QUEEN'S BENCH DIVISION
Strand, London WC2A 2LL
B e f o r e :
|(on the application of MARK A.B. HORVATH)||Claimant|
|THE SECRETARY OF STATE FOR
THE ENVIRONMENT, FOOD AND RURAL AFFAIRS
Smith Bernal WordWave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr.Tim Eicke (instructed by DEFRA Legal Services) appeared for the Defendant.
Crown Copyright ©
The Community legislation
"Having regard to the Treaty establishing the European Community, and in particular Articles 36, 37 and 299(2) thereof,
(1) Common conditions should be established for direct payments under the various income support schemes in the framework of the common agricultural policy.
(2) The full payment of direct aid should be linked to compliance with rules relating to agricultural land, agricultural production and activity. Those rules should serve to incorporate in the common market organisations basic standards for the environment, food safety, animal health and welfare and good agricultural and environmental condition. If those basic standards are not met, Member States should withdraw direct aid in whole or in part on the basis of criteria which are proportionate, objective and graduated. Such withdrawal should be without prejudice to sanctions laid down now or in the future under other provisions of Community or national law.
(3) In order to avoid the abandonment of agricultural land and ensure that it is maintained in good agricultural and environmental condition, standards should be established which may or may not have a basis in provisions of the Member states. It is therefore appropriate to establish a Community framework within which Member States may adopt standards taking account of the specific characteristics of the areas concerned, including soil and climatic conditions and existing farming systems (land use, crop rotation, farming practices) and farm structures.
(24) … it is necessary to complete the shift from production support to producer support by introducing a system of decoupled income support for each farm. While decoupling will leave the actual amounts paid to farmers unchanged, it will significantly increase the effectiveness of the income aid. It is, therefore, appropriate to make the single farm payment conditional upon cross-compliance with environmental (sic), food safety, animal health and welfare, as well as the maintenance of the farm in good agricultural and environmental condition".
"This Regulation establishes:
- common rules on direct payments under income support schemes in the framework of the common agricultural policy …;
- an income support for farmers (hereinafter referred to as the 'single payment scheme');
"(c) 'agricultural activity' means the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining the land in good agricultural and environmental condition as established under Article 5".
1. A farmer receiving direct payments shall respect the statutory management requirements referred to in Annex III, according to the timetable fixed in that Annex, and the good agricultural and environmental condition established under Article 5.
Statutory management requirements
1. The statutory management requirements referred to in Annex III shall be established:
- public, animal and plant health,
- animal welfare."
"Good agricultural and environmental condition
1. Member States shall ensure that all agricultural land, especially land which is no longer used for production purposes, is maintained in good agricultural and environmental condition. Member States shall define, at national or regional level, minimum requirements for good agricultural and environmental condition on the basis of the framework set up in Annex IV, taking into account the specific characteristics of the areas concerned, including soil and climatic condition, existing farming systems, land use, crop rotation, farming practices, and farm structures. This is without prejudice to the standards governing good agricultural practices as applied in the context of Council Regulation (EC) No 1257/1999 and to agri-environment measures applied above the reference level of good agricultural practices.
Protect soil through appropriate measures
| - Minimum soil cover
- Minimum land management reflecting site-specific conditions
- Retain terraces
|Soil organic matter:
Maintain soil organic matter levels through appropriate practices
| - Standards for crop rotations where applicable
- Arable stubble management
Maintain soil structure through appropriate measures
|- Appropriate machinery use|
|Minimum level of maintenance:
Ensure a minimum level of maintenance and avoid the deterioration of habitats
| - Minimum livestock stocking rates or/and appropriate regimes
- Protection of permanent pasture
- Retention of landscape features
- Avoiding the encroachment of unwanted vegetation on agricultural land"
"(a) an agricultural activity, or
(b) an agricultural land of the holding, including the parcels on set aside".
Article 7 provides detailed rules for reduction or exclusion. If non-compliance is intentional, there may be total exclusion from one or several aid schemes for more than one calendar year.
"1. Any payment entitlement accompanied by an eligible hectare shall give right to the payment of the amount fixed for the payment entitlement.
2. 'Eligible hectare' shall mean any agricultural area of the holding taken up by arable land and permanent pasture except areas under permanent crops, forests or used for non-agricultural activities".
"The system of reductions and exclusions envisaged in Regulation (EC) No 1782/2003 with regard to cross compliance obligations however targets at a different aim [sc. from combating irregularities and fraud], namely to set an incentive for farmers to respect the, already existing, legislation in the different fields of cross compliance".
The Proposal for a Council Regulation
"In order to maintain land in good agricultural condition, standards should be established for a number of areas in which standards do not currently exist."
"It is, therefore appropriate to make the single farm payment conditional upon cross-compliance with environmental, animal-welfare and food-quality criteria".
"Member States shall define good agricultural conditions taking into account the framework set up in Annex IV".
"26. The Court has consistently held … that Articles 130r and 130s [now Articles 174 and 175] of the Treaty are intended to confer powers on the Community to undertake specific action on environmental matters. However, those articles leave intact the powers held by the Community under other provisions of the Treaty, even if the measures to be taken under the latter provisions pursue at the same time one of the objectives of environmental protection.
28. It follows that, even if considerations of environmental protection were a contributory factor in the decision to adopt the regulation at issue, that does not of itself mean that it must be covered by Article 130s of the Treaty".
"13. It is clear from the provisions of the amended regulations that the aims of the Community schemes for the protection of forests are partly agricultural since they are intended in particular to contribute to safeguarding the productive potential of agriculture, and partly of a specifically environmental nature, since their primary objective is to maintain and monitor forest ecosystems.
14. In such circumstances it is necessary, in order to determine the appropriate legal basis, to consider whether the measures in question relate principally to a particular field of action, having only incidental effects on other policies, or whether both aspects are equally essential. If the first hypothesis is correct, recourse to a single legal basis is sufficient …; if the second is correct, it is insufficient … and the institution is required to adopt the measure on the basis of both the provisions from which its competence derives … . However, no such dual basis is possible where the procedures laid down for each legal basis are incompatible with each other … .
15. With more particular reference to the common agricultural policy and the Community environmental policy, there is nothing in the case-law to indicate that, in principle, one should take preference over the other. It makes clear that a Community measure cannot be part of Community action on environmental matters merely because it takes account of requirements of protection referred to in Article 130r(2) of the EC Treaty … . Articles 130r and 130s leave intact the powers held by the Community under other provisions of the Treaty and provide a legal basis only for specific action on environmental matters … . In contrast, Article 130s of the Treaty must be the basis for provisions which fall specifically within the environmental policy …, even if they have an impact on the functioning of the internal market … or if their objective is the improvement of agricultural production … .
Regulatory Impact Assessment
"235. A rationale for including PROW is that they are generally represented on the land by a visible path (i.e. a landscape feature) which is related to habitat.
The retention of a path covered by a PROW may also avoid the deterioration of habitats – in some cases PROW contribute to the diversity of the habitat.
237. The purpose of this proposal [i.e., the requirements that appear in the crucial paragraphs] will be to reinforce existing requirements in relation to public rights of way under the Rights of Way Act 1980 (HA) [a confused reference to the Highways Act 1980, as amended by the Rights of Way Act 1990]. However we do not consider that it is possible to require, as a condition of the Single Payment, compliance with the statutory right of access under the Countryside and Rights of Way Act 2000. …
238. One point to note is that responsibility for maintaining a PROW … does not always fall on the landowner. In many cases it may fall on the highway authority …
239. Regardless of whether the way is publicly maintainable, landowners are often responsible for maintaining any stiles or gates crossing the way (s.146HA). …
240. The Commission have also expressed doubts that, unless further habitat or landscape benefits can be identified, Rights of Way might be considered outside the scope of cross compliance measures. Our Lawyers agree that there is a risk of losing a challenge brought against the inclusion of measures protecting paths which are PRoW in GAEC. A challenge might be brought on the basis that paths which are PRoW are not 'landscape features' within Annex IV of the Council Regulation, and/or that the protection of paths which are PRoW does not contribute to keeping the land in good GAEC in the manner envisaged by the Council Regulation. Our arguments on the second point would be strengthened if we can show some habitat benefit. We can justify legally a decision to include in cross compliance the proposed measures protecting the paths as public rights of way, although we stand a high risk of being challenged, and perhaps a 50% chance of winning any case. The consequences of losing a challenge are that the measure would have to be removed; there would be little financial loss.
Economic Impacts – Farm Business
242. Farmers are already expected to comply with these rules under legislation. There is no extra cost to the farmer from this proposal.
243. Public footpaths are a valuable feature of the countryside, important both to those who live in and visit the countryside. This measure may result in an improvement in the condition of public rights of way bringing wider environmental benefits where poorly maintained paths result in widespread trampling of adjoining vegetation.
Broader Rural Impacts
244. This may help to improve the percentage of footpaths in favourable condition and offer an enhancement to public access to the English countryside, particularly in locations favoured by day visitors or longer stay visitors such as walkers.
245. There may be some regional benefits where walkers, trekkers and mountaineers are an important contributor to the rural economy such as in upland areas and countryside around major settlements".
The English legislation
"(1) The standards of good agricultural and environmental condition in Article 5(1) of the Council Regulation are set out in the Schedule".
"Public rights of way
26. A farmer must not –
(a) without lawful authority or excuse, disturb the surface of a visible footpath, a visible bridleway, or any other visible highway which consists of or comprises a carriageway other than a made-up carriageway, so as to render it inconvenient for the exercise of a public right of way; or
(b) without lawful authority or excuse, in any way wilfully obstruct the free passage along a visible highway.
27. A farmer must maintain any stile, gate or similar structure, other than a structure to which section 146(5) of the Highways Act 1980 applies, across a visible footpath or bridleway in a safe condition, and to the standard of repair required to prevent unreasonable interference with the rights of persons using the footpath or bridleway.
28. – (1) Where a farmer has disturbed the surface of a visible footpath or bridleway (other than a field-edge path) as permitted under section 134 of the Highways Act 1980, he must, within the relevant period under section 134(7) of that Act, or within an extension of that period granted under section 134(8) of that Act –
(a) so make good the surface of the path or bridleway to not less than its minimum width as to make it reasonably convenient for the exercise of a right of way; and
(b) so indicate the line of the path or bridleway on the ground to not less than its minimum width that it is apparent to members of the public wishing to use it."
The validity of the England Regulations
"Apart from the principle that farmers should observe a minimum level of environmental standards as a condition for the full granting of direct payments ("cross-compliance"), another basic principle embodied in the Community strategy for the integration of environmental; considerations into the CAP is that, wherever the society desires that farmers deliver an environmental service beyond that baseline level, this service should be purchased through agri-environmental measures"..
"It cannot be held contrary to the principle of non-discrimination to apply national legislation, the compatibility of which with Community law is moreover not contested, because other Member states allegedly apply less strict rules. Inequalities of this kind, if they exist, must be eliminated by means of the consultations … but they cannot be the foundation of a charge of discrimination with regard to the provisions made by a Member State which applies equally to any person under its jurisdiction, the regulations which it had adopted for fishing quotas".
Discrimination on grounds of nationality would have been contrary to the Treaty. Criminal proceedings v. Perfili, Case C-177/94 was to the same effect.
"8. Under Article 40(3) of the EEC Treaty the common organisation of the agricultural markets to be established in the context of the Common Agricultural Policy must 'exclude any discrimination between producers or consumers within the Community'. That provision covers all measures relating to the common organisation of agricultural markets, irrespective of the authority which lays them down. Consequently, it is also binding on the Member States when they are implementing the said common organisation of the markets.
9. That finding is borne out by a consistent line of cases … in which the Court held that the prohibition of discrimination laid down in Article 40(3) of the EEC Treaty is merely a specific enunciation of the general principle of equality which is one of the fundamental principles of Community law. That principle requires that similar situations shall not be treated differently unless differentiation is objectively justified.
10. Consequently, where Community rules leave Member States to choose between various methods of implementation, the Member States must comply with the principle stated in Article 40(3). That principle applies, for instance, where several options are open to the Member States as in this case, where they may choose as the reference year 1981, or, subject to certain conditions, either 1982 or 1983.
11. It follows that in such circumstances a Member State may not choose an option whose implementation in its territory would be liable to create, directly or indirectly, discrimination between the producers concerned, within the meaning of Article 40(3) of the treaty, having regard to the specific conditions on its market and, in particular, to the structure of the agricultural activities carried out in its territory".
"33. However, in order to provide a full answer to the national court, it is necessary to point out that this finding cannot lead to the conclusion that the Member States are authorised to introduce any type of clawback measure in any circumstances whatsoever. It must be observed, first, that, having regard to the fact that the adoption of a national measure such as that at issue in the main proceedings falls within the scope of the common agricultural policy, such a measure cannot be established or applied in such a way as to compromise the objectives of that policy and, more particularly, those of the common organisations of the markets in the milk sector.
34. Second, … where the competent authorities of the Member States lay down or apply such measures they must do so on the basis of objective criteria.
35. Third, it is settled case-law that where Community rules leave Member states to choose between various methods of implementation, the Member States must exercise their discretion in compliance with the general principles of Community law (Joined Cases 201/85 and 202/85 Klensch and Others  ECR 3477, paragraph 10).
36. Consequently, a clawback measure such as that at issue in the main proceedings must be established and applied in compliance with the principles of legal certainty and protection of legitimate expectations … . Moreover, it must be proportionate to the aim pursued … and applied without discrimination (see, to that effect, in particular Klensch and Others, paragraph 8). Similarly, such a measure must respect fundamental rights, such as the right to property … and the freedom to pursue a trade or profession … ."
"27. It is settled case-law that the requirement for a uniform application of Community law and the principle of equality require that the terms of a provision of Community law that makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an independent and uniform interpretation throughout the Community; that interpretation must take into account the context of the provision and the purpose of the relevant regulations. In the absence of an express reference, the application of Community law may sometimes necessitate a reference to the laws of the Member States where the Community Court cannot identify in Community law or in the general principles of Community law criteria enabling it to define the meaning and scope of such a provision by way of independent interpretation … .
28. In the present case, Community law and, in particular, the Staff Regulations provide sufficient guidance to allow the scope of Article 4 of Annex VI to the Staff Regulations to be defined and, therefore, to establish an independent interpretation of the meaning of 'State' in relation to the different national laws, as accepted by the parties themselves in their written pleadings.
29. First, the Court has held that it is apparent from the general scheme of the Treaties that the term 'Member State', for the purposes of the institutional provisions, refers only to government authorities of the Member States and cannot include the governments of regions or autonomous communities, irrespective of the powers they may have. If the contrary were true, it would undermine the institutional balance provided for by the Treaties, which, inter alia, govern the conditions under which the Member states, that is to say, the states party to the Treaties establishing the Communities and the Accession Treaties, participate in the functioning of the Community institutions … ."
"That assessment [sc. of the meaning of 'work done for another State'] cannot be called in question by the applicant's argument based on the existence of an autonomous meaning of 'State' in Community law which encompasses decentralised bodies. Although it is clear that, in accordance with the case-law cited by the applicant in the context of a failure of a Member state to fulfil its obligations, it can be considered that the authorities of a State which are charged with ensuring observance of the rules of Community law can be either central authorities and authorities of a federated State or territorial or decentralised authorities of that State within the sphere of their respective competence, it is also necessary to recall that an action following which the Court of Justice can declare that a Member State has failed to fulfil one of its obligations can only be brought against the government of that State, even if the failure to act is the result of the action or omission of the authorities of a federal State, a region or an autonomous community … . That case-law thus cannot be relied upon in support of the applicant's proposition for a broader interpretation of the meaning of 'State'."
"Despite the transfer to Scottish Ministers by virtue of section 53 of functions in relation to observing and implementing obligations under Community law, any function of a Minister of the Crown in relation to any matter shall continue to be exercisable by him as regards Scotland for the purposes specified in section 2(2) of the European Communities Act".
Section 2(2) of the 1972 Act provides for the implementing of Community obligations. A similar provision to that in the Scotland Act appears in Schedule 3, paragraph 5, of the Government of Wales Act 1998. The situation is similar for Northern Ireland.
"The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, birth or other status".
"The diversity of internal legislation inherent in a federal State can never, in itself, constitute discrimination, and it is unnecessary to justify it. To claim the contrary would be to mistake totally the very essence of federalism".
"50. The Court recalls that Article 14 of the Convention protects against a discriminatory difference in treatment of persons in analogous positions in the exercise of the rights and freedoms recognised by the Convention and its Protocols. It observes in this connection that in the constituent parts of the United Kingdom there is not always a uniform approach to legislation in particular areas. Whether or not an individual can assert a right derived from legislation may accordingly depend on the geographical reach of the legislation at issue and the individual's location at the time. For the Court, in so far as there exists a difference in treatment of detained suspects under the 1988 [Northern Ireland] Order and the legislation of England and Wales on matters referred to by the applicant, that difference is not to be explained in terms of personal characteristics, such as national origin or association with a national minority, but on the geographical location where the individual is arrested and detained. This permits legislation to take account of regional differences and characteristics of an objective and reasonable nature. In the present case, such a difference does not amount to discriminatory treatment within the meaning of Article 14 of the Convention".
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties".
"The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest … The three rules are not, however, 'distinct' in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule".
References and directions