England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF
JUSTICE QUEEN'S BENCH DIVISION
CROWN OFFICE

		Royal Courts of Justice Strand, London, WC2A 2LL
		21 December 1999

LORD JUSTICE ROBERT WALKER:

Introductory

This is an application for permission to appeal, with the appeal to follow if permission is granted, from an order of Moses J made as long ago as 23 February 1998. There is also an application to this court to make a reference to the European Court of Justice under Article 234 (formerly 177) of the Treaty. This court heard full submissions on all these points and reserved judgment. The background to the delay, and to the application for a reference, is that on 14 January 1999 this court adjourned the application for permission to appeal to await the outcome of a reference to the Court of Justice made by the Scottish Sheriff Court of Grampian Highlands and Islands, sitting at Stornaway, in a case entitled Procurator Fiscal against Patino and Bellbeat Limited (the Pembroke case). But the reference to the Court of Justice in the Pembroke case has now lapsed as a result of the abandonment of the prosecution in which it was made.

The order of Moses J was made in judicial review proceedings concerned with the implementation of the common fisheries policy of the European Union. Like the Pembroke case, it originated in a criminal prosecution, in this case a prosecution in the Crown Court in Swansea for offences allegedly committed in December 1995. The offences charged were fishing by a vessel called the Lofoten for species of fish including hake, anglerfish and megrim in Area VII at a time when these fisheries were closed. This court has been told of other prosecutions of a similar character which were pending when the judicial review application was first made (most if not all of those other proceedings are now past history) and of two sets of proceedings (a prosecution before a stipendiary magistrate sitting in Torquay, and judicial review of the ruling of a stipendiary magistrate sitting in Truro) which are now pending. It is not necessary to go into the detail of the other proceedings but they show the general importance of the issues raised in this appeal.

The owner of the Lofoten is Astonquest Ltd (Astonquest), the applicant in these judicial review proceedings. The principal relief sought in the proceedings is a declaration that a decision of the respondent the Ministry of Agriculture, Fisheries and Food (MAFF) dated 25 September 1997, under which the Lofoten was allocated its fishing quota for October 1997, was unlawful as contrary to Community law. There is also a claim for damages.

Fishing quotas: the Community framework

The Community's common fisheries policy has developed as an important part of the common agricultural policy. Fisheries were not even mentioned in the original Treaty, but fish were to be treated as 'agricultural products' within Article 32 (formerly 38). Since the Treaty of Maastricht the establishment of a common fisheries policy has been clearly stated as one of the Community's areas of competence. The policy has developed, and its unified control has been provided for, by a series of regulations of the Council of Ministers. For present purposes the most important regulations are Council Regulation 3759/92 (on the common organization of the market in fishery and aquaculture products) and Council Regulation 3760/92 (establishing a Community system for fisheries and aquaculture). The recitals to the latter regulation reflect the importance of improving and extending measures for the conservation of stocks of fish. One of the first recitals states,

"Whereas the objective should be to provide for rational and responsible exploitation of living aquatic resources and of aquaculture, while recognizing the interest of the fisheries sector in its long-term development and its economic and social conditions and the interest of consumers taking into account the biological constraints with due respect for the marine eco-system."

A later recital refers to the need for the Community fisheries sector to be restructured on lines laid down at Community level, with the economic and social consequences being taken into account.

The basic control mechanism of the common fisheries policy is that the Council of Ministers determines the total allowable catch for the next year, fixing tonnages for each stock (that is, the separate spawning stock of a particular species in a particular area). This determination is made under Article 8(4) of Regulation 3760/92 and is directed to management objectives and strategies established by the Council under Article 8(3).

The areas referred to are the sea areas (numbered I to XIV, some of which have several subdivisions) designated for the purposes of the common fisheries policy. These extend from area XIV (off the coast of Greenland) in the north-west to area IX (off the Iberian coast) in the south-east and from area X (including the Azores) in the south-west to area III (the Baltic) in the north-east. Area VII, which is most relevant to this appeal, is subdivided into ten parts, and covers all or most of the English Channel, the Irish Sea, St George's Channel, the Celtic Sea, and the part of the Atlantic Ocean known as the Western Approaches.

Within these extensive areas no fewer than 39 species of whitefish live and breed. Some are pelagic, that is living near the surface (herring and mackerel are well-known examples). Others are demersal, that is living on or near the bottom of the sea (plaice and sole are well-known examples). Fishing is carried out by a variety of means including beam trawling, nets of various types and long line fishing (the Lofoten's usual means of fishing). The affidavit evidence did not go far into these background matters (perhaps on an over-generous assumption of judicial notice) but some awareness of them is necessary to an understanding of how fishing quotas work in practice.

The total allowable catch determined by the Council (in practice, each December) is then shared between member states in such a way that (subject to various adjustments and the possibility of exchanges) each member state is entitled to a specified percentage of each stock (or of each stock in a particular area). The annual total allowable catch may be, and in practice often is, amended in the course of the year. Member states are obliged to close a fishery if it becomes apparent (from reported catches) that its allocation is about to be exhausted.

Article 9(2) of Regulation 3760/92 provides as follows,

"Member States shall inform the Commission each year of the criteria they have adopted for distribution and of the detailed rules for the use of fishing availabilities allocated to them, in accordance with Community law and the common fisheries policy."

This has the effect of conferring on member states the power, and the duty, to adopt a distribution system for their respective quotas. Mr Barry Edwards, the head of the relevant division in the Fisheries Department of MAFF, has deposed that the United Kingdom's quota management rules were notified to the Commission during March 1997 and have not elicited any comment. Several years before, in 1992, a complaint was made to the Commission about the system of quota allocation then in force in the United Kingdom, but that complaint seems to have gone into abeyance.

Other Community measures (notably Council Regulation (EEC) 105/76 and Commission Regulation (EC) 2939/94) provide for the recognition and functioning of producers' organisations (POs). These play an important part in the implementation of the common fisheries policy and their status and functions are highly relevant for the purposes of this appeal. A PO can be recognized only if it is an organization whose membership is limited to producers (that is, those who fish) formed on the initiative of the members and with membership being voluntary. A PO must also have "sufficient economic activity". Responsibility for the recognition of a PO is placed in the competent authority (in this case, MAFF) of the member state in which the organisation is based.

Fishing quotas: the national system

The management system adopted by the United Kingdom is set out in Mr Edwards' affidavit and its exhibits. In brief summary, the allocation of quotas of restricted stocks (which are called 'pressure stocks' and include, in practice, all commercially significant stocks) varies as between three different classes of fishing vessel -

(a)	what is called 'the sector' consisting of vessels over 10 metres in length whose owners are members of POs;
(b)	vessels over 10 metres whose owners are not members of POs (these are called 'non-sector'); and
(c)	vessels of 10 metres or less (the under ten-metre fleet).

The under ten-metre fleet is not relevant in this case. The thrust of Astonquest's attack on the allocation system is that it discriminates against the non-sector and is for that reason objectionable, and contrary to Community law.

It is not in dispute that there is a difference between the methods of allocation to the sector and the non-sector (although MAFF denies that there is any unlawful discrimination). In the case of the sector global allocations are made to POs and internal division between the members of any PO is managed by the PO itself. The non-sector, on the other hand, have a single allocation which is then regulated by reference to monthly catch limits. The under ten-metre fleet fish against a further single allocation but its vessels are not subject to monthly catch limits. The monthly catch limits imposed on the non-sector lie at the heart of Astonquest's complaint.

Mr Edwards has (in paragraphs 9 to 11 of his first affidavit sworn on 28 November 1997) summarized the position as follows ('group' referring to the sector, the non-sector or the under ten-metre fleet),

"The allocations made to each group are based proportionately on the catches (track records) made over a reference period by the registered and licensed vessels in each group at 1 January of each quota year. The reference period is usually the 3 years immediately preceding the quota year for whitefish stocks. In calculating the track records for each group, any overfish against allocation will be deducted.

Any vessel fishing in the non-sector is in competition with all other vessels authorised to fish against non-sector allocations. Each vessel in the non-sector is free to target any quota species, subject to the monthly catch limits and any other limitations set out in its fishing licence, and so can move "in" and "out" of fisheries. The non-sector is therefore effectively a "fishery of choice" but one within which individual vessels have no entitlement to a specific share of the quota allocations made. On the other hand, vessels which belong to a PO may only fish against stocks for which the PO has been given an allocation, subject to the catch restrictions which the PO operates.

At present all 19 UK POs are managing sectoral allocations for whitefish stocks and together they account for approximately 95% of the UK whitefish quotas in tonnage terms. The remaining 5% is managed by the Fisheries Departments on behalf of [the non-sector and the under ten-metre fleet]"

It must be noted that the present system of allocation to the different sectors has been introduced, not by a single radical change, but piecemeal (by reference to different sea areas and fish stocks) since the beginning of the 1990s. Some but not all of the detail is given in paragraph 8(a) of Mr Edwards's first affidavit. For that reason comparative figures for different years have to be treated with some caution.

The important role of POs is recognized in Regulation 3759/92, Article 4(i) of which includes in their functions

"to apply, where the member state concerned has provided for the management of some or all of its national catch quota or quotas to be managed by [POs], within the limit of any quantities allocated to that member state from the total volume of allowable catches for the stock or group of stocks in question, the measures necessary to ensure the proper management of the catch quotas authorised."

POs vary in size and they do not all take a uniform approach to their task of sharing their allocations between their members and monitoring their performance. Moses J summarized the position as follows,

"There are 19 fish producers' organisations. Their size varies considerably, the largest has over 400 members, the smallest has less than 20. Typically, they have between 30 to 100 members. The most significant distinction, for the purposes of the instant case, is between the way producers' organisations manage their allocation and the way the allocation to the non-sector is managed by the Fisheries Departments. The licences issued to vessels within the membership of a producers' organisation do not lay down specific catch limits: it is the responsibility of each producers' organisation to set and enforce such limits for each of its members. On the other hand, the Fisheries Departments place catch restrictions in the licence granted to each vessel within the non-sector. Producers' organisations are free to decide themselves how they impose catch limits on their members. Fourteen of the nineteen producers' organisations, including all of those with more than 50 members, impose monthly catch restrictions without differentiating according to the track record of an individual vessel. The minority of five producers' organisations impose annual limits (two impose an annual limit on an owner rather than individual vessel). In the non-sector, only monthly catch restrictions are imposed as part of each non-sector vessel's licence conditions.

It is important to stress that the monthly catch restriction to be imposed in a non-sector vessel's licence is not the result of a simple arithmetical division between each non-sector vessel. A calculation is made about two weeks before the start of each month based on the available non-sector allocation, seasonal profile of the relevant stock, and past performance of the non-sector as a whole; thus a forecast is made of the likely number of vessels targeting the particular stock in question and the number likely to land smaller quantities. I emphasise the role forecasting of the likely numbers targeting a particular stock plays in calculating the catch restriction because it leads to an apportionment which allows those who are likely to target a particular stock to take a greater proportion of that stock than would be the case if the apportionment was the product of a simple arithmetical division between all those in the non-sector licensed to fish for that particular stock. For example, in 1996 only 130 vessels of the 527 licensed to fish for hake in the non-sector actually did so. Thus, based on those figures, a calculation would be made which would allow the 130 to catch and land a greater amount of hake than would be the case if one-twelfth of the annual hake allocation was divided amongst all 527."

The judge then summarized the different procedures for monitoring and enforcement applicable to the sector and the non-sector. He commented that,

"The delegation of management responsibility to [POs] is cost-effective since it avoids the need to monitor the quota taken up by individual vessels; the Department need only monitor the aggregate of the quota fished by members of [POs]."

In our national law the statutory system of control and enforcement depends on the Sea Fish (Conservation) Act 1967 (the 1967 Act) as extensively amended by various statutes enacted since the United Kingdom's entry into the Community. Section 4 of the 1967 Act imposes a general system of licensing of fishing boats (this is of course distinct from the system of registration which led to the Factortame litigation, the history of which was summarised by the Divisional Court in R v Secretary of State for Transport ex parte Factortame [1997] Eu LR 475). Section 4(5) provides,

"A licence under this section shall be granted to the owner or charterer in respect of a named vessel and may authorise fishing generally or may confer limited authority by reference to, in particular, -

(a) the area within which fishing is authorised;

(b) the periods, times or particular voyages during which fishing is authorised;

(c) the descriptions and quantities of fish which may be taken; or

(d) the method of sea fishing."

In practice, licences confer authority limited by reference to all those matters. Section 11 prescribes penalties for offences. These include, for the most serious offences, a fine of £50,000 on summary conviction (or an unlimited fine on conviction on indictment), and forfeiture of an illegal catch or gear. The rules of POs (exemplified by those of the Northern Producers' Organisation exhibited to Mr Edwards's first affidavit) do generally provide for POs to levy fines and other financial penalties on any of their members who breach the rules by overfishing. It was however said by Mr Couceiro in his second affidavit, and was not really contested by Mr Edwards, that in practice POs tend to be less rigorous in policing their rules than MAFF is in policing the conditions attached to its licences.

This court was shown the forms of licence currently issued under the 1967 Act by MAFF in respect of sector and non-sector vessels respectively. Each form of licence is subject to 15 paragraphs of conditions, some of them very detailed. Each form of licence also incorporates a schedule, which in each case includes sections headed 'Limitations to authority' 'Species for which you may not fish' (mostly restricted by reference to official areas) 'Permitted bycatches' and 'Catch restrictions'. It is only under the last heading that a sector licence differs from a non-sector licence. Each form imposes an overall annual limit of 500 tonnes for pelagic species, but in addition the non-sector licence includes a further two pages setting out monthly limits for a number of species (19 in the example shown to the court), these limits being defined by reference to sea areas and weight of fish.

The judge may (in the summary quoted above) have somewhat overstated the degree to which control of sector fishing is delegated to POs. The position seems to be correctly summarized in the second affidavit of Mr Edwards,

"Licences are re-issued annually, and contain conditions relating to:

(i) the sea area in which a vessel is authorised to fish

(ii) the fish stocks which a vessel may catch - in practice this is done by listing those stocks which a vessel is not authorised to retain on board and land. This list may be added to during the year as quota allocations become exhausted.

(iii) the type of fishing gear which may be used - eg restrictions on the use of beam trawling gear.

(iv) the quantities of quota stocks which may be caught - these are subject to change throughout the year depending upon uptake and seasonality.

Any changes to these conditions during the course of the year are notified to vessel owners through licence variations. Vessels breaching any of the above conditions are committing an offence and are therefore liable to prosecution. The first three are common to all vessels, whether belonging to a PO or in the non-sector. Catch restrictions are however only found in the licences of non-sector vessels. The PO is responsible for setting and enforcing any catch restrictions placed upon its members."

In addition to the factual matters summarized above there are other, more debatable, issues of fact which it will be necessary to come back to. Some of these surfaced (either before Moses J or in this court) without having been mentioned in Astonquest's application for judicial review or without having been clearly raised in the affidavit evidence. Astonquest has sought to rely on (i) the more severe enforcement regime faced by owners in the non-sector and (ii) the argument that the non-sector arrangements result in a higher level of discards of dead fish, when neither of those matters is raised in its form 86A. Some of Astonquest's affidavit evidence tends to be argumentative and backs its assertions with out of date statistics and anecdotal material. MAFF also has put forward some submissions on a rather tenuous evidential base. In these circumstances this court must do the best it can to steer a middle course between procedural severity and insouciance in order to identify and determine the real issues on the appeal.

Principles of Community Law

But before the court gets to those factual issues it is necessary to consider the test to be applied in reviewing the decision under challenge - that is MAFF's decision allocating the Lofoten's catch limit for October 1997. As always in judicial review proceedings, it is necessary to distinguish between the function of the decision-maker whose decision is under review, and the function of the reviewing court. But where the decision involves principles of Community law those functions may not be quite the same as they would be in a purely domestic situation (see generally the judgment of Laws J in R v MAFF ex parte First City Trading [1997] 1 CMLR 250).

The judge considered the relevant legal principles at pp 9-16 of his judgment. He noted that discrimination between either producers or consumers is prohibited by Article 34(3) (formerly 40(3)) of the Treaty. This is a particular manifestation of the principle of equality (or non-discrimination) which is one of the general principles of Community law. Both the issue of whether there is discrimination, and the issue (if it arises) of objective justification, must be determined in the light of the underlying purpose of the measures in question. On this point the judge referred to the opinion of Advocate General Capotorti in Ruckdeschel [1977] ECR 1753, 1778 (and see also passages at 1779 and 1783). Whichever issue is being considered the important thing is, in the judge's words,

"testing the measures it is sought to impugn against the objectives those measures seek to achieve and the consistency of those objectives with Community policy."

The judge then referred to the need for proportionality, referring to Mignini [1992] ECR 2651, 2684. That was a case concerned with a provision, made pursuant to Council Regulation 1491/85 relating to soya beans, requiring certain processors of subsidised soya beans to have storage facilities on the premises of the production establishment. The Court of Justice held this measure to be disproportionate to the objective, which was to prevent fraud. It stated in its judgment (at p.2684),

"It is apparent both from the nature of the contested provisions and from the arguments put forward by Mignini and the Italian Government on the one hand and by the Commission on the other hand that, for the purpose of examining those provisions, the infringement of the principle of non-discrimination cannot be dissociated from the infringement of the principle of proportionality. The validity of the contested provisions must therefore be assessed with regard to both the principle of non-discrimination and the principle of proportionality.

As the Court has consistently held (see, in particular, the judgment in Case 300/86 Van Landschoot v Mera [1988] ECR 3443, paragraph 9), the prohibition on discrimination laid down in the second subparagraph of Article 40(3) [now 34(3)] of the Treaty, which is a specific expression of the general principle of equal treatment, prevents comparable situations from being treated differently, unless such difference of treatment is objectively justified.

The Court has also held (see, in particular, the judgment in Joined Cases 279, 280, 285 and 286/84 Rau v Commission [1987] ECR 1069, paragraph 34) that in order to establish whether a provision of Community law complies with the principle of proportionality, it must be ascertained whether the means which it employs are suitable for the purpose of achieving the desired objective and whether they do not go beyond what is necessary to achieve it. Furthermore, whilst a measure's patent unsuitability for achieving the objective which the competent institution seeks to pursue may affect its legality, the Community institutions must, nonetheless be recognized as having a broad discretionary power in regard to the common agricultural policy which reflects the responsibilities which the Treaty imposes on them."

The judge identified the relevant objectives of the common fisheries policy by reference to Article 2 of Council Regulation 3760/92, which refers both to conservation of fisheries and to "rational and responsible exploitation on a sustainable basis, in appropriate economic and social conditions for the sector, taking account of its implications for the marine eco-system, and in particular taking account of the needs of both producers and consumers."

The judge then turned to his own functions in reviewing the impugned measure, referring to the judgment of Laws J in First City Trading already mentioned. Moses J said, (at p.13),

"The fact that the court must exercise its own judgment as to whether the measure is objectively justified and proportionate does not mean that it exercises its judgment in the same way as the original decision-maker who has to decide which of a range of options is most appropriate. The consequences of this distinction are that the court can only interfere when the option chosen by the decision-maker falls outwith the range of options legally open to that decision-maker."

He referred to Schräder [1989] ECR 2237, 2270,

"However, with regard to judicial review of compliance with the abovementioned conditions, it must be stated that, in matters concerning the common agricultural policy, the Community legislator has a discretionary power which corresponds to the political responsibilities imposed by Articles 40 [now 34] and 43 [now 37]. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution intends to pursue (see in particular the judgment in Case 179/84 Bozzetti v Invernizzi [1985] ECR 2301)."

Schräder was a case on the co-responsibility levy in the cereals sector. The levy was challenged as being disproportionate and neither appropriate nor necessary in order to meet the objective of stabilising the market. It was in that context that the Court of Justice stated (at p.2269),

"of course, when there is a choice between several appropriate measures, the least onerous measure must be used and the charges imposed must not be disproportionate to the aims pursued."

That passage was immediately followed by paragraphs 22-4 of the judgment, already quoted.

The judge also referred to Schlüter [1973] ECR 1135 and to the decision of Hobhouse J in Milk Marketing Board v Cricket St Thomas Estate [1991] 3 CMLR 123. In the former case (concerning emergency levies which were introduced to compensate for currency fluctuations and which in the event caused considerable hardship to some traders) the Court of Justice stated (at para 22)

"In exercising their powers, the institutions must ensure that the amounts which commercial operators are charged are no greater than is required to achieve the aim which the authorities are to accomplish. However, it does not necessarily follow that the obligation must be measured in relation to the individual situation of any one particular group of operators. Given the multiplicity and complexity of the economic circumstances, such an evaluation would not only be impossible to achieve, but would also create perpetual uncertainty in the law."

In the latter case (which was concerned with the level of contributions levied by the Milk Marketing Board on a dairy enterprise, which had diversified its production in various ways) Hobhouse J said (at p.150, para 59),

"Provided that the scheme is non-discriminatory in principle and fair, there is no principle of Community law, nor was any authority cited to me, which requires complete equality. Indeed, in an open economy which has as one of its tenets free competition, there must inevitably be inequalities between those who are competing more successfully and those who are not."

He then referred to Ruckdeschel and to Schlüter.

The characteristically clear and thorough judgment of Hobhouse J in the Cricket St Thomas Estate case recounts (p.128, para 8) that there had been a reference to the Court of Justice which had ruled that the milk marketing scheme in question did not infringe Community law, provided that its requirements were consistent with the principle of proportionality. It was for the national court to make the necessary findings of fact in order to decide that issue. Hobhouse J had the benefit of a full agreed statement of facts supplemented by additional documentary and oral evidence. I have to say that an agreed statement of the basic uncontroverted facts would have been of great assistance in this case, in which the court has had to disinter the facts from a mass of affidavit evidence, some of it argumentative in character, and from additional material produced piecemeal during the course of the hearing.

In arguing that the judge erred in principle in his approach, Mr Fergus Randolph submitted that the Schräder test of a measure being "manifestly inappropriate" should not have been applied to a situation in which MAFF had (as counsel submitted) little or no scope for the exercise of discretion. It was a situation in which (as the Court of Justice put it in Dillenkofer [1996] ECR I 4845, 4879-80, in the context of failure to transpose a directive on package holidays),

"the member state in question was not called upon to make any legislative choices and had only considerably reduced, or even no, discretion."

He drew attention to the reference in Schräder (para 22) to "the Community legislator".

I doubt whether identification of the Community legislator, or distinctions between primary and secondary legislation, either at the Community or at the national level, are of much assistance in determining the margin of appreciation available to a national decision-maker. To give weight to the formal distinction between primary and secondary legislation would be inappropriate, particularly in view of the very wide power to amend primary legislation by order in council conferred by s.2 of the European Communities Act 1972. The margin of appreciation depends on the character of the decision which the national decision-maker has to make, including its political content (in the widest sense), the degree to which it involves taking scientific or technical advice (see Upjohn v Licensing Authority [1999] 1 WLR 927, 945 CJEC), and the extent to which it is circumscribed by detailed provisions in Community legislation under which the national decision-maker is acting (Norbrook Laboratories v MAFF [1998] ECR 1-1531 is a striking example). Manifest inappropriateness - that is, obviously missing the target area - remains the test in every case, but the size of the target area varies according to the circumstances.

I am not persuaded that the judge erred in instructing himself as to the relevant principles of Community law, or in his approach to the facts. In particular, I think he was right to point out that in Schräder the reference to the least onerous measure must be read in its context of the imposition of a charge, and in the light of the more general observations in the next three paragraphs of the judgment. Nevertheless, it is necessary to look closely at the way in which the judge applied the relevant principles to the rather intractable evidence before him.

Astonquest's complaints and the affidavit evidence

In view of the way in which the affidavit evidence has developed it is necessary to begin with a summary of Astonquest's form 86A in support of its application for judicial review. The grounds set out in the form are divided into five sections, headed 'Introduction', 'The decision', 'Background', 'The inequity of the allocation system' and 'The illegality of the decision'. It is not necessary to comment on the first three sections which relate to matters already covered.

The fourth section of the form 86A attacks the basis of allocation of quota, as between sector and non-sector vessels, as being unfair. It relies on official figures, as at an unspecified date, set out in exhibit "SJS7" to an affidavit sworn by Mr Stephen Swabey, Astonquest's solicitor, showing the allocation of quota (expressed in what are called cod equivalent tonnes) as follows:

	number of vessels	capacity units	%	quota	%
under ten-metre fleet	7659	278,244	28.6	15,129	2.9
non-sector	1281	174,450	17.9	41,859	8.1
sector	1303	519,505	53.4	460,634	89.0

It is a serious criticism of the applicant's case, which at the outset relied so heavily on these figures, that the figures are not dated. The court was told that there were about 800 non-sector vessels at the time when these proceedings were commenced, and that there are now about 500 (with the corresponding figures for the sector being about 1400 and 1600 respectively). It seems likely, therefore, that the figures are seriously out of date.

This section of the form 86A then goes on to what has emerged as the real burden of Astonquest's complaint, that is that MAFF allocates quota to POs on an annual basis, but allocates it to the non-sector on a monthly basis, with no facility for unused quota to be carried forward on an individual (rather than a sector-wide) basis. This, it is said, has an adverse effect on the track records of individual vessels in the non-sector, whose owners will as a result find it increasingly difficult to join a PO if they wish to do so.

The last section of the form 86A then sets out the legal basis of Astonquest's basic complaint,

"The allocation methodology used by MAFF is unlawful as being contrary to Community law in that it is discriminatory and disproportionate."

The discrimination is said to consist of treating sector and non-sector vessels in a totally dissimilar manner, with the eventual result that non-sector vessels lose their track records (and so lose their ability to fish). The treatment is said to be disproportionate because the obvious detrimental effects on non-sector fishermen (many of whom are Spanish or have Spanish connections) are not objectively justifiable.

So there were originally two complaints in the form 86A. The primary complaint was of an unfair division of quota as between the sector and the non-sector. The secondary complaint was of unfair management of the part of the quota which does get allocated to the non-sector. The primary complaint has not been formally withdrawn but it appears to have been answered in paragraph 17 of Mr Edwards's first affidavit, which deposes that the non-sector

"contains a higher proportion of vessels targeting non-TAC stocks, such as molluscan shellfish, crabs and lobsters, and also vessels which are less active and therefore have historically low track records for quota stocks."

In paragraph 20 Mr Edwards states that his department is aware that between half and two-thirds of the Lofoten's income is derived from non-TAC stocks. This is not disputed in paragraph 13 of the second affidavit (sworn on 8 January 1998) of Mr John Couceiro, a director of Astonquest.

The secondary complaint and MAFF's response to it have however been elaborated in successive rounds of affidavit evidence sworn by Mr Couceiro and Mr Swabey on behalf of Astonquest and by Mr Edwards. The original evidence in support of the application consisted of a largely formal affidavit of Mr Swabey exhibiting various documents (it was followed by a second formal affidavit exhibiting further documents which had been omitted) and an affidavit of Mr Couceiro. He is a British citizen and was then living in Haverfordwest, but he is a veteran of the Factortame saga (as is Jaderow Ltd, a company listed in exhibit "SJS 1" as supporting Astonquest in this litigation).

Much of Mr Couceiro's first affidavit is a rehearsal of old controversies going back to the 1970's. Mr Couceiro then (paragraphs 11 ff) briefly described the quota system and complained of the regime of very low monthly quotas to which the non-sector was subject. He pointed out that the imposition of monthly limits led to a higher level of discards (that is, dead fish being thrown back into the sea). He complained of discrimination in policing, with a vessel in the non-sector being subject to "the full majesty of the criminal law" whereas a comparable vessel in the sector would "have its knuckles metaphorically rapped by those who administer the PO" (that language is unfortunately typical of Mr Couceiro's apparent preference for vivid phrases rather than verifiable facts). He added some further complaints, mostly relating to past events.

Mr Edwards in his first affidavit stated that the application was completely misconceived and had been brought simply to stave off a prosecution. He described the current system of quota allocation in paragraphs which I have already set out, either verbatim or in the judge's summary. He emphasised that the monthly catch limits were not 'entitlements' but were upper limits produced (as noted in the judge's summary) by forecasting exercises. Since they were not entitlements, the question of an individual vessel carrying forward the unused part of any monthly limit did not arise; the unused quota was carried forward in the forecasting process, but for the benefit of the non-sector as a whole. Mr Edwards emphasised that the Fisheries Department have two main objectives in their management of fishing quotas:

"to ensure that UK fishermen take as close as possible to 100 per cent of all UK quotas without exceeding them; and to ensure that each group has the opportunity to take its allocation in full""

He denied that the closure of fisheries operated to the prejudice of the non-sector. As to the very low catch limits for hake cited by Mr Couceiro, Mr Edwards stated that the limits had been so low on only two occasions in the previous five years (that is in January and October 1995).

Mr Couceiro's second affidavit referred to the long-outstanding complaint made to the Commission in 1992. It exhibited an official consultative document about a possible changeover to fixed quota allocations, and an article in a trade journal about 'ghost fishing' (that is, the over-declaration of catches so as to bolster up a vessel's track record). It also exhibited an internal document from MAFF's files (without any explanation of how it reached the deponent's hands) containing the comment that "enforcement and discipline are words that the POs fail to recognise".

In the course of his second affidavit Mr Couceiro took issue with numerous points on Mr Edwards's affidavit and raised several new points. But the main burden of this affidavit was that the monthly limits imposed on the non-sector did not make for flexibility, but had the reverse effect; and that the fact that several POs voluntarily adopted monthly limits proved nothing, because they permitted members' vessels to carry forward unused quota, or to share it between groups of vessels. Mr Couceiro also stated that although Astonquest and the companies supporting it could in theory join existing POs or decide to form their own PO, there were practical problems about either course. (This court was told that Astonquest and many of its supporters have joined POs during the course of this litigation; that is one of the reasons why the number of vessels in the non-sector is now down to about 500.)

Mr Edwards made a second affidavit on 30 January 1998, much of which was devoted to a more detailed description of the quota management arrangements and the system of granting and enforcing licences. He concluded (paragraphs 13-14),

"If vessels were given individual allocations, monitoring their uptake would be more difficult than at present and would require a significant increase in the resources which the Fisheries Departments would have to devote to quota management.

There are advantages and disadvantages, which Fisheries Departments recognise, of fishing in the sector and the non-sector. They have carefully looked at various approaches to managing the non-sector quotas and have concluded that the present system of monthly catch restrictions is a fair and cost effective means of managing quotas for over 10 metre vessels which remain outside PO membership."

He re-emphasised the point that the non-sector's monthly restrictions are not a simple arithmetical division of each available fish stock. He stated (paragraph 19) that

"since PO vessels were required to take sectoral allocations for all stocks in 1995, the 62 Anglo-Spanish vessels which remain in the non-sector have taken and will continue to take the bulk of the non-sector's allocation of these stocks."

Mr Edwards exhibited to his second affidavit, as "BSE 3", a table showing (for each year from 1992 to 1997 inclusive) the national and the non-sector's allocations and uptake of the three species most relevant to this case: hake (in areas VI and VII), anglerfish (in area VII) and megrim (in area VII). Mr Randolph in his submissions drew attention to the large fall over this period in the non-sector's percentage share of the national quota (from 53.3% in 1992 to 21.1% in 1997). But this is not a steady fall; the percentage was almost the same in 1992, 1993 and 1994; then it fell by more than half; then it was steady from 1995 to 1996 and 1997. The dramatic fall between 1994 and 1995 resulted from a considerable number of Anglo-Spanish vessels (which fish for hake) joining to form their own PO, the Wales and West Coast PO. During the whole of the period the national quota of hake has declined (from 7140 tonnes in 1992 to 5925 tonnes in 1997, the lowest point being 5140 tonnes in 1996). The national uptake has never been lower than 92.5% (the provisional figure for 1997) and the non-sector's uptake has never been lower than 98.2% (in 1992). The Lofoten's catch of hake fell sharply between 1993 and 1994 but has since then been fairly stable, the figures for the last three years being -

	aggregate of non-sector monthly limits	Lofoten catch
1995	37	28.1
1996	33	30.9
1997	37	29.7 (provisional)

The figures for anglerfish and megrim are broadly comparable except that the national quota of megrim has risen over the period.

Mr Couceiro made a third affidavit on 16 February 1998. This was sworn just before the hearing and Mr Edwards did not have an opportunity to answer it. Some of the points made in this affidavit appear to me to be trivial or misguided: for instance in paragraph 12 Mr Couceiro said of the Lofoten that "the reference to Anglo-Spanish is puzzling" when a large part of Mr Couceiro's first affidavit had been concerned with the past history of Factortame. The most substantial point made (or repeated) is in paragraph 5:

"Of course every method of allocation has its advantages and disadvantages. This is as true of the monthly allocation systems as of any other. In fact, the monthly allocation system suffers from the overriding disadvantage (over and above that of lack of flexibility leading to inability to maximise catching opportunities) of encouraging discards and therefore wastage of fish. Inevitably, with 12 separate maximums, vessels are going to overfish (and therefore discard) every month rather than four times or once a year. This is directly contrary to the spirit (and possibly the letter) of the CFP."

The judge concluded that the even distribution of quota throughout the year was an important objective of a rational exploitation of fisheries, and that a system of monthly restrictions promoted that objective. Although these restrictions reduced flexibility within the non-sector, the judge considered that

"the promotion of a cost-effective system would be hampered by a system which allowed [exchange or] sale of under-used quota in the non-sector. The lack of choice in that respect is outweighed by the advantages of the present system of imposing monthly restrictions."

The judge then referred to the figures in exhibit "BSE 3" (which I have already summarised). The judge did not regard the problem of discards as significantly worsened by monthly limits in the non-sector. He concluded,

"I am satisfied that the system applied by the Fisheries Departments, measured against the objective of the CFP, achieves overall fairness and such equality of treatment as the division of responsibility between sector and non-sector allows. That division, contemplated and promoted by the CFP, does not permit complete equality but, in my judgment, the Fisheries Departments have established sufficient objective justification for the distinctions of which Mr Couceiro sincerely, but unsuccessfully, complains."

In this court Mr Randolph has criticised the judge's approach and conclusions in several respects. I have already considered, and rejected, the criticism of the way in which the judge directed himself as to the law. As to the judge's view of the facts Mr Randolph's most powerful point, which he developed in various directions, was that the judge failed to identify the advantages of the monthly limits (imposed on the non-sector) which were perceived as outweighing its disadvantages. The principal disadvantages, as spelled out in Mr Couceiro's evidence, are that small monthly limits may make it uneconomic for a fishing vessel to set out on a trip (the basic cost of which is of the order of £20,000 to £25,000); that vessels in the non-sector are harder hit by mechanical troubles or other mishaps which prevent a vessel going to sea for a matter of weeks or months; and the increased likelihood of discards.

Although the judge did not fully identify the perceived advantages at the end of his judgment, reference to earlier passages in it shows that the principal advantages which he must have had in mind were that the system of monthly limits (i) secured an even spread of fishing throughout the year; (ii) helped to achieve the very high level of take-up achieved by the non-sector overall; and (iii) was cost-effective. Each of these points calls for some comment. After Mr Edwards referred to the need for even spread, Mr Couceiro drew attention to the existence of various seasonal factors, which Mr Edwards accepted. So 'even' should be amended to 'appropriate'. But the forecasting system on which the non-sector's monthly catch limits are based is well adapted to take account of predictable seasonal supply and demand. However, there is nothing to indicate that a system of monthly allocations with individual vessels being able to carry forward unused allocations (as operated by some POs) is not also capable of achieving an appropriate spread of fishing throughout the year. This advantage is therefore problematical.

The full take-up of quota allocated to the non-sector is amply demonstrated by the figures in exhibit "BSE 3", which show that take-up by the sector is not so full. Mr Edwards strongly emphasised this point in his evidence, almost (to my mind) to the point of suggesting that full take-up of quota, however desirable an objective, may have assumed so much significance for MAFF as to overshadow other important considerations, including conservation of fish stocks. Mr Couceiro has rightly pointed out that the regular discarding of large quantities of dead fish cannot easily be reconciled with the objectives of the common fisheries policy; Evans LJ referred to it in the course of argument as an environmental obscenity. The judge did, I consider, attach too much importance to the achievement of full take-up at any cost, and insufficient importance to the effect of monthly catch limits in increasing the likelihood of discards.

I also think that the judge was, with all respect to him, rather too ready to accept the submissions made on behalf of MAFF in relation to the need for cost-effectiveness. Inconvenience or expense to a national authority is not a ready justification for a discriminatory provision, especially where those affected are small producers who are themselves under economic pressure (see Landschoot [1988] ECR 3443, 3462, para 16). Mr Parker, appearing on behalf of MAFF and sensing that cost-effectiveness had little appeal to the court, withdrew to another line of defence and submitted that the carry-forward of monthly limits in the non-sector would be unmanageable. But in the absence of evidence of alternative measures having been tried and having failed that submission also seems problematical.

The evidence as a whole satisfies me that since the introduction of POs fishermen in the non-sector have been inclined to regard themselves as second-class citizens, and that this perception has not been groundless. The steady move from the non-sector to the sector demonstrates this. Fishermen have been voting with their feet against the non-sector.

However there are obvious attractions for producers, especially in hard times, in belonging to an organisation which has characteristics of both a club and a cooperative. Community legislation has encouraged the formation of POs and provided for their recognition and regulation. But it also plainly contemplates other vessels remaining outside POs and being regulated directly by the national authority (in this case, MAFF). The non-sector cannot justifiably complain of being more directly under the supervision of the national authority when that is inherent in the Community legislation. Both PO members and those in the non-sector are liable to be prosecuted for any breach of the conditions of their licences.

In the end I cannot wholly agree with the judge's conclusion that the advantages of monthly catch limits outweigh their disadvantages. But it does not follow from that that there has been any unlawful discrimination. As Schiemann LJ pointed out in the course of argument, discrimination usually consists of one decision-maker treating one class in one way and another class differently, not in two decision-makers according different treatment to two respective classes. Astonquest's real complaint is that POs have worked out better schemes for division of their shares of quota, and that MAFF has failed to follow them.

I think that MAFF would be well advised to consider whether its existing scheme cannot be made rather more flexible in order to assist the difficulties of the shrinking non-sector, and reduce the offensive practice of discards. But I am not persuaded that the impugned decision (or the wider policy under which it was taken) was manifestly inappropriate for the task which MAFF, as the national authority, had to perform. The Community legislation contemplates and indeed requires that management and control of the sector (vessels in POs) and the non-sector (vessels not in POs) should be organised in different ways. Moreover although I share the distaste of Evans LJ for discards, that aspect of the matter has never been in the forefront of Astonquest's case and there is no statistical (or even anecdotal) evidence enabling the court to assess to effect on discards of monthly limits in the non-sector. Had I taken a different view on the legality of MAFF's decision I would still be doubtful about granting relief on an application which seems to have been inspired by a prosecution for an offence unrelated to the non-sector's monthly limits.

I would therefore grant permission to appeal, but I would dismiss the appeal. I would not refer any question to the Court of Justice under Article 234 because the principles to be applied are clear. The difficulty is in taking a correct view of the facts, which is a matter for the national court.

Lord Justice Schiemann:

I have had the advantage of reading in draft the judgments of Evans LJ and Robert Walker LJ. I agree with them both that permission to appeal to this court should be given and that the appeal ought to be dismissed for the reasons given by the latter.

One of the purposes of the regulatory regime for fish is to preserve the species by inhibiting overfishing. The principle of a maximum allocation is not in itself in dispute. In an ideal world not a single fish over the allocation would be caught. In the real world this could only be achieved by inhibiting fishing whenever there was a danger that a new draught of fishes might result in the allocation being exceeded. It was not submitted that this was the only way in which a regulatory regime consistent with Community Law could be framed. The MAFF regime leads to discards in certain circumstances. While it is manifestly wasteful to throw excess catches into the sea I do not consider that the establishment of a regulatory regime which envisages that this may happen in certain eventualities is in itself unlawful. It is obvious that fishermen will try to exceed their allocation unless the monetary benefit from so doing is exceeded by attendant disbenefits. The purpose of fining anyone who exceeds his catch is to provide such a disbenefit. The fact that fishermen occasionally catch more than their allocation and discard the excess indicates that the disbenefit is a discouragement of sufficient strength to make it unlikely that the fishermen deliberately set out to catch significantly more than their allocation. That is a substantial benefit flowing from the regime. I do not regard the fact that under the regime established by MAFF situations may arise in which a fisherman finds it in his interest to discard some fish which, by accident, he has caught, itself leads to the conclusion that the regime is irrational or otherwise contrary to Community Law.

As for the other differences in treatment of the sector and the non-sector I can see nothing contrary to Community Law in them.

Community law clearly permits the establishment of a system of fishing control which is in part under the detailed control of POs and in part under the control of the MAFF. They have, broadly speaking established separate regimes to ensure that they stay within their sectoral allocations. The MAFF and some of the POs chose the MAFF system. The bulk of the POs chose another system. I think that the appellants accept that either of these regimes would comply with the law were it not for the other. The complaint is essentially that the co-existence of these regimes results in discriminating against those who opt to move into the non-sector regime. It seems to me to follow from the fact that Community Law permits the establishment of two regimes, one to be administered by the state and one of which can be administered by POs, that it can not be a legitimate ground of complaint that the system administered by the MAFF differs from the system administered by the majority of POs. The law does not require the MAFF to conform with what the POs have done; nor does it require the POs to conform with what the MAFF have done; nor does it require them both to conform with each other. They each are entitled to make their own judgment.

There are advantages in belonging to the non-sector regime. In particular, any would-be fisherman has access to it and does not need to have a past history of successful fishing. There is no need for some piscene equivalent of the milk quota. He is free to target any quota species. He can move from one species to another. In so far as the other vessels in the non-sector do not exhaust the monthly maximum then the "surplus" is notionally carried forward to be divided amongst everyone for the rest of the year. So he benefits from the fact that others do not fish right up to their maximum. Correlatively he loses if he does not fish up to his maximum: his "surplus" is distributed amongst the whole fleet. Whether any particular fisherman loses or gains in any particular month will vary depending on a variety of matters.

I accept that from some other points of view the position of those in the non-sector may well be worse than that of those within the sector. That however does not establish that there has been discrimination, let alone unlawful discrimination, by anyone.

We were told that the appellants had complained to the Commission of the alleged breaches of Community Law by the Respondents. However the Commission has taken no action. This is by no means conclusive but buttresses the conclusion which I had reached independently of that fact.

I would dismiss this appeal.

LORD JUSTICE EVANS:

1. 'Lofoten' is a fishing vessel owned by Astonquest Ltd. Astonquest has been prosecuted in the Crown Court at Swansea for alleged offences committed in the sea area known as Area VII (off the southern and western coasts of England and Wales and surrounding Ireland) in December 1995. By this application for judicial review, Astonquest challenges the lawfulness under EC law of the Decision of the Ministry of Agriculture, Fisheries and Food dated 25th September 1997 "pursuant to which the Applicant's vessel "Lofoten" was allocated its fishing quota for October 1997".
2. I gratefully adopt and express my appreciation for Robert Walker's L.J.'s summary and analysis of the voluminous evidence. This was necessary because the evidence includes much irrelevant material and at the same time it needed to be supplemented by counsel during their oral submissions. The overall picture is now reasonably clear, although some uncertainty persists.
3. The central issue, in my judgment, is whether the system operated by MAFF for establishing the quota given to individual non-sector vessels (meaning, those vessels which do not belong to officially-recognised groups known as Producer Organisations), which it does on a monthly basis, is unlawful on the grounds either that unlawful discrimination results between sector and non-sector vessels or because the restrictions placed on non-sector vessels are inconsistent with the objectives of the E.C. fisheries policy.
4. I have used the neutral words "for establishing the quota given to individual non-sector vessels" because MAFF objects to the monthly figure being described as an "allocation" of that quantity to that vessel. MAFF insists that the figure does no more than place an upper limit on the quantity which the vessel may land during the month in question. It is a restriction but not an allocation, MAFF says, because neither a shortfall nor an excess of the actual landing figure against the quota can be carried forward to the following month. This is the feature of the system for non-sector vessels which lies at the heart of the present dispute. The question is whether the system which restricts but does not allocate, and which does so on a monthly basis, is lawful or not.
5. MAFF has the responsibility under United Kingdom legislation of administering the European Community's fisheries policy, as laid down in European Regulations. Their objects can be stated broadly as combining the rational and responsible exploitation of fish resources with a proper recognition of the interests both of the fishing industries and of consumers (Recital to Council Regulation 3760/92). To these ends, allocations are made to individual European countries as regards the quantities of particular fish stocks that may be caught and in what sea areas. These allocations are made annually.
6. European Regulations provide expressly for the recognition and functioning of POs. Accordingly, the quota management rules for the United Kingdom under which MAFF operates (these were notified to the European Commission on 11 March 1997, since when no comment has been received : Edwards 1st Affidavit para.7) divide the annual allocation between "the sector", meaning those vessels over 10 metres which belong to a PO, and "the non sector", meaning those vessels over 10 metres which do not so belong. The third category, of vessels under 10 metres, to which a part allocation is also made, is not relevant for present purposes.
7. The non-sector therefore "represents", or consists of, individual vessels over 10 metres "which do not fish against the allocations made to POs. These vessels fish against a single allocation monitored by the Fisheries Department who set monthly catch limits in consultation with the fishing industry" (Edwards 1st Affidavit para. 8(b)).
8. Pre-determined amounts of the U.K. annual quota are allocated to the sector and the non-sector, with the former taking much the greater part (about 95 per cent. in tonnage terms). It is in the management of these quota allocations that the significant difference between sector and non-sector lies. Each PO is responsible for setting and enforcing catch limits for its members. "Some set monthly catch restrictions by vessel, others set annual quotas for vessels or for the companies to which those vessels belong" (Edwards 1st Affidavit para.12). The Fisheries Department monitors performance by the PO as a whole and it has power to close a particular fishery if the PO's vessels exceed or are likely to exceed its allocation. Individual vessels which exceed any catch restrictions placed on them by the PO do not commit a criminal offence against their licence conditions, although they are subject to disciplinary procedures which may be initiated by the PO (Edwards 1st Affidavit para.12). There was evidence that the POs may impose monetary penalties described as "fines" although outside the sanctions of the criminal law.
9. By way of contrast, non sector vessels are managed directly by the Fisheries Department -

"This is achieved by placing monthly catch restrictions per vessel in the licences of the vessels concerned. Any vessel; found exceeding those catch restrictions is committing an offence and therefore liable to prosecution. Fisheries Departments aim to spread quota availability as evenly as possible throughout the year, in the interest of fairness to all elements of the non-sector. ....Catch restrictions are therefore set with this aim in mind and are adjusted as necessary during the year on the basis of the latest catch statistics and the advice of industry representatives at the monthly meetings of the non-sector management committees convened by Fisheries Departments" (Edwards 1st Affidavit para.13).

10. I was left with the impression that these processes of industry consultation, however extensive they may be, are not relied upon by MAFF as signifying any form of industry approval to the system which they operate for non-sector vessels.
11. Taking account of a number of matters (fish type, area and seasonal factors particularly), MAFF allocates part of the annual quota to the non-sector and then divides it in order to calculate a figure for an individual vessel for that month. The divider is not, however, the total number of non-sector vessels (for the area and type of fish in question) - say 500 vessels - because not all of the vessels will be active during the month and the total monthly allocation figure would not be achieved. The individual figures might also be unacceptably small,. So the monthly total is divided by the smaller number of vessels - say 100 - which MAFF considers will be active and likely to achieve the total figure regardless of what the others do. If the total is exceeded in fact, then the allocation for later months can be reduced. MAFF emphasises that the interests of the industry require it to maximise catches within the UK's annual allocation, as well as restricting catches to the allocation in the interests of conservation.
12. However, the effect for individual non-sector vessels is that the monthly figure is a maximum which cannot be exceeded except on pain of criminal prosecution for the vessel, her owners and skipper. If the vessel lands a lower figure, the shortfall cannot be carried forward to the following month, so far as the individual vessel is concerned. Nothing in the European Regulations would be inconsistent with permitting the vessel to do this, and MAFF itself does so by taking account of a shortfall (or excess) in the monthly landings when it calculates the next month's figures for non-sector vessels ; but the individual vessel receives at best a proportionate (on the above figures, 1/100th.) share of the amount which has been carried forward as a result its shortfall, even when this was due to the vessel needing repairs or being unable to sail during the month in question.
13. The evidence shows or suggests that the risk of prosecution for exceeding the vessel's monthly figure leads to the deplorable situation where the excess catch is returned to the sea, so that no more than the permitted maximum will be recorded or landed. Skippers do this rather than face prosecution, and it must be borne in mind that the size of catches cannot be predicted. The vessel may fish lawfully and yet find, when the nets or lines are hauled in, that the permitted and even expected maximum has been exceeded. If the MAFF rules permitted the excess to be carried forward to a subsequent month, or even to be allocated to another vessel in the same ownership, then the grotesque need to return freshly caught but dead fish to the sea in the name of conservation and in order to avoid prosecution would not arise.
14. Individual 'sector' vessels, by contrast, are unlikely to find themselves in this situation. PO rules do not always place monthly catch restrictions, nor do the restrictions apply to individual vessels. If the PO's rules are breached, no more than a monetary penalty follows, and there is room for doubt as to how rigidly the rules are enforced. There is no risk of criminal prosecution, save where the vessel fishes in an area which has been closed to all vessels of the particular PO or (possibly) during the last month of a year ; it is unclear whether an individual vessel could then commit an offence, if the total allocation was exceeded by the PO. That seems unlikely, with the result that the individual (sector) vessel never faces the risk of criminal prosecution for over-fishing which may present itself to a non-sector vessel month by month.
15. In my judgment, two questions of law arise. The first is whether there is unlawful discrimination between non-sector and sector vessels by reason of the fact that catch restrictions are made subject to the sanctions of the criminal law for non -sector vessels but not, for practical purposes, for sector vessels which belong to a P.O. The second is whether the MAFF system for management of non-sector vessels, which on occasions makes it necessary for non-sector vessels to return dead fish to the sea in order to escape criminal prosecution for over-fishing, is consistent or not with the European legislation under which the system is operated.
16. Dealing first with the second question, MAFF's initial justification for its system for non-sector vessels was this -

"It would be inappropriate to operate similar arrangements for the non-sector. The large number (c.900) of white fish vessels coupled with the much smaller non-sector quotas would, for many vessels result in individual annual allocations being so small as to be unmanageable. This could prejudice Fisheries' Departments overriding objective of ensuring that the non-sector takes its quota allocations in full and so could result in the non-sector receiving even smaller quotas in succeeding years" (Edwards 1st Affidavit para.27).

In his second affidavit, after advancing reasons why MAFF favours and encourages the formation of POs to manage allocations on behalf of their members (para.9) and why monthly catch restrictions for non-sector vessels may be justified (paras. 11-12), Mr Edwards says this -

"13. If vessels were given individual allocations, monitoring their uptake would be more difficult than at present and would require a significant increase in the resources which the Fisheries Department would have to devote to quota management.

14. There are advantages and disadvantages, which Fisheries Departments (sic) recognise, of fishing in the sector and the non-sector. They have carefully looked at various approaches to managing the non-sector quotas and have concluded that the present system of monthly catch restrictions is a fair and cost-effective means of managing quotas for over 10 metre vessels which remain outside PO membership. This is particularly so in the light of the number of vessels operating in the non-sector and the number of stocks which the Fisheries Department have to manage. However, which of the two sectors is more advantageous to the fishermen is a purely commercial decision .....".

17. Mr Kenneth Parker Q.C. for MAFF did not pursue this "cost effective" justification before us. I can appreciate the difficulties for MAFF of regulating the catches of large numbers of individual vessels, although these difficulties are partly caused by the setting of monthly limits for individual vessels which MAFF deems necessary in order to discharge its responsibilities. There remains Mr Edward's assertion that the system is "fair". I do not find any clear explanation of the reasons why a vessel may not carry forward a shortfall to the following month, or why a non-sector vessel, but not (for practical purposes) a sector vessel, should be at risk of prosecution for over-fishing in a particular month. The consequence of MAFF's rigid adherence to monthly figures for individual vessels, and of its insistence that these are upper limit restrictions not allocations, is that circumstances must arise where dead fish are returned to the sea. The evidence does not persuade me that what I have called this obscene result is inevitable under the Regulations which MAFF is required to operate, and for this reason I would hold that the decision which is challenged was unlawful.
18. In the circumstances, I need say no more about the challenge based on discrimination between sector and non-sector vessels. The management of sector vessels by the PO's does demonstrate, however, that monthly catch restrictions, with criminal sanctions, are not necessarily required for the purposes of achieving (and not exceeding) that part of the annual quota allocated to the United Kingdom.
19. There is, however, a feature of this case which makes it necessary to consider whether the Court should grant the relief sought by the appellant, even if the MAFF system is objectionable as in my view it is. The argument has centred on the issue of quota allocation and discrimination between sector and non-sector vessels. In one respect, however, their respective situations are the same. No vessel may fish in an area which at the relevant time is closed for the species in question. That as I understand it is the charge brought against the 'Lofoten' in the Swansea Crown Court. In these circumstances, it seems to me that no injustice is done if the decision is upheld in the present case, and for this reason I agree reluctantly that the appeal should be dismissed.

Order: Appeal dismissed with costs. Permission to appeal to the House of Lords refused.