Duff v Minister for Agriculture (No. 2)

• Jurisdiction: Ireland
• Judgment Date: 04 March 1997
• Date: 04 March 1997
• Docket Number: [1990 No. 2528P, S.C. No. 311 of 1992]
• Court: Supreme Court

High Court

Supreme Court

[1990 No. 2528P, S.C. No. 311 of 1992]

Duff v. Minister for Agriculture (No. 2)

Fintan Duff and Others

Plaintiffs

and

The Minister for Agriculture and Food, Ireland and The Attorney General, Defendants (No. 2)

Cases mentioned in this report:—

Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation[1948] 1 K.B. 223; [1947] 2 All E.R. 680.

Bourgoin S.A. v. The Minister of Agriculture [1986] Q.B. 716; [1985] 3 W.L.R. 1027; [1985] 3 All E.R. 585; [1986] 1 C.M.L.R. 267.

Cassidy v. Minister for Industry and Commerce [1978] I.R. 297.

Cornée v. Co-operative Agricole Laitière de Loudeac (Joined cases 196-198/88) [1989] E.C.R. 2309.

Cotter v. The Minister for Agriculture (Unreported, High Court, Murphy J., 15th November, 1991).

Desmond v. Glackin (No. 1) [1993] 3 I.R. 1; [1992] I.L.R.M. 490.

Deutsche Milchkontor and Others v. Germany (Joined cased 205-215/82)[1983] E.C.R. 2633; [1984] 3 C.M.L.R. 586.

Dunlop v. Woollahra Municipal Council [1982] A.C. 158; [1981] 2 W.L.R. 693; [1981] 1 All E.R. 1202.

East Donegal Co-operative Livestock Mart Ltd. v. The Attorney General[1970] I.R. 317; (1970) 104 I.L.T.R. 81.

Klensch v. Secretaire d'État étatà l'Agriculture et à la Viticulture (201/85) [1986] E.C.R. 3477; [1988] 1 C.M.L.R. 151.

Kühn v. Landwirtschaftskammer Weser-Ems (Case C-177/90) [1992] E.C.R. 1-35; [1992] 2 C.M.L.R. 242.

Mixnam's Properties Ltd. v. Chertsey U.D.C. [1964] 1 Q.B. 214; [1963] 3 W.L.R. 38; [1963] 2 All E.R. 787.

Mülder v. Minister van Landbouw en Visserij (Case 120/86) [1988] E.C.R. 2321; [1989] 2 C.M.L.R. 1.

Murphy v. The Attorney General [1982] I.R. 241.

Pine Valley Developments Ltd. v. The Minister for the Environment[1987] I.R. 23; [1987] I.L.R.M. 747.

Rogers v. Louth County Council [1981] I.R. 265; [1981] I.L.R.M. 144.

Spronk v. Minister de l'Agriculture et de la Pêche (Case C-16/89)[1990] E.C.R. I-3185; [1992] 1 C.M.L.R. 331.

The State (Keegan) v. The Stardust Victims Compensation Tribunal[1986] I.R. 642; [1987] I.L.R.M. 202.

The State (Lynch) v. Cooney [1982] I.R. 337; [1982] I.L.R.M. 190; [1983] I.L.R.M. 89.

The State (McGeough) v. Louth County Council (1956) 107 I.L.T.R. 13.

Tomadini S.n.c. v. Amminstrzione delle Finanze dello Stato (Case 84/78) [1979] E.C.R. 1801; [1979] 2 C.M.L.R. 573.

Von Deetzen v. Hauptzollamt Hamburg-Jonas (Case 170/76) [1988] E.C.R. 2355; [1989] 2 C.M.L.R. 327.

Wachauf v. Germany (Case 5/88) [1989] E.C.R. 2609; [1991] 1 C.M.L.R. 328.

Wiley v. The Revenue Commissioners [1994] 2 I.R. 160; [1993] I.L.R.M. 482.

European Union - Mistake of law - Minister - Implementation of European legislation - European legislation imposing restrictions on milk production - European legislation giving Minister discretion to make special provision for certain categories of farmer - Minister intending to make special provision for such farmers - Minister's method of making provision contrary to European legislation - Whether farmers entitled to compensation for Minister's mistake of law.

Legitimate expectation - Plaintiffs adopting farm development plans under European Directive encouraging increase in output - Partial funding coming from European Commission - Plaintiffs borrowing to fund increase in production - Subsequent European Regulation imposing penalties for production in excess of quota - Plaintiffs liable to penalties if targets in development plan met - Whether plaintiffs having legitimate expectation in respect of farm development plan - Council Directive 72/159/EEC - Council Regulation EEC/857/84.

Negligence - Minister - Agents - Whether Minister liable for negligence of agents - Whether failure to advise or warn of effect of Council Regulation constituting negligence.

Plenary summons.

The facts and the relevant statutory provisions are summarised in the headnote and fully set out in the judgment of Murphy J., infra.

A plenary summons was issued on the 21st February, 1990. The action was heard by the High Court (Murphy J.) on the 11th, 12th, 13th, 16th and 18th February, 1992.

Notice of appeal was filed on the 21st September, 1992. On the 14th January, 1993, the Supreme Court referred the following questions to the European Court of Justice, pursuant to Article 177, sub-art. 3 of the Treaty of Rome, 1957:—

"1. Having regard to the third paragraph in the preamble to Council Regulation EEC/857/84 and to Article 40, sub-art. 3 of the Treaty of Rome, 1957, is the first indent of art. 3, sub-art. 1 of the said Council Regulation EEC/857/84 to be construed in Community law as imposing on Member States, in allocating reference quantities, an obligation to grant a special reference quantity to producers who had adopted milk production development plans under Council Directive 72/159/EEC and had invested substantial sums of borrowed monies in furtherance of such plans?

2. Alternatively, having regard to the fundamental principles of Community law, in particular the principles of respect for legitimate expectations, non-discrimination, proportionality, legal certainty and respect for fundamental rights, should the discretion vested in the competent authority in Ireland by the first indent of the said art. 3, sub-art. 1 be construed as an obligation to grant a special reference quantity to the [plaintiffs] in view of the fact that their milk production development plans were approved by the competent authority in Ireland?

3. If the answers to question 1 and 2 are in the negative, is Council Regulation EEC/857/84 invalid on the ground that it is contrary to Community law, in particular to one or more of the following principles: "

• (a) proportionality;

• (b) legitimate expectations;

• (c) non-discrimination laid down in Article 40, sub-art. 3 of the Treaty of Rome, 1957;

• (d) legal certainty, and

• (e) respect for fundamental human rights,

insofar as it fails to require Member States, in allocating reference quantities, to take into account the special situation of producers who had adopted milk development plans under Council Directive 72/159/EEC?"

On the 15th February, 1996, the Court of Justice delivered its judgment on the reference from the Supreme Court, Case C-63/93, reported (with the opinion of the Advocate General of the 8th June, 1995) at [1996] E.C.R.I-569. The Court of Justice answered the questions in the following terms at p. 613:—

"1. The first indent of art. 3, sub-art. 1 of Council Regulation EEC/857/84 of the 31st March, 1984, adopting general rules for the application of the levy referred to in art. 5c of Regulation EEC/804/68 in the milk and milk products sector, read in the light of the third recital in the preamble to that regulation, is to be construed as not imposing on Member States an obligation to grant a special reference quantity to producers who had adopted milk production development plans under Council Directive 72/159/EEC of 17th April, 1972, on the modernisation of farms.

2. No requirement flowing from the protection afforded by general principles of law, such as the protection of legitimate expectations, the prohibition of discrimination, proportionality and legal certainty, or by fundamental rights, such as the right to property and the freedom to pursue a trade or profession, imposes on the competent national authority any obligation, under the first indent of art. 3, sub-art. 1 of Council Regulation EEC/857/84, to grant special reference quantities to producers who have adopted development plans, even where those plans have been approved by the competent authorities.

3. Consideration of the above mentioned general principles and fundamental rights has not disclosed any factor of such a nature as to affect the validity of the first indent of art. 3, sub-art. 1 of Council Regulation EEC/857/84."

The appeal was heard by the Supreme Court (Hamilton C.J., O'Flaherty, Blayney, Barrington and Keane JJ.) on the 15th and 16th October, 1996.

Council Regulation EEC/857/84 introduced a scheme whereby dairy farmers became liable to a levy if they produced more than the quota (or "reference quantity")allocated to them, as calculated in accordance with art. 2 of that regulation. However, art. 3 provided that "for the determination of the reference quantities referred to in art. 2 . . . certain special situations shall be taken into account."

Among the special situations to be taken into account were:—

• (a) "development farmers", i.e. those who had adopted milk production development plans under an earlier European Directive;

• (b) young farmers;

• (c) "diseased-herd farmers", i.e. those whose production levels in the year in which reference quantities were assessed had been depleted by disease in their herd.

Article 3 of the Regulation of 1984 provided that the Minister had a discretion to make special provision for the first two categories, while the third category were entitled as of right to special provision. Article 5 provided that where special provision was made, it was to be made from a "reserve constituted by the Member State" within the total quota allocated to it.

Ireland's total quota had been calculated on a more favourable basis than that of the other Member States. Part of this favourable treatment had been due to the situation of development farmers. The Minister for Agriculture announced his intention to make special provision for development farmers, and accepted that they would be "severely penalised" if no special provision was made. However, he did not establish a "reserve" under art. 5 from which to make special provision. Instead, he distributed the entire national quota, and proposed to make provision for the special categories from quotas which were not fully taken up, known as "flexi-milk". This approach was taken after extensive consultation with all interested parties, including development farmers. However, the European Commission subsequently indicated that "flexi-milk" could not be used in this way. The Minister then...