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Supreme Court of Ireland Decisions
You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Maher v. Minister for Agriculture, Food and Rural Development  IESC 32;  2 IR 139;  2 ILRM 481 (30 March 2001)
Cite as:  IESC 32,  2 ILRM 481,  2 IR 131,  2 IR 139
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1. What has become known as the milk quota system has given rise to much litigation, both at the level of the member States and in the Courts of Justice of the European Communities. The present case arises out of the making by the first named respondent (hereafter “the Minister” ) of the European Communities (Milk Quota) Regulations 2000 (S.I. No. 94 of 2000) (hereafter “S.I. 2000” ). These provided for certain changes in the system which I shall endeavour to summarise at a later point. The validity of S.I. 2000 is challenged by the appellants on the ground that it constitutes the exercise of legislative power by the Minister contrary to Article 15.2.1º of the Constitution, violates the property rights of the applicants guaranteed by the Constitution and is not afforded immunity by the provisions of Article 29.4.7 of the Constitution, providing for the consequences of our accession to the European Economic Communities. The appellants’ claim was dismissed in the High Court in a reserved judgment by Carroll J. and they have now appealed from that judgment and order to this court.
2. The milk quota scheme was first introduced in 1984 by the Council of EEC in order to cope with problems which had arisen from the implementation of the Common Agricultural Policy (hereafter “the CAP” ) established under the Treaty of Rome as it affected the market in dairy products. The measures establishing the scheme were, accordingly, part of the common organisation of the market in the milk sector in the EEC, deriving from the CAP and known as the COM.
3. One of the features of the COM was a guaranteed price for milk producers throughout the EEC. This ultimately had it as its consequence a supply of milk and milk products throughout the EEC which was hugely in excess of the demand, resulting in massive costs to the community and severe downward pressure on milk prices. Attempts to deal with the problem in other ways having proved abortive, the scheme adopted in 1984 provided for a ceiling on milk production in each of the member States and the allocation to individual producers of a ceiling on their annual production. This was effected by the imposition of what was described as a “super levy” on any producer who exceeded the ceiling which would render uneconomic the production of any milk in excess of the relevant figure. This was done by the allocation of what were called “reference quantities” to the individual producers which became known as “quotas” and it will be seen that it was an essential part of the scheme that the total of the quotas in any member State, including Ireland, should not exceed the quota allocated by the EEC to the member State in question.
4. The scheme was originally intended to run for five years up to the 31st March 1989, but was in fact successively extended up to the 31st March 1993. A new, but substantially similar, system was then adopted which expired on 31st March 2000.
5. While the scheme achieved its objective of halting the growth in milk production in the EEC, the quota was initially set at a level which was substantially above the consumption of milk and milk products in the EEC. Accordingly, there continued to be a surplus of milk in the community. Various methods were adopted by the EEC of dealing with the resultant problems. Eventually, what was called “Agenda 2000” was adopted by the EEC Commission with a view to preparing the dairy sector for the further problems which would arise from the enlargement of the European Union and the liberalisation of trade within the World Trade Organisation. The latter developments would mean, not merely a new threat of surpluses in milk production, but also an undermining of the effectiveness of the quota regime in maintaining milk prices.
6. Agenda 2000 proposed to continue the milk quota regime for six years to March 2006 and also envisaged other proposals which were of particular relevance to the present proceedings. These related to what was seen by the Commission as a particular problem, i.e. the extent of quotas held by persons who were no longer actively involved in the production of milk. Under the scheme as originally introduced, the milk quota was attached to the land and could only be transferred to another person if the land to which it was attached was being transferred to that person. An exception was introduced, however, in 1987 which enabled producers to lease any part of the quota which he or she did not intend to utilise in a particular year until the end of the milk quota year.
7. The new measures adopted by the EEC to give effect to Agenda 2000 required the member States to adopt detailed rules as to what was to happen in relation to the transfer of quotas. It also conferred certain discretions on the member States as to provisions which might or might not be included in any such detailed rules. The relevant rules in Ireland are contained in S.I. 2000 which is challenged in these proceedings.
8. The effect of S.I. 2000 is that, subject to certain exceptions, it is no longer possible for persons who are not actively engaged in milk production to transfer their quota with the land by way of sale. Nor, again, subject to certain exceptions, is it possible to lease a quota with the land. While a quota can be transferred upon the renewal of a lease of lands, a person who has not been involved in milk production for three years or more, can make a temporary lease or transfer of the quota for one further year and no more. The regulations also provided for a “restructuring scheme” under which a quota holder can offer all or part of his or her quota to the purchaser of the milk in return for payment. The maximum price is to be determined by the Minister. There are exceptions to these various requirements when the lands were being sold, leased, given to or inherited by a spouse or family member.
9. The first applicant in an affidavit said that he was the owner of 130 acres of land in Cashel, Co. Tipperary and that there was a milk quota attached to the lands which amounted to approximately 28,170 gallons. He said that as a result of borrowings which he had to make at high interest rates in the 1970s to develop his dairy business and the wiping out of his dairy herd by brucellosis between May and September 1980, he found it necessary to earn an income outside dairy farming. He and his wife, accordingly, in 1986 started up an oil distribution company and in the year 1996 he leased his lands and milk quota to one Maurice Ryan: the lease expired on the 31st March 2000. He said that, as a result of the introduction of S.I. 2000, if he wished to retain his quota, he had only three options:
10. He said that neither of the first two options were available to him and the third would only enable him to retain the quota for a year. However, if he were to dispose of the milk quota, his options would be to sell it under the restructuring scheme at the maximum price fixed by the Minister of £1.36 per gallon or do the same in a year’s time, after temporarily leasing it for one year. He would also be entitled to sell it to his former lessee, Mr. Ryan, but the latter was not interested in acquiring it. He said that the figure fixed by the Minister did not represent the market value of the milk quota. He said that his two children were aged 14 and 16 and that he wished to retain his milk quota so that they could take up dairy farming in a few years’ time if they so chose.
11. The second applicant said that he was the joint owner with his wife of lands and premises at Fethard, Co. Tipperary together with the milk quota attaching to the lands: the lands comprised approximately 77 acres and the milk quota amounted to approximately 24,404 gallons. He said that some years ago he began to suffer from ill health and it became necessary for him to cease milk production and sell his cows. Since then most of his income had been earned from leasing some of the lands together with part of his milk quota and temporarily leasing the balance of the milk quota. He said that his only options as a result of the introduction of S.I. 2000 were to resume milk production or sell his quota under the restructuring scheme. He said that, as he was now nearly 76 and no longer in full health, he was not in a position to resume milk production. As to the sale of his quota under the restructuring scheme, his complaints were the same as those of the first applicant.
12. The third applicant is the owner of 20 acres of land at Clonoulty, Co. Tipperary together with the milk quota attaching to the lands amounting to 11,844 gallons. She said in her affidavit that for a number of years she had temporarily leased the quota to the local creamery and that most of her income had come from that temporary lease. Her only other income was the sale of weanling calves born in the winter/spring months and sold the following autumn/winter. As in the case of the other two applicants, she said that her only options as a result of S.I. 2000 were to resume milk production or sell her milk quota under the restructuring scheme and that she was not in a position to resume milk production as she could not afford the cost of installing a new milking parlour. Her complaints as to the option of selling under the restructuring scheme were to the same effect as those of the first and second named applicants.
13. The relevant EEC Regulations are Council Regulation (EEC) No. 3950/92 of 28th December 1992 as last amended by Council Regulation (EC) No. 1256/99 of 17th May 1999 (hereafter “the EC Regulations” ).
14. Article 6 requires member States, before a specified date, to authorise for a twelve month period temporary transfers of individual reference quantities which producers who were entitled thereto do not intend to use. It also provides that the member States may vary transfer operations depending on the category of producers or dairy production structures, may limit them at the level of the purchaser within regions and may determine to what extent transfer operations may be renewed. It also permits a member State to decide not to comply with this requirement, on the basis of certain criteria. The last mentioned discretion was not exercised in the case of Ireland.
16. As already noted, the detailed rules in Ireland are set out in S.I. 2000. However, Article 8a of the EC Regulations provided that
18. Sub-paragraph (2) goes on to provide that, where there is a transfer of land to which the milk quota attaches, the milk quota is to be added to the “national reserve” unless one of the relevant exemptions in the regulations has been availed of. The concept of the “national reserve” , which has been a feature of the EEC milk quota scheme since its inception in 1984, means in effect that, where a milk quota ceases to be attached to a particular farm, it may remain available as part of the total quota to which the member State is entitled. Under S.I. 2000, such milk quotas become available to active milk producers, with priority being given to small and medium producers.
19. The exemptions provided for under S.I. 2000 from Article 5(1) must next be considered. Article 7, in effect, enables the Minister to grant a certificate of entitlement to transfer a milk quota to a person who satisfies him that he has been actively engaged in the production of milk for the previous three years. Article 6 enables the quota to be transferred to the spouse and defined members of the family of the transferor. Article 9 enables the lessee of land and a quota to purchase the leased quota with or without the land from the lessor on the termination of the lease, provided he or she is a producer. Article 10 provides for the transfer of the quota on a renewal of the lease. Article 12 provides for the transfer of the quota to the lessor where a lease of land which the milk quota attaches terminates.
20. Article 8 of the EC Regulations provides that
22. Article 26 of S.I. 2000 enables the Minister, pursuant to Article 8(b), to introduce a scheme called the “milk quota restructuring scheme” for the surrender of a milk quota at the end of each milk quota year and its reallocation at the beginning of the following year. Sub-paragraph (5) provides that the maximum payment for a surrendered quota and the reallocation price is to be set by the Minister.
23. The Minister also availed of the power conferred on the member State by Article 6.1 of the EC Regulations as to the temporary transfer of quotas which producers who were entitled thereto did not intend to use. Article 27 of
26. The factual background in Ireland against which the Minister, in purported exercise of the powers conferred on the member States, made S.I. 2000, was set out in an affidavit by Mr. Patrick Evans, an assistant principal officer in the milk policy division of the department of the Minister. He said that Ireland had had particular difficulties in relation to the milk quota scheme due to the large number of small and medium scale producers in the dairying sector. Of 31,500 active producers engaged in milk production in Ireland, 68% of the total had a milk quota of less than 35,000 gallons. He said that in view of the fact that milk production was far more profitable than beef, sheep or pig production, producers were constantly seeking to expand their dairying enterprise and that, as a result, the demand for milk quota in Ireland far exceeded the supply of such quota.
27. Mr. Evans said that this situation was compounded because of the leasing of land and quota, which represented between 9% and 10% of the national quota. A further 6% of the national quota was leased temporarily without land on an annual basis. In the result, a significant portion of the profit from milk production was transferred from the milk producer to the owner of the quota who, in most instances, was no longer involved in milk production. This was likely to increase because of the number of producers ceasing milk production and resulted generally in a less efficient dairying industry characterised by a lack of certainty and higher production costs. He said that it was standard practice for member States to consult with the Commission beforehand on the measures they might propose to adopt for the application of the milk quota regime in their respective territories and this procedure had been fully observed by Ireland.
28. Mr. Evans further deposed that the Minister had consulted with organisations representing the dairy industry and other interested parties before making a decision on the changes that should be introduced. He said that there was a general consensus that
29. Mr. Evans said that the Minister, in implementing the new regime by way of S.I. 2000, was of the view that the provisions were necessary in order to ensure that the objectives contained in the EC Regulations were achieved in Ireland. In particular, the changes were intended to ensure, as provided in Article 8a of the EC Regulations, that quotas were solely attributed to active milk producers.
30. Mr. Evans said that the first and second named appellants had benefited to the extent of approximately £70,000 and £46,000 respectively from their quotas, during periods when they were not active milk producers.
31. Article 32 of the Treaty of Rome under the title “Agriculture” provides that the common market is to extend to agriculture and trade in agricultural products and must be accompanied by the establishment of a common agricultural policy. The objectives of the CAP are set out in Article 33 as follows:
32. Article 33.2 requires account to be taken of the particular nature of agricultural activity, resulting inter alia from the “social structure” of agriculture, in working out the CAP.
33. Article 34 provides for the establishment of a common organisation of agricultural markets and under Article 2 may include the measures required to attain the objectives set out in Article 33, including in particular the regulation of prices.
34. Article 5 provides that
35. Article 189 establishes what might be called the legislative machinery of the community. It provides that
36. Article 29.4.3º of the Constitution provided inter alia that the State might become a member of the European Economic Community established by the Treaty of Rome. Article 29.4.7º, as amended, provides that
38. The law of the European Communities can have legal effect in Ireland because of the making of Regulations which are directly applicable in each of the member States. The EC Regulation, on foot of which the Minister purported to make S.I. 2000, is such a regulation. It is, accordingly, to be distinguished from Directives, which have binding force as to the result to be achieved for each member State to which they are addressed, but which leave the member States free to choose the form and methods for implementing the directive. The jurisprudence of the Courts of Justice of the European Communities has, of course, established that the law of the communities, whether embodied in regulations or directives, must be given primacy, where it is applicable, over the domestic law of the member States.
39. It is claimed on behalf of the applicants in the present proceedings that S.I. 2000 was made in violation of certain provisions of the Constitution and that its making was not necessitated by the obligations of membership of the European Union or of the communities within the meaning of Article 29.4.7º of the Constitution. The first article relied on is Article 15.2.1º which provides that
40. The second ground is that S.I. 2000 constitutes an unjust attack on the property rights of the applicants, in the form of their respective milk quotas, guaranteed by Articles 40.3.1º and 2º and 43 of the Constitution.
42. S.I. 2000 was necessitated by the obligations of Ireland’s membership of the Communities within the meaning of Article 29.4.7º of the Constitution, the applicants could not succeed, even if the regulations were otherwise in violation of the Constitution.
43. In the High Court, the learned High Court judge held that the discretions which were left to the member States were within the principles and policies determined by the Council of Ministers in the organisation of the milk market in the European Union and that S.I. 2000 did not go beyond what was required by those principles and policies. She said that the decision of the Minister that quotas should go to active milk producers was in accordance with the stated policy of the Regulations. She was of the view that S.I. 2000 was necessitated by the obligations of membership of the EU. However, she was also of the view that, because the choices made in S.I. 2000 were within the principles and policies of the milk quota scheme, it could also be regarded as valid secondary legislation which was not contrary to Article 15.2.1º of the Constitution.
44. As to the claim that S.I. 2000 was in breach of the property rights of the appellants, the learned High Court held that it was clear from the jurisprudence of the European Court of Justice that the right to property safeguarded by the community legal order did not include the right to dispose for profit of an advantage such as a milk quota. She concluded that the nature of the milk quota, which was created by European law, must bear the same meaning in domestic law as in the legal order of the European Union.
45. The learned High Court judge had been urged by counsel for the appellants to have regard to the Dáil Debates on the Eleventh Amendment of the Constitution Bill in determining what was meant by the expression “necessitated by the obligations of membership ...” in Article 29.4.7º. She rejected the submission that she was entitled to have regard to what was said during the course of the Oireachtas debates, but had regard de bene esse to the fact that during the passage of the Bill through the Oireachtas the word “necessitated” was substituted for the word “consequent on” . However, she was also of the view that that did not assist the arguments advanced on behalf of the applicants as to the validity of S.I. 2000.
46. As already noted, the appellants have appealed from the judgment and order of the High Court. The respondents have served a notice to vary the judgment in so far as it could be construed as allowing the court to have regard to the amendment effected to the Eleventh Amendment of the Constitution Bill during its passage through the Oireachtas.
47. Mr. Gerard Hogan S.C., on behalf of the applicants, did not invite the court to overrule its previous decision in Meagher to the effect that s. 3 of the 1972 Act was not invalid having regard to the provisions of the Constitution. He submitted, however, that in determining whether S.I. 2000 was itself “necessitated” by the obligations of EC membership and thus immune from constitutional scrutiny, the court should not follow in its entirety the reasoning by which the court arrived at its conclusions in that case. (It should be pointed out at this stage that the court in Meagher, having ruled on the constitutionality of s. 3 of the 1972 Act, went on to consider whether the specific regulations challenged in that case were intra vires and unanimously concluded that they were.) He said that, in so far as any of the judgments in that case suggested that the word “necessitated” should be equated to “convenient” or “desirable”, that reasoning should not now be followed. He submitted that the word “necessitated” clearly indicated that Article 29.4.7º allowed for the transfer of legislative, executive and juridical sovereignty to the European Union and the Communities only where this was a legal obligation resulting from membership of the EU and the Communities.
48. Mr. Hogan submitted that this approach to Article 29.4.7º was reinforced by the parliamentary history of the Third Amendment of the Constitution Bill, 1971: the words “consequent upon” originally used in the Bill had been replaced by “necessitated” at the committee stage. In the present case, the issue, accordingly, was as to whether the making of S.I. 2000 by the Minister in purported exercise of the powers conferred by s. 3 of the 1972 Act was a legal obligation deriving from our membership of the Communities and not simply a consequence of that membership.
50. He submitted that this provision in the Constitution would have been quite unnecessary if legislative sovereignty could be surrendered to the European Union in the manner suggested by some of the reasoning in Meagher. Mr. Hogan further submitted that, having regard to the wide range of choices which a member State could make under the relevant Articles of the EC Regulation, it could not be said that, even adopting the reasoning of the court in Meagher, legislation in the form of a ministerial regulation was necessitated in this case by the obligations of EC membership and he cited in particular passages in the judgment of the court and of Denham J. in that case. He also cited the decision of Murphy J. as a High Court judge in Green .v. Minister for Agriculture (1990) 2 IR 17.
51. Mr. Hogan submitted that, assuming that S.I. 2000 was not shielded from constitutional scrutiny by virtue of Article 29.4.7º, it clearly violated Article 15.2.1º of the Constitution, since it constituted delegated legislation which went significantly further than simply giving detailed effect to principles and policies contained in a parent Act. He relied particularly in support of this proposition on the decisions of this court in Cityview Press Ltd. .v. AnCO , (1980) IR 381, O’Neill .v. Minister for Agriculture , (1997) 2 ILRM 435 and Laurentiu .v. Minister for Justice, Equality and Law Reform , (2000) 1 ILRM 1 and of the High Court in McDaid .v. Sheedy , (1991) 1 IR 1 and Lovett .v. Minister for Education , (1997) 1 ILRM 89.
52. Mr. Hogan submitted that, in determining whether S.I. 2000 was constitutionally valid, as being no more than the detailed implementation of principles and policies contained in parent legislation, it was immaterial that S.I. 2000 had been made in purported exercise of a power conferred by an EC Regulation, as distinct from a Directive, citing observations of the Court of Justice in Case 230/78 SPA Eridania - Zuccherifici . Mr. Hogan said that, while Mr. Evans in his affidavit had laid stress on the provisions of the Regulation enabling member States to take measures “with the aim of ensuring that reference quantities are solely attributed to milk producers” , it is nowhere said that this is a community objective which the regulation requires member States to implement: on the contrary, it simply enables member States who wish to pursue this policy objective so to do.
53. Mr. Hogan urged that it was clear from S.I. 2000 that the Minister had elected to make substantial and important policy choices, of which the most significant in practical terms was the effective breaking of the link between land and quota, save for family transactions. He said that the jurisprudence of the Court of Justice made it clear that, in areas where common rules applicable to all the member States are not laid down by a particular regulation, the member States in implementing the regulation in those areas are entitled to act in accordance with the procedural and substantive rules of their own national law, citing the decision of the Court of Justice in Kjell Kirllson .v. Svenska Jordbruksverket , Case C-292/97 (2000) ECR 1-2737. He also relied on Case C-258/93 Dominikanerinnen-Kloster altenhohenau , (1995) ECR 1-4069.
54. As to the claimed violation of the applicants’ property rights, Mr. Hogan accepted that the Court of Justice had generally taken the view that milk quotas do not constitute a property right so far as community law is concerned and referred in this context to R. .v. Ministry of Agriculture, xp. Bostock , Case C-2/92 (1994) ECR 1-955. However, that case was concerned with the right to dispose of a quota for profit, whereas the present case involved what was effectively a form of compulsory acquisition by the State of a quota at a price substantially less than the prevailing market value. He said that, in these circumstances, a milk quota might qualify for protection as a property right which the member States were obliged as a matter of community law to protect, citing the comments of the Advocate General in Damand .v. Haubtzollampt Trier , (KC-186/96) 1998 ECR 1-8529, 8541.
55. Mr. Hogan further submitted that, in any event, the dicta in Bostoch did not prevent such a right from being regarded as a property right for the purposes of Irish constitutional law. He pointed out that in Duff .v. Minister for Agriculture (KC-63/93 (1996) ECR 1569, the Advocate General had pointed out that the fact that the plaintiff’s legitimate expectations at community law level had not been infringed by the actions of the Minister did not prevent such a requirement being founded on principles of national law and that, in the event, that passage had enabled the plaintiff to succeed when the case returned to this court.
56. Mr. Hogan submitted that there was no valid reason why an intangible but valuable right such as a milk quota should not be regarded as a property right and, as such, it had been unquestionably violated by S.I. 2000.
57. On behalf of the respondents, Ms. Mary Finlay, S.C. submitted that, even if it were assumed that the making of S.I. 2000 by the Minister was not “necessitated” by the obligation of Ireland’s membership of the European Communities within the meaning of Article 29.4.7º of the Constitution, it was intra vires s. 3 of the 1972 Act as representing the detailed implementation of principles and policies set out in parent legislation, in accordance with the law as found by this court in Cityview Press Ltd. .v. AnCO and Laurentiu .v. Minister for Justice, Equality and Law Reform .
58. Ms. Finlay submitted that the EC Regulations, which had direct effect in Ireland, were the equivalent of parent legislation in that they enabled the member States to exercise certain discretions in regard to the implementation of the milk quota scheme generally throughout the European Union.
59. Ms. Finlay submitted that, in the context of the common organisation of the market in milk and milk products, it was recognised that the position of producers varied in different areas throughout the Community and that this required different responses in different areas. It was for that reason that the Regulations empowered the member States to take certain limited decisions as to the precise way in which the COM was to be implemented in each member State. Such discretions had, however, to be exercised at all times in accordance with the Regulations and with a view to achieving the overall objectives and aim of the COM and in such a way as to avoid discrimination between producers in different parts of the Community.
60. Ms. Finlay submitted that s. 3 of the 1972 Act authorised the Minister to make regulations for the purpose of enabling the EC Regulations as to the milk quota and super levy scheme to have full effect in Ireland and that was the sole purpose of S.I. 2000. Accordingly, prima facie , S.I. 2000 was intra vires the powers conferred on the Minister by s. 3 of the 1972 Act.
61. Ms. Finlay submitted that the super levy/milk quota regime was established by EC regulations and that the respective roles of the Council of Ministers and EC Commission on the one hand and the member States on the other hand in the COM was analogous to the respective roles of the Oireachtas and the Executive in relation to purely domestic legislation. All the essential policies and principles relating to the COM were determined by the Council of Ministers and what was left of the member States were detailed implementing rules and limited permissible variations. The position of the Minister was thus not the same as that of the relevant ministers in O’Neill .v. Minister for Agriculture and Laurentiu .v. Minister for Justice and the making of S.I. 2000 complied with the test laid down in Cityview Press Ltd. .v. AnCO .
62. Ms. Finlay submitted that it was not correct to say that the break in the link between land and quota “effected by the 1999 EC Regulation” and S.I. 2000 was a radical new departure, as suggested on behalf of the applicants. Since the introduction of the general rule in 1984 that quota should transfer with the land, a series of exceptions had been created and those introduced by the 1999 Regulation were only the last in the sequence. She further submitted that Article 7(1) expressly obliged the member States to lay down detailed rules: S.I. 2000 were such detailed rules. As to the decision not to provide for the automatic transfer of quotas with land, this could only be done for the purpose of ensuring that quotas were solely attributed to active milk producers and this was what S.I. 2000 was intended to achieve.
63. Ms. Finlay submitted that restructuring schemes had also been authorised in the member States by EC law since 1987. The actions that could be taken by member States with a view to completing restructuring of milk production were exhaustively set out in Article 8 of the EC Regulation and in making the detailed rules the member States were constrained by the express provisions of that Regulation and the overall aims and policies of the CAP, COM in milk and milk products, the additional levy scheme and the relevant EU instruments. Ms. Finlay submitted that in making Regulation 27 relating to the temporary leasing of quota, the Minister was acting in accordance with the express obligation under Article 6.1. It was merely the precise terms of a detailed temporary leasing scheme which were left to be specified by the member State and this was what had been done in S.I. 2000.
64. As to the submission that Article 40.3.2º and 43 had been violated by
65. S.I. 2000, Ms. Finlay submitted that it was clear that a milk quota was not a property right and the opinion of the Advocate General in Duff .v. Minister for Agriculture was not authority for the proposition that the nature of the rights conferred by a milk quota on the appellants were different in Irish law.
66. Ms. Finlay submitted that there was no question of anything in the nature of a compulsory acquisition by the State of a quota at less than the prevailing market price. The quota was not acquired in any sense by the State: in the present case, the applicants were all persons who were no longer engaged in active milk production and who were entitled to release their quota, which would then be reallocated to an active producer who would pay them the specified price. Each of the applicants was simply endeavouring to earn a greater profit from the milk quota currently held by them than was permissible under the S.I. 2000 and were not seeking to use the quota for the purpose for which it was intended, i.e. the production of milk up to the amount of the quota.
67. If, contrary to the submissions, it was found that any of the provisions of S.I. 2000 prima facie violated the Constitution, it was submitted that they were “necessitated” by the obligation of membership of the European Union or of the Communities and hence were entitled to the protection of Article. 29.4.7º of the Constitution. Ms. Finlay submitted that it was clear from the decision of this court in Meagher that the fact that the member State had been left some element of choice or discretion as to the precise form a particular measure should take was perfectly consistent with the measure being necessitated by the obligations of EC membership. Thus, in Meagher, although the relevant directive contained no express provision as to the creation of sanctions, the court accepted that the nature of the sanctions to be imposed, including the penalties, were properly determined by regulation. She submitted that the somewhat broader approach to the construction of the phrase “necessitated by the obligations of membership” than that being contended for on behalf of the appellants was also consistent with the decision of this court in Crotty .v. An Taoiseach (1987) IR 713.
68. Ms. Finlay said that the respondents strongly resisted the proposition advanced by the appellants that the reasoning in Meagher should be reconsidered at this stage by the court. Meagher had been a decision on the constitutionality of s. 3 of the 1972 Act and had been continuously relied on since then by the State, approximately 498 statutory instruments having been made by various ministers under s. 3 of the 1972 Act.
69. As to the notice to vary, Mr Paul Gardiner S.C. on behalf of the respondents submitted that the decision of this court in People (DPP) .v. McDonagh (1996) 1 IR was not authority for the proposition that the parliamentary history of a particular bill was an admissible aid to the interpretation of an amendment of the Constitution effected by way of referendum. He said that to hold otherwise would be to derogate from the primary role of the people in determining whether the Constitution should be amended which had been emphasised in two recent decisions of this court, McKenna v. An Taoiseach (No 2) (1995) 2 IR 10 and Hanafin .v. Minister for the Environment (1996) 2 IR 321. He submitted that it followed that the court was not entitled to have regard to the fact that the words “consequent upon” originally used in the Third Amendment of the Constitution Bill had been replaced by “necessitated” at the committee stage.
70. It is accepted in this case that, if the making by the Minister of S.I. 2000 was “necessitated” by the obligations of membership of the European Union or the European Economic Community, it could not be successfully challenged by the appellants. It would seem to follow that this should be the first issue to be addressed by this court.
71. As a result of the passage of the Eleventh Amendment of the Constitution, Article 29.4.3º empowered the State to become a member of inter alia the European Economic Community established by the Treaty of Rome. Article 29.4.5º ensured that laws enacted, acts done or measures adopted by the State which were necessitated by the obligations of membership of inter alia the EEC were not invalidated by any other provision of the Constitution. Section 2 of the 1972 Act, which provided that the treaties governing the European Communities and the existing and future acts adopted by the institutions of the communities were to be binding on the State and be part of its domestic law under the conditions laid down in the treaties, was clearly necessitated by the obligations of membership of those communities.
72. The result was a historic transfer of legislative, executive and judicial sovereignty to the European Communities and, as a result of further referenda, the European Union. In particular, the exclusive roles hitherto enjoyed by the Oireachtas in the legislative field and the courts in the administration of justice were significantly abridged. The developing jurisprudence of the European Court of Justice also made it clear that there existed effectively an autonomous European legal order and that the member States were obliged to acknowledge the primacy of Community law over national law in areas where it was applicable.
73. It was also, moreover, clear that the Member States envisaged that the communities established by treaties were to be dynamic in their nature and that the obligations of membership referred to in Article 29.4.5º would not be static.
74. In the result, a significant new volume of legislation became applicable in Ireland and binding on all the citizens either in the form of Directives which the State, as a result of its membership, was obliged to implement in domestic legislation, or Regulations which were directly applicable in Ireland and did not require such legislation for their implementation. Since, under the communities’ legal order, the method by which a Directive was implemented, as distinct from its substance, was to be determined by the Member State, the Directive itself would contain no indication as to which of the two normal methods employed in Ireland - an Act of the Oireachtas or a ministerial regulation - was to be employed. The Directives, in short, did not contain the enabling provision, commonplace in domestic Irish legislation, under which a minister or some other body so authorised by the Oireachtas can give detailed effect in the form of regulations to policies determined by the Oireachtas. That was not necessarily the case with Regulations which, of their nature, did not require implementation by either legislation or regulation. As the present case demonstrates, however, it was also possible for the Council of Ministers to issue regulations having direct effect in a Member State such as Ireland which, in defined areas, required or authorised the Member State to adopt its own rules whether by way of legislation or regulation. It is also, of course, obvious that in some instances, in the case of both Directives and Regulations, their detailed implementation can be effected by administrative acts rather than by legislation or regulation.
75. Accordingly, had s. 3 of the 1972 Act not been enacted by the Oireachtas, it would have been necessary for Directives to be implemented by an Act of the Oireachtas, since there would have been no parent legislation in this country enabling it to be done by way of regulations made by the appropriate minister. The same would apply to those Regulations in which the member States were required or authorised to adopt rules themselves for the purpose of implementing the Regulations. Thus, although a Directive did no more than require the member States to reduce or increase a tariff or duty by a specified sum, leaving no policy choice to be made by the Oireachtas, it would have been necessary for an Act to be passed if Ireland was to fulfil its obligation as a member of the community.
76. As already noted, s. 3 of the 1972 Act, giving Ministers the power to make regulations for the purposes of s. 2, was found to be constitutional by this court in Meagher. The judgments in the case were cited frequently in the course of the arguments in the present case and clearly require careful consideration.
77. The facts can be briefly summarised. Two Council Directives of the EEC prohibited the administration to animals of certain hormonal preparations for fattening purposes. The second Directive required the member States to ensure that official on-the-spot random controls were made for the presence of the prohibited substances and to conduct, through the appropriate authority, an investigation at the farm of origin to determine the reason for the presence of the substances. The Minister, in purported exercise of the powers conferred on him by s. 3 of the 1972 Act, made regulations providing that the possession of the proscribed substances was to be an offence. They also enabled a judge of the District Court or Peace Commissioner to issue a search warrant where there was reasonable ground for suspecting that a person was in possession of one of the prohibited substances. The Regulations further provided that the time limit under the Petty Sessions (Ireland) Act 1851, under which proceedings for summary offences had to be instituted within six months, was not to apply and that the proceedings could be commenced at any time within two years after the date of the offence.
78. The applicant was a farmer who was prosecuted under the regulations, following a search of his premises on foot of a search warrant granted by a District Court judge. He instituted proceedings seeking, inter alia , a declaration that the provisions of s. 3 were invalid having regard to the provisions of the Constitution, together with a declaration that the regulations were, in consequence, ultra vires . It was held in the High Court that so much of s. 3(2) of the 1972 Act as entitled a Minister by regulation to repeal or amend a previous law was unconstitutional and that, accordingly, the regulations were of no effect.
79. The Minister and the Attorney General then appealed to this court. The court considered first the constitutionality of s. 3 of the 1972 Act and allowed the appeal of the Minister and the Attorney General, the judgment of the court being delivered by Finlay C.J. It then went on to consider an alternative argument advanced on behalf of the applicant that, assuming s. 3 to be constitutionally valid, the regulations were nonetheless ultra vires .
80. Giving the judgment of the court, Finlay C.J. said that the obligation of membership would necessitate the facilitating of laws enacted, acts done or measures adopted in some instances at least - and possibly in a great majority of instances - by the making of ministerial regulation rather than legislation of the Oireachtas. In the result the power to make regulations conferred by s. 3(2) was immune from constitutional challenge.
82. As that passage indicates, there are two broad categories of cases in which a regulation made in purported exercise of the powers conferred by s. 3 might be found to be ultra vires the powers conferred on Ministers by s. 3. The first category would be cases in which the making of the regulation was found not to be “necessitated” by the obligations of membership referred to in Article 29.4.5º and to have violated some constitutional right of the plaintiff. The challenge in such a case would be no different from the challenge mounted to an Act of the Oireachtas allegedly necessitated by the obligations of membership which prima facie violated a constitutional right of the plaintiff. The second category of cases in which such a challenge could be successfully mounted to a Regulation is where the implementation of a Directive or defined parts of an EC or EU Regulation by ministerial regulation rather than an Act of the Oireachtas would be in conflict with the exclusive legislative role of the Oireachtas under Article 15.1 and would not be saved by the provisions of Article 29.4.5º. That would arise in a case where the ministerial regulation went further than simply implementing details of principles or policies to be found in the Directive or Regulation in question and determined such principles or policies itself and the making of the Regulation in that form, rather than in the form of an Act of the Oireachtas, could not be regarded as necessitated by the obligations of membership. That this is what was intended to be conveyed by that passage in the judgment of the court is, I think, made clear when one comes to consider the judgments of the court on the vires issue in that case and, in particular, the judgment of Denham J.
83. Blayney J. (with whom Finlay C.J. and O’Flaherty and Egan JJ. agreed), pointed out in the first instance that the requirement in the Directive for on-the-spot random controls could not be effected unless power was given to enable a compulsory search to be made of farms where animals were kept. It followed that so much of the regulation as authorised the issuing of such warrants by the District Court was necessitated by the provisions of the Directive.
84. As to the extended time limit for the institution of criminal proceedings and the amendment purportedly affected for that purpose by the regulations of the time limit under the Petty Sessions Act, 1851, Blayney J. said that it was accepted that the creation of offences by the regulations was required for the implementation of the relevant Directives. He also pointed out that there was uncontested evidence that the six months’ limitation period for the institution of proceedings under the Petty Sessions (Ireland) Act, 1851 would in many instances be too short and he said that it followed that the Minister had power to provide for a longer period and so had power to extend the six months to two years.
85. Blayney J. went on to reject a submission by Counsel for the applicant in that case that, because Article 189 of the Treaty of Rome left to the State the choice of the form and methods of implementing a directive, what was done by way of implementation was not necessitated by the State’s obligation of membership. In a passage of some significance in the context of the present case, he added:-
86. In her judgment, Denham J, with whom Finlay C.J., O’Flaherty J. and Egan J. also agreed, said that the fact that the creation of a right of search and the amendment of the Petty Sessions (Ireland) Act, 1851 were “necessitated” under the Directive, was not the end of the matter. Article 189 left to the national authorities the choice of form and method and, in choosing the form or method, the Minister must have due regard, not merely to Article 29.4.3º of the Constitution, but also to Article 15.2. The learned judge went on:-
89. It follows that, in the present case, the first enquiry must be as to whether the implementation of the EC Regulation by legislation, whether in primary or secondary form, was necessitated by the obligations of membership within the meaning of Article 29.4.5º of the Constitution. It is clear that it was.
90. Article 7.1 expressly required the making of detailed rules by the member States as to the transfer of quotas with a holding in the case of its sale, lease or transfer by inheritance to purchasers. To that extent at least, Ireland was under an obligation to adopt such detailed rules and it was not contended on behalf of the appellants that this could have been achieved by administrative decisions, rather than legislation, either primary or secondary in form, which was binding in law on all those affected whether as persons entitled to quotas, producers of milk or purchasers of milk or milk quotas.
91. The second enquiry in the present case is as to whether, given that the making of detailed rules in legislative form, to at least that extent, was necessitated by the obligations of membership, their being made in the form of S.I. 2000 other than by an Act was in conflict with the exclusive legislative role of the Oireachtas under Article 15.1 and was not necessitated by the obligations of membership.
92. As the submissions on behalf of the parties demonstrate, there are two routes by which a conclusion can be reached on this issue. One can initially decide whether the making of the regulation in the form of a statutory instrument rather than an Act of the Oireachtas was “necessitated” by the obligations of membership. If it was, then it is clearly unnecessary to consider whether it is in conflict with Article 15.2 or, for that matter the Articles guaranteeing the private property rights of the applicants. Alternatively, one can determine first whether it violates either Article 15.1 or the private property rights or both of them. If the latter course were adopted, and the conclusion were reached that no breach of the Constitution had been established, it would be unnecessary to consider whether enactment in the form of a regulation rather than by an Act was necessitated by the obligations of membership.
93. Ultimately, however, it is immaterial which of these alternative approaches is adopted, because it is almost beyond argument that the choice of a statutory instrument as a vehicle for the detailed rules rather than an Act was not in any sense necessitated by the obligations of community membership. There would appear to be no difference in principle between the obligation on a member State to implement a Directive and the corresponding obligation under a Regulation, such as the EC Regulation in the present case, to adopt detailed rules for the implementation of specified parts of the Regulation. In each case, while the member State is obliged to implement the Directive or the specified part of the Regulation, the choice of form and method for implementation is clearly a matter for the member State.
95. I have already referred to the submission advanced on behalf of the appellants in this case that, in so far as the reasoning in Meagher suggested that the power to make Regulations under s. 3 of the 1972 Act could be availed of by a Minister where it was “convenient” or “desirable” so to do, it should not be followed. I am satisfied, however, that neither the judgment of the court nor the judgments of Blayney J. and Denham J. on the vires issue lend any support to the proposition that, in cases where it is convenient or desirable for the community measure to be implemented in the form of a Regulation rather than an Act, the making of the Regulation can for that reason alone be regarded as “necessitated” by the obligations of membership. Thus, while it appears from the judgment of the court that an argument was advanced on behalf of the respondents in that case that the necessity for “expedition” in the implementation of a Directive would justify its implementation in the form of Regulation rather than an Act, such a submission, as a general proposition, would, in my view, be unsustainable and derives no support from the judgments in Meagher. Doubtless, where no policy choices are left to the member State, expedition is one of the factors which may legitimately be taken into account in deciding to opt for the making of a Regulation rather than the enactment of primary legislation, but it would be a serious overstatement to say that it justifies the making of regulations rather than the enactment of an Act in the case of every Directive or EU Regulation and again that is clearly not consistent with what was held by this court in Meagher.
97. It follows that, in the present case, it could not be said that the making of the rules in the form of S.I. 2000 rather than an Act was necessitated by the obligations of membership and the essential enquiry must be as to whether the Minister in making S.I. 2000 was in breach of Article 15.1 of the Constitution.
99. However, in applying that test to a case in which the regulation is made in purported exercise of the powers of the Minister under s. 3 of the 1972 Act, it must be borne in mind that, while the parent statute is the 1972 Act, the relevant principles and policies cannot be derived from that Act, having regard to the very general terms in which it is couched. In each case, it is necessary to look to the Directive or Regulation and, it may be, the treaties in order to reach a conclusion as to whether the statutory instrument does no more than fill in the details of principles and policies contained in the EC or EU legislation.
100. Thus, there are no doubt many cases, of which Meagher was one, where no choice has to be made by the member State as to the appropriate policy to be implemented: the policy in that case was unmistakably the outlawing of the hormonal substances in question and the giving of the necessary powers of search and prosecution to the competent authorities in the member States. Nor had the State any discretion as to whether any particular part of the impugned Regulation was to be omitted. In the passage I have cited, Blayney J. emphasises that the implementation of the Directive in that case was in no sense a voluntary act by the member State.
101. In the present case, the EC Regulations, as already noted required the member States to adopt detailed rules as to the transfer of quotas with land and it also required the authorisation of temporary transfers of quotas which producers who were entitled thereto did not intend to use. However, in three areas, it was left to the member States to decide whether they elected to pursue specified courses of action. First, they could effectively derogate from the provisions of Article 7.1 by providing that quotas were not to be automatically transferred with a holding. They could only do so, however, in order to ensure that quotas were solely attributed to active milk producers. The Minister decided to make use of this option by providing in S.I. 2000 that, subject to certain exceptions, quotas were not to be automatically transferred with the land. Since one of the exceptions was in favour of active milk producers, there can be no doubt that the Minister, in making the Regulation in that form, could not be accused of having effected an impermissible derogation from the general provisions of Article 7.1. S.I. 2000 also allowed for exceptions in the case of sales or transfers to specified members of the family of the person entitled to the quota.
102. The member States were also entitled under Article 6 to determine to what extent transfer operations might be renewed. This was availed of by the Minister so as to restrict persons entitled to quotas who had leased their quotas for three successive years from making more than one further lease of the land and quota. Finally, Article 8 enabled the member States to take one or more of five courses of action with a view to completing restructuring of milk production or environmental improvement. One of these was availed of by the Minister to introduce the milk quota restructuring scheme.
103. It seems clear that, had the Minister taken the view that, in the Irish context, the number of persons leasing quotas was so insignificant that regulations designed to eliminate the practice were unnecessary and would only create hardship with little or no corresponding benefit to the operation of the COM in Ireland, he would have been making a valid choice in terms of the EC Regulation and, indeed, of the general policy of the CAP and the COM. If that were not the case, and the elimination of such practices was to be of universal application throughout the Community, no such option would have been afforded to the member States. The same considerations apply to the options as to restricting temporary leases and introducing a milk quota restructuring scheme. It is, of course, the case that, as the evidence of Mr. Evans demonstrates, the election by the Minister to make the choices that he did resulted from the fact that, whatever be the position in other member States, in Ireland the prevalence of the leasing practice was resulting in a less efficient dairying industry with higher production costs.
104. It is undoubtedly the case that the milk quota/super levy scheme is intended to be tightly regulated by the EC institutions and that the manner in which it operates in all the member States is regularly monitored by the Commission. However, that does not alter the fact that, in specific areas, the EC has decided that the manner in which it is to be implemented in the member States is to be left to the member States to determine.
105. As I have already indicated, a Directive, or in this case a Regulation, can be equated to the parent statute in which, in the case of domestic legislation, one would expect to find principles and policies laid down which were then to be implemented in detail by a form of delegated legislation. There is, however, manifestly a significant difference between a Directive or Regulation, which is applicable throughout the fifteen member States of the European Union, and an Act of the Oireachtas the effect of which is confined to a relatively small and homogeneous area within the European Union. In the case of a Regulation which is intended to apply in a number of different regions throughout the European Union in which the conditions of the dairying industry may vary widely, it is not surprising to find that the Regulation, in specified areas, leaves choices as to the nature of the implementing measures to be introduced by the member State. The issue in this case is as to whether the choice of the appropriate measures can be regarded as involving no determination of policy or principle, as that expression has been used in previous decisions of this court.
106. I have experienced some difficulty in arriving at a conclusion as to how this issue is to be resolved. Applying the reasoning which found favour in Meagher, it seems self-evident that there are choices to be made by Ireland, as a member State, in determining how it will implement the Regulation in those areas where it has been afforded a discretion. Once it is acknowledged that rules of this nature may be implemented in a manner requiring parliamentary scrutiny and that implementation by ministerial regulation is not necessitated by our membership of the European Union, it gives rise to natural misgivings to find that there is no role for the democratically elected institutions of the State, other than the limited one under s. 4 of the 1972 Act. I am, however, persuaded by the analysis carried out by Fennelly J. in the judgment that he will deliver that, in the case of the operation of the super levy scheme, the choices as to policy available to the member States have in truth been reduced almost to vanishing point. As he points out, the scheme which has given rise to these proceedings was essentially the creation of the European Union and, if one seeks to determine the principles and policies which underlie it, one must look, not to any parent legislation in Ireland, but to the treaties of the European Union and the Regulations and Directives which have established the complex machinery of the CAP and the common market in milk. It follows that the making of the Regulation was not an impermissible exercise of the legislative role of the Oireachtas and that the appellants’ contentions to the contrary are not well founded.
107. There remains the question as to whether the Regulations also constituted an unjust attack on the alleged property rights of the applicants in contravention of Articles 40.3.1º and 2 and 43 of the Constitution. I have no doubt that the Regulations do not violate any property rights within the meaning of the relevant articles of the Constitution. Even if one were to adopt the most expansive view of what is meant by a right of property within the meaning of those articles and extend it beyond the well accepted species of property under our law - real and personal property, including, under the latter category, choses in action - it could still in no sense be equated to a right of property.
108. It seems to me unnecessary in this context to consider whether rights in the nature of licences conferred by the law in relation to particular property, such as planning permissions or licences for the sale of alcohol, constitute property rights. The quotas to which the applicants were entitled in this case are not licences or permits which may enhance the value of property which they own or occupy. The applicants may produce as much milk as they please and require no licence from any authority so to do.
109. The attempts by the EEC to redress the consequences of the policy of guaranteeing the price of milk in the Community led to the super levy scheme, a regulatory regime intended to redress the imbalance in the market brought about by the guaranteed price policy. That in turn resulted in milk producers, including the applicants, being entitled to sell their milk up to a specified level without incurring the super levy which would make production uneconomic. Manifestly, such a regulation of the market in milk products could always be altered to the economic disadvantage of those, who, like the applicants, had previously benefited from it, but it is a singularly inapt use of language to describe that result as a violation of property rights.
110. The fact that the right in question may effectively be disposed for cash does not mean that it is a property right. A person who is standing in a queue to buy a particular commodity and gives up his place to someone else for cash would not appear to be doing anything unlawful, but he is most assuredly not disposing of a property right, merely his right to occupy that particular place on public or private land at that particular time. Nor do I find that any assistance is to be derived from comparisons with patents, trademarks or copyright rights, which under our legal system are nowadays generically described as “intellectual property rights” . Systems of law in developed societies invariably protect those who produce such intangible assets in the expectation of reward by creating a discrete structure of legal protection, embodied in our case in the relevant statutes. They are not remotely comparable in my view to the opportunities for profit presented by a regulatory scheme designed for the benefit of subsidised producers.
111. It is accordingly unnecessary, in this context, to consider whether, in any event, any supposed infringement of property rights under Irish law was necessitated by the obligations flowing from membership of the European Union.
112. The position under community law must also be considered, since it is clear that whether the rights of property safeguarded by the community legal order have been infringed in any particular case is a question to be determined in accordance with that law.
114. That statement of the law seems to me to accord in every important respect with the position under our Constitution. The comments of the Advocate General in Damand .v. Haubtzollampt Trier suggesting a different approach have not been endorsed by the Court of Justice.
115. Although it was urged on behalf of the applicants that Bostock did not wholly shut out the possibility of a claim based on what was claimed to be a compulsory acquisition of the right in question, it is clear that, if the entitlement to a milk quota is not a right of property, it is immaterial whether what was involved in this case constituted a compulsory acquisition of the right in question. Moreover, in circumstances where, as here, the applicants were fully entitled to continue availing of their milk quotas if they resumed milk production, however inconvenient or difficult that might have been in their individual circumstances, it could hardly be plausibly contended that any property right they might have had had been compulsorily acquired. Nor is the right in any event necessarily acquired by the State or any of its organs. While the Minister is entitled to fix a price for the transfer of the quota to another person which is below what it would fetch in the market, the applicants are hardly in a strong position to complain of such an interference with the forces of the market.
case arises out of an application by Nicholas Philip (otherwise Martin) Maher,
Malachy Brett and Rita Ryan, the applicants and appellants, hereinafter
referred to as the applicants, against the Minister for Agriculture, Food and
Rural Development, Ireland and the Attorney General, respondents, hereinafter
referred to as the respondents. The application for relief was refused by the
High Court (Carroll J.) on 16th December, 2000. Against that order and the
judgment delivered on 15th December, 2000 the applicants have appealed to this
Court. This application arises by way of judicial review. In essence it is
the applicants’ case that the Minister for Agriculture, Food and Rural
Development, hereinafter referred to as the Minister, did not have legal
authority upon which to make the European Communities (Milk Quota) Regulations
2000 (S.I. No. 94 of 2000), hereinafter referred to as Regulations 2000.
actions which could be taken under Article 8 of the council regulations were to
a view to restructuring of milk production or to environmental
account of the legitimate interests of the parties”.
my view, S.I. 2000 even though it involved the making of choices within the
framework of the principles and policies of the milk quota scheme, was
necessitated by the obligations of membership of the E.U. Precisely because
those choices were within the principles and policies of the milk quota scheme,
it can equally well be viewed as permitted secondary legislation which is not
contrary to Article 15.2.1. of the Constitution.
to the claim that the right to a milk quota is a property right within the
meaning of Article 40.3.2 and Article 43 of the Constitution, regard must be
had to the decision of the European Court of Justice in
v. Ministry of Agriculture
Applicants seek to establish that they have greater protection under the
Constitution than under community law. In my view the nature of the milk quota
which is created by European Law must bear the same meaning in domestic law as
in the legal order of the European Union. The purpose of the creation of the
milk quota system was to regulate and restructure milk production within the
union. It was not for the creation of a new form of landlordism which would
allow the owner of a quota to live off the rent obtained there from without
producing a single gallon of milk. In my view this ground also fails.”
written submissions were filed on behalf of the applicants which were
supplemented by oral argument from counsel. Mr. Gerard Hogan, S.C., counsel
for the applicants, highlighted the relevant regulations, focused on the
‘necessitated’ point, considered the matter of permissible
delegated legislation, touched on the issue of parliamentary debates and made
submissions on the property rights dimension.
referred to Article 29.7 of the Constitution of Ireland and submitted that the
word “necessitated” therein is a straightforward word meaning
legally obliged, a clear legal provision. Counsel argued that Article 29.4.6
has to be read in harmony with Article 29.4.7. He submitted that the object
was to protect a national legislature as far as possible. Counsel argued that
29.4.7 is the general rule, that it must be necessitated, and 29.4.6 is an
referred to what he submitted were three key authorities. He referred to
v. Minister for Agriculture
 1 I.R. 356
he argued was either wrongly decided or not applicable to the present case;
v. Minister for Agriculture
 2 IR 17, which he distinguished; and
v. Minister for Agriculture
 1 I.R. 329
is an authority for an interpretation of “necessitated” which also
extends the constitutional immunity to domestic measures which are simply
“convenient” or “desirable” then he submitted that the
appellants did not resile from respectfully submitting that such reasoning
ought not now to be followed. He argued that such a conclusion is at odds with
the plain language of Article 29.4.7. He submitted that the word
“necessitated” is not ambiguous and plainly implies a legal
obligation only. Even if “necessitated” were not so unambiguous,
interpretation, he submitted, is at odds with the underlying purpose of Article
29.4.7 which is to allow for the transfer of legislative, executive and
judicial sovereignty to the European Union only where this is legally
obligated. But that where it is not so obligated, Article 29.4.7 makes it
equally plain that the Constitution reigns supreme. He argued further that the
Constitution must be
harmoniously and in light of all the interlocking provisions especially
interaction of Article 29.4.6 and Article 29.4.7. He submitted that it is
generally accepted that Article 29.4.6 was formulated to deal with the
increasing strain which the flexibility provisions of the Treaty of Amsterdam
and the increasing variable geometry of European law, of which the 1999 Council
Regulations are just a specialised example, were placing on the necessitated
obligations wording contained in Article 29.4.7. He submitted that Article
29.4.6 is designated to allow the State to exercise certain specific options
and discretions arising under the Treaty of the European Union and the treaties
establishing the European Communities provided that the prior approval of both
Houses of the Oireachtas is forthcoming. He stressed that the fact that
Article 29.4.6 permits the State to exercise certain options and discretions
subject to the key parliamentary safeguards reinforces the submission that
Article 29.4.7 ought not to be given an interpretation which would permit the
further reduction of legislative sovereignty to the European Union in the
absence of an expressed Union or Community legal obligation to this effect.
Counsel submitted that in
the Supreme Court upheld the constitutionality of s.3 of the European
Communities Act, 1972
necessitated by the obligations of Community membership on the ground that it
was part of the necessary machinery which became a duty of the State upon its
joining the Community and therefore necessitated by that membership; that the
Court had envisaged circumstances in which the exercise of that power would be
unconstitutional; and that the present case involved a challenge to the
Minister’s powers to make regulations under s.3 of the Act of 1972.
Counsel submitted that in this case the European Union legislation allowed a
Member State significant choices in respect of fundamental principles and
policies under the 1999 Council Regulations, and, accordingly, he submitted
that the implementation of these provisions by means of a statutory instrument
was not necessitated within the meaning of Article 29.4.7.
submitted that the 1999 Council Regulations confer such extensive concessions
on Member States, together with a wide panoply of choices, that the exercise of
the said discretions could not be said to be necessitated by the obligations of
counsel submitted that insofar as
is an authority for the interpretation of the word ‘necessitated’
he submitted it was incorrect. However, he referred to the application of the
double construction rule and the presumption that the Minister will not make
regulations where the appropriate approach is legislation. Counsel argued that
such is the case here. That the Minister in making this scheme by statutory
instrument was exercising an unconstitutional power and hence in that way his
argument comes within the
decision as made.
submitted that there were no adequate principles and policies in European law
enable a statutory instrument to be made by the Minister. He submitted that it
would be hard to describe Regulations 2000 by virtue of their size, range of
decisions, range of choices, and range of policy aspects, as anything other
than legislation. He submitted that it is clear from Regulations
as far as land transfers and the operation of the restructuring scheme are
concerned, the Minister had elected to make substantial and important policy
choices. He gave the following examples:
also submitted that the Minister exercised substantial policy choices conferred
by article 6(1) of the 1992 Regulations (as inserted by the 1999 Regulations)
in that he had determined via article 27 of Regulations 2000: a) the category
of persons entitled to lease quota on a temporary basis, b) the number of years
for which they will be entitled to lease quota and c) the circumstances in
which the Minister can derogate from the rules which he has prescribed.
Counsel submitted that fundamental principles of Irish constitutional law
require that policy decisions and choices must be made by the Oireachtas and
not delegated to the Minister and his civil servants. He said that it was
highly implausible that the drafters of Article 29.4.7 ever envisaged that the
system of parliamentary democracy enshrined by Articles 5,6 and 15 of the
Constitution would be undermined and that decisions of fundamental importance
could be taken by the executive rather than the legislative branch of government.
the core of counsel’s argument was the analysis that there is a
national law. That if the State elects to take this action it must do so by
legislation, as there is a
back to the national state. Counsel submitted that the respondents had argued
that in this situation the principles and policies are determined, that it is a
Community policy. However, counsel argued that, it is clear from the language
of article 8.a that this is not so. He referred to the use of the word
“may”, and said that if the State wants to take the measures it
can, but it is not an implementation of Community policy. Counsel argued that
the Minister is legislating in this case, that the Minister is making far
reaching radical changes, and that such changes may only be made by the
Oireachtas. That here the Minister is making major policy decisions which may
only be made
for the applicants stressed that in this case what was for consideration was
that European Union legislation had in
transferred effective law making power back to the State. Counsel referred to
judgment and relied on the judgment of the Chief Justice where he pointed out
that there could be cases where the appropriate mode to give effect to European
legislation would not be a statutory instrument, on the
principle. He submitted that this is such a case.
submitted two representative examples of how there were no principles or
policies and why the Minister is legislating. Firstly, he referred to
articles 5 and 6
the statutory instrument, the family transaction. He submitted that this is
pure policy. On an analysis of the agricultural community he submitted that
there is nothing similar in European law that speaks of that; he submitted
that it was a policy judgment which in Ireland was reserved to the Oireachtas.
Secondly, he referred to article 6 of the Council regulations, a mandatory
system of temporary leasing. Here there is determination of the category of
producer. A determination of how temporary leasing should run and for how
long. He submitted that there was nothing in article 6 governing this.
made submissions on the extent to which a milk quota is a property right.
Counsel submitted that a valuable permission is being effectively extinguished
and that in a restructuring scheme there is a form of compulsory purchase where
the Minister determines the price. He stated that the Minister is fixing the
price substantially below the market price as of 1st April, 2000.
accepted that the European Court of Justice has generally taken a view that
milk quotas do not constitute a property right so far as Community law is
concerned. However, he submitted that the present case concerns a form of
compulsory acquisition by the State of a quota at a price substantially less
than the prevailing market value. In these circumstances a milk quota may
qualify for protection as a property right which the Member States were obliged
as a matter of Community law to protect and he referred to the comments of the
Advocate General in
v. Hauptzollamt Trier
(Case C-186/96)  E.C.R. 1-8529, at p. 8541. Counsel argued that the
did not prevent such a right being regarded as a property right for the
purposes of the Irish Constitution. He submitted that this was made clear by
the opinion of Advocate General Cosmas in
v. Minister for Agriculture
(Case C-63/93)  E.C.R. 1-569. In
the European Court held that the plaintiff’s legitimate expectations at
Community law level had not been infringed by the actions of the Minister, but
the Advocate General observed at para. 60 that this did not prevent “such
a requirement from being founded
principles of national law
which, in an appropriate case, may ensure greater protection in this respect
than that afforded by the general principles applicable in the Community legal
pointed out that when the case returned to the Supreme Court both
O’Flaherty J. and Barrington J. for the majority seized upon this passage
to justify finding that the Minister had infringed the plaintiff’s rights
as a matter of Irish public law. Counsel submitted that it would be
unrealistic not to regard a milk quota as a valuable asset in its own right, as
land itself. If, for example, a chose in action can be regarded as property (
Éireann v. Ireland
 3 I.R. 321) there seems little reason by which another valuable and
tangible right such as a milk quota should not be so regarded. If a milk quota
is such a right then he respectfully submitted that it follows inexorably that
Regulations 2000 infringes that right. For example, no matter how excellent
the public policy reasons, the Minister could not prescribe a scheme for the
forfeiture of unused agricultural land at a price significantly below market
value or which seriously inhibited the right to lease such an asset. Yet this
is what has been proposed by Regulations 2000 and it is submitted that these
provisions are manifestly in conflict with Articles 40.3.2 and 43 of the
submitted that fundamentally this case is not about milk quotas, it is about
the separation of powers between the executive and the legislature. It is an
example of the democratic deficit. He submitted that the executive has usurped
the role of the legislature. He submitted that the case requires the Court to
protect the integrity of the democratic system and that key decisions of policy
should not be made by the executive. Article 29.4.7 transfers sovereignty to
the European Union to the extent legally required. If it is not required it is
Mary Finlay, S.C., counsel for the respondents, submitted that it was
fundamental to the Minister’s position that what is at issue is a
European scheme which forms an integral part of the Common Organisation of the
Market (C.O.M.) which is part of the Common Agricultural Policy (C.A.P.). She
submitted that C.A.P. was created by treaty and that the C.O.M. in milk
products is a European scheme created by regulation. Counsel submitted that
the Court is required to look at what the Minister is authorised to do. The
Minister was given choices as to details only. Counsel pointed out that the
milk quota is exclusively within the Community province. There is no
legislative function in Ireland.
submitted that insofar as the Supreme Court considers the method chosen by the
State to provide detailed implementing rules it is governed by Irish law
exclusively. This Court can only find what is the appropriate method by
looking at the nature of the Community law that requires the details. Counsel
submitted that the European Union regulations are part of the domestic law of
Ireland and that they are similar to an enabling act of the Oireachtas. In
this instance the regulations exist as part of Irish law and are analogous to
an enabling act, that the principles and policies may be found in an enabling
act or in regulations. Counsel relied on the principles and policy test.
Counsel submitted that the question was whether as a matter of Irish public law
the Minister had acted properly.
referred to the
case and the reference therein to the fact that the
test applies. Counsel accepted that she had to satisfy the Court that the
Minister was acting
s.3 by making Regulations 2000 and that he could only do that if he was not
invading the power of the Oireachtas under Article 15.2.1. of the Constitution.
submitted that the Minister was not breaching Article 15.2.1, the sole and
exclusive power of making laws being vested in the Oireachtas, in this case.
Counsel submitted that there was enabling legislation, being the relevant E.U.
regulations and ss. 2 and 3 of the European Communities Act, 1972. Counsel
submitted that the relevant provisions in considering the principles and
policies are: 1) The Treaty provisions of Articles 32 to 38 inclusive,
Article 10 (formerly Article 5), and the general obligation on the State to
take measures to ensure fulfilment of obligations. 2) The Common Organisation
of the Market, Council Regulation (E.C.) No. 1255/1999 of 17th May, 1999. 3)
The milk quota regulations, especially Regulation (E.E.C.) No. 3950/92 of 28th
December, 1992 and Council Regulation (E.C.) No. 1256/1999 of 17th May, 1999.
is obliged to have in place an effective detailed system for the application of
the milk quota system in Ireland. The objective of the milk quota regulations
is to put quotas into the hands of milk producers. That is an aim of the milk
quota regulations. Therefore the Minister’s decision to take measures
under Article 8a is part of his obligation to do so, it represents the
implementation of the scheme.
referred to Mr. Hogan’s suggestion that the European Union regulations
had returned legislative powers to the Member States, especially the 1999
Regulation. Counsel for the respondents said that no such legislative
competence was returned. European law was the origin of the milk quota system.
The competence rests exclusively with the European Union to make policy choices
to achieve a single market. From the outset the European Union delegated
detailed rules to the State. This has continued to date. The State has the
function of making detailed rules. The European Union has delegated choices to
the Member States. Counsel submitted that when the State is implementing
European Union provisions the State is bound by obligations including
fundamental rights and to seek to achieve the objectives of the scheme. In
this case the Minister has power to make choices. The question for the Court
is whether the choices, given to the Minister in the context of the European
scheme, are general policy choices.
submitted that the purpose of the milk quota system is part of price stability
in C.O.M. and to achieve a fair standard of living for dairy producers. The
inter-relationship between the price of a gallon of milk and the quantity of
the quota is important.
pointed out that there is a real prospect of the milk quota scheme ending in
2006. It is referred to in the Regulations. Counsel stated that none of
plaintiffs are producers. All the plaintiffs have given up milk production.
They are outside the parameters of the regulations. Counsel submitted that it
is part of the objective of the regulations that persons actively producing
milk are persons in whose hands the quota should rest.
did not make the case that the Minister is obliged to make these rules by
statutory instrument. Counsel submitted that it was permissible for the
Minister to do it by statutory instrument as the principles and policies are
clearly set out in the European Union regulations. Counsel did not rely on the
necessitated form. If it is not necessitated under Article 29.4.7 the Minister
can only make regulations if it does not encroach on the Oireachtas. Counsel
for the respondents argued that it did not because the principles and policies
are in the regulations. Further, that under Article 10 of the Treaty there is
an obligation on Ireland to effectively implement European Union schemes.
relation to the submission that the milk quotas are property rights within the
meaning of Article 40.3.2 and Article 43 of the Constitution and that
Regulations 2000 constitute an unjust attack on same contrary to such
constitutional provisions, counsel submitted that the argument was unstateable.
It was submitted that the applicants’ right to a milk quota is not a
property right within the meaning of the Constitution. A milk quota under
Irish law must have a similar characteristic to that under Community law as it
has been exclusively created by Community law. It is common case that the
European Court of Justice has determined that the right to a milk quota is not
a property right under Community law and, accordingly, it was contended that it
is not a property right within the meaning of the Constitution. It was
submitted that even if a milk quota is to be given a separate characteristic
under Irish law, it is in accordance with Irish law a licence created by law
and subject to an implied condition that the law may change the licence scheme
or conditions attaching to such licence. The changes to such a scheme made by
Regulations 2000 do not conflict with Article 40.3.2 or Article 43 of the
Constitution. Further, it was submitted, Regulations 2000 being necessitated
by the obligations of membership of the European Union, Articles 40.3.2 and 43
cannot be relied upon to invalidate any of the provisions thereof, by reason of
kernel of this case is the delegated legislation by the Minister. The question
this was a breach of Article 15.2.1 of the Constitution of Ireland. A decision
on this matter determines the major issue.
case concerns Regulations 2000, being the European Communities ( Milk Quota)
Regulations, 2000 (S.I. No. 94 of 2000). These regulations form part of a
scheme relating to milk quotas throughout the European Union. The Minister in
making Regulations 2000 did so pursuant to section 3 of the European
Communities Act, 1972 for the purpose of giving effect in Ireland to Council
Regulation (E.E.C.) No. 3950/92 of the 28th December, 1992 establishing an
additional levy on milk and milk products (as amended by Council Regulation
(E.E.C.) No. 1256/1999 of the 17th May, 1999) and Commission Regulation
(E.E.C.) No. 536/93 of the 9th March, 1993 which laid down additional rules on
the application of the additional levy.
milk quotas scheme originates in policy established over many decades. After
World War II farmers in Western Europe were managing farms in a traditional
fashion. There was a need to modernise. The European Economic Community
introduced price levels for products, including milk. Europe developed the
Common Agricultural Policy (C.A.P.), which involved annual review of common
prices in the Community. With this policy there was a rise in production and a
secure price for producers for the quota. This C.A.P. was a market policy. A
policy for a single market, managed centrally. The E.C. Treaty, Art. 33(1)
39(1)) sets out the objectives of the C.A.P. as follows:
applying the C.A.P. account must be taken of, in accordance with Article 33(2)
E.C. Treaty provides that to attain objectives (a) to (e), as set out above, a
common organisation of agricultural markets must be established. This may be
done in a variety of ways. The Community having established a common
organisation of the market, Member States are obliged not to undermine that
which is established.
C.A.P. fixes prices in some products. This is done in a variety of ways to
achieve the objectives of Community policy. The Community institutions have a
discretion in the method of achieving the objective. In
GmbH v. Hauptzollamt Berlin- Packhof
(Case 5/73)  E.C.R. 1091, at p. 1112 this was described as follows:
matters for determination on this appeal are issues of law - essentially the
validity of Regulations 2000. However, the factual and legal background to the
milk quota system is relevant and was before the High Court, and this Court, in
the affidavit of Patrick Evans, Assistant Principal Officer in the Department
of Agriculture, Food and Rural Development.
year the Commission carries out an analysis of the market situation and future
outlook with regard to each of the agricultural products governed by a common
organisation to the market. The Commission’s report of this market
analysis is followed by whatever proposals the Commission considers necessary
to provide for changes to ensure that the objectives of the regime in
individual sectors continue to be met. These proposals are known as the
“Price Proposals”. If adopted by the Council the proposals lead to
the introduction of new Council regulations or amendments to existing
regulations. From time to time the Commission makes proposals for major
reforms of the operation of the C.A.P. In 1992, the Council adopted proposals
known as the MacSharry Proposals for the reform of the C.A.P. These proposals
initially contained certain provisions for the reform of the common
organisation of the market in the milk sector. However, these were not adopted
by the Council. The proposals ultimately adopted at that time led to very
little change in the provisions governing the operation of the market in the
milk sector. In 1998 the Commission made further proposals for further major
reforms in the operation of the C.A.P. These were known as the Agenda 2000
proposals. The primary influence on the Commission in framing these latter
proposals was the likely impact on the operation of the C.A.P. resulting from
the expected enlargement of the European Union and of further trade
liberalisation arising from negotiations within the World Trade Organisation
which were due to commence in 1999. The Agenda 2000 proposals contained
proposals for significant changes in the operation of the common organisation
of the market in the milk sector.”
made reference to the agreement reached and implemented in Council Regulations
Nos. 1255/1999 and 1256/1999. He referred to article 8a of Regulation 3950/92
(as inserted by Article 1(10) of Regulation 1256/1999) and stated that this is
the clear policy of the Member States - the Regulation provided a framework
whereby Member States were given choices to ensure that milk quotas would be
attributed to active milk producers.
milk quota scheme is governed fundamentally by Community provisions. The
scheme is part of the Common Agricultural Policy and the Common Organisation of
the Market. In both broad policies and practical direction it is centrally
controlled in Europe.
regulations are binding on Member States and are directly applicable within
Member States. They are of general application. They are norms created by the
Community. They are used extensively in relation to agriculture. As they are
directly applicable they are part of national domestic law automatically: see
v. Amministrazione delle Finanze
(Case 34/73)  E.C.R., 981 at p. 990 where it was noted by the European
Court of Justice that:
being part of domestic law of the State, may be treated as instruments setting
out policies and principles for subordinate legislation.
the principles and policies are set out in the Community regulations then there
may be no role for the national parliament to determine principles and
policies. If the principles and policies are established in law in the State,
albeit in Community regulations rather than domestic legislation, then it is
open to the Minister to make the required and technically detailed statutory
law does not determine the mode of implementation of the milk quota scheme
within the national state. Ireland has the choice of mode of implementation.
That choice falls to be made in accordance with Irish public law.
relevant Irish public law is to be found in the Constitution of Ireland.
Article 15.2.1 of the Constitution gives to the national parliament the sole
and exclusive power of making laws for the State. No other legislative
authority has power to make laws for the State. To this Constitution, as part
of the general scheme of national entry to the European Community, have been
added Article 29.4.6 and Article 29.4.7. Article 29.4.6 states:
matters were analysed in
v. Minister for Agriculture
 1 I.R. 329. In that case I stated at pp. 366-367:
the principles and policies test to this case, if the principles and policies
are to be found in the European regulations then it is open to the Minister to
proceed by way of statutory instrument. If there are choices to be made within
a scheme then these choices may not be policy decisions. The exercise of a
choice governed fully by a structure established in a policy document (such as
a European regulation) is not the determination of a policy.
organisation of the milk market by regulations began decades ago and is
continuing. In Regulations 2000 the Minister, purporting to exercise powers
conferred on him by section 3 of the European Communities Act, 1972 and for the
purpose of giving effect to Council Regulation (E.E.C.) No. 3950/92 of the 28th
December, 1992 and Commission Regulation (E.E.C.) No. 536/93 of the 9th March,
1993 made Regulations 2000, being a statutory instrument. This followed on
Council Regulation (E.C.) No. 1256/1999 of 17th May, 1999 amending Regulation
(E.E.C.) No. 3950/92 of the 28th December, 1992 establishing an additional levy
in the milk and milk products sector. The policies may be seen therein. For
example, recital (2) states:
regulations have over the decades set out the policies of the milk quota
scheme. They stress, as above, that the States make decisions “in
accordance with the general principles of Community law.”
regulations, the European provisions, relating to the milk quota scheme were
referred to in written and oral submissions by the parties and copies provided
to the Court. The European provisions contain extensive principles and
policies. They are analysed fully by Fennelly J., with which analysis I agree.
principles and policies of the milk quota scheme have been determined in the
European provisions. The Minister in making Regulations 2000 was not
determining principles and policies. The Minister was implementing the
policies and principles in accordance with the general principles of Community
law. The Minister was not purporting to legislate. Consequently, there was no
breach of Article 15.2.1 of the Constitution of Ireland.
submissions of counsel in relation to this aspect of the case have been set out
earlier. Whilst there were submissions that milk quota may qualify for
protection as a property right which Member States are obliged as a matter of
Community law to protect the stress put on this aspect of the submissions was
did not prevent such right being regarded as a property right for the purposes
of Irish Constitutional law.
Community law was stated in
v. Ministry of Agriculture, ex parte Bostock
(Case C-2/92)  E.C.R
where it was held at p. 984 that:
it was argued that while
concerned the right to dispose of a quota for profit, the applicants’
case concerns a form of compulsory acquisition by the State of a quota at a
price substantially less than the prevailing market price. In such
circumstances, it was submitted, a milk quota may qualify for protection as a
property right which States are obliged under Community law to protect.
Reference was made to comments of the Advocate General in
v. Hauptzollamt Trier
(Case C-186/96)  E.C.R. 1-8529 at p. 8539
The Advocate General stated,
justification for the indecisive and case-by-case approach which the Court of
Justice tends to take in defining the criteria for protecting property
interests is based, at least in part, on this wide range of views which the
Community legislation has spawned within the legal orders of the Member States,
in particular in the field of private law.
the Court did not follow the approach of the Advocate General on the property
right issue. The Court’s judgment is based on to the intention grounding
the milk quota, the aims of the Community in the general interest. The Court
stressed the fact that such steps are necessary to achieve the aim, in the
the applicants submitted that milk quota is a property right under Irish
constitutional law. The applicants have relied upon the opinion of Advocate
General Cosmas in
v. Minister for Agriculture
(Case C-63/93)  E.C.R. 1-569 where he stated:
was made also to
Milchkontor v. Germany
(Cases 205 to 215/82)  ECR 2633 and in particular to paragraphs 30 to
that case the Supreme Court (O’Flaherty, Blayney and Barrington JJ.,
Hamilton C.J. and Keane J. dissenting) held that on the evidence the Minister
had in fact decided to make provision for development farmers such as the
plaintiffs, young farmers and disease-herd farmers. However, the Minister had
made a mistake of law in seeking to provide for these categories of farmers
other than by establishing a reserve under Article 5. The decision was
accordingly illegal, and therefore it was not a question of reviewing the
manner in which the Minister had reached his decision. The majority held that
the plaintiffs were entitled to compensation for the Minister’s mistake
of law. Thus the case may be distinguished as being grounded on the
Minister’s mistake of law.
am satisfied that in certain circumstances persons may have a greater
protection of property rights at national law than under Community law. As to
whether such a situation exists depends on the facts, circumstances and laws of
property rights under the Constitution of Ireland are enshrined in Article
43. They provide:
determine the precise right in issue under Irish law it is necessary to analyse
the nature of milk quota in relation to constitutional property rights. There
are a number of relevant factors to this analysis.
nature of the right conferred by a milk quota is to permit the holder to
produce milk up to the quantity of the quota without the payment of a levy.
Milk quotas form part of the levy scheme which is constantly subject to
changes, including reduction in the amount of quota without compensation:
Farmers’ Association & Ors. V. Minister for Agriculture
 E.C.R. 1-1809. In that case, in relation to the issue of legitimate
expectation, the nature of the constant adjustments of the scheme were addressed:
is also appropriate to consider the genesis of the milk quota. The foundation
of that right is in Community law. A milk quota is quintessentially a
Community creation. It was created and is updated regularly by Community laws.
On any analysis a milk quota is grounded in Community law. Community policy
governs the development of milk quotas, indications of future policy have
already been given. Because of this the fundamental principles of milk quotas
will continue to be governed Community wide by Community law. Insofar as
domestic law on milk quota exists, it is subject to the principles and policies
established in Community law.
is of the essence of the milk quota scheme that quota is released by those
ceasing to produce and reallocated to a producer. The facts of this case
relating to the applicants are relevant. The applicants are not producers.
They have earned monies from the quota, however. There are a number of options
opened to each of them. They are not seeking to use the quota as producers
principles of Community law do not prohibit the State treating a milk quota as
a property right provided such approach is consistent with Community law. It
must be in compliance with Community law. The domestic right in this case,
however, is itself grounded in Community law, on the facts, circumstances and
law. In analysing the rights under the milk quota scheme in Ireland the same
characterisations should apply as under Community law. The essence of the
right in this jurisdiction is not severable from the concept of the right under
Community law. The right in issue arises in a scheme created with a view to
the aims of the Community in the general interest. The nature of the right
stemming as it does exclusively from the C.O.M. does not change. Any
“right” which the applicants have is solely because of the milk
quota regulations which enable them to produce a milk quota to a certain level
with monetary consequences. It is a right created by Community law subject to
a change in the scheme.
as it may be analysed as similar to a property right it is analogous to a
licence and to Irish law in relation to such schemes. An analogy may be seen in
v. Minister for the Environment
 2 I.R. 20. The applicants were holders of taxi licences who claimed
that certain regulations made by the Minister for the Environment under the
Road Traffic Act, 1961 had had the effect of reducing the value of their taxi
licences and that this constituted an unjust attack on their property rights.
Costello J., in rejecting the applicants’ arguments, primarily on the
ground that no diminution in the value of their licences had actually occurred,
observed, at p. 28:
similar approach was taken in a consideration of the liquor licensing scheme.
(Pheasantry) v. Donnelly
 I.L.R.M. 512, the Court emphasised that the licence was granted subject
to certain limitations and conditions. Carroll J. stated:
of this line of reasoning may also be detected in cases such as
 1 I.R. 409 and
Motorists Provident Society Ltd. v. Attorney General
 I.R. 339.
nature of a domestic right such as a licence is dependent on the law, usually
statutory, which creates and develops the specific scheme. Behind the stated
scheme is a policy being implemented through the legislation by the
legislature. Such a scheme is in the public interest. It may be viewed
through the concepts of the exigencies of the common good and proportionality.
milk quota scheme at Community level is based on policy related to the market
and to aims of the Community, which policies have been stated in treaties,
regulations and cases. Policy changes and develops. Conditions and terms of
the milk quota scheme change from year to year. Indeed, this is a scheme with
a very ‘hands on’ supervision from central institutions. It is a
policy with the general aim of the common good. The applicants have an
advantage, a right, as a consequence of this policy. It is a right created in
the public interest and subject to the public interest. It is a right to which
the applicants know the terms and conditions and know of their variability. On
this analysis the scheme is constitutionally permissible.
mode of implementation of the detailed milk quota scheme in Ireland pursuant to
European provisions is a matter of choice for Ireland. The choice is governed
by Irish public law. It was not necessary that the State chose implementation
by statutory instrument. However, that choice is valid under Irish public law
as the European regulations are part of Irish law and may be regarded in the
same way as an enabling statute of the Irish legislature.
the principles and policies are set out in the European regulations then Irish
public law permits implementation by way of a statutory instrument of the
principles and policies of the European regulations. The statutory instrument
is not laying down principles and policies so it is not
Further, as no principles or policies are being determined there is no
requirement for the national legislature to legislate. Article 15.2.1 is not
being defeated as the decisions of principles and policies have been made in
the European regulations. The detailed implementation must be in accordance
with the regulations. Indeed, the practice is that the implementation of the
principles and policies of the milk quota scheme is overseen tightly from Europe.
case is not about any democratic deficit in Ireland. If there is a democratic
deficit it should be met prior to the making of the Community regulations. If
any such deficit exists it cannot be addressed after the policies and
principles have been established by the Community regulations. This is not a
case of the executive usurping the role of the legislature. Once principles
and policies have been established by Community regulations there is no role,
certainly no meaningful role, for the national legislature.
democratic system in Ireland functions through three branches of government.
However, in addition, the State is subject to European institutions and
provisions made therein. These regulations are directly applicable. These
regulations are part of Irish law as a consequence of Ireland’s
membership of the European Union. They are part of Irish law without any input
from the three branches of government.
principles and policies in relation to the milk quota were set down in the
European provisions. These regulations are directly applicable in Ireland.
They set out the principles and policies of the milk quota scheme. This scheme
is a creation of the European Union and an important part of the Common
Agricultural Policy and the Common Organisation of the Market. It is
quintessentially a market device run from central institutions.
are choices to be made within the regulations. However, these choices are the
exercise of a discretion within the principles and policies established. The
fact that there is a discretion does not take it outside the principles and
policies established - which have been established at European level. The
discretion exercised is a limited one within the principles and policies
the method chosen to implement Regulations 2000 was constitutional and not a
breach of Article 15.2.1. It was not a violation of the separation of powers
as the decisions had all been taken at European level. Indeed, to hold that
the choice left to Ireland required legislation might well diminish the status
of the national legislature; to require it to act as a body in decision making
where the decisions as to principles and policies have been made,
nature of the milk quota was established at European level, it is a creation of
the European Union. The applicants have submitted that it is a property right
under Irish constitutional law, that they are entitled to the protection of the
Irish Constitution. I am satisfied that this is not so in this case. The
nature of a milk quota is similar under Community and Irish law. Milk quota
arises as a scheme under C.A.P. and C.O.M. to regulate the European market. It
is a right to produce and sell milk to the amount of their quota. In fact none
of the applicants are producers. It is a scheme the terms and conditions of
which are constantly changing. Restructuring is an important aspect under
Community principles and policies. It is a scheme in the general interest.
Even if it is a property pursuant to the Articles of the Constitution of
Ireland, it is subject to the exigencies of the common good and principles of
proportionality, consequently also to the general aim of this scheme. Either
way the applicants have not made out a case as claimed.
have had the advantage of reading the judgment of Fennelly, J. and I agree with
his reasoning and conclusions on the issue as to whether the national rules
contained in the European Communities (milk quota) Regulations 2000 (S.I. No.
94/2000) (“The 2000 Regulations”), implemented for the purpose of
community regulations ought to have been introduced by way of primary
legislation in order to comply with the provisions of the Constitution in lieu
of the statutory instrument adopted by the Minister.
J. has very clearly set out all the factual elements and applicable law , in
particular the legal measures adopted at both community level and national
level governing the milk quota system. Therefore, it is not necessary for me
to make detailed reference to those matters and I do so only so far as it is
necessary for the purpose of addressing the particular issues with which this
judgment in concerned. Those issues are the claim made on behalf of each of
the Applicants that the 2000 regulations infringed the property rights of the
Applicants as guaranteed by the Constitution and, or alternatively, their
property rights as protected by European Community law.
this respect it was submitted on behalf of the Applicants that a milk quota
should be treated as just as valuable an asset in its own right as land itself.
In effect the Applicants were being required to sell their milk quota under the
2000 restructuring scheme to the Minister at a price fixed by him at a fraction
of its market value. It was submitted that this was equivalent to the
forfeiture of unused agriculture land at a price significantly below its market
value and was in conflict with Article 40.3.2 and Article 43 of the Constitution.
the basis on which the milk quota could be sold into the restructuring scheme
pursuant to the 2000 Regulations was a matter within the discretion of the
national authorities it fell to be exercised in accordance with national law ,
the Minister was bound in so doing to respect the property rights of the
Applicants as guaranteed by the Constitution.
was also submitted that, even if a right derived from community law does not
fall to be considered as a fundamental right within the meaning of that law, it
does not follow that such a right cannot enjoy protection of the Constitution
where it is expressly or implicitly recognised as a fundamental right.
regards European community law, it was submitted that the right to property is
one of the fundamental rights protected by community law. While it was
accepted that the Court of Justice has generally taken the view that milk
quotas do not constitute a property right so far as community law is concerned,
as in the case of
-v- Ministry of Agriculture, ex-parte Bostock
(C-2/92  ECR 1-955)
was submitted that Bostock concerned the right to dispose of a quota for profit
whereas the present case concerns a form of compulsory acquisition by the state
of a quota at a price substantially less than the prevailing market value. In
this context a quota may qualify for protection as a property right which the
member states in turn are obliged, as a matter of community law to protect. In
support for this submission the Applicants relied on the opinion of the
Advocate General in
-v- Hauptzollampt Trier
(C-186/96  ECR 1-8529 at 8541).
That opinion included the following statement at paragraph 42 “
quotas thus constitute instruments of market intervention which through the
process of the law, have become an item of property. The content of that item
of property/instrument will clearly vary according to the various national
legal systems. Some will require a closer link between the quota and the
holding or will subject the transfer of the quota to various conditions. The
quota is not thereby deprived of its character as an item of property, just as
fire arms are enriched uranium or not deprived of their character as items of
property by the restrictions on transferring them. These conditions will only
provide a means of preventing, to some extent, the creation of ‘quota
the Respondents it was submitted that the nature of rights conferred by the
milk quota on the Applicants can be no different under Irish law than under
Community law. The Respondents rely on the judgment of the Court of Justice in
R -v- Ministry of Agriculture, ex-parte Bostock
for the submission that so far as Community law is concerned a milk quota it is
not a property right. It follows, in their submission, that it cannot be a
property right under national law. Furthermore, on the facts of the case the
Applicants are seeking no more than to earn a greater profit from the milk
quota currently held by them than is allowed for by the 2000 Regulations.
These milk quotas form part of the additional levy scheme which has been
introduced for a limited period only and which has been the subject of constant
changes including reductions in the amount of quota without compensation which
has been upheld as permissible by the Court of Justice. It is not a property
right in Community law.
the alternative the Respondents argue that if the Applicants are to be
considered as having a property right in their milk quota, it can be no greater
than a property right and a licence to produce and deliver milk in the amount
of their quota. The changes made by the 2000 Regulation does not interfere
with this right since the quota must be regarded in Irish law as a licence or
permit created by law and subject to an implied condition that the law may
legitimately change the licence scheme or conditions attaching to such licence.
Accordingly, the 2000 Regulations do not conflict with either Article 40.3.2 or
43 of the Constitution.
is appropriate first of all to consider the submission on behalf of the
Applicants that the State is entitled and indeed bound to respect
constitutional guarantees for the respect of fundamental rights even where that
right is derived from Community law in circumstances where the degree of
protection to be afforded to such a right is left to the discretion of the
member state. In support of that contention, the Appellants relied on the
views expressed in an opinion of Advocate General Cosmas in
-v- Minister for Agriculture
(C-63/93  ECR 1/569)
where he held that the Plaintiff’s legitimate expectations at Community
law level had not been infringed by the actions of the Minister, but this did
not prevent “...
a requirement from been founded on principles of national law which, in an
appropriate case, may ensure greater protection in this respect than that
afforded by the general principles applicable in the community legal order
do not consider that the proposition as framed and advanced on behalf of the
Appellants needs to find its source in Community law. It seems to me that the
view expressed by Advocate General Cosmas is no more than a reflection of the
position in national law when member states exercise their legislative powers
in a matter in which they have competence and a discretion as to the legal
protection to be afforded to fundamental personal rights. In such circumstances
the Member States have the power, or as the case may be, the duty to legislate
in accordance with national law including constitutional law. One of the
primary duties of the organs of government under our Constitution including the
judicial organ of government is to ensure due observance of the Constitution,
respect for the fundamental rights which it protects and where appropriate to
defend and vindicate them, always with due regard to the precedence which the
Constitution in effect accords to Community law and its fundamental principles
by virtue of the relevant provisions of
course it is the case that a Member State when introducing legal measures at
national level, which fall within the scope of community law, such as giving
effect to a directive or regulation, must comply with community requirements
with regard to the protection of fundamental rights which is an integral part
of the community legal order. (C-222/84
-v- Chief Constable of the RUC
 ECR 1651
para. 18). This is so even if the measures taken are within the ambit of a
discretion left to the member state. Whether such a measure respects the
community protection of fundamental rights must be determined by community law
where the State enacts a legislative measure in the exercise of a discretion
conferred by community law it is not ipso facto absolved from ensuring that
such legislation is compatible with the Constitution. This is self-evident
from the terms of Article 29.4 which,
that no provision of the Constitution
laws enacted or measures adopted by the State which are
“necessitated” by the obligations of membership of the European
Union or of the Communities. The discretion allowed to the Member State maybe
so circumscribed by community law that the entire of any legislative measure
taken by it or the exercise of such discretion is “necessitated”.
This could arise where the exercise of a discretion conferred by community law
was required to be exercised exclusively having regard to the policy
considerations and objectives of the community measure and where considerations
of national law would distort the proper exercise of such a discretion.
the other hand, the discretion conferred by community law on the State when
implementing legislative measures maybe sufficiently wide to permit the State
to have full regard to the constitutional protection afforded to fundamental
rights without impinging on the full effect and uniform application of
community law. In such circumstances the State, in the exercise of such
discretion, would be bound to respect personal and fundamental rights as
guaranteed by the Constitution.
this particular case it may well be that the discretion conferred on the
Minister to cease to apply Article 7 (1) of Regulation (EEC) 3950/92 as amended
by the insertion of Article 1 (10) of Regulation (EC) 1256
of Article 8 a (b) is so circumscribed to be considered
“necessitated” within the meaning of Article 29 of the
Constitution. These concern the rules on the transfer of quotas. The position
may be otherwise in respect of the power conferred on the Minister by the
national regulations, the 2000 Regulations, to fix the maximum price per
litre/gallon for which the price of milk quotas may be calculated.
it is not necessary to venture further into these issues unless the Applicants
have established that they have a property right and that the constitutional
guarantees have been infringed as they allege.
next question which arises is whether a right being asserted by the Appellants
in these proceedings is a property right, and if so whether it has been
infringed contrary to Article 40.3.2 or Article 43 of the Constitution.
of all regard must be had to the general context in which the milk quota or
super levy system has functioned and been regulated. It is an integral part of
the Common Agriculture Policy the objectives of which are set out in Article 33
of the E.C. Treaty namely:-
34 of the Treaty authorises the community to take all measures required to
attain the above objectives and in particular measures concerning the “
of prices, aids for the production and marketing of the various products,
storage and carry over arrangements and common machinery for stabilising
imports or exports.
milk quota system is an integral part of the common organisation of the market
in the milk sector. This common organisation of the milk sector market was
introduced initially by council Regulation (EEC) No. 804/68 with a view to
guaranteeing to producers a common target price with the support of certain
basic common organisation of the market in the milk sector from its inception
on the adoption of Council Regulation (EEC) no. 804/68 and its evolution to the
present regime to which the 2000 Regulations apply has been clearly set out in
the judgment of Fennelly, J. From a general point of view it is clear that
the milk quota system as successively varied and amended was intended to
achieve the objectives of the common organisation of the market in the milk
sector and those of the Common Agricultural Policy. In particular it had
among its primary objectives that of maintaining market balance and producers
income. In a real sense it created an artificial market for milk products
since the regime was designed at all times to counteract the negative effects
of prevailing market forces in open unregulated national markets. A stable
milk sector market has benefits for the consumer and thus for society for a
whole but it can be fairly said that at least equal benefactors of the
regulation of the market are those farmers who participate in the milk quota
regime. This is highlighted by the recital in Council Regulation (EC) 1255/99
which recites as one of its fundamental objectives
ensure a fair standard of living for the agricultural community.”
by the various measures and mechanisms authorised by the Treaty, a particular
and common organisation of the market of milk as a product was constructed.
The market can be said to be particular in so far as that the conditions of
trade, including the price of milk, are fashioned by the regulatory regime to
the direct benefit of producers. The history of the establishment and
evolution of the common organisation of the market in the milk sector, as
outlined in the judgment of Fennelly, J. and elsewhere, demonstrates that the
regulatory regime did not always achieve the objectives anticipated either
because it did not have the full effect expected or because of intervening
factors such as over production of milk. The common organisation of this
market successively over the years has been subject to variations, refinements
and amendments with a view to achieving the basic objectives of the Common
Agricultural Policy. These changes have included reductions in the amount of
quota without compensation (the legality of which was upheld by the Court of
Justice in the
Farmers Association and Ors -v- Minister for Agriculture
(C-22/94  ECR 1 1809
Such constant changes are an inherent feature of the common organisation of
the market in the agricultural sector. As Mr Patrick Evans, official at the
Department of Agriculture, Food and Rural Development, points out in paragraph
9 of his affidavit “
year the commission carries out an analysis of the market situation and a
future outlook with regard to each of the agricultural products governed by the
common organisation to the market. The Commissions report of this market
analysis is followed by any proposals the Commission considers necessary to
provide for changes to ensure that the objectives of the regime in individual
sectors continued to be met
Neither the organisation nor the market which it governs can be assumed to
seems to me that when changes are effected to a regime regulating the
organisation of a product market, such as that which we have here, which are
rational to the regime and the objectives to be achieved by it, those who
participate as economic operators in that market must, in principle, accept
such changes as an inherent element in that market in which they participate
provided, at least, those changes do not affect other substantive rights
independent of the regime and do not offend against fundamental principles such
as non- discrimination.
a person’s rights or activities under such a regulatory regime were to be
abridged or limited for purposes
to those of the regulatory regime, any question of compensation which might
arise would have to be approached from a different perspective. Such could
arise, for example, where a state authority compulsory acquired portion of a
farmer’s lands for public road or public housing to the extent that his
entitlement to be attributed or ability to use a quota was reduced or
eliminated altogether. Obviously this does not arise in this case
substantive independent right which has been put in issue in this case is what
is claimed to be the Appellant’s fundamental right to the ownership of
property. No issue has arisen concerning the breach of fundamental principles
such as non-discrimination.
the Applicant’s property rights as guaranteed by the Constitution have
been breached falls to be considered in the light of the impact of the 2000
regulations on their position as persons who have been allocated a quota under
the system and the disadvantage which they claim to suffer as a result of that
is not contested, and it indeed it is part of their case, that each of the
Applicants participated for a significant number of years in the milk quota
regime and profited therefrom. It is also the case that each have profited, in
varying degrees, from a leasing of their quota in respect of milk quantities of
which they were not the actual producers.
Maher submits that the only real option to him are either to resume milk
production or to sell his milk quota under the 2000 milk quota restructuring
scheme. It was submitted that at present he is not in a position to resume
milk production as this would be very expensive. Selling the quota to Mr Ryan
is not a realistic option as he and Mr Ryan have not been able to agree on
terms. In practice, it is claimed, he cannot keep the quota for any of his
children and that the option of his children to buy an equivalent level of
quota from a future restructuring scheme is subject not only to the
availability of quota at that time but also subject to the operation of a
restructuring scheme being in place. His only option therefore is to sell the
quota under the 2000 milk quota restructuring scheme at a price less than the
of their age it is not a realistic option for them to resume milk production
and the only realistic option open to them is to sell under the restructuring
scheme at a price less than the market value of the milk quota.
Ryan it is contended is in much the same position. She could not afford at
this stage, it is stated, to return to milk production and selling into the
restructuring scheme is her only option leading again to a loss by comparison
to what she could obtain if she was allowed to sell on the open market.
common elements in the position of the three applicants is that none of them
are active producers, all have the option of resuming production of milk on
their respective farms and benefiting in full from the milk quota regime, but
because of their personal circumstances the resumption of working their farm to
produce milk is not a realistic option for them personally. In each case it is
claimed that they are realistically only left with one option to sell into the
restructuring scheme. This would involve selling at the capped price fixed by
the Minister of £1.36 per gallon. In support of the first
Applicant’s claim, evidence was tendered on his behalf by way of the
affidavit of Mr Noel Corcoran, an auctioneer, to the effect that his milk quota
had a value of £3.00 per gallon “on a sale on the open
market”. It is not in dispute that, at least at the time of the High
Court proceedings, the capped price fixed by the Minister was significantly
less than what would be obtainable on the “open market.”
their written and oral submissions the Applicants contended that it would be
unrealistic not to regard a milk quota as valuable an asset in its own right as
land itself, and that the resulting effect of the price fixed by the Minister
was analogous to “to the forfeiture of unused agricultural land at a
price significantly below market values or which seriously inhibited the right
to lease such an asset. Such a consequence was manifestly in conflict with
Articles 40.3.2 and 43 of the Constitution.”
of all it should be said that the 2000 Regulations apply to all persons who
were holders of a milk quota so to speak at the time of their entry into force
and it is not in issue that they apply to all that class of persons in
accordance with objective criteria.
to those regulations, each of the Applicants is entitled, in common with all
other holders of quotas, to retain the quotas attributed to them on resuming
production of milk. It is for reasons wholly personal to them that they will
not do so.
quotas are not being forfeited. That the Minister was entitled to make
detailed rules concerning restrictions on transfer of quota with land with a
view to implementing the community regulations is not in dispute (save
obviously as to whether it ought to have been done by way of primary
legislation or secondary legislation). In making such rules and in exercising
the discretion provided for in Article 8a(b) of Regulation 3950/92 (as inserted
by Article 1.10 of Regulation 1256/1999, the Minister was constrained by the
objective of “
that reference quantities are solely attributed to active milk producers
As Fennelly, J. points out in his judgment, member state discretionary action
is circumscribed by the objectives of the scheme authorising it and that “
the instant circumstances, Member States are authorised to act only to achieve
the aim of ensuring that reference quantities are attributed to producers
my view the adjustments implemented by the 2000 Regulations are internally
rational to the objectives to be achieved by the regulatory regime. There is
no forfeiture. There is no interference with a substantive right, such as
foregoing measures are no more than regulatory adjustments which are an
inherent part of a particular organisation of any market. Clearly no economic
operator who participates in such a market can legitimately expect it to remain
in a static or frozen form and must accept the consequences of such inherent
internal adjustment as governing his or her participation in that market.
seems to me that on any view the interest of the Applicants in their quotas,
however it is characterised, have not been substantively diminished subject
only to the remaining question which has arisen with regard to sale under the
2000 restructuring scheme. In reality it is that question which has been the
focal point of the Applicant’s complaint regarding infringement of their
property rights. In doing so they have contrasted the price available in the
restructuring scheme by virtue of the capped price fixed by the Minister and
that which would be available on what, the first Applicant’s auctioneer
referred to as, “
It may be said that “open market” is hardly an apt term since the
market in milk and hence its price is a creature of the particular market
conditions created by the regulatory regime itself.
reality it is the price which the sale of a quota, based on the maximum fixed
price per gallon, (or litres), would obtain on that particular market as a
construct of the regulatory regime, which is contested.
26 (5) of the 2000 regulations is the provision which authorises the Minister
to fix the capped or maximum payment for a quota surrendered in the 2000
Restructuring Scheme. It is also the provision which authorises the Minister
to set the reallocation price. It is not this provision which is in issue with
regard to the infringement of the Applicant’s property rights but rather
the price fixed by the Minister pursuant to that provision and which he
announced by way of departmental notice no. 94/1, namely that the maximum price
for quota to be offered under the restructuring scheme is fixed at 30p per
litre or approximately £1.36 per gallon. The uncontested evidence before
the High Court, as set out in paragraph 39 of the affidavit of Mr Evans is that
the maximum price was fixed having regard to the objectives contained in
Article 8, (the allocation of quotas to active milk producers). In this regard
Mr Evans added “
say and believe that this was a fair price taking into account the interest of
milk producers requiring additional quota and those person disposing of their
quota. Most of quota surrendered and reallocated in accordance with the scheme
will be reallocated to small and medium size producers. In most cases,
producers finance the purchase of additional quota by raising loans from
lending institutions. Many of the producers will have required quota in
previous years, similarly financed. On the other hand, persons selling their
quota under the restructuring scheme are likely to have benefited significantly
from leasing their quota over a number of years with land or under temporary
is clear that the price fixed by the Minister is internally and rationally
related to the functioning and the continuing existence of the common
organisation of the milk market with a view to achieving it’s objectives.
Non-active milk producers, such as the Applicants who have a quota and who for
reasons personal to them do not wish to or cannot resume actual production of
milk are allowed an opportunity to sell at a maximum price which takes account
on the one hand of the needs of such persons and on the others of persons who
wish to enter the system, acquire a quota or an additional quota and actively
produce milk. The so called ‘market value’ relied upon by the
Applicants is also an artificial product of the organised market in milk. The
potential opportunity to sell at the “market price” generated by
the functioning of the quota system to the exclusion of the regime now
established by the 2000 regulations (including the price fixed by the Minister
under those regulations) is not a property right. Property rights generates
notions of proprietorship and dominion. In the context of this scheme I do not
consider that the Applicant’s had a proprietary interest in the selling
at the particular “market price” which they seek to rely on. For
the reasons stated I consider that the Minister, in fixing the price which he
did, has acted within the ambit of the common organisation of the milk market
and a quota regime and if there can be said to be a market price it is that
governed by the maximum price fixed by the Minister. To hold otherwise it
would be to deny the Minister his right and duty to exercise his lawful
regulatory powers to ensure the proper functioning of the system. It would
also wrongfully attribute to the Applicant’s some proprietorial right to
determine how the regulatory system in which they have participated should be
is well established that the protection of fundamental rights is an integral
part of the community legal order which Member States must respect. The right
to property is one of those rights (C-4/73
 ECR 491,
para 14 and C-4/79
-v- Land Rhinland Pfalz
 ECR 3727
paras 17-30). Action on the part of Member States taken within the scope of
community law has to comply with community requirements with regards to the
protection of fundamental rights (C-22/84
Chief Constable of the RUC
 ECR 1651
para 18). In the Wachauf case the Court of Justice held that “
those requirements are also binding on the Member States when they implement
community rules, the Member States must, as far as possible, apply those rules
in accordance with those requirements
 ECR 2609
para19). The Hauer case made it clear that the compatibility of such measures
with the fundamental rights as protected by the community must be determined
autonomously in the light of community law alone. [at p.3744].
for the Applicants have freely acknowledged that in the Bostock case (cited
above) the Court of Justice held, in reaffirming an earlier decision, that
“the right to property safeguarded by the community legal order does not
include the right to dispose, for profit, of an advantage, such as the
reference quantities allocated in the context of the common organisation of a
market, which does not derive from the assets or occupational activity of the
person concerned ...” (at p. 984)
statement of the law still stands and nothing in the subsequent case law of the
Court of Justice including its decision in
-v- Hauptzollampt Trier
(cited above) has qualified it notwithstanding the views expressed by the
Advocate General in that case.
Applicants have argued that Bostock concerned the right to dispose of a quota
for profit whereas this case is concerned with what is in effect a compulsory
acquisition of the State of a quota at a price substantially less than the
prevailing market price. As I have already held there is no forfeiture of the
quota. It is the personal circumstances of the Applicants which prevent them
from utilising the quota attributed to them. What they are concerned with is
the price limitation on which they may sell that quota. In my view the
situation of the Applicants is governed by the Court of Justice in the Bostock
is in any case parallel jurisprudence of the Court of Justice in its approach
to the assertion of property rights in the context of the common organisation
of the market in the agricultural sector. In this approach the Court of
Justice, without declaring that the rights in question are in fact property
rights, has dealt with the issue by defining the proper restrictions which in
any event maybe placed on the exercise of property rights in the context of a
common organisation of the market. In
(C-265/87  ECR 2237
the Court stated “
the right to property and the freedom to pursue a trade or profession ... do
not constitute an unfettered prerogative, but must be viewed in the light of
the social function of the activities protected thereunder. Consequently, the
right to property and the freedom to pursue a trade or profession may be
restricted, particularly in the context of a common organisation of the market,
provided that those restrictions in fact correspond to objectives of general
interest pursued by the community and that they do not constitute a
disproportionate and intolerable interference which infringes upon the very
substance of the rights guarantee
approach has been followed in successive cases and repeated in the Demand case
where the Court stated, at paragraph 40, “
regard to more particularly to right to property, which according to the
Plaintiff in the main proceedings has been infringed, the Court held, in
paragraphs 28 and 29 of
cited above, that the regulations in question form part of a body of
legislation intended to remedy the surpluses on the milk market and therefore
correspond to aims pursued by the community in the general interest and that
the conversion into a definitive reduction without compensation does not affect
the actual substance of that right
the ensuing paragraph it stated “
must be added, regardless of the legal nature to be attributed to an additional
reference quantity, but having regard to the persistence of surpluses, a
definitive withdrawal of 4.74% of an additional reference quantity appears to
be appropriate and necessary to achieve the aim of that measure, namely an
enduring reduction of surpluses
issue being clearly governed by decisions of the Court of Justice, there is no
obligation to make a reference under the third paragraph of Article 234 of the
E.C. Treaty (C-283/81
-v- Ministry of Health
 ECR 3415,
of the three applicants is a farmer in County Tipperary. Each is entitled to a
reference quantity, commonly called a milk quota, for the production of milk
on his or her holding. Each of the applicants has for a number of years, by
reason of personal circumstances, leased either the relevant holding together
with the milk quota or temporarily leased the milk quota itself. These
arrangements permitted the applicants to continue to benefit from the milk
quota entitlement without actively engaging in milk production. They were
carried out in accordance with the milk-quota regulations in force.
situation of the applicants was changed in the year 2000. The first respondent,
the Minister for Agriculture Food and Rural Development (“the
Minister”), made new regulations. The applicants may either have to
resume active production or have their milk quotas sold for restructuring at a
price determined by the Minister. They claim that this could not be done in the
way the Minister did it, namely by regulations and without any act of the
Oireachtas. Furthermore, the applicants say that their fundamental rights in
respect of property have been infringed.
case raises in a different form one of the issues which was decided by this
v Minister for Agriculture and Food and others
1 I.R. 329 ( “
It is necessary to consider further the relationship between European Community
law and the constitutional prerogative of the Oireachtas as the sole law-making
authority for the State.
Common Agricultural Policy of the European Community (“CAP”) is
one of the foundations of the European Community. Although it is becoming
normal to refer to the European Union, all the legal issues in the present case
arise under the Treaty Establishing the European Community ( The EC Treaty). I
will use the new numbering and form of numbering introduced by the Treaty of
Amsterdam. Article 33EC states the objectives of the CAP, which include
improved conditions of production, fair standards of living, stable markets and
reasonable prices for consumers. It also provides that account should be taken
particular nature of agricultural activity, which results from the social
structure of agriculture and natural disparities between the various
preferred mechanism for attainment of the objectives of the CAP is, as
envisaged by Article 34EC, the common organisation of the market
individual product categories. A common organisation of the market
include all measures required to attain the objectives set out in Article 33,
in particular regulation of prices, aids for the production and marketing of
the various products, storage and carryover arrangements and common machinery
for stabilising imports and exports.”
37EC reserves the power to establish a common organisation of the market to the
Council acting on a proposal from the Commission.
basic common organisation of the market in milk products was laid down by
Council Regulation (EEC) No 804/68 of 27 June 1968 (OJ English Special Edition
1968 (I), p. 176.) on the common organisation of the market
milk and milk products. Its aim was to guarantee to producers a common target
price, supported by certain intervention measures.
system failed, however, to resolve the more or less permanent market imbalance
amounting to structural over-supply. The Community responded
introducing the so-called co-responsibility levy, via Council Regulation
of 17 May 1977
1977, L 131, p.60.) The levy was payable by producers at rates varying from
1.5% to 4% of the target price on all milk sold. (See Case 179/84
 ECR 2301.) Still the surpluses persisted.
very serious situation furnished the setting for the introduction of what is
commonly called either the super-levy or the milk quota system. Council
Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) 804/68
...... of 31 March 1984 ( Regulation 856/84 ) commences by reciting that the
“market in milk products in the Community is suffering from structural
surpluses as a result of an imbalance between supply and demand...”
In particular, it records in the third recital in the preamble that:
essentials of the new regime, as it existed up to 1987, are succinctly
summarised, and described as “revolutionary,” in the judgment of
Murphy J in
v Minister for Agriculture
1 I.R. 356, at page 362 (
Regulation 856/84 contains the basic elements of the scheme and Council
Regulation (EEC) No 857/84 of 31 March 1984 adopts, as its title states
rules for the application of the levy referred to in Article 5c of Regulation
(EEC) No 804/68 in the milk and milk products sector.”
The core of the new system was the establishment of a structure of reference
quantities at Community, national and producer level. The additional levy or
super-levy was designed to penalise excess production by requiring the producer
to pay an amount per gallon, the "super-levy" on any excess such that he would
incur a loss. Hence the need to relate milk quota to landholding. In the
result, the so-called milk quota came to be perceived, rightly or wrongly, as a
species of property right enjoyed by those producers who met the initial
conditions, or some later adjustments, to be awarded one. The regime was
originally introduced for a five-year period, but has been renewed for
successive periods. At present it is due to expire on 31 March 2008, but
subject to a specific undertaking by the Council to conduct a mid-term review
with a view to allowing it to run out after 2006.
is in controversy in the present case is the aspect of the regime that
regulates the relationship between the ownership of agricultural land and the
milk quota derived from it. The applicants complain of changes to the rules
regarding the transfer of holdings with milk quota attached and the rules
regarding temporary transfer of milk quotas. These changes followed the
adoption of Council Regulation (EEC) No 3950/92 of 28 December 1992 but
especially of Council Regulation (EC) No 1256/99 of 17th May 1999. I will
consider these changes in detail later in this judgment.
present case centres essentially on the exercise by the State, by means of
secondary legislation, of a number of options or discretions conferred by the
Community rules. It is important to note from the outset that it is not
suggested, in any respect, that the State has committed any infringement of
Community law by exceeding the scope of the discretion conferred by those
rules. The national rules are contained in the European Communities (Milk
Quota) Regulations 2000 ( S. I. No. 94 of 2000) (the “2000
Regulations”) made in exercise of the powers conferred by section 3 of
the European Communities Act 1972. The 2000 Regulations make changes in the
existing regime insofar as it attaches milk quota to land, make provision for
the adding of milk quota so detached from land to the national reserve and
provide for the phasing out of the system of temporary transfers.
first-named applicant owns 130 acres of land, of which 36.17 acres have a milk
quota of 28,170 gallons. The latter was awarded to him in 1990 under the
so-called “Mulder” arrangements. The latter point in no way
affects his legal position, except that the “Mulder” quotas were
awarded to milk producers who had gone out of production temporarily under a
Community scheme and this may explain why this applicant has not for some years
been actively engaged in milk production.
wishes to keep his land with milk quota until one or more of his children, now
aged 14 and 16, are of an age to enter dairy farming if they so wish. He
objects to being compelled, as he sees it to sell his milk quota to the
Minister at “a pittance” i.e. the price likely to be fixed by the
second-named applicant jointly owns with his wife 77 acres with a milk quota of
24,404 gallons. He is 76 years of age. For reasons of ill-health he has for
some years, in part leased his lands with milk quota and, for the remainder
(9404 gallons), has temporarily leased the milk quota to the local co-operative
third-named applicant is the owner of twenty acres of land with milk quota of
11,844 gallons. She has for a number of years availed of the right of temporary
transfer of the entire of this milk quota to the local co-op. She cannot
continue the temporary transfer without the consent of the Minister. She sees
her only options as being the resumption of milk production or sale into
restructuring on the Minister’s terms.
applicants say that they are placed at a disadvantage by being prevented from
leasing land and milk quota and/or temporarily leasing milk quota (where
relevant) at open market rates. In particular the Minister has indicated a
price for the sale of milk quota into restructuring of £1.36 (said to be
about to descend to £1.00) per gallon as against an open-market price of
£3.00. This, they claim, amounts to a regime of compulsory purchase of
their milk quota.
applicants applied for judicial review of the 2000 Regulations. Mr Patrick
Evans, of the Milk Policy Division of the Department of Agriculture gave on
affidavit a very comprehensive account of the milk quota system. The matter was
heard by Miss Justice Carroll, in the High Court. The applicants argued that
the aspects of the 2000 Regulations complained of, to the extent that they
consisted of the exercise by the State of options, represented the making of
policy choices and could not, therefore, be considered to be necessitated by
membership of the European Communities for the purpose of Article 29.4.7 of the
Constitution. Consequently, they could be enacted only by primary legislation.
The right of a holder of milk quota to sell his land with quota attached could
not be restricted or abolished by secondary legislation. Accordingly, the 2000
Regulations were introduced in contravention of Article 15.2.1 of the
Justice Carroll dismissed the claim of the applicants. She held that
Minister was entitled to make the decision that quotas should go to active milk
producers which was in accordance with the stated policy under the milk quota
applicants have appealed to this Court. The say principally that the learned
trial judge erred in law in holding that the Minister was merely executing
principles and policies laid down in Community regulations. They state rather
that, in making the choices which he did, he made decisions which themselves
involved policy choices which could be made only by primary legislation passed
by the Oireachtas. They also state that the 2000 Regulations infringe their
property rights as guaranteed by the Constitution and/or by Community law.
applicants claim that the 2000 Regulations are not necessitated, principally
because they consist of the exercise of choice, by the obligations of
membership of the Community and secondly that they are not within the ambit of
principles and policies laid down in the Community regulations.
seems to me more logical to approach these two questions in the reverse order.
Firstly, do the 2000 Regulations represent a valid exercise by the Minister of
the powers delegated to him considering the Constitution, the European
Communities Acts and the Community regulations? If they do, they are permitted
and valid and the question of whether they are necessitated does not arise.
applicants submitted that Regulation 1256/99 allowed Member States such broad
discretion that it involved for this State the making of significant choices in
respect of fundamental principles and policies. It amounted to the return of
broad measures of legislative power to the Member States. Wherever Community
law does not lay down common rules as part of the common organisation of the
market in milk and milk products, the recent case-law of the Court of Justice
shows that the national authorities
in accordance with the procedural and substantive rules of their own national
Dominikanerinnen-Kloster Altenhohenau v Hauptzollamt Rosenheim
 ECR I- 4069, paragraph 26; Case C-292/97
and others v  ECR I-2737). In any event, at a general level, national
measures implementing a regulation provided for by the regulation itself are
by the public law of the Member State in question.”
Eridania v Minister for Agriculture and Forestry
 ECR 2749, paragraph 33).
such a situation and, in the light of the decision in
15.2.1 of the Constitution requires that delegated legislation should not stray
beyond the principles and policies laid down in the parent act. The
constitutional constraints on secondary legislation could not be dispensed
with. The applicants also relied on a range of decisions of the High Court and
of this Court.
applicants lay special emphasis on the important policy choices made by the
Minister in breaking the link between land and milk quota. They contest the
existence of any Community policy to favour active milk producers. Article 8a
confers a discretionary power only. The exercise of the latter must be
subjected to the test laid down by this court in
Press v An Comhairle Oiliuna
I.R. 381. The relevant principles and policies must be set out in the
governing statute. In the present instance, they are not set out in the
Community Regulations so that the 2000 Regulations represent an impermissible
exercise by the executive of legislative power and are, for that reason, invalid.
the 2000 Regulations consist of the exercise of options or the making of
choices of a fundamental kind. Even though the occasion for their making
derives from Community legislation, they are not mandatory or obligatory.
Hence, they are not
by the obligations of membership of the European Union or of the
they do not benefit from the exemption conferred by Article 29.4.7 of the
Constitution from scrutiny for any infringement of its other provisions, in
particular Article 15.2.1. In this context, the Court was invited to consider
the change made in the course of the legislative process leading to the passing
by the people of the necessary constitutional amendment to permit accession by
the State to membership of the Community from
in the wording now found in Article 29.4.7 of the Constitution.
the Court in
upheld the constitutionality of the European Communities Act, 1972, in
conferring wide power on the State to implement provisions of Community law by
using the forms of delegated legislation, the judgment of the Court in that
case clearly envisaged circumstances in which an exercise of that power could
be held to be unconstitutional. The applicants took issue with the judgments in
and certain High Court judgments, as well as the judgment of the learned trial
judge insofar as they gave a broad meaning to the expression,
the applicants fail in all of their arguments aimed at impugning the validity
of the 2000 Regulations, they say that the latter constitute an improper
invasion of their rights of property, specifically in their rights in respect
of milk quota. As they represent the exercise of discretion, they are not
"necessitated" and not protected by Article 29.4.7 from other provisions of the
Constitution. They fairly concede that the case-law, specifically Case 2/92
v Ministry of Agriculture, ex p. Bostock
ECR I- 995, ("Bostock") is against them. Milk quota is not considered by the
Court of Justice to be a property right. They cite a recent opinion of Advocate
General Ruiz-Jarabo Colomer (Case C-186/96
v Hauptzollamt Trier
ECR I-8529) to suggest that change is possible. They also say that Community
law does not prevent national law from offering a higher level of protection
v Minister for Agriculture
 ECR I-569, Advocate General Cosmas’ Opinion, paragraph 60, and
v Minister for Agriculture
 I.R. 22.)
sole purpose of the 2000 Regulations was to give effect to Regulation 3950/92
and Regulation 1256/99. These have general application in Irish law by virtue
of Article 249EC. Their role is analogous to an act of the Oireachtas and all
relevant principles and policies are to be found in this basic enabling
legislation. The 2000 Regulations are thus
powers conferred by section 3 of the European Communities Act, 1972 (“the
act of 1972"). They were, in any event, necessitated by the obligations of
membership of the European Community.
respondents contest, in particular, the applicants’ claim that a large
body of legislative power has been returned to the Member States. All national
rules must be approved by the Commission. In practice, they are always
discussed in advance. The national rules at issue in this case are detailed
rules and make limited permissible variations in the common organisation of the
exceptions to the rule of the transfer of land with milk quota existed from
1984 and have been progressively extended. The changes made by Regulation
1256/99 were only the last in a series of exceptions. The Minister was
constrained by the very precise objective set out in Article 8a, i.e.,
aim of ensuring that reference quantities are solely attributed to milk
as well as the general principles of Community law. Furthermore, the Minister
has no power to determine the destiny of milk quota which he permits not to be
transferred with land. It must, in accordance with Article 7(1), be added to
the national reserve.
restructuring has long been expressed as an objective of the Community
regulations, as can be seen, in particular, from Article 8 of Regulation
3950/92 Restructuring has existed before and independently of changes in the
rules regarding the transfer of quota.
State has not exercised the option not to implement temporary transfer, as
permitted by Article 6(2) of Regulation 3950/92 . It is accordingly
implementing the mandatory obligation expressed in Article 6(1) to introduce a
temporary leasing scheme within the scope of very limited options. Reliance is
placed on the definition of producers to show that the Minister , in Regulation
27(3) was implementing Community policy. The Applicants are not producers.
main issue is whether the 2000 Regulations represent impermissible and invalid
legislation, taking the form of a statutory instrument, in circumstances where
primary legislation is required. The Constitution, the act of 1972 and the EC
Treaty all have a bearing on the issue. It is also necessary to consider the
principal authorities, especially
enormous body of subordinate laws is, nonetheless, constantly passed by means
of statutory instruments, regulations and orders. This type of delegated
legislation is, by common accord, indispensable for the functioning of the
modern state. The necessary regulation of many branches of social and economic
activity involves the framing of rules at a level of detail that would
inappropriately burden the capacity of the legislature. The evaluation of
complex technical problems is better left to the implementing rules. They are
not, in their nature such as to involve the concerns and take up the time of
the legislature. Furthermore, there is frequently a need for a measure of
flexibility and capacity for rapid adjustment to meet changing circumstances.
Without suggesting that a different approach is required for the present case,
by reason of the fact that it concerns the implementation of European Community
legislation, it is obvious that the adoption of detailed rules regulating
production and trade in agricultural products is a particularly notable example
of the exigencies of this type of law-making. There is, for example, an obvious
need to be able to react rapidly and often severely to sudden trading problems
or so as to protect human and animal health in the face of the outbreak of
the other hand, it is obvious that secondary legislation largely by-passes
parliamentary scrutiny and the democratic process. Thus, the courts have found
it necessary to strike an appropriate balance between the protection of the
exclusive law-making domain of the Oireachtas and the proper function of the
executive. The distinction is a functional one, aimed at designating the proper
bounds of legislative and executive power. Delegated legislation is permitted
and does not infringe Article 15.2.1, provided that the principles and policies
which it is the objective of the law to pursue can be discerned from the act
passed by the Oireachtas so that the delegated power can only be exercised
within the four walls of the law. This serves the double purpose of preserving
the legislative prerogatives of the Oireachtas and assuring those affected by
orders or regulations that the courts may be asked to police the bounds set by
the law and, if necessary, to declare them to be
powers of the Minister or other delegated authority.
passage contains a proper emphasis on the essential part of the Oireachtas in
preserving and assuring the democratic nature of the State. Article 15.2 also
performs the function, recalled by Barrington J in his dissenting judgement of
balance between the rights of individual citizens and the exigencies of the
As to the application of the test of principles and policies, Denham J went on
to point out that:
case depends on its own facts and requires that the principles and policies
....be set out in the legislation.”
the case in question, it was held that the Aliens Act, 1935 failed the test,
since it contained no discernible principles or policies at all. The test,
however, remains intact. It provides the basis for deciding whether a given
legislative act abdicates the exclusive authority of the Oireachtas. It is
intrinsic to the test, and is important in the present case, that the named
executor of delegated authority has power and discretion to make decisions
within the four walls of the governing statute. For example,
Government of Ireland
I.R. 555 shows that a discretionary power may, in certain circumstances, be so
expressed that the decision whether to exercise it at all may be postponed
embarking on a consideration of the relevance of
to the present case, it is necessary to recall the changes to the
constitutional and legal structure of this State resulting from membership of
the European Communities and later the European Union and to refer to the
provisions of the EC Treaty which are principally concerned. The import of
cannot be considered in isolation.
first important constitutional provision is Article 29.4.3 introduced by the
Third Amendment to the Constitution in 1972 under which it was provided that
become a member of the .........European Economic Community.”
Article 29.4, paragraphs 3, 4, and 5, respectively authorised the State by
means of successive constitutional amendments to ratify the Single European Act
in 1987, the Treaty on European Union (the Maastricht Treaty) in 1992 and the
Treaty of Amsterdam in 1997. It emerges clearly from the judgment of this Court
v An Taoiseach
 IR 713 that the legislative capacity of the Council (and, since then,
increasingly the European Parliament as co-legislator) seriously encroaches on
the legislative sovereignty of the State.
29.4.7 provides in addition that:
Community regulations giving effect to the common organisation of the market in
milk and milk products are "first pillar Community measures, i.e. they were
adopted under the EC Treaty. Accordingly, it is unnecessary, in the present
case, to have regard to any acts or measures adopted under the Treaty on
European Union. Furthermore, it is probable that the authority to ratify the
respective Treaties, in particular, the EC Treaty provide sufficient basis, in
Community law terms, for the full effect in Irish law of directly applicable
Community measures, even without the additional protection provided by Article
first two paragraphs of Article 249EC provide:
regulations are directly applicable; their entry into force and their
of any measure adopting
v Amministrazione delle Finanze dello Stato
ECR 99, paragraph 23.) As Denham J. explains, in different words, they do not
require any national act of implementation for their binding effect. Indeed,
where they are, in their own terms, capable of being directly applied, it has
been said that:
Member States must not adopt or allow national institutions with a legislative
power to adopt a measure by which the Community nature of a legal rule and the
consequences which arise from it are obscured.”
however, as frequently happens especially in the case of a common organisation
of the market, regulations, in addition to being directly applicable, allow
Member States discretion in their implementation, some national act of
implementation or transposition will be required. Then the principle cited by
the applicants from the judgment of the Court of Justice in
comes in. The Court there, at paragraph 34 of the judgment, said:
the last sentence refers to the right of the courts of the Member States
refer questions of interpretation to the Court of Justice pursuant to Article
234EC (then Article 177 of the Treaty).
was observed succinctly by Lord Hoffman,
law is indifferent to the internal arrangements of power within a member state."
v Secretary of State for Heath  1 All ER, 850 at 860)
passages must be read with those, also cited by the applicant, from the more
recent case-law on milk quotas. It will suffice to quote the following from the
applicants claim that a broad measure of competence has been returned to the
Member States will be examined on its merits by reference to Regulation 3950/92
and Regulation 1256/99. However, Member States have limited scope for
independent action when dealing with milk quotas. They cannot take action to
grant them to fill a gap left by the amendment of a Community Regulation (Case
v MAFF esp. Eckroyd
 ELR I - 2741.) I believe it is possible to say that the passages just
quoted do not give any support to the applicants' claim that Member States act
autonomously in making choices when implementing Community rules. They
establish the following propositions.
in the absence of common rules, or where Community law authorises such action,
Member States may adopt their own national rules. Secondly, by virtue,
10EC (formerly Article 5 of the Treaty), Member States
ensure the implementation of Community regulations and take no action to
undermine them. Thirdly, in doing so, they are implementing Community law, with
the result that general principles of Community law, notably the principle of
equal treatment but also the fundamental rights protected in the Community
legal order must be respected. Fourthly, Community law is indifferent as to the
national method of implementation ( subject to the principle of effectiveness
as explained in the passage from
as well as the principle of equivalence, i.e., that rights under Community law
are treated no less favourably than those granted by national law). For present
purposes, that indifference relates to the choice between legislation and
summary, Member States, acting within the framework of Community regulations,
exercise powers or discretions which are conferred on them for the furtherance
of the objectives of the scheme in question. Community law does not require any
particular form of implementation. That is a matter for the legal system of the
Member State concerned, except that the implementation must not have the effect
of impeding the effectiveness of Community law.
view might be taken by the Court of Justice regarding the direct effect of
treaty provisions or acts of secondary legislation, section 2 was clearly an
essential part of the machinery for giving effect to those provisions as a
matter of Irish law, in view of
is the effect of section 3(1) which is in issue. The applicants accept, as they
must, that the act of 1972, as was found in
is compatible with the Constitution. However, they rely on the reiteration in
the judgment of the Court, on that issue, of the principle that legislation
must be so interpreted as not to be in conflict with the Constitution, in
particular that an act cannot be interpreted so as to invade the exclusive
legislative domain of the Oireachtas. Finlay C. J., delivering the judgment of
the court stated at page 352:
early part of this passage might be read as implying that, in some
circumstances, the implementation of Community law is
by reasons of the demands of Community law itself, carried out by regulation.
It is clear, however, from the second quoted paragraph that this reading is not
what was intended; in any event, as shown above, Community law makes no such
demands. The issue of “necessity” is appropriately considered by
reference to the content, not the form, of the instrument.
it is perfectly possible for the courts, at least at the level of general
principle, to apply the principles and policies test laid down in the case-law
on Article 15.2.1 without any conflict with Community law. That test is
designed, as is clear from the judgment of Denham J in
to protect the democratic basis of government, a principle which finds
expression in the EC Treaty and in the judgments of the Court of Justice.
Article 6 of the Treaty on European Union records that:
second part of the decision in
deals with the application of the principles and policies test to the
implementation by means of a regulation made under the act of 1972 of
Community law in the form of a Council directive. Blayney and Denham JJ
delivered individual judgments, with which Finlay C. J. and O’Flaherty
and Egan JJ agreed.
two directives at issue concerned the prohibition of use of certain
animal-growth hormonal substances. The State had included respectively a power
to search farms and an extension of the time fixed by statute for commencing
prosecutions of offences
ministerial implementing regulations. Blayney J decided that the directives
could not be implemented without the first provision and that an extension of
the time for prosecution was necessary. He reiterated the principle of the
supremacy of Community law over national law and held that the national
measures in controversy were
by the directive.”
His determination of the issue followed from an analysis of Community law
The respondents argued in this case that, on a true analysis of the Community
directives, Ireland as a Member State had discretion and was not bound to adopt
the particular implementing measures and that the Court still found them to be
That is, in my view, to miss the point and to confuse the interpretation of
Article 29.4.7 of the Constitution with the interpretation of Community law.
The fact is that, rightly or wrongly, Blayney J held that the provisions in
question were required by
Denham J shortly expressed the same opinion (page 363). This result is the same
as would have followed if questions of interpretation of the relevant
provisions had been referred to the Court of Justice and the latter had ruled
that the adoption of the two provisions in controversy constituted
Community-law obligations of the State.
should say that I fully agree with the judgment of the Chief Justice in his
and with his conclusion that none of the measures impugned in this case
by the obligations of membership.”
also agree, consequently, that the essential question is whether the Minister
was in breach of Article 15.2.1 of the Constitution. If he was, the 2000
Regulations will be invalid, since, unlike those involved in
they are not "necessitated".
will deal, firstly, with the change in the rules linking land and milk quota.
From the outset, the Community rules envisaged that, in general, agricultural
land used for milk production would be transferred only with the relevant milk
quota attached. The original provision was Article 7(1) of Regulation 857/84,
were differences between Formula A (where the milk quota is allocated to
producers) and Formula B, adopted in Ireland, (where it is allocated to
purchasers). However, rules were formulated to ensure that the same rules
would apply where Formula B was adopted. (See Commission Regulation (EEC) No
1374/84, Article 5 and Murphy J in
may be noted that this provision was not founded on any explicit reasoning to
be found in any of the recitals in the preamble to the regulation. The
respondents’ argument that there were significant exceptions from the
beginning to the rule of transfer of land with milk quota is not convincing.
Article 7(3) merely provided part of the reference quantities might be added to
the national reserve. Article 4, which was also invoked, authorised Member
States to compensate milk
undertaking to discontinue milk production definitively”
to add the amounts so freed to the national reserve. Ireland did not, in fact,
exercise these options. I am similarly unconvinced by a number of other
examples of special exceptions which were cited from the years 1985 to 1987.
It seems clear that the Community, as of 1984, opted firmly for a policy that
land could be transferred only with the milk quota attached.
857/84 was repealed by Council Regulation (EEC) No 3950/92 of 28 December 1992
establishing an additional levy in the milk and milk products sector. The
fourteenth introductory recital to that Regulation states:
the event, Article 7 was re-enacted by Regulation 3950/92 with some changes
which are immaterial to the present case. Article 8 of Regulation 3950/92
provide for some other limited exceptions such as transfer to the national
reserve when land is transferred for improvement of the environment. It also
authorised Member States, with a view to restructuring of milk production, to
permit transfer of reference quantities without the corresponding land
the aim of improving the structure of milk production at the level of the
Generally, however, the link between land and milk quota was maintained.
prohibition on sale or transfer of land without milk quota, because it was
effected by a regulation was, of course, directly applicable in Irish law and
needed no further enactment to give it effect. It was, nonetheless, reinforced,
as the applicants point out, by penal provisions in Regulation 12(1) of the
European Communities (Milk Levy) Regulations, 1985 (S. I. No. 416 0f 1985) and
by Regulation 4 of the European Communities (Milk Quota) Regulations
(S. I. No 266 of 1995)( the “1995 S.I.”)
Regulation (EC) No 1256/99 of 17 May 1999 amending Regulation (EEC) No
Regulation 3950/92 ....... authorised radical change in the rules regarding the
maintenance of the link between land and milk quota on sale or transfer.
changes in the rules made by the Minister, the 2000 Regulations, regarding
attachment of land to milk quota commence with Regulation 5(1) which provides,
in relevant part:
amounts to a clear and explicit decision by the State to avail of the power
given by Community law to break the link between land and milk quota. There are
a number of exceptions. The applicants say that both by deciding to exercise
that option and in choosing the exceptions, the Minister was impermissibly
is crucial to this issue to discern whether, in making this decision, the State
is pursuing a Community objective or, recalling the applicants’
contention that power has been returned to the Member States, a purely national
one. The power not to apply the provisions of Article 7(1) is given by Article
8a, inserted by Article 1(10) of Regulation 1256/99. That Article permits
Member States to take such action
the aim of ensuring that reference quantities are solely attributed to active
reflects policy expressed in the fourth recital in the preamble:
believe that this recital and the general scheme of the milk quota regime
demonstrate that the State is acting as a delegate of the Community in making
the choice to separate land and milk quota. As is shown by the case-law, the
fact that Community regulations authorise the Member States to exercise
discretion does not take action of the latter kind outside the scope of the
Community regime. Member State discretionary action is circumscribed by the
objectives of the scheme authorising it. The milk quota is itself a creature
entirely of Community law. Member States are bound, by virtue of Article 10EC
(formerly Article 5 of the Treaty), to ensure that Community law is
implemented; national rules must comply with the general principles of
Community law and the particular rules which apply. In the instant
circumstances, Member States are authorised to act only to achieve the aim of
ensuring that reference quantities are attributed to producers. Any action by
the State in pursuit of a an unauthorised objective would be susceptible of
challenge, by means of an infringement action pursuant to Article 226EC in the
Court of Justice as being contrary to the terms of Regulation 1256/99.
applying the principles and policies test on the basis that Regulation 1256/99
stands in the place of an act of the Oireachtas, I believe that the State, in
adopting Regulation 5 of the 2000 Regulations was exercising a power expressly
conferred and for the purpose for which it was given.
the light of that conclusion, it is probably not necessary to give separate
consideration to the exceptions. They consist of modifications to the departure
from the link of land and milk quota. However, they were argued as constituting
distinct legislative choices.
principal exceptions which have been canvassed in argument before the Court are
those in Regulations 6, 7, 9 and 10. It will be sufficient to refer to these
for the purpose of evaluating the extent and the nature of the legislative
power exercised by the Minister in making the 2000 Regulations.
6 provides that the “
milk quota attached to a holding shall be transferred”
the case of
“sale, lease, gift or inheritance by a person to a relative of that
term defined in
6(2). It includes spouses, parents, children, brothers, sisters, grandparents,
grandchildren, uncles and aunts. It is suggested that this also involves the
making of a legislative choice not contemplated by Community law. It is not
clear that the applicants have any independent interest in challenging this
provision. It would not benefit them if it were annulled. Their claim is in
reality that the Minister did not have the power, by regulation, to end the
link of land to milk quota in the event of sale or transfer. For what it is
worth, however, I believe that this exception would be held to fall comfortably
within the power conferred on the Member States by the regulation. I have
already referred to the inclusion of
social structure of agriculture”
the considerations relevant to the common agricultural policy. If it is correct
to say that Member States are authorised by Community law to restrict or end
the rule that milk quota transfers with land, there is no basis – and
none has been suggested – for saying that Community law would regard it
as impermissible to make an exception for certain defined family transactions.
The wording of Article 7(1) has at all times included
the cases where the link would apply. There is enough evidence in the case-law
cited to the Court ( Case C-313/89
 ECR I- 1647; Case C-44/89
Deetzen v Hauptzollamt Oldenberg
 ECR I-5119
to show, not surprisingly, that the Court of Justice interprets provisions of
Community law so as to favour family transactions. As already noted, Article
33EC requires account to be taken of
social structure of agriculture,”
which unarguably includes the family basis of farm ownership. The relaxation
of the new rule to favour family transactions accords with that aim.
virtue of Regulation 7, where a producer (or his legal personal representative)
can obtain a certificate from the Minister, inter alia, that he has produced
milk on the holding for a period of three years prior to the milk quota year in
which the transfer is proposed, he may continue to transfer land with quota.
This patently favours the active milk producer and accords with the objective
of Article 8a and the sixth recital. This provision also demonstrates that
removal of the land/milk-quota link is by no means as draconian as has been
suggested. It remains open to each of the applicants, as they acknowledge, to
resume production of milk on their own land and by this means and to regain the
right to sell their land with milk quota.
9 permits the purchase of land by a lessee of land and quota to be made with or
without milk quota on the expiry or earlier determination of a lease. The
lessee must, himself be a producer. This also favours the active milk producer.
10 permits the renewal of an existing lease on its expiry, in which case the
milk quota is transferred to the lessee for the term of the renewal. This
provision cannot be the subject of complaint. Apart form favouring milk
production, it represents the sort of fine regulatory choice which fits easily
within the scope of action which can be taken without infringing Article 15.2.1
of the Constitution.
should explain the purpose of the detailed consideration I have given to the
Community provisions. It has never been contested that the 2000 Regulations
were, in Community law terms, within the scope of the discretion available to
the State. Therefore, I am not considering an issue of Community law. If I
were, the court might be obliged to refer to the Court of Justice. I am
judging, rather, whether the scope of the discretion conferred by Community law
in regulations which become part of national law was so independent of
principles and policies laid down by those Community regulations, as to place
the State in conflict with Article 15.2.1 of the Constitution.
this point, it is also necessary to consider the Communit
regarding temporary transfer of milk quotas. They, to some extent, also involve
separation of land and milk quota. Temporary transfers were first authorised
by Council Regulation (EEC) No 2998/87 of 5 October 1987 amending Council
Regulation 804/68 ... This recites that
has shown that certain producers do not intend, over a 12-month period, using
up all their individual reference quantities
Member States should be authorised to place at the disposal of other producers
for the 12-month period in question, the quantities which are not going to be
used by other producers who are entitled thereto;”
this premise, Article 1 inserted a new Article 1a in Regulation 804/68 as
Article 6 of Regulation 3950/92 renewed the power to permit temporary transfer,
transforming it, however, into an obligation, and adding that Member States
“determine to what extent transfer operations may be renewed.”
(1) and (2) ostensibly preserve the right of a milk quota holder to make a
temporary transfer of
part of his or her milk quota as he or she does not intend to use during that
milk quota year.”
Paragraph (3), however, denies this right where the holder has
made milk deliveries to a purchaser, or sold milk or milk products directly for
consumption, during any three successive milk quota years since 1 April 1997
and who made a temporary transfer of his quota under Regulation 16 of the
Regulations of 1995 or under paragraph (2) during each of the 3 milk quota
years in question..”
(4), on the other hand permits a person who, likewise, has
“neither made milk deliveries to a purchaser, or sold milk or milk
products directly for consumption,”
but has leased the land and milk quota for the same period to make a temporary
transfer but for one year only.
(5) enables the Minister, on application, to approve a temporary transfer for
one further milk quota year only by a person affected by paragraph (3) or
(4), where exceptional circumstances have caused the failure to deliver milk.
respondents have made it clear that the State has not exercised the option
granted by Article 6(2) of Regulation 3950/92 not to implement Article 6(1).
Consequently, it is said, the State was obliged by Article 6(1) to
... temporary transfers of individual reference quantities which producers who
are entitled thereto do not intend to use.”
it is further argued that the applicants do not come within the definition of
producer. That term is defined in Article 9 of Regulation 3950/92 as a
or legal person ...... farming a holding within the geographical territory of
respondents rely on the decision of the Court of Justice in Case C-152/95
v Préfet de l’Aisne
ECR I-5429. That case dealt with the identical definition in Article 12(c) of
Regulation 857/84, where farmers, who had ceased milk production, (no
explanation for this cessation appears in the report) sought compensation under
a Community scheme for
undertaking to discontinue production definitively. The Court of Justice held
had not been given an independent meaning for the purposes of the rules on
discontinuation of milk production.”
21). It held (paragraph 23):
Court, in that judgment recalled its judgment in Case C-341
 ECR I-25, where it had said:
status of producer is accorded to any person who manages a holding, that is to
say a set of production units ... and sells or delivers milk or milk
consideration of this issue involves the interpretation of a provision of a
Community regulation, the issue of the obligation of this Court to refer
questions to the Court of Justice can arise. For the moment, I will say only
that, in my view, the meaning of the term
is quite clear. None of the applicants come within that definition. Therefore,
they cannot rely on Article 6(1) of Regulation 3950/92 to claim the right to
continue to make temporary transfers of their milk quotas. Accordingly, the
Minister, in denying them that right by the terms of Regulation 27 was not
making a choice between different options conferred by Regulation 3950/92. He
was not entitled in Community law to grant the right to make temporary
transfers to persons who were not producers. That is, of course, a conclusion
of Community law which might have to be referred for preliminary ruling.
this Court, as a
.... against whose decisions there is no judicial remedy under national
not obliged by Article 234EC to
a question of interpretation to the Court of Justice, unless
decision on that question is necessary to enable it to give judgment.”
is the situation which pertains in the present case, as I will explain.
has been seen, Article 6 of Regulation 3950/92 authorises Member States to
to what extent transfer operations may be renewed.”
The State was, on any view, entitled to determine that the right to make
temporary transfers should be permitted for one further year only, unless
exceptional circumstances were demonstrated. In making this decision, the
Minister acting on behalf of the State was exercising a discretion conferred by
Community regulations and for one of the policy reasons clearly stated by
Community law. This is supported by the fourth recital in the preamble to
Regulation 1256/99. It expresses the view that Member States
have the possibility to decide in accordance with the general principles of
Community law that, in cases of substantial under use
milk quota ]
over a significant period of time, the under used reference quantities will
revert to the national reserve
a view to their reallocation to other producers;”
my view, the Minister was entitled to decide, in the light of the general
policy of favouring active producers that persons entitled to milk quotas, not
in active production, but having used the facility of temporary transfer for
three years past should be entitled to renew such temporary transfer for one
further year only. In so doing, he was acting in accordance with principles
and policies set out in the Community regulations.
is only in respect of the first of these issues that the applicants are in a
position to maintain that their property rights have been infringed. It has
been established since at least as early as the judgment of the Court of
Justice in Case 11/70
 ECR 1125, that fundamental rights and in particular rights to property
are protected in the Community legal order. In Case 44/79
 ECR 3727, that court explained that such protection was inspired by the
common constitutional traditions of the Member States and the European
Convention for the Protection of Human Rights and Fundamental Freedoms. The
court drew attention specifically to the German and Italian Constitutions and
to Article 43 of the Constitution of Ireland. However, it is equally clear
from this judgment that "the question of a possible infringement of fundamental
rights by a measure of the Community institutions can only be judged in the
light of Community law itself." (paragraph 14). The other named sources of
fundamental-rights protection are integrated into the Community legal order. In
Court of Justice
citing its earlier decision to the same effect in Case C-44/89
its judgment in
Court of Justice used the expression,
of the legal nature to be attributed to an additional reference quantity,”
assessing and then rejecting a claim that Community provisions had infringed
rights of property. As Murray J. explains in his judgment, when Member States
exercise discretions conferred on them by Community law, as in this case, it is
for Community law to decide
they have infringed fundamental rights. The Court of Justice stated in
paragraph 29 that
protection of fundamental rights
the Community legal order
are also binding on the Member States when implementing Community rules.”
added). In that case, the Court of Justice considered both Community rules
and the exercise of discretion at national level.
did not refer in its judgment to the point made by the Advocate General, in his
Opinion, that national law might
appropriate cases ... ensure greater protection ... than that afforded by the
general principles applicable in the Community legal order.”
my opinion, the applicants' complaint that their fundamental rights, whether or
not described as property rights, have been infringed by the 2000 Regulations
is unsustainable as a matter clearly decided in the constant case-law of the
Court of Justice. Specifically, I cannot accept that their said rights were
infringed by the State in exercising the discretion conferred on it to cease to
apply Article 7(1) of Regulation 3950/92 (as amended) as introduced by the
insertion by Article 1(10) of Regulation 1256/99 of Article 8a(b). I agree
with the judgments of Denham and Murray JJ. on the issue of protection of
property rights in milk quotas in Community law. I think that the position of
the Court of Justice regarding claims based on infringements of property rights
in milk quotas is clear beyond argument to the extent of being
On that basis - which was not seriously contested on behalf of the applicants
- I do not think the Court is under an obligation to refer any question for
preliminary ruling to the Court of Justice of the European Communities pursuant
to Article 234EC.
the present case the alleged infringements flow from the exercise of Member
States' discretion within the framework and in pursuit of Community policies.
In my view, the principle enunciated in
applies to such a situation. It is not a case of the exercise of an autonomous
power to impose restrictions permitted by Community law but in furtherance of
national policies. If this was such a case, of course, Article 15.2.1 of the
Constitution would apply and it would also follow that any law so enacted would
be amenable to scrutiny by reference to other articles of the Constitution,
specifically Article 43.
need not follow that in every case an exercise of a power delegated by
Community law which is valid in the sense of being within principles and
policies laid down by the latter will survive scrutiny
other articles of the Constitution. It is difficult to envisage circumstances
in which the exercise of a discretion would violate a provision of the
Constitution protecting, for example, property rights without at the same time
involving the invasion of the exclusive legislative role of the Oireachtas, but
in principle that must be possible. I agree with Murray J. in his treatment of
the issue of property rights.