Decision of the Scottish Land Court

Ronald Bruce Eunson (Appellant) v The Scottish Ministers (Respondents)

Case reference SLC 134/16
before
Lord Minginish, Chairman, and Mr John A Smith
22 March 2017

[1] This appeal, which parties have agreed can be disposed of on the basis of their written submissions, raises the question whether a farmer or crofter can challenge, by way of appeal to this court, the allocation of his land to one or other of the categories into which the respondents have divided eligible land in Scotland for the purposes of the Basic Payment Scheme (“BPS”, as to which, see below). It has already been the subject of various orders by which we sought further clarity as to why it was being said by the respondents that such an appeal is incompetent and we are grateful to Mr Lavelle of the respondents’ legal department for bringing that clarity by way of his very full and helpful statement received by the Court on 19 January 2017. The appellant has had the opportunity of responding to that statement and has done so by way of a submission made on 30 January.

[2] The appeal has also been the subject of requests for clarity on the part of the appellant, as to which of the “relevant decisions” listed in the Schedule to The Rural Payments (Appeals) (Scotland) Regulations 2015 (“the 2015 Regulations”) was being challenged. That clarity was provided by Mr Eunson by email dated 18 November 2016 in which he confirms that the relevant decision is the one at para 6 of the Schedule, being:

“A decision of the Scottish Ministers in respect of the allocation, refusal, withdrawal, recovery or reversion of payment entitlements, under or in accordance with Section 1, 2 or 3 of Chapter I of Title III to the Direct Payments Regulation, Article 63 of the Horizontal Regulation or Article 23 of the Horizontal Implementing Regulation.”

The respondents’ position

[3] The respondents challenge the competency of this appeal because, they say, it has nothing to do with the “allocation, refusal, withdrawal, recovery or reversion of payment entitlements” under the Direct Payment Regulation (Regulation (EU) No 1307/2013). They say that the process of allocating land to payment regions under art 23 of that Regulation, on the one hand, and that of allocating payment entitlements under the BPS, on the other, are two separate and distinct processes which do not impinge on each other. Although the allocation of land to a particular payment region will determine the value of the entitlements used to claim against that land, that has nothing to do with the allocation, refusal, withdrawal, recovery or reversion of the entitlements themselves. When entitlements are allocated they are allocated not to the land but to the farmer or crofter who is entitled to them. Accordingly, whereas para 6 clearly allows appeals to do with entitlements it does not allow appeals to do with the allocation of land into particular payment regions.

The appellant’s position

[4] The appellant, on the other hand, argues that the two processes are, in reality, parts of a single overall process and that appeal is competent against any decision taken as part of that process: as it is succinctly put in the final paragraph of his response “The allocation of Payment Regions is the allocation of payment entitlements”.

The operation of the Basic Payment Scheme

[5] In order to resolve this it is necessary to explain this part of the BPS as we understand it.

[6] The Scheme was introduced as part of the implementation of the new, or reformed, Common Agricultural Policy of the European Union which was to run from 2015 to 2020. It replaced the previous Single Payment Scheme (“SPS”) but was similar to it inasmuch as both involved the allocation of “entitlements” to farmers without which they could not participate in the scheme. Again as with the SPS, as well as needing entitlements, a claimant under the BPS must have at his disposal one hectare of matching land for each entitlement without which he cannot activate his entitlements so as to receive payment under the Scheme.

[7] Articles 20 and 24 of the Regulation deal with eligibility for and allocation of entitlements. They say nothing about land classification. Article 22 empowers the European Commission to set a “national annual ceiling” for BPS expenditure in each Member State. Article 23, however, permits “regionalisation” of the scheme and differentiation of the value of entitlements as between regions:

“1. Member States may decide, by 1 August 2014, to apply the basic payment scheme at regional level. In such cases, they shall define the regions in accordance with objective and non-discriminatory criteria such as their agronomic and socio-economic characteristics, their regional agricultural potential or their institutional or administrative structure.

2. Member States shall divide the annual national ceiling for the basic payment scheme referred to in Article 22(1) between the regions in accordance with objective and non-discriminatory criteria.”

[8] Making use of these powers the Scottish Ministers divided all Scottish agricultural land into three regions, Region 1 being better quality agricultural land used for arable cropping, temporary grass and permanent grass, Region 2 being rough grazing and Region 3 being poorer rough grazing, and allocated different payment rates per hectare to each, the better land attracting the higher rates. It is against the treatment of his land in this context that Mr Eunson has brought this appeal, arguing that the respondents have failed to allocate his land, as between these regions, in accordance with objective and non-discriminatory criteria such as their agronomic and socio-economic characteristics or their agricultural potential.

[9] However, that is a matter which bears on the merits of the appeal, not its competency, and this decision is concerned only with competency. Returning, then to our explanation of the BPS system, what a farmer is paid depends not only on the number of entitlements and hectares which he has at his disposal but which of these regions his land falls into. He will be paid the rate per hectare applicable to his land. So the allocation of the land affects the amount of BPS support the person claiming on the land receives. That is the importance of the matter to Mr Eunson and everyone else who is aggrieved by the Scottish Ministers assessment of the quality of their land.

[10] It was because of that importance that we were hesitant about accepting the respondents’ challenge to the competency of this appeal without further enquiry. We doubted the absence of a right of appeal against decisions which had such an obvious and direct bearing on the amount of support a claimant stood to receive. That further enquiry having been carried out in the form of the clarification of the respondents’ position already referred to, however, it seems to us that the position of the respondents is correct and that what we are dealing with here are two different and distinct processes – one involving the allocation of entitlements to scheme participants and the other involving the allocation of land into regions according to its quality.

[11] In the early stages of matters the respondents argued that land allocation decisions were purely administrative and therefore challengeable only by way of judicial review (see para (b) of the answers received by the Court on 19 December 2016). We were not persuaded that this argument had merit, since the allocation of entitlements can also be described as an administrative process. There is, however, a distinction, in that the legislation confers rights to entitlements on eligible claimants in terms of clear criteria, whereas the assessment of land quality for regionalisation purposes is necessarily a less precise matter. It seems clear, therefore, that a decision was taken by the Scottish Ministers (and, ultimately, by the Scottish Parliament, in terms of the 2015 Regulations) that such decisions should not be amenable to challenge by way of appeal. In fairness to them it should be said that they do operate a review system which allows their decisions to be challenged at that level but without resort to this court. Mr Eunson availed himself of that opportunity but without success.

[12] At the end of the day, therefore, the matter comes down to a short, sharp point: that the decision appealed against is not one “in respect of the allocation, refusal, withdrawal, recovery or reversion of payment entitlements”, does not, therefore, come within para 6 of said Schedule and is not, therefore, reviewable as a “relevant decision” under art 4 of the 2015 Regulations, nor appealable to this court under art 8. We have therefore refused the appeal as incompetent.

[13] We realise that this will come as a considerable disappointment to Mr Eunson, given how long the appeal has been pending, but it is because we wanted to enquire into the position carefully that matters have taken this long.

Expenses

[14] Following our usual practice, we have allowed 21 days for motions and submissions on expenses.