inferred that the Premium Regulations did not achieve or at any rate did not adequately achieve the purpose for which they were designed. On the 31st of March 1984 the Council adopted new regulations (EEC number 857/84) imposing a levy or penalty on excess milk production. These regulations, to which I have referred as "the Quota Regulations", provided for a scheme under which special reference quantities (or "quotas" as they are generally known) were allocated and production in excess of those quotas was penalized by the imposition of a levy. Of the alternative courses available Ireland adopted what is described as Formula B under which the levy is imposed on the purchaser (usually a co-operative society) and is calculated by reference to the quantities of milk product purchased by it in any year which are in excess of those purchased by it during the basis year, that is to say, the calendar year 1983 in the case of Ireland. It is then the task of the purchasers to notify their suppliers of the amount of milk product supplied by them during the basis year as that amount in turn constitutes the quota of the individual producer. In the event of the purchaser becoming liable to pay levy on any excess purchases he is entitled under the Quota Regulations to pass on the levy to the individual producers by whom the excess was created.


The Quota Regulations represented a dramatic effort to solve the problem of excessive dairy production. It froze milk production by reference to the basis year. Those farmers who were not engaged in milk production in that year were effectively precluded from the production of milk and those farmers who had been so engaged were limited to the amount of the milk product produced by them in the year designated (without prior notice) as the basis year. It follows that the Quota Regulations excluded entirely from production of milk products those farmers who had availed of the Premium Regulations and had given in return for a premium an undertaking not to market milk products during a period which included the calendar year 1983. Such farmers could not complain that they were not in milk production during the relevant year. Their grievance was that at the expiration of the non-marketing period they were precluded from resuming milk...

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