Farm Ireland

Saturday 26 May 2018

Department loses landmark case

The High Court has ruled that a Department of Agriculture CAP payment inspection was procedurally flawed.
The High Court has ruled that a Department of Agriculture CAP payment inspection was procedurally flawed.

It's not often the High Court partakes in the intricacies of the Single Payment Scheme and CAP regulations, but when they do, the results can have a huge effect on farmers.

A recent case may be particularly significant after the court ruled that the Department of Agriculture's inspection was "procedurally flawed", opening the floodgates for other farmers subject to penalties to lodge a case.

It could affect hundreds or even thousands of decisions which have resulted in reductions to eligibility and payments for farmers.

The case taken by Michael O'Connor of Nenagh, Co Tipperary against the Minister for Agriculture and others saw the court examine a number of elements of the appeals process open to farmers as well as the significance of the 'control report'.

High Court Judge Michael White considered a challenge to the decision of the appeals officer after Mr O'Connor applied for the 2010 Single Payment Scheme and Disadvantaged area scheme.

Following the inspections and decisions of an officer of the Agriculture Department, his total SPS payment of €147,000 for 2010 was rejected.

Mr O'Connor instructed his solicitor to seek a review of the decisions on his exclusion of the SPS for the inclusion of inappropriate parcels of commonage lands in his SPS application and also a sanction of 5pc in respect of a cross compliance test carried out on his cattle herd.

His legal team also objected to the "automatic imposition of a totally disproportionately high penalty" without him "being provided with sufficient information and evidence concerning the case against him". Submissions were made to the District Inspector. At this stage, extra penalties were imposed on Mr O'Connor.

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An Oral Appeal was heard and legal submissions were made. After the Appeals Officer made their decision, Mr O'Connor appealed this decision to the director of Agricultural Appeals seeking to have the decision revised.

Mr O'Connor appealed the decision of the appeals officer to the High Court and as a result, some potentially very significant issues around the Department of Agriculture's compliance with EU regulations which relate to the inspections process have come to light.

The EU regulations around what the Dept of Agriculture inspectors have to do are very detailed and quite clear, and highlight the importance of a 'control report'.

For example, under the regulations, every on-the-spot check and follow-up of non-compliances brought to the attention of the Agriculture Department shall be the subject of a control report which makes it possible to review the details of the checks carried out.

The regulations also set out what details must be contained in the control report. The farmer must be given the opportunity to sign the report to attest his presence at the check and to add observations. Where irregularities are found, the farmer shall receive a copy of the control report.

Further, and more worryingly, the requirement for these control reports extend to where the on-the-spot check is carried out by means of remote sensing.

If irregularities are revealed as a consequence of these checks, the opportunity to sign the report shall be given to the farmer before the Department Officer draws their conclusions from the findings with regard to any resulting reductions or exclusions. The farmer must be informed of any non-compliance within three months after the date of the on-the-spot check. In Mr O'Connor's case, he was provided with a Single Application Inspection Report known as SAIR 10 and a Detail Report Sheet following an on-the-spot inspection for cross compliance. The published court judgement states it did not include any of the matters set out in a control report.

Judge White stated the documents provided to Mr O'Connor could not be described as a control report, even if the court considered it appropriate to combine documents. Mr O'Connor was not given an opportunity to sign any report in respect of the unannounced inspections in respect of the commonage and findings made by the inspector. He was not given a chance to rebut the findings of the inspectors before the decision was made that an automatic penalty be applied because the application exceeded the 20pc rule of disqualified land.

It would appear that the Department of Agriculture have been failing to provide any farmer which has deductions made to his eligibility with a control report for a number of years. Judge White said that officers of the Department of Agriculture had "very little regard for fair procedures" as these guidelines in respect of the SPS inspection were "ignored completely".

"This lack of respect for fair procedures was extended to the review, when another penalty was imposed without any opportunity given to the appellant to make submissions in advance of imposition of an extra penalty," it states. The Department argued the written determination should be considered as a whole and any procedural flaws should not lead to the exclusion of evidence that Mr O'Connor was not entitled to include the commonage in his SPS application.

The Judge said the court is faced with the situation that the inspection that led to the imposition of the SPS penalty was "procedurally flawed".

The court held that Mr O'Connor should be entitled to payment of the subsidy on the lands which qualified for payment, which the judge found to be 167ha excluding commonage. He was also found liable for the 5pc sanction imposed on the cross compliance check.

Department knew about control report omission

Concerns over a lack of Control Reports being given to farmers following inspections was brought to the Agriculture Department's attention over a year ago, a farm body stated.

The Irish Natura and Hill Farmers Association (INHFA) said they were not surprised there was not a Control Report given as they "seem to be absent in most inspections brought to our attention".

"Indeed this is something we brought to the attention of the minister and Department officials in March of 2015 in an open letter to the minister on land Eligibility concerns," said an INHFA spokesman.

The farm body said the move by the appeals office to uphold the decisions in the absence of a report shows a "lack of knowledge of the correct procedures".

"We are aware of several cases where, despite representations made by farmers regarding the lack of a Control Report, the Appeals Officers accepted the Department's line that a couple of other documents together formed a Control Report," stated the INHFA, adding that the farmers did not get a "fair and impartial hearing".

Solicitor John Cuddy, who has represented farmers in many appeals, said it was "alarming" that the Agricultural Appeal Office repeatedly upheld the Department in the absence of a Control Report.

The ICSA's General Secretary, Eddie Punch, said: "What is emerging is that the Department need to act very carefully in order to ensure fair play and justice for farmers given that they are administering draconian penalties," he said.

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