Saturday, 15 November 2014

UPDATE: Common Good - Barrhead High School and Cowan Park

Google imagery
Further to my post about this in September - when I said that I didn't think that Cowan Park was common good meaning that there was therefore no reason why East Renfrewshire Council couldn't build a new Barrhead High School on it - I subsequently sent the following Freedom of Information request to ERC:-

"I am concerned that an error has been made by the Council in assuming that Cowan Park, the site of the proposed new Barrhead High School, is common good land.

In 2004, ERC reported to an enquiry by Andy Wightman and James Perman that it had no common good (CG) and it seems that Friends of Cowan Park were told as recently as October 2012 by Head of Planning Iain Maclean that there was no CG in E Renfrewshire.

Therefore, this FOI is to request all correspondence, e-mails and/or notes, records or minutes of meetings, conversations etc. which led to ERC changing its position and concluding that Cowan Park was CG after all.

I realise that legal advice may be immune from FOI but (without prejudice to the generality of the previous sentence) I want to know who asked what and when and from whom in relation to whether Cowan Park is CG and who replied to any such questions and when.

I also want to know (also without prejudice as above) what, if any enquiries were made to the Council archivist (or other person) to search the minutes/records of Barrhead Town Council at the time of acquisition of the original Cowan Park in 1910 to see what light contemporary record may have shed on the legal status of the park."

In reply to this, ERC said:-

"Following on from the Portobello decision in [September] 2012, and with that decision not being appealed, the Council reconsidered this issue from 2013. 

Our Legal Services provided internal advice on this matter in June 2013. The same month the Council approached Shepherd and Wedderburn for their opinion. They instructed Counsel [subsequently confirmed to be James Findlay] and provided an opinion in July 2013. 

The Council had also asked for further expert opinion and received this from Professor Rennie in October 2013"

Unsurprisingly (and not unreasonably), ERC were not prepared to waive immunity and reveal these various opinions. But the fact they had one from as august a lawyer as Professor Robert Rennie does tend to make me look a bit of a lone voice in the wilderness that Cowan Park isn't common good. That said, it's important to know what the question the lawyers were asked was. For example, was it "Is Cowan Park common good?" or was it "Cowan Park is common good, what do we do now?" If it was the latter, then the question of whether the park is CG is still open.

As to enquiries made in the Council's archives, three were revealed:-


The first is intriguing - apparently no record of a Barrhead common good fund discovered in post 1970 records. The second two were more disappointing, though: a member of the public had apparently found reference to a CG fund in 1967 and something relating to it was retrieved and scanned in response to a request from the Council's legal department in November 2013. So it was beginning to look as if, contrary to my theory (that a statutory burgh like Barrhead, as a mere "creature of statute", can't have such an essentially common law thing as a common good fund), there might have been a CG fund after all.

Now you can't use FOI to force a Council to supply you with material from its publicly accessible archives. I can't afford to commission research in ERC's archives and, as I live in Portugal, I can't go along to look in them myself. However, their archivist, Craig Geddes, was kind enough to copy to me free of charge some material he had already scanned and had on file in response to these earlier enquiries. These were very revealing.


Firstly, there were copies (above) of Barrhead Burgh Council minutes relating to the 1968/69 sale of 8.14 acres from Cowan Park to Renfrew County Council for the current school and the purchase by BBC of 13.2 acres from neighbouring Dubbs Farm to add back to the park in compensation. There was no mention of common good in either transaction. Neither, it must be admitted, was there any mention of the purchase being made under the Public Parks (Scotland) Act 1878 as ERC stated in its recent petition to the Court of Session for authority to dispose of the land for the new school. [1]

Secondly, was a copy of the index to Barrhead Burgh Council's minutes for 1909-10 covering the period of the original acquisition of the park under the Cowan bequest (below). Observe the absence of reference to common good under the heading of "Cowan Park" or indeed anywhere under "Cl-" to "Cr-" in that year's alphabetical index:-

    
But perhaps most revealing of all was the material retrieved and scanned in response to ERC legal department's request of 28 November 2013. These were copies of the front pages of the Abstract of the Accounts of BBC from sample years 1965 and 1975. I'm only reproducing (below) 1965 because the scan is a bit clearer but 1975 is identical:-


Note how this appears to show that there was a common good account but nothing in it. However, my guess is that this format of abstract accounts was a pro forma common to all Scottish pre-1975 burghs, including common law ones which indubitably did have CG accounts. So Barrhead, not having one, inserted "NIL" under this heading as it might have inserted "Not applicable". And I would also guess that what the member of the public discovered in the second of the three enquiries in the archives was a similar "NIL" entry in 1967.

Now, I readily admit that this is all a huge pile of guesswork based on the slenderest of evidence. But the fact remains that there has not yet been a knockout punch that Barrhead did have a common good account: just because it was a burgh which existed before 1975 doesn't necessarily mean it had to have one. Or, if it did, that Cowan Park was part of it (particularly considering that another scan from the burgh accounts I was sent shows that Barrhead appears to have had a separate public parks account). There is, obviously, further more methodical research to be undertaken.

I'll take the opportunity to repeat a point made in my previous post, which is that, in ERC's petition to the Court of Session for authority to dispose of part of Cowan Park for the new school, it was explicitly stated that the 13.2 acres bought from Dubbs Farm to replace the 8.14 acres sold to Renfrew CC for the current school had been bought under the Public Parks (Scotland) Act 1878. Yet the petition also claimed these 13.2 acres to be common good. But if it was bought under the Public Parks Act, then, per the Wark dictum in the case of Magistrates of Banff v Ruthin Castle, it cannot be CG. This is evidence of muddled thinking about CG on the part of ERC and/or its lawyers on at least one aspect of the case and one can't help wondering if there might also be other mistakes being made. 

    
Meanwhile, Barrhead News has reported that ERC's case is back in the Court of Session on 20 November. This is a hearing to plan the future progress of the case rather than the actual hearing of the appeal against Lord Tyre's decision in August. (Which was that ERC's proposals did not amount to a disposal of the site of the new school and therefore he had no power to authorise them. Note also that his name is Lord Tyre - not Tyne - and he did not rule in August that Cowan Park is common good: ERC went into court taking that as read (wrongly IMO) and asking him to rule on that footing.) I know nothing about court procedure but I wonder if it's not too late to use the opportunity of next week's hearing to convince the court to allow ERC to amend its pleadings so as to seek a declarator (a court order making a declaration of legal status) that Cowan Park is not CG (and, only if it is, an appeal thereafter against Lord Tyre's ruling in August.)


Footnote

[1] The minute did however confirm that the sale of 8.14 ac. to RCC was to be effected by way of a "conveyance" (as opposed to the more usual "disposition") which confirms my suspicion in regard to how the condition in the original 1910 acquisition restricting use of the land to a public park (i.e. not a school) was circumvented.


Friday, 5 September 2014

Common Good - Barrhead High School and Cowan Park


East Renfrewshire Council (ERC) wants to build a new £22m high school in Barrhead to replace the decrepit existing one built in the 1970s. They have planning permission and funding but there’s a problem – the site of the new school is in a public park called Cowan Park which is inalienable common good (CG) land. That means the Council cant change its existing use even though they have planning permission. There’s a statutory procedure which enables a council to apply to the courts for permission to dispose of inalienable CG but there’s no procedure to permit them to retain it but change its use.


But theres a glimmer of hope. The new school is to be built as a public private partnership involving ERC leasing the site for 25 years to a private sector partner which will then sublet the new school back to the Council for the same period. If ERC can convince the court that this arrangement amounts to a disposal then considering the Council is also proposing to demolish the old school, landscape the site and add it back to Cowan Park so there’s no net loss of green space – the court should look favourably on the application.

ERC lodged its application with the Court of Session in February 2014 and the Lord Ordinary (Lord Tyre) issued his judgement on 19 August: he did not agree that the PPP arrangements amounted to a disposal. This, therefore, stops the new school project in its tracks because, as already noted, there is no procedure for a Council to retain inalienable CG but change its use.

There are various options now open to ERC in light of this setback. They could do what both North and South Lanarkshire Councils did when faced with a similar dilemma some years back and go ahead and build the school anyway in the hope nobody will object. Or they could do what Edinburgh Council did in the face of a legal challenge to building a new school on inalienable common good (Portobello Park) and obtain a private Act of Parliament to authorise the project. But the point of this blog is to question whether Cowan Park – the site of the new Barrhead High School – is common good land at all. Because, if it’s not, there’s nothing to stop the project going ahead right now. To begin with, it’s indispensably necessary to do a bit of history.

Medieval Origins of Common Good 

Nowadays, government finances its expenditure by tax. But in the Middle Ages, the authorities were supposed to “live off their own”, that is finance their official functions from their own property. Burghs were a sort of medieval equivalent of today’s Enterprise Zones or Freeports and, when they were established in Scotland from the 12th century onwards by the Crown (“royal burgh”) or a lay or ecclesiastical magnate (“burgh of barony”), they were given by their patron an endowment, the income from which was meant to finance their running expenses. 

Today, if you wanted to endow something, you’d give a sum of money to fund managers to invest in a portfolio of stocks, shares and other investments. But in the Middle Ages, the stock market didn’t exist and the only thing which yielded an annual return was land in the shape of the rent paid by its tenants. Thus, the endowment of medieval burghs was land and this land is a burgh’s “common good”.  

The rent the common good land yielded funded the services the town provided although in a pre-industrial era these were pretty minimalist and dated by today’s standards: they did not, for example, include housing. Many burghs provided a school although they were not obliged to and not all did: many considered provision of a burgh kirk of greater importance. Beyond that, the services provided often amounted to little more than a bit of rudimentary street sweeping if there was anything left over after repairing the mercat cross and the tolbooth.


There was a sub-set of common good: property used by the town or its citizens. These included things like the tolbooth (town hall & gaol) and such medieval arcana as public bleaching greens and market stances. These were inalienable in the sense that the magistrates couldn’t sell them on a whim and so deprive the citizens of their use. (There’s a complicated area of law around the right to sell an inalienable CG asset in the context of replacing it with a better facility but I don’t want to go there just now.) But the rest of the common good – the majority of it which was just the assets in the portfolio of the burgh’s endowment, so to speak – was freely alienable by the council. Thus, if Blackburgh Town Council happened to own the lands of Whitecraigs, it could sell them and invest the proceeds in the lands of Greenriggs instead just as the trustees of a modern endowment might sell shares in Company A to reinvest in Company B. 

Another feature of burgh life in times gone by was the “special trust”. Nowadays, if you want to donate money for a purpose not catered for by one of the numerous established charities, you would nominate your own trustees. But in previous centuries (when there were few charities as we now understand them), donors tended to nominate their local burgh council as trustee. Again, the principal investment was usually land but the magistrates had to apply the rents to the particular local purpose directed by the donor – frequently educational or care of orphans or the elderly etc. (These trusts were often known as “mortifications”.)

Industrial Revolution – statutory powers and rates 

The arrangements described above were barely adequate in the pre-industrial era but cracked fatally under the strain of the onset of the Industrial Revolution in the second half of the 18th century. The meagre resources of the common good supplemented by trusts (i.e. charity) proved totally inadequate to finance the new challenges faced by rapidly growing towns such as improved water supplies, sanitation, street lighting etc. 


At first, individual burghs responded by obtaining private Acts of Parliament authorising specific projects paid for by levying a tax – a “rate” – on the citizens. There was also the problem of towns which were not burghs (royal or baronial) and so had no resources to fund improvements at all: some of these (Airdrie is an example) responded by seeking an Act to incorporate themselves as a burgh, conferring statutory powers of management and to levy rates to pay for them. These statutory developments continued and grew until they reached a culmination in the Burgh Police (Scotland) Act 1892 (the word “police” used there in its original sense of civic government generally rather than just law enforcement). This Act gave the local sheriff power to declare any town with a population over 700 a burgh and gave all burghs – existing and new, royal or baronial – a vast range of powers of management ranging down to minutiae such as bathing machines, shoeblack stands and abuse of steam whistles and trumpets. In a parallel development, general Acts of Parliament were passed on subjects of more general import – e.g. education and housing – giving burghs the power – and, increasingly in the 20th century, the duty – to provide these services. And all of this legislation was underpinned by powers to pay for everything through rates imposed on the citizens.

So far as burghs’ property portfolios were concerned, therefore, by the 20th century, the common good (and land held by trusts administered by burghs) had become a historical legacy dwarfed by the vast extent of the schools, reservoirs, sewage works, council house estates etc. etc. acquired as a result of these statutory developments. This led to a famous dictum by Lord Wark in the 1943 case of Magistrates of Banff v Ruthin Castle Ltd which analysed burgh property into three mutually exclusive categories thus:-

“… all property of a royal burgh or of a burgh of barony not acquired under statutory powers or held under special trusts forms part of the common good.”


Before Cowan Park - OS 6 inch map, 1896

Back to Barrhead 

Where does Cowan Park fit into this historical matrix? 

It was acquired by Barrhead Burgh Council (BBC) in 1910. That date sets off an immediate alarm bell – this is not some piece of ancient burghal patrimony like Glasgow Green or Edinburgh’s Meadows but a late acquisition firmly in the “statutory era”. That’s not to say Cowan Park can’t be common good: it might be if, for example, it had been bought with a cash surplus on the common good account. But it wasn’t. It was acquired after a local businessmen, James Cowan of Ross Hall (now a private hospital), bequeathed money to create a public park in Barrhead. His trustees carried this out by buying land from local brothers Joseph and John Turner for £4,200 which the Turners, at the request of the Cowan Trustees, conveyed directly to BBC by a Feu Disposition. This contained a real burden (title condition) to the effect that the land conveyed be held by BBC as a public park for the use and enjoyment of the inhabitants of Barrhead in all time coming and for no other purpose. 

Now, remembering the mutually exclusive “trichotomy” of burgh property per the Wark dictum of common good, statutory acquisition or trust property, we need to mention the Public Parks (Scotland) Act 1878 which gave burgh councils statutory power to provide parks. So the possibility of a statutory acquisition is very much in play. And here we need to consult Barrhead’s burgh archives because, if it was minuted that the town council had resolved to accept the Cowan bequest and fund the maintenance of the park from the common good fund or, alternatively, accept it in virtue of statutory powers under the Parks Act and fund it off the rates, then that would be almost conclusive. These enquiries need to be made but let’s assume meantime that the Council minutes are silent and we need to tease out the answer from other more circumstantial evidence. 


At first sight, it looks like a no-brainer that this is common good. First, there’s the precedent of the Banff case already mentioned. This concerned the gift by the Duke of Fife to the councils of Banff (royal burgh) and Macduff (burgh of barony) jointly of Duff House (above) and its policies. The possibility of a statutory acquisition under the Public Parks Act wasn’t argued to the court – perhaps because, ever since the gift, the property had been let commercially, first as a hotel and then as a private clinic. That just left a choice between common good and trust and what was fatal to trust was that (in contrast to the Cowan bequest to Barrhead which decreed a public park) the Duke of Fife’s gift to Banff and Macduff had been unconditional with no particular trust purposes imposed. Hence it was CG. 

Second, there’s another even closer precedent. The 1952 case of McDougal’s Trustees v Inland Revenue concerned the gift to Edinburgh Corporation of the Hermitage of Braid (below) in very similar circumstances to James Cowan’s gift to BarrheadMr McDougal had bought the land from a third party and directed them to convey it directly to the Corporation subject to a real burden that it be used as a public park for the benefit of the citizens of Edinburgh and for no other purpose. Again, the possibility of a statutory acquisition under the Parks Act wasn’t argued (it’s harder to understand why not) so it was a contest between common good and trust. But what proved fatal to trust this time was that the transaction had been specifically linked to the common good in that the Edinburgh CG fund had lent Mr McDougal the price of the land on the basis it would repaid when he died.


But to my mind, there’s a more fundamental distinction between Cowan Park in Barrhead and these cases: Edinburgh, Banff and Macduff are all burghs of great antiquity and existed as such at common law. But Barrhead only became a burgh for the first time in 1894 under the statutory procedures of the Burgh Police (Scotland) Act 1892. As a mere “creature of statute”, which can only do what a statute authorises it to do, any property acquired by Barrhead can only be – in the words of the Wark dictum – “acquired under statutory powers”.
(Against that, I would have to point out s.38 of the 1892 Act (which was repealed but substantially re-enacted by s.7 of the Town Councils (Scotland) Act 1900) which provided “The magistrates and Commissioners elected in virtue of this Act shall, within the limits of the burgh for the purposes of this Act, possess such and the like rights, powers, authorities, and jurisdiction as are possessed by the magistrates and council of royal … burghs in Scotland.” But I would emphasise the words “for the purposes of this Act” which do not include the acquisition of some sort of statutory common good fund.)

Entrance to Cowan Park
That’s all a very long and lawyerish way of saying I don’t think Cowan Park in Barrhead is common good at all. Or at least, that there are some very plausible arguments that it might not be. I’ll finish with a few more random points:

1. East Renfrewshire Council appears to have only recently started to believe that Cowan Park is common good. In response to Andy Wightman and James Perman's enquiry into CG in 2004, they reported that they had none and ERC’s Head of Planning told Friends of Cowan Park (FOCP) the same as recently as October 2012 [1]. ERC having no CG is, of course, entirely consistent with it having no common law royal burghs or burghs of barony within its boundaries. 

2. Consistently with the above, the building of the current Barrhead High School on Cowan Park in the early 1970s didn’t seem to be attended by any common good implications. Barrhead Burgh Council sold 8.14 acres of the park for the school to Renfrew County Council in 1968. (There is one curiosity about this transaction, however. There’s no sign in the public records [2] of the feudal superiors waiving the burden in the 1910 Feu Disposition by the Turners to BBC that the land could only ever be used as a park to allow it to be used for a school instead. However, that anomaly could be explained by the fact the BBC to RCC sale was effected by a deed sometimes used for sales to public bodies called a “statutory conveyance”: there’s a school of thought that a statutory conveyance washed the land it conveyed clean of any burdens restricting its use.) 

3. To replace the 8.14 acres sold out of the park for the current school in 1968, Barrhead Burgh Council bought 13.2 acres the following year from a neighbouring farmer. In East Renfrewshire Council’s recent petition [3] to the Court of Session for authority to dispose of part of Cowan Park for the new school, it was explicitly stated that this 13.2 acres had been bought under the Public Parks (Scotland) Act 1878 yet the Council also claim this to be common good. But if it was bought under the Public Parks Act, then, per the Wark dictum, it cannot be CG. This is evidence of muddled thinking about CG on the part of ERC and/or its lawyers and one wonders if there might not also have been mistakes made about the status of the original acquisition of the park from the Cowan trustees in 1910. 

4. A final little point is that, in ERC's Annual Accounts for 2012/13, there’s mention under the heading of Council administered trust funds (page 109) of a “James Cowan Bequest” (balance at 31/3/12 - £132) and a “Cowan Park Cropping Fund” (£9). The FOCP website tells us that James Cowan bequeathed £10,000 to a park and, as already seen, only £4,200 of that was spent on the actual land. Could these entries in the Council accounts represent the shrivelled residue of the balance of £5,800. The point here is, could this (despite the adverse dicta in the M’dougal (Hermitage of Braid) case) point towards Cowan Park being an asset of a special trust rather than common good? I’m no expert on trust law but I don’t think using a part of the park for an alternative use would offend against the terms of any such trust provided equivalent land were returned to the park in a way which didn’t destroy its overall integrity.

POSTSCRIPT – since I started typing this, East Renfrewshire Council has issued an obscurely worded press release from which it appears that, rather than moving straight to a private Act of Parliament (which the release wrongly calls a “Private Members Bill”), the Council is going to appeal Lord Tyre’s decision that the arrangements with their PPP partner do not amount to a “disposal”. I was going to type “Good luck with that” but I’ll replace that with a rather more humble suggestion that, if ERC are minded to spend more on legal fees, I think it would be a good idea to investigate whether an appeal could be combined with seeking a declaration as to whether Cowan Park is common good at all. Because if it’s not, there’s nothing to prevent the new school going ahead.
Footnotes

[2] Copies of the relevant Register of Sasines search sheets are available on Friends of Cowan Park's website  
[3] The petition can be seen on Andy Wightman's website
  

Wednesday, 13 August 2014

"Oder von" (or which bit of "or" don't you understand?)


Feakins v Scottish Ministers – European ruling on force majeure, Single Farm Payments and the National Reserve

Robin Feakins is no stranger to the courts. During the 2001 foot and mouth disease (FMD) epidemic, his farm at Sparum in Worcestershire was used as a crematorium for the carcases of thousands of animals culled from the neighbourhood and he subsequently sued DEFRA over the clean up. The issue was how 13,000 tonnes of ash be disposed of after it had been removed from the farm but Mr Feakins’ claim that it be incinerated was ultimately thrown out by the Court of Appeal in favour of DEFRA’s preferred (and far cheaper) option of landfill.


In 2002, he moved to the Scottish Borders but his purchase of Harwood Estate near Bonchester Bridge in Roxburghshire also involved Mr Feakins in litigation. Some time after the sale, the sellers raised an action for rectification of the Land Register to remove from his title a cottage on the estate called Clocker Lodge they claimed had not been intended to be included in the sale. But the sheriff ruled that the cottage lay under the red boundary line and was therefore included in the plan which described the subjects of sale for the purposes of both the missives (contract) and the disposition (conveyance): there was, therefore, no inaccuracy in the Register to correct so the cottage was Mr Feakins’ whatever the sellers’ intentions may have been. A case that sends there-but-for-the-grace shivers up the spine of any rural conveyancer, it’s an object lesson in not using a scale as small as 1:25,000 for a deed plan. [1]


Clocker Lodge as seen in Google Streetview


 In the Clocker Lodge case, Mr Feakins described himself as a “self-made man who tried to make sure that what he was getting was what he was supposed to be getting” and that may explain why it wasn’t long before he was in court again, this time suing the Scottish Government over allocation of “Single Farm Payment entitlements”. This requires a bit of background explanation.

Since 2005, Single Farm Payment (SFP) has been the principal subsidy paid to farmers under a periodic re-jig of the EU Common Agricultural Policy in 2003 which was known as “the Mid Term Review”. In order to receive SFP a farmer needs to own SFP entitlements. These were allocated to farmers on the basis of the average amount received under previous CAP subsidy schemes (the amount of which depended on  production, whether number of animals kept or crops grown) divided by the average number of hectares of land farmed in the “reference years” of 2000, 2001 and 2002.
Example
Suppose a farmer received €175k of subsidy over 300 hectares farmed in 2000, €172k over 305ha in 2001 and €177k over 319ha in 2002. He would receive 308 (average of 300, 305 & 319) entitlements to receive €567.10 (average of €175k, €172k & €177k divided by 308) each in 2005 and subsequent years irrespective of his production.
In CAP-speak, subsidy was said to have been “de-coupled” from production. Another condition of SFP is that the farmer needs to have a hectare of farmland (owned or leased) for each SFP entitlement he claims on. Thus, suppose our farmer who received 308 entitlements to €567.10 on the basis of his activity in the reference years (2000-02) only farmed 280 hectares in 2006 (due, for example, to having sold some land or given up a lease), he would only receive that year 280 x £567.10 = €158,788.

Back to Robin Feakins. Calculating his SFP entitlements by reference to his farming in 2000-02 gave him two big problems. The first was that, as FMD had wrecked his stock in 2001 which was not recovered in 2002, his production based (“coupled”) subsidy take averaged over the reference years was low. Second, when he bought Harwood in 2002, the two farms on the estate – Tythehouse and Langburnshiels – were let under leases not due to expire until 2006 so he had no production during the reference years there either.  

But the Euro Regs made allowance for this: the so-called “hardship clause” allowed farmers affected by force majeure such as FMD to use the unaffected year(s) for the purposes of calculating their SFP Entitlements. (So, using the figures above, the farmer affected by FMD in 2001/02 would receive 300 (hectares in the year 2000) entitlements to receive €583.33 (€175k divided by 300) each.) The regs also recognised that basing future subsidy on past events could give rise to a host of other problems so provided for a “National Reserve” of entitlements which could be awarded to farmers falling within certain categories. One of these – the so-called Category 5 - was farmers who had expanded their operation by buying land during the reference years (2001-03) which was let and they weren’t due to get vacant possession of to farm themselves until after 2003: they could apply for a number of entitlements equal to the extra hectares bought in at the rate of the average (€/ha) in the parish where the land acquired lay. 



Thus, Mr Feakins applied to DEFRA and received 411 SFP entitlements (SFPEs) to €566.52 each on the basis of his production at Sparum (411ha) in 2000 before it was struck by FMD. So far so good. In 2005, in anticipation of Langburnshiels and Tythehouse coming back in hand, he applied to the Scottish Executive Environment and Rural Affairs Department (SEERAD) for an allocation from the National Reserve under Category 5 of 498 (area of L’shiels & T’house (909ha) minus area of Sparum (411ha) which he had since rented out) SFPEs at the average rate in the parish of Hobkirk where the Scottish farms were situated of €191.08. But SEERAD refused this application citing a rule which, they claimed, prohibited anyone benefiting from the hardship clause and getting an allocation from the National Reserve: under this so-called “best value rule”, you could choose the one that was more profitable to you but not have both – hence why I think of it as the “can’t have your cake and eat it rule”.

To fight this refusal which threatened to cost him around £65,000 a year, Mr Feakins enlisted leading Scottish agricultural law silk, Sir Crispin Agnew of Lochnaw QC and multi-lingual expert in European law, Michael Howlin QC. But to understand the argument this formidable legal battalion broadsided SEERAD with in the Land Court, it’s necessary to look at the European legislation which enacted the Mid Term Review.

There were two pieces of legislation being roughly the equivalent of a British Act of Parliament setting out the broad principle and a statutory instrument made by Ministers to add detail. These were respectively EU Council Regulation 1782/2003 (the Act) and EU Commission Regulation 795/2004 (the SI) [2]. The hardship clause (allowing farmers to omit reference years affected by force majeure when calculating their SFPEs) is Art. 40 of 1782/2003. The categories of application to the National Reserve are Arts. 19 to 23 of 795/2004: in particular, it’s Art. 22 which contains Category 5. The best value (cake eating) rule SEERAD founded on was Art. 18(2) of 795/2004 which read as follows:-

“In cases where a farmer [who applies to the National Reserve] meets the condition [sic] for applying two or more of Articles 19 to 23a of this Regulation or Articles 37 (2), 40, 42(3) or 42(5) of Regulation (EC) No 1782/2003, he shall [not have his cake and eat it]”
 Messrs Agnew & Howlin contended for a “disjunctive” interpretation of this, namely that it should be read as if it had been worded:-

In cases where a farmer [who applies to the National Reserve] meets the condition [sic] for applying two or more of (i) Articles 19 to 23a of this Regulation; or (ii) Articles 37 (2), 40, 42(3) or 42(5) of Regulation (EC) No 1782/2003, he shall [not have his cake and eat it]”
Thus, because Mr Feakins met the conditions for applying only one of the articles listed under each of head (i)(Art. 22: Cat 5) and head (ii) (Art. 40: hardship clause), the best value (cake eating) rule was not engaged.
That argument involves reading quite a lot into the word “or” where it appears between the words “Regulation” and “Articles” in Art. 18(2) but in this respect his counsel were fortified by the fact that, in the German version of 795/2004, the equivalent wording was oder von – “or of”. For his part, counsel for SEERAD made a point (which I confess I don’t understand) about the word “condition” in 18(2) being in the singular and drew attention to the fact that, in the French version of 795/2004, it was plural.

The Land Court was largely unmoved by this linguistic sophistry but at the same time troubled by the fact that there didn’t appear to be any particularly obvious rationale for the best value (cake eating) rule: why should a farmer be precluded from applying to the National Reserve just because he was in a minority who had suffered from force majeure? (The Court invited SEERAD to provide it with examples of how this could lead to such a farmer gaining an unfair advantage but described the material received as “cryptic” and providing “little illumination”.) Not without misgivings, therefore, it allowed a reference to the European Court of Justice (ECJ) for a ruling.
The German advocate general to the ECJ, Juliane Kokott (perhaps best known for her 2010 ruling that cheaper motor insurance for women was contrary to EU discrimination law) delivered her opinion on 18 June 2014 [3]. She too rejected the “disjunctive” interpretation of Art. 18(2) of 795/2004 (best value/cake eating rule) contended for by Mr Feakins but decided nevertheless that it was ultra vires: In 1782/2003, the European Council of Ministers had delegated to the European Commission to define the categories in which farmers might apply to the National Reserve but they had not given it power to make ancillary rules such as the best value (cake eating) rule.

European Court of Justice
If the ECJ upholds the advocate general’s opinion (which it usually does), then SEERAD was wrong to refuse Mr Feakins' Cat 5 application to the National Reserve in respect of his purchase of Harwood Estate and the Scottish Government Rural Payments and Inspections Directorate (SGRPID, as SEERAD was renamed when the Nats took power in 2007) now owes him a sum of money likely to be north of half a million pounds. But it means more than that because Scotland only has a finite SFP budget to share out. So if Mr Feakins and any others in his position are due more, that means every other farmer’s SFPEs will have to be reduced. All the way back to 2005. And not just in Scotland, but throughout the EU. Because of these knock on effects, the European Commission entered appearance in the Feakins proceedings in the ECJ to argue that any ruling in his favour be not retrospective due to the fact that EU Member States would face “serious difficulties” of recalculation. But AG Kokott rejected this on the basis that no detailed information on the scale of the potential problem had been presented to her. 

Harwood Estate from the air, Tythehouse Farm top right
Bear in mind that the scope for making corrections by reducing other farmers’ SFPEs in future years is limited by the fact that 2014 is the last year of SFP before moving on to the new system of the latest CAP Reform in 2015. (I haven’t even begun to think about how, if at all, any baggage from the current system can be carried forward into the new.) But how many farmers benefited from the hardship rule and applied to the National Reserve? I’m going to stick my neck out and guess not enough to cause any real pain to everybody else’s subsidy cheques. But I would not like to be the civil servant charged with making the calculation after the Feakins ruling becomes final. Is there an Excel spreadsheet formula capable of it?
Footnotes
[1] Clocker Lodge case:- Lubbock v Feakins; comment by Prof Robert Rennie here  
[3] AG Kokott's opinion here