(Lord McGhie, Sheriff R J MacLeod, Mr J A Smith)
(Application RN SLC 69/10 – Order of 11 Feb 2011)
AGRICULTURE – APPEAL – SUBSIDIES – RURAL PAYMENTS – SINGLE FARM PAYMENT – SINGLE PAYMENT – CROSS COMPLIANCE – MISSING ANIMAL –DEEMED DEATH – OBLIGATION TO NOTIFY – LATE NOTIFICATION – PENALTY – RETROSPECTIVE PENALTY – PAYMENT REDUCTION MATRIX – INTENT-EXTENT – “ON OR OFF FARM” – SEVERITY –PERMANENCE – WHETHER RECTIFIABLE – DIRECT EFFECT OF EUROPEAN REGULATIONS – EUROPEAN AUDITOR – RURAL PAYMENTS (APPEALS) (SCOTLAND) REGULATIONS 2009 – EUROPEAN COMMISSION REG (EC) NO 796/2004, arts 41, 48, 66 – EUROPEAN COUNCIL REG (EC) NO 1782/2003, arts 3, 5, 6, 7, 24 – EUROPEAN COUNCIL REG (EC) NO 73/2009, art 146 – EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC) NO 1760/2000, arts 3, 4, 6, 7 – THE CATTLE IDENTIFICATION (SCOTLAND) REGULATIONS, SSI 2007/174
On 1 November 2008, in the course of a count of their cattle, the appellants noticed that they were one animal short. They did not identify which animal it was and took no further action. On 24 February 2009 at an “on–the-spot” inspection the animal was identified. On 3 March 2009 the appellants reported the animal as dead, returning its passport and giving that date as the date of death. The respondents, however, determined that 1 November 2008 should be taken to be the date of death. On that view the report was out of time. This was a breach of cross compliance obligations. In November 2009 they determined an appropriate penalty at 3% by applying their penalty-fixing system which was intended to be objective, transparent and to produce consistent results. Their system involved the use of a Cattle Penalty Calculator and a Payment Reduction Matrix. Had they been applying the Calculator and Matrix published by them in November 2008 or March 2009 the matter would have been dealt with by way of warning letter and without reduction in amount. The appellants challenged various aspects of the Calculator and Matrix. They contended that there were no relevant domestic provisions implementing the relevant European legislation and that it was not clear which European provisions applied. They criticised procedures for assessment of severity. Their main substantive challenges were to the classification of the breach as “off-farm” and of its impact as permanent. In particular, they contended that the effect of the breach was rectified when notification of the death was eventually made. It was also argued that the imposition of penalty was vitiated by the respondents’ failure to provide a copy of the control report in terms of art 48 of Reg (EC) No 796/2004. The appellants also contended that the application of the penalty “was unlawful” because of the retrospective nature of the change of guidance which was not made until nine months after the inspection and criticised other aspects of communication by the respondents.
HELD A (1) that the Regulations had direct effect and did not require to be implemented by domestic provisions; (2) that although aspects of the operation of the Calculator and Matrix raised some concerns it was only necessary to deal the two substantive points raised; (3) that it was essential in considering the consequences to distinguish between the fact of an animal being missing or dead, which was not in itself a breach, and the failure to give timeous notification; (4) that the effect of a failure in notification was to mean that the records were inaccurate and that this was an “off-farm” offence; (5) that on the face of the material of which the Court was aware, the effects of the breach could properly be said to come to an end when the death was reported; and (6) that in the particular circumstances a penalty of 1% was appropriate. B. It was also held that art 48 did not impose any requirement to provide the farmer with the full report. The report was required only for administrative purposes. It was enough to satisfy the relevant regulations that the farmer had been provided with details of the alleged non-compliance within three months of the inspection. C. Further, it was held that the respondents were entitled to apply the correct view of the law as they understood it at the time of imposing the penalty and were not obliged to proceed on the basis of the incorrect guidance as to the law previously published by them. OBSERVED that the Land Court did not have jurisdiction to consider whether any remedy was available to the appellants in respect of their complaints of administrative failures but that a failure by Ministers to provide clear information was not necessarily a failure in any relevant duty. OBSERVED FURTHER that if the Court in any case reached a conclusion which appeared inconsistent with a decision by Ministers in another case, it could be concluded either that there was some relevant distinction between the cases or that the Court would be bound to conclude that the other decision was wrong. Attempts to rely on administrative decisions taken in other cases were usually a waste of time.
The note appended to the Court’s order is as follows:
 This is an appeal under the Rural Payments (Appeals) (Scotland) Regulations 2009 (“the 2009 Appeal Regulations”). The appellants are Oosterhof & Co., a partnership which runs a beef rearing suckler herd based at Savoch Farm, Lonmay, Fraserburgh. The respondents are the Scottish Ministers.
 The appeal is against a decision of the respondents to withhold 3 per cent of all the appellants’ support payments for the year 2009. That was by way of a cross-compliance penalty for failing to report the death of a cow within seven days of the death in circumstances where an animal was found to be missing and was deemed to have died. Parties being agreed that it ought to be possible to resolve the issues in the appeal by way of debate and without the necessity of a proof, we heard debate at Edinburgh on 22 November 2010, when the appellants were represented, with the prior approval of the Court, by Dr Gerard Banks, Agricultural Consultant, and the respondents by Mr Bryan Heaney, advocate.
European Community Treaty 1957, Article 249 (ex 189)
European Commission Regulation (EC) No 796/2004, Articles 41, 48, 66
European Council Regulation (EC) No 1782/2003, Articles 3, 5, 6, 7, 24
European Council Regulation (EC) No 73/2009, Article 146
European Parliament and Council Regulation (EC) No 1760/2000, Articles 3, 4, 6, 7
European Communities Act 1972, sec 2(1)
The Cattle Identification (Scotland) Regulations, SSI 2007/174 Schedule 2, para 3, Schedule 3, para 10
The Rural Payments (Appeals) (Scotland) Regulations 2009
Agrargenossenschaft Pretszch v Amt fur Landwirtschaft  ECR 1-11053
Antonio Munoz Cia v Frumar Ltd  ECR 1-7289
Hopermann v Bundesanstaldt fur Landwirtschaft  ECR 1-1669
Nilson vLannsstyrelsen  ECR 1-10165
Schumacher v Bezirkregirung Hannover  ECR 1-6071
Messrs Ewan Campbell v Scottish Ministers 2004 SLCR 1
Dickie v Scottish Ministers 2004 SLCR 23
T Millar & Son v Scottish Ministers 2006 2 SLCR 200
The Mount Stuart Trust v McCulloch 2010 S.C. 404
Stephen v Scottish Ministers 2008 SLCR 107
Wyatt and Dashwood European Union Law 5th Ed
 The appellants run a herd of approximately 750 suckler cows. The cattle are grazed in batches, some on Savoch Farm itself and others on other grazings in the area, including seasonal grazings on let from the RSPB on the Loch of Strathbeg Reserve which includes sand dunes, deep stagnant ditches and wetlands.
 On 1 November 2008, in the course of a count of their stock, the appellants noticed that they were one animal short in one of these batches. Their pleadings contain a clear admission that they knew this animal to be the one bearing the identification number UK520578 302267 (see the appellants’ response to the respondents’ averment that on 1 November 2008 the appellants found this animal to be missing). However in the course of the debate it became apparent that the appellants’ position was that, as at 1 November 2008, they did not know that it was this particular animal that was missing. They had simply noticed that they were one animal short in one of several batches of animals counted at that time. They did not identify which animal it was and took no further action. In particular they did not make any intimation to the British Cattle Movement Service (BCMS) that an animal was missing. Although it was hard to understand how the person responsible for the appellants’ pleadings had failed to see the need to clarify the specific assertion made in the respondents’ answers, we are satisfied that the true state of affairs was, indeed, that the appellants had not identified the missing animal at the time. Mr Heaney, although expressing his concern at the appellants’ apparent change of position on this matter, was content to proceed on that basis. Because we were hearing a debate and not a proof, the reasons for taking no further steps at the time in relation to the missing animal were not fully examined. It was said by Dr Banks that the grazing areas were of a nature which were not easily subject to exhaustive visual check. It was said that, at the time, it was thought quite likely that the missing animal was in fact somewhere out on the grazings.
 On 24 February 2009, staff from the Inverurie office of the respondents’ Rural Payments and Inspections Directorate arrived at the appellants’ farm to carry out an “on–the-spot” inspection. This inspection was a random inspection, in the sense that the appellants’ farm had been randomly chosen and that the inspection had not been triggered by any previous failures on the part of the appellants. The inspection took several days, in the course of which the appellants’ entire stock was counted and it was found that one animal was indeed missing. That animal was identified as animal 267, as we shall call it. In the course of the inspection the appellants freely disclosed that they had been one short in the November count and accepted that this must be the animal in question. On 3 March 2009, at the close of the inspection, the appellants reported animal 267 as dead to the BCMS, returning its passport and giving that date as the date of death. However, Mr Stuart Lorimer, Principal Agricultural Officer at Inverurie, who had carried out the inspection, applying his understanding of the relevant rules and guidance, determined that the date of death should be taken to be 1 November 2008.
 On 23 March 2009 Mr Lorimer wrote to the appellants referring to his inspection and saying that it had revealed some errors in the animal records. These errors, three in number, were identified in an Annex to Mr Lorimer’s letter. The appellants were able to provide information which eventually satisfied the respondents that, in relation to two of the alleged errors the records were, in fact, in order. It may be added that although the appellants had been left with the impression that the ultimate penalty had been influenced by the number of errors initially determined, we are satisfied that this was not the case. The other alleged errors are irrelevant to the present appeal. Our concern is solely with the error in respect of animal 267. This was identified by the error code “DD” which is the code for failure to report the death of an animal. Mr Lorimer’s letter went on to say this:-
“If you claim under any Direct Aid Scheme, for example Single Farm Payment Scheme, the faults found at this inspection may affect the payment(s) you receive in 2009. Our 2009 Cross Compliance rules are currently under review so we cannot tell you what affect these faults may have until that review is complete. When it is complete, I will write to you again to tell you if there are any penalty implications.”
 On 23 November 2009 the respondents wrote to all agricultural producers to give them, in effect, the results of the review referred to in Mr Lorimer’s letter of 23 March. The relevant parts of this letter are as follows:-
CROSS COMPLIANCE UPDATE
This letter provides important information about changes the Scottish Government has been forced to make to the implementation of cross compliance in Scotland.
Changes to Cross Compliance Penalty System
- European Commission Audits have ruled that the current penalty system is too lenient.
- Cross compliance breaches will generally result in a 3% support scheme payment reduction.
- We will write to farmers/land managers who have been inspected since 1 January 2009 to explain the implications of any cross compliance penalties as soon as their inspection results have been finalised.”
The letter then went on to give further information in a question and answer format.
 The appellants fell into the category of those who had been inspected since 1 January 2009 and three days later, on 26 November 2009, Mr Stewart A. Johnston, another Principal Agricultural Officer based at Inverurie, wrote to tell them that the errors found at inspection would result in a 3% cross compliance penalty. The letter included reference to the other two errors said to have been found on inspection but, as we have said, we are satisfied that these did not in fact affect the level of the penalty. The error in respect of animal 267 on its own would have resulted in the penalty now under appeal. Mr Johnston’s letter does not spell out what the breach in respect of which the penalty was being imposed was – referring to it instead simply by the code “DD” – but it did explain that it was being imposed as a result of the need to comply with the requirements of Articles 3 and 4 and Annex III of EC Regulation 1782/2003 and told the appellants that, in terms of the (new) cross compliance guidance the error had been assessed under four heads as follows:-
SEVERITY Minor Effect
 On 18 December 2009 the appellants applied for a review of that decision in terms of the 2009 Appeal Regulations. As these Regulations require, a review meeting was then held. It took place on 4 February 2010 and was attended by Mr Oosterhof of the appellants and Miss Jennifer Kinnaird of the respondents’ said Directorate as the Reviewing Officer. The result of Miss Kinnaird’s review – which was that she felt unable to change the original decision – was communicated by her to the appellants by letter dated 30 March 2010. The appellants then appealed to this Court.
 The 3 per cent penalty amounted to a reduction of £6,090 in the appellants’ Single Farm Payment for 2009 and also applied to payment entitlements under the Scottish Beef Calf Scheme, the Less Favoured Area Support Scheme and Rural Development Contracts Scheme.
 Animal 267 has never been found. It is not known for certain, therefore, what has become of it. We accept Dr Banks’ contention that the most likely explanation is that it is in one of the bogs or lochs on the holding. No realistic alternative was suggested.
 Regulation (EC) No 1760/2000 of 17 July 2000 established a system for the identification and registration of bovine animals. Article 3 provides that the system is to comprise ear tags, computerised databases, animal passports, and individual registers kept on each holding. Article 4 deals with ear tags. Article 6 deals with passports and requires, by paragraph 4, that in the case of the death of an animal the passport is to be returned by the keeper to the competent authority within seven days of the death. Article 7 deals with registers and computerised databases and, by paragraph 1, provides inter alia as follows:-
“With the exception of transporters, each keeper of animals shall –
- keep an up-to-date register,
- once the computerised database is fully operational, report to the competent authority all movements to and from the holding and all births and deaths of animals on the holding, along with the dates of these events, within a period fixed by the Member State of between three and seven days of the event occurring.”
 Paragraph 3 of Schedule 2 of the Cattle Identification (Scotland) Regulations 2007 (“the Cattle Identification Regulations) allows the full period of seven days for the reporting of deaths in Scotland. It provides at sub-para (3):-
“… the keeper shall notify the Scottish Ministers of [the animal’s] death in accordance with Article 7(1) of Regulation (EC) No. 1760/2000 by entering the details in the identification document and sending it to the Scottish Ministers within 7 days of the death”.
Paragraph 10(1) of Schedule 3 of these regulations provides:-
“If an animal for which an identification document has been issued is lost or stolen, the keeper shall within 7 days of becoming aware of that fact notify the Scottish Ministers of it and return the identification document to them.”
 European Council Regulation (EC) No 1782/2003 established common rules for direct support schemes under the common agricultural policy. It established the Single Payment scheme which replaced the previous agricultural aid schemes. It was in force in November 2008 but was repealed with effect from 1 January 2009. We return to the detail of repeal but it may be noted that it was replaced by European Council Regulation (EC) No 73/2009. Article 3 of 1782/2003 introduced a requirement that a farmer receiving direct payments must respect the statutory management requirements referred to in Annex III and the good agricultural and environmental conditions established under art 5. This is what is known as “cross compliance” and the statutory management requirements listed at Annex III included Regulation (EC) No 1760/2000.
 Article 6(1) of Reg 1782/2003 provided, so far as relevant, as follows:-
“Where the statutory management requirements or good agricultural and environmental conditions are not complied with at any time in a given calendar year (hereinafter ‘the calendar year concerned’), and the non-compliance in question is the result of an act or omission directly attributable to the farmer who submitted the aid application in the calendar year concerned, the total amount of direct payments to be granted, after application of Articles 10 and 11 to that farmer, shall be reduced or cancelled in accordance with the detailed rules laid down under Article 7”.
 So far as relevant, Article 7 provided as follows:-
“1. Detailed rules for the reductions and exclusions referred to in Article 6 shall be laid down in accordance with the procedure referred to in Article 144(2). In this context, account shall be taken of the severity, extent, permanence and repetition of the non-compliance found as well as of the criteria set out in paragraphs 2, 3 and 4 of this Article.
2. In case of negligence, the percentage of reduction shall not exceed 5% and, in case of repeated non-compliance, 15%.
In duly justified cases Member States may decide that no reduction shall be applied where, given its severity, extent and permanence, a case of non-compliance is to be considered as minor. Cases of non-compliance which constitute a direct risk to public or animal health shall however not be considered as minor.
3. In the case of intentional non-compliance, the percentage of reduction shall not in principle be less than 20% and may go as far as total exclusion from one or several aid schemes and apply for one or more calendar years.”
 European Commission Regulation (EC) No 796/2004 laid down detailed rules for the implementation of cross-compliance. It fleshed out Regulation 1782/2003. It was in force both as at November 2008 and February/March 2009 but has, we understand, since been repealed. Article 41 contained general principles and definitions in relation to cross-compliance controls and provided, inter alia, as follows:-
“For the purposes of this Chapter, the following general principles and definitions shall apply:
(a) A ‘repeated’ non-compliance shall mean the non-compliance with the same requirement, standard or obligation referred to in Article 4 determined more than once within a consecutive period of three years, provided the farmer has been informed of a previous non-compliance and, as the case may be, has had the possibility to take the necessary measures to terminate that previous non-compliance;
(b) The ‘extent’ of a non-compliance shall be determined taking account, in particular, of whether the non-compliance has a far-reaching impact or whether it is limited to the farm itself;
(c) The ‘severity’ of a non-compliance shall depend, in particular, on the importance of the consequences of the non-compliance taking account of the aims of the requirement or standard concerned;
(d) Whether a non-compliance is of ‘permanence’ shall depend, in particular, on the length of time for which the effect lasts or the potential for determining those effects by reasonable means.”
 Article 48 contained requirements relating to a Control Report which must be prepared following upon a farm inspection. So far as relevant it read:-
“1. Every on-the-spot check under this Chapter … shall be the subject of a control report to be established by the competent control authority.
The report shall be divided into the following parts;
(a) a general part containing, in particular, the following information:
(i) the farmer selected for the on-the-spot check;
(ii) the persons present;
(iii) whether notice of the visit was given to the farmer and, if so, the period of advance notification;
(b) a part reflecting separately the checks carried out in respect of each of the acts and standards and containing, in particular, the following information:
(i) the requirements and standards subject to the on-the-spot check;
(ii) the nature and extent of checks carried out;
(iii) the findings;
(iv) the acts and standards in relation to which non-compliances are found;
(c) an evaluation part giving an assessment of the importance of the non-compliance in respect of each act and/or standard on the basis of the criteria ‘severity’, ‘extent’, ‘permanence’, and ‘repetition’ in accordance with Article 7(1) of Regulation (EC) No 1782/2003 with an indication of any factors that should lead to an increase or decrease of the reduction to be applied.
Where provisions relating to the requirement or standard in question leave a margin not to further pursue the non-compliance found, the report shall make a corresponding indication. …
2. The farmer shall be informed of any determined non-compliance within three months after the date of the on-the-spot check.
3. Without prejudice to any particular provisions contained in the legislation applicable to the requirements and standards, the control report shall be finalised within one month of the on-the-spot check. However, that period may be extended to three months under duly justified circumstances, in particular if chemical or physical analysis so require.
Where the competent authority is not the Paying Agency, the report shall be sent to the Paying Agency within a month of its finalisation.”
 Article 66 dealt with the application of reductions in cases of negligence and provided:-
“1. Without prejudice to Article 71, where a non-compliance determined results from the negligence of the farmer, a reduction shall be applied on the overall amount of direct payments, as defined in Article 2(d) of Regulation (EC) No 1782/2003, that has been, or has to be, granted to the farmer concerned following aid applications he has submitted or will still submit in the course of the calendar year of the finding. That reduction shall, as a general rule, be 3% of the overall amount.
However, the Paying Agency may, on the basis of the assessment provided by the competent control authority in the control report in accordance with Article 48(1)(c), decide either to reduce that percentage to 1% or to increase it to 5% of that overall amount or, in the cases referred to in the second subparagraph of Article 48(1)(c), not to impose any reductions at all.”
The cases referred to in that paragraph of art 48(1)(c) are cases where the relevant requirement leaves a margin not to further pursue the particular non-compliance in question.
 European Council Reg (EC) No 73/2009 repealed Reg (EC) No 1782/2003 with effect from 1 January 2009 but provided, by art 146(2) that:-
“The references made in this Regulation to Regulation (EC) No 1782/2003 shall be understood as referring to that Regulation such as it was in force before its repeal.
References in other acts to Regulation (EC) No 1782/2003 shall be construed as being made to this Regulation and shall be read in accordance with the correlation table set out in Annex XVIII.”
In the correlation table, arts 23 and 24 are correlated with arts 6 and 7 of Reg (EC) 1782/2003 and are in the same terms as the latter.
 Dr Banks submitted that Regulation (EC) No 73/2009 had no effect in Scotland because it had not been implemented by way of Scottish Statutory Instrument. Whereas Regulation 1782/2003 was “supported” (Dr Banks’ term) by the Common Agricultural Policy Schemes (Cross-compliance) (Scotland) Regulations 2004, there is, apparently, no equivalent for Regulation 73/2009. We note that it was Regulation 1782/2003, which was in force in November 2008. In any event, Mr Heaney, in response, relied on the direct effect of European Regulations. Regulation (EC) No 73/2009 states in terms, at art 149, that it “shall be binding in its entirety and directly applicable in all Member States” and we agree with Mr Heaney that the position is that European Union regulations which are capable of having direct effect without domestic legislation have that effect: EC Treaty Article 249 (ex 189), European Communities Act 1972, sec 2(1), Antonio Munoz Cia v Frumar Ltd; Wyatt and Dashwood para 5-022and following. Dr Banks did not address us in detail. He made no reference to legal authority. It may be worth pointing to the distinction implicit in art 249 between “regulations” and “directives”. While the latter may require to be implemented by domestic measures - and not all Regulations will necessarily have direct effect in terms of European jurisprudence - we are entirely satisfied that the provisions of the EU Regulations relevant in the present case, have direct effect without the need for reference to, or reliance on, domestic provision.
 The respondents devised a penalty-fixing system which is intended to give effect to the foregoing law, as well as other cross-compliance provisions, and to be objective, transparent and to produce consistent results. For breaches of the requirements relating to cattle their system involves the use of a Cattle Penalty Calculator and a Payment Reduction Matrix.
 The Cattle Penalty Calculator allocates a numerical value within a range of 0 to 1 to each breach. The aggregate numerical value of all breaches discovered is known as the “Absolute Severity Score”. The Absolute Severity Score is then converted into a percentage by dividing it by the number of animals inspected and multiplying by 100, producing what is known as the “Percentage Severity Score”. Provided that the Absolute Severity Score is less than 3 and the Percentage Severity Score is less than 10, a breach, or the breaches, are classified as being of “minor” severity. The other, more serious, gradations are “minimum”, “medium” and “high”.
 The numerical values allocated to breaches for the purposes of the Penalty Calculator do not take account of the extent of a breach, in terms of its effect, or of its permanence or otherwise. It is in order to bring these considerations into play that the Payment Reduction Matrix is used. The best way of explaining it is simply to show it. We attach, as appendix 1, a copy of the front page of pro. 15. Although this bears to be dated 02-02-10, it shows Version 1.1 and Dr Banks advised us that that version was the one first produced when the Matrix was revised in November 2009. It was not disputed that it was the version on which the respondents based their decision in the present case.
 In the present case the respondents have classified the breach as negligent, off-farm in terms of its effect (we explain that term below), minor (as a result of applying the Penalty Calculator), and permanent, thus producing the penalty of 3% which they imposed. So far as the application of this penalty fixing system is concerned, it is the respondents’ classification of the breach as being “off-farm” and “permanent” which are challenged in this appeal. We heard some critical comment about the respondents’ approach to assessment of severity and this is a matter upon which we would have wished to hear further submissions on behalf of the Ministers had we considered it directly relevant to the issues before us. However, we did not understand Dr Banks to challenge the actual finding applied in this case. We have no reason to think that any error in the Ministers’ approach to this issue could have been to the prejudice of the appellants and it is, accordingly, unnecessary to say anything about the validity, or otherwise, of that approach.
 The Cattle Penalty Calculator and Payment Reduction Matrix have been in use by the respondents, in one form or another, since 2005. But, as their letter of 23 November 2009, quoted above, tells us, in 2009 they felt obliged to take a more severe view of certain cross-compliance breaches as a result of criticism by the European Commission’s auditors who considered that the approach taken in the United Kingdom generally was too lenient.
 That criticism seems to have resulted from audit inspections carried out by the Commission’s auditors in Wales but we understand that it has resulted in general revisal of the approach taken by all the paying agencies within the UK. The productions in this case include a copy of an exchange between the Director of the Commission’s AGRI J Audit (whom, for convenience, we shall call “the auditor”) and Mr Michael Cooper of the UK. Co-coordinating Body (representing the various UK payment agencies) dated 15 May 2009. It is in the form of a large number of observations and requests made by the auditor with responses inserted by the UK. This material was discussed at debate and it may be helpful, in terms of explaining the respondents’ position, to refer to it in some detail here. References below to the comments of the auditor are to the material as quoted in the letter of 15 May 2009.
 Of the many matters dealt with in this document, the following appear to have informed a change in the respondents’ approach to cases such as this when they issued the revised guidance of November 2009.
 The relevant section begins at page 14 and is headed “Assessment of non-compliances; calculation of reductions and exclusions”. The introductory paragraph reads:-
“Generally, the sanctioning system seemed too lenient, mainly because of the guidelines which set thresholds for severity, extent and permanence. Due to the evaluation guidelines, the default result of non-compliance is either a warning letter with no financial consequences or a 1% sanction, rather than the 3% basic sanction rate defined in Art. 66 of R. 796/2004.”
 Paragraph (16), at page 14, is headed “Use of the non-compliance evaluation category “Inadvertent and minor in nature” or “Non-negligence”. This is a category which had been in use by UK authorities to cover, it would seem, cases such as the present one, because the auditor says “Some of these [i.e. some of the breaches classified under this heading] are relatively serious findings, such as animals unaccounted for in the BCMS cattle register, failures to report movements, births and deaths.” There is then reference to the particular legal meaning of negligence in UK domestic law and the auditor concludes that “even accepting this logic [i.e. the understanding of negligence in the UK] it is reasonable to assert that even transcription errors are the result of lack of care, therefore they can be considered negligent”. Referring to a specific case in which a farmer was given only a warning letter for a failure to report a dead animal and a missing animal the auditor comments that, “taken in isolation and in absolute terms, this type of error is too serious to not merit a sanction”. The response from the UK is that “This level will not be used for 2009 onwards”. The result, we understand, is that all breaches discovered on inspection since 1 January 2009 have been regarded as either negligent or intentional.
 At paragraph (18)(a), under the heading “Certain errors are too important not to merit a sanction”the auditor says “The approach to certain errors is too lenient, considering the significant health risk posed by unidentified and unrecorded and untraceable animals/carcasses; specifically this includes beasts having lost both ear tags TG(1), and also failure to report movements, births and deaths.”
 At paragraph (20)(b), page 24, the auditor is quoted as questioning the classification of a failure to report a dead animal breach as an “on farm”, rather than “off farm”, breach and asking, at page 25, “Should not DD errors [i.e. dead animals not reported to the cattle tracing system] … be considered as off-farm in those cases where there are as (sic)wider implications for public/animal health/entry into the human food chain and there is movement of the carcass off-farm?”
 At paragraph (22), page 28, the auditor comments on the way in which the permanence or rectifiability of breaches is assessed in the UK and says:
“Evaluation of permanence (i.e. is the breach rectifiable or not) seems to be interpreted not in terms of whether the action of the farmer has caused damage (or risk of damage) to the environment or public/animal health, but rather whether the paperwork can be fixed. For example, rather than looking at the effects when a valuable habitat is lost, or groundwater polluted, the authorities focus on whether a permit could be obtained a posteriori. Or once an animal has been moved from the farm without supporting documentation to enable traceability in the food chain, they focus on whether the cattle register can be updated, instead of the risk posed by that breach of a disease outbreak/food scare. This seems to be against the whole concept of cross-compliance.”
The UK response (at page 31) is that a review of the definition of permanence is being undertaken for implementation in 2009.
 It was, as we understand it, as a result of these criticisms and of the unspoken but very real threat of European Union penalties in the way of withholding funds if things were not tightened up which lies behind them, that the respondents and, we understand, their counterparts in other UK authorities changed the way in which they dealt with, among other things, failures to report animal movements and the deaths of animals. In Scotland at any rate the Absolute Severity Score for failure to report a dead animal was increased from 0.7 to 1, more of these cases were classified as having off-farm effects and all of them came to be regarded as permanent.
 We have made reference to the detail of this exchange between the European Commission and the UK by way of background and to explain why the respondents felt forced to make certain changes in the way they dealt with breaches such as this one in 2009. The opinion of the Commission’s auditors is entitled to great respect, but it is to European law directly that we have to have regard. As a court of law we, must apply our own view of the proper construction of the Regulations.
 Dr Banks took us through the effect of the change in the respondents’ approach on a case such as this. It was not disputed that, had this case been dealt with in terms of the guidance in place in November 2008, the result would have been a warning letter and not a reduction of 3% in the appellants’ entitlements.
 In order to deal with the grounds of appeal contained in the application it is not necessary for us to set out the parties’ submissions at length. Both Dr Banks and Mr Heaney helpfully provided written copies of their submissions. These are held by the Court and there is no need to repeat them here.
 We should, however, record that Mr Heaney referred us to the approach taken by both the European Court of Justice (in Nilson, Schumacher, Hopermannand Pretszch) and this court (in Campbell, Dickie, T Millar & Son and Stephen)in cases such as this. Given our familiarity with these cases it was not necessary for Mr Heaney to take us through them and he did not do so. The essential points which emerge from them are that a purposive approach has to be taken with a view to securing that the Regulations governing the European scheme for administration of agricultural subsidies are properly applied. It might be added that we are satisfied that a similar approach is necessary in relation to the scheme for rural payments and that the importance of a tightly administered scheme includes the wider issues of protection of the environment and the securing of both animal and human health and welfare. The decisions of the European Court are binding on us and establish that severe penalties may be appropriate in furtherance of the aim of uniform functioning of the scheme which is a complex one applying over a very wide area of Europe. Entitlement to the substantial payments involved does require a high degree of care and attention to detail. There is no room for what Mr Heaney called “the exercise of a sympathetic discretion”. That is the approach this court has consistently taken in such cases, as the examples cited show, and it is the approach we take in this case also.
 It must also be added that Mr Heaney’s written submission was based on the apparently agreed fact that an identified animal had been found to be missing on 1 November 2008. The submission did not require to address the question of what should happen if the keeper simply found that there appeared to be an animal short at a time when the identity of the missing beast could not immediately be determined. However, much of the submission for the appellants approached the case on that basis and we also heard discussion of what would have happened had the fact that any animal was missing first come to light at inspection. Although Mr Heaney indicated that he was prepared to try to deal with these issues, he made it clear that he had expected to make submissions based on the apparent agreement that an identified animal was known to be missing in Novemeber 2008. This is an important and complex area and there is a risk that even a capable and experienced pleader, faced with an unexpected change on such an issue, may not be able to address the full implications on his feet. We ourselves have now had time to reflect on the complexities and are satisfied that the wider issues will require further consideration in a suitable case. While we appreciate the efforts which were made to try to cover related topics and the natural desire to have guidance from the Court, we have decided that the present appeal must be dealt with by limiting ourselves strictly to the facts of the present case as agreed or non-controversial. We do not attempt to express any view on the issues raised as to related aspects of the Scottish Minister’s practice although our comments will give some indication of areas which may require further thought. For the reasons discussed below we have been able to deal with the present appeal within the structure of the respondents’ Matrix. That is not to say that we are positively satisfied that it reflects a sound construction of all the relevant Regulations.
 We take the grounds of appeal in the order in which they are set out in the appellants’ written submission excluding ground 5 as irrelevant because the matter to which it refers was not relied upon by the respondents in imposing the penalty appealed against and ground 9, which Dr Banks intimated at the outset of the hearing was no longer being insisted upon.
 The inspector had to deal with the situation as at the date of his inspection, 24 February to 3 March 2009. The position was that animal 267 was missing. He had to determine the status of that animal as at that date. From the information supplied to him by the appellants it appeared very likely that the animal had been missing since at least 1 November 2008. It seems to us that it was, in these circumstances, entirely reasonable for the inspector to presume animal 267 to be dead. By that time that was the most likely explanation for its absence. It was not disputed that the grazing terrain included areas where a carcass could disappear. Had the animal strayed onto a neighbouring farm it is probable that this would have been reported to the appellants or to the BCMS. This seems to have been accepted by the appellants at the time in as much as when they did make a report in relation to animal 267 in March 2009 it was as a dead animal rather than a missing one. We consider that the inspector was entitled to treat this as a case involving a dead animal and not merely a missing one. Accordingly, we repel this ground of appeal.
 Having concluded that animal 267 was dead, the inspector then had to address the question of the date of death. In order to do so he applied guidance provided by the respondents. This required him to establish when the animal had gone missing. The appellants told him an animal, which in retrospect was probably animal 267, was missing as at 1 November 2008. He therefore fixed that as the date of death. Had he not been able to do so, because it had not been noticed that an animal was missing, the guidance would have required him to go back to the last recorded event for the animal in the appellants’ records.
 We heard some discussion of the guidance but we did not have information as to the parameters within which it applied and it is inappropriate to say more than that, as presented to us, it appeared to be a system which would penalise a keeper for failure to notify a death of which he was in fact unaware. We heard no discussion of whether the familiar expression “knew or ought to have known” or equivalent would be used as the basis of decision or whether the failure to notify was treated as an absolute offence. We are satisfied that in the circumstances of this case it was perfectly reasonable for the inspector to take 1 November 2008 as the date of death. But, a subsidiary and fundamental question arises as to whether the absence of any notification of such death prior to inspection is indicative of a breach of duty by the appellants.
 The circumstances in which a keeper may note that an animal is not where it is expected to be, may vary considerably. An animal missing when there has been a gather and count is one situation. Where a keeper simply notices that he has not seen a particular animal for a while and resolves to keep a look out, may be quite another. Some assessment of the history of events is likely to be made when the problem comes to light at inspection. The precise history would be relevant if the breach depended on some element of fault but not if the failure to notify a death required to be treated as an absolute offence. In the present case, however, it is not disputed that there was a count which revealed that an animal was missing. Although Dr Banks referred to the difficulties the appellants would have faced in making an exhaustive search, it is not suggested that any search was ever made. It is not suggested that any purposeful attempt was made to find it or to identify which animal it was.
 Unlike the domestic Cattle Identification Regulations, the European Regulations, to which we refer at para  above, make no mention of missing animals. They do not appear to contain any explicit requirement to report an animal as missing. We did not hear analysis of the implications of that omission. It may be said that the mere fact that an animal might be said to be “missing”, in the loose sense that the keeper did not know precisely where it was, was not created an offence by European Regulations. Whatever obligations it might give rise to in other contexts, such as legislation relating to animal welfare, the fact that the keeper might not know where an animal was at any point would not, itself, give rise to any obligation to notify.
 The Cattle Identification Regulations create obligations to notify the Scottish Ministers and return the passport to them within 7 days of a death or of becoming “aware” of the fact that the animal is lost or stolen: see our para . There is an obvious contrast in that the obligation to notify a death is not explicitly qualified by any reference to the keeper’s knowledge: para 3(3) of sch 2. We understand that the respondents’ practice where an animal is found to be missing at inspection is to assume a death and to treat the keeper as in breach of an obligation to notify even where there is no identified reason for the keeper to suspect that there is anything to report. We have some reservations about this general practice but would wish to hear further submissions if it comes to be challenged in proceedings before us. In the present case the respondents had a specific history to consider.
 On 1 November 2008 the appellants knew they were one animal short in their count. They did not know which animal it was. They did not know where it was. They did not know whether it was dead or alive. They could say that it was missing from their count but could not say that it was missing from the farm. It might have been alive somewhere on the grazings but the other possibilities were that it was dead or that it had moved off the relevant holding. There was nothing to suggest that it was more likely to be alive on the holding than either dead or off the holding.
 Although the focus of the appellants was on the circumstances in which they found themselves in November 2008, we consider that the primary focus should be on the prima facie breach revealed by the inspection. There was an animal missing which should have been on the holding according to the records. It was investigation of this which revealed the probable death. If the animal died on or before 1 November 2008, there was a failure to notify the death. Such a failure can properly be attributed to the appellants. Whatever the implications of failure to notify in circumstances where a keeper could not have known of the death, we are satisfied that, in the circumstances of this case, it cannot be said that they had no reason to be aware of it. The European jurisprudence to which we were referred demonstrates that high standards of compliance are required.
 It is enough to say that, on the admitted facts of this case, we consider that the inspector was entitled to treat animal 267 as having died on 1 November 2008 and that the appellants’ failure to do anything in the way of investigating the circumstances in which an animal came to be missing from the count entitled the inspector to hold that they were in breach of the requirement to report the death within seven days of that date or, in any event, long before the inspection. That was a relevant cross-compliance requirement. We cannot sustain the second ground of appeal.
 What this refers to is the “extent” criterion referred to in art 7 of Reg 1782/2003, as defined in art 41 of Reg (EC) 796/2004: see paras  and  above. The terms “on farm” and “off farm” appear to be the respondents’ shorthand for the definition in art 41. But, we have to apply the terms of the definition itself, which are that “[t]he extent of non-compliance shall be determined taking account, in particular, of whether the non-compliance has a far-reaching impact or whether it is limited to the farm itself.”
 It seems to us that this does contemplate a need to take account of the actual impact of the non-compliance and that it may be too simplistic to view it as involving only two hard and fast categories. Had the intention been to refer to effects as either “on-farm” or “off-farm” that could readily have been said.
 We understand that, where no death has been notified but the carcass is found on the farm and can be buried on the farm, the respondents treat the extent of the non-compliance as limited to the farm itself. Where the carcass is found off the farm they treat the effects as not being limited to the farm itself and accordingly “off-farm”. They do not appear to distinguish between a situation where the carcass is found in a contained situation off the farm and one where it is taken to be off the farm but cannot be found. It appears that their system while depending on the tracing of the carcass, does not make any assessment of whether the consequences are, in terms of art 41, “far-reaching”. Where, as here, the carcass has not been found they apparently take the view that because of the risk that the animal has gone off the farm, the non-compliance should treated as “off-farm” and, by implication, “far-reaching”.
 In discussion of this matter it is apparent that there is a real risk of confusing two quite distinct things: (a) the risks which flow from an animal going missing and (b) the consequences which flow from failure to report that animal as missing. The risk of a missing animal spreading disease or entering the food chain illegally is one which flows from the animal having gone missing in the first place, not one which flows from a failure to report it as missing. The failure to report may have a bearing on how the spread of disease can be addressed but is not a cause of disease.
 The respondents’ approach does not appear to address the issue of the impact of a failure to report. This may, or may not, depend on whether the carcass is found on farm, off farm or not found at all. At debate we explored with Mr Heaney the consequences of failure to report an animal missing or dead. We heard nothing to persuade us that there were any significant direct consequences. It seems unlikely that a failure to report an individual death would have any such consequences because reporting a death is not said to lead to any steps being taken or to any other consequences bearing on the animal in question. We were told that when an animal is reported missing no search for it is instigated by the authorities nor any form of enquiry undertaken as to what has become of it. We were not directed to any Regulation which imposed any obligation following report of a ‘deemed’ death. The direct effects of failure to report are the same whether the animal is assumed to be on or off the farm. However, that is not to say that failure to report does not have important consequences. Every such failure inevitably detracts from the aim of an all inclusive system allowing the location and status of all animals to be ascertained. It means that the register is not up-to-date and accurate. If there was widespread neglect in the reporting of missing or dead animals the registration and traceability system would eventually become unreliable and would lose its effect as an accurate record. In the circumstances, we are satisfied that the label “off-farm” was properly applied to the appellants’ breach, although not for the reasons relied on by the respondents. We cannot sustain this ground of appeal.
 It may be observed that the respondents’ approach does not appear to us accurately to reflect the advice given by the auditor. What he said was “Should not DD errors for both list 1 and list 2 be considered as off-farm in those cases where there are wider implications for public/animal health / entry into the human food chain and there is movement of the carcass off-farm” (emphasis added). In the present case there is neither any evidence of wider implications for public/animal health or entry into the human food chain nor of the carcass having gone off-farm. However, we are not yet persuaded that the auditor’s advice itself addresses the effects of failure to notify as opposed to the effects of the fact of movement of an animal or carcass. We come back to the observation that the only direct effect of non-compliance of this kind is that the register is inaccurate as long as the fact of the animal’s death goes unreported. That effect is not limited to the farm itself.
 The respondents appear to take the view that because a breach cannot be undone it is permanent. If so, it may be said that their approach confuses the fact of commission of the breach with its effects. A non-compliance once committed cannot be undone but that says nothing about the permanence of its effects. It is to the “effects” of a non-compliance that art 41 draws attention: “Whether a non-compliance is of ‘permanence’ shall depend, in particular, on the length of time for which the effect lasts or the potential for terminating these effects by reasonable means”. The direct effect of this non-compliance, that the register was not accurate, was an effect which could be brought to an end, as was done in March 2009, by reporting the animal as dead, which allowed the register to be corrected to show, accurately, the status of the animal. What could not be rectified was the fact that, owing to this breach, the register was inaccurate for a period of four months. But the length of the period during which a breach has effect does not have a direct bearing on the issue of whether such effect can be brought to an end.
 It is easy to be influenced by the duration. A failure to report for four months seems much worse than a failure to report of a couple of days. But, the test of permanence does not depend on duration. When an animal dies, the Register becomes inaccurate. But an inaccuracy in a register can be remedied by correction. Indeed, it is implicit in the scheme that the initial, inevitable, inaccuracy will be remedied if notification of death is made within seven days. It is hard to see any pragmatic basis upon which it could be said that the inaccuracy is not remedied by a report on, say, the eighth day. For seven days the inaccuracy would be attributable to the event. For the eighth day it might be attributed to the breach. But in both cases, the inaccuracy can readily be accepted as determined, or coming to an end, on registration.
 There was nothing in the respondents’ pleadings to suggest that they had given consideration to the need to consider the practical effects of late registration when applying their Matrix. We attempted to explore this at debate. It may be sufficient to say that no positive irremediable consequences of the effects of breach were suggested. However, as an expert Court we have attempted to apply our own knowledge and understanding to the circumstances. There is a sense in which the effect of the breach cannot be remedied. It did have the effect of creating a period when the Register was inaccurate. This might have created a risk. However, it would be entirely commonplace to describe a risk as being rectified when steps have been taken which bring it to an end. Although we recognise that there is a sense in which the very fact that a risk was created is something which cannot be remedied, we see no need for such a rarified approach in the context of the compliance regime. Nevertheless, we have attempted to address the potential risks arising from the inaccuracy of the Register and to consider whether there is a substantive danger which cannot properly be said to be brought to an end by registration.
 Perhaps the most obvious risk is that of an outbreak of FMD involving the farm. If the keeper had not sent the passport for the missing animal to BCMS and a situation arose where all the animals on the farm had to be destroyed, the check of records on farm would show that an animal was unaccounted for and steps could be taken to find it locally. If the assumed death had been registered and the passport sent to BCMS, the fact that a potentially contaminated animal had not been safely destroyed would not be recognised immediately. We did not hear anything to show how it would ever be recognised. It is sufficient to say that, in that situation, notification to BCMS would not have had the direct effect of providing an effective safeguard against the risk of spread of disease.
 To test the proposition that failure to register in time inevitably has the effect of creating a risk to public health, it is reasonable to consider a failure timeously to register an identified death. If the carcass is known to have been disposed of safely, the effect of delay would simply be that the Register was inaccurate. That effect would be determined when registration was made. There is no doubt that there can be situations where the only relevant effect does relate to the paperwork and where any risk attributable to the effects of non-registration can be seen to come to an end when notification is made. It seems to us that when considering an appropriate penalty for failure, the situation where the beast is taken to have drowned in a bog is essentially the same. The differences cannot fairly be said to be relevant to the assessment of appropriate penalty.
 In circumstances like the present we have not been able to identify how the time of registration of death would have any relevance to the safety of the food chain. In any event, we have not identified a situation where a failure to notify timeously would have effects which would not be capable of being brought to an end by notification. In their pleadings, the respondents suggested that a failure to inform the BCMS of a death might mean that an animal might move off the farm and enter the food chain without being traceable through BCMS records. A dead animal would not move itself off the farm and the intention must clearly have been to refer to an animal being “moved” off the farm. The respondents did not address the appellants’ response that no animal could leave the holding without a passport and no mart, producer or slaughterhouse would accept an animal without such passport. If the animal was to enter the food chain in a wholly illegal manner it is highly unlikely that its identifying tags would accompany it. Notification of death of a specified animal would have no relevance in such circumstances.
 We are satisfied that when dealing with the question of penalty, the aim of art 7 of Reg (EC) 1782/2003, was to direct attention to the need to consider the effects of “the non-compliance found”. We have not yet been persuaded that there is any justification for assessment by reference to speculative effects which might arise in other circumstances.
 In addition to public safety the scheme for identification and registration was designed to protect against fraud. We recognise that one potential route for fraud might involve illegal use of tags from a dead animal but it takes some imaginative thinking to figure a situation of any possible relevance to the present. We take from the auditor’s letter that the administering authorities should look at particular effects. We cannot identify any adverse effect realistically possible in the circumstances of the present case where the consequences of failure to register timeously would not be brought to an end by late registration.
 We have taken the view expressed above on what we would regard as a straightforward approach to consideration of the question of the effects of breach. Some very general support for this approach can be found in an established line of authority relating to breach of contract. In that context, any individual decision will turn on the particular circumstances and the terms of the particular contract in issue, However, the concept of a remediable breach of contract is well known and appears to us to raise issues similar to the present. Even where matters are expressed in terms of whether a breach is remediable, the courts have recognised that it is appropriate to look not at the breach but at its effects. For example, a failure to pay money by an agreed date will be a breach of contract which can never be undone. But the courts will look carefully at the effect of late payment to see whether, in the particular circumstances, payment remedies the effects of the breach. In The Mount Stuart Trust v McCulloch this Court discussed that issue in the context of irritancy of a lease. The question was whether an irritancy incurred by failure to pay rent within a period of time specified in the lease was a remediable breach. As part of a decision on wider issues, this Court found that it was. The decision was appealed and the appeal court supported the Land Court decision. The Inner House did not require to deal with any situation similar to the point presently in issue but made clear their view that there was no hard and fast criterion by which a breach could be said to be irremediable. “The question of remediability must be approached in a commonsense way”: para . As was noted in Mount Stuart, this was consistent with the approach of the English Court of Appeal in Expert Clothing Service & Sales Ltd v Hillgate House Ltd. In that case there was a contractual obligation to have reconstruction work completed by a specified date. It had not been started at that date. It was agreed that there had been a once and for all breach. There was a very clear obvious sense in which the breach could not be remedied. But the Court of Appeal considered that the question of whether the breach was remediable, within the meaning of the agreement, required consideration of the whole background. In short even where the question was whether a “breach” was remediable, the court has recognised a need to look at the effects of breach and to do so in a commonsense way. Under art 41, the respondents are expressly directed to look at “the effect”. We see no reason why that should not be done in a commonsense way.
 As we have seen the change of classification in the respondents’ Matrix, to treat failure to notify as “permanent” in its effects, is something the respondents apparently felt driven to by the auditor’s comments. We do not think there is a direct conflict between our approach and what the auditor said. The auditor encouraged the paying agencies of Member States to have regard to the effects of a breach and not simply to whether the paperwork could be put right. The examples quoted, at  above, of loss of a habitat or pollution of groundwater are of acts where the breach was in carrying out a particular activity without relevant permissions or accompanying documents. That is quite distinct from situations where the failure to notify was itself the breach. In any event we do not read the auditor’s comments as suggesting that the possibility of remedying the paperwork should always be disregarded as an irrelevant consideration.
 In our view this ground of appeal must be sustained. In terms of the respondents’ Matrix, the breach in this case should have been treated as “Rectifiable”.
 Dr Banks argued that the appellants were entitled to receive a copy of the control report which the respondents were required to prepare in terms of art 48 of Reg (EC) No 796/2004: our para  above. His written submission refers to the time limit contained in art 48(1)(c) but that paragraph does not itself contain any time limit. There are three time limits contained elsewhere in art 48: para (2) provides that the farmer shall be informed of any determined non-compliance within three months after the date of the on-the-spot check and para (3) provides (a) that, without prejudice to any particular provisions contained in the applicable legislation, the control report is to be finalised within one month of the on-the-spot check and (b) that where the competent authority is not the Paying Agency, the report is to be sent to the Paying Agency within a month of its finalisation. The appellants accept that para (2) has been complied with in terms of Mr Lorimer’s letter of 23 March 2009 but say that in addition to that they were entitled to receive a copy of the control report itself.
 The respondents say that art 48 does not require them to supply the farmer with a copy of the control report. They explain that, in their understanding, the control report is something which is prepared for internal audit purposes only. That is supported by the references to the Paying Agency. But, whatever their understanding, the issue for us turns on the express provisions of the Regulation.
 Although he did not refer to it, Dr Banks’ argument derives some support from recital (35) to Reg 796/2004, which concludes “Irrespective of the kind of on-the-spot check carried out, the farmer should receive a copy of the report if irregularities are found”, and also some support from art 28 which explicitly requires that, where that article applies, a copy of the control report must be given to the farmer where irregularities are found. Article 28 is not in the chapter of the Regulation dealing with “Controls Relating to Cross-compliance”, which is where art 48 is to be found. Article 28 is in Chapter II which is headed “Controls with regard to Eligibility Criteria”. It is art 48 which applies in the present case. We are satisfied that Mr Heaney is correct in his submission that the Article simply does not contain the requirement which the appellants claim. This ground of appeal is therefore refused.
 The appellants contended that the application of the penalty “was unlawful” because of the retrospective nature of the change of guidance which was not made until nine months after the inspection. The revised guidance was published on 23 November 2009 but was applied by the Scottish Ministers to all inspections carried out after 1 January of that year. Indeed in this case the guidance was applied to a non-compliance committed in November 2008 but that is because Article 66 of Regulation 796/2004 makes clear that penalties are to be applied in the year in which the findings of non-compliance are made.
 Dr Banks did not present any authority in support of his assertion that a change of approach to penalty for offences which had already been committed was “unlawful”. It is plain that retrospective legislation is not necessarily unlawful. Legislation will have to be given retrospective effect if it is clear that that is the intention of the legislature. However, the argument in the present case was not based on any change in the substantive law. What had happened was simply that the Scottish Ministers had concluded that they had not been applying the law properly. Once they became aware of their assumed error, their policy changed to try to ensure that they were applying the law correctly. We heard no argument of principle to persuade us that this was an unlawful approach and it is not clear what alternative approach they could properly have taken in compliance with their own obligations. There was some reference to a keeper’s “reasonable expectation” that a penalty once intimated would not be changed but there was no attempt to address that as a legal concept. Whatever relevance it might have in some types of litigation we are not satisfied that it has any bearing on our jurisdiction under the 2009 Appeals Regulations. Dr Banks did suggest that it was unfair that a keeper might have acted in the belief that one penalty scheme was in place only to find that a more severe one was subsequently imposed. If we had been dealing with a case of intentional breach where a keeper deliberately decided not to bother trying to find a missing animal on the basis that the cost and effort involved would be greater than the effects of the expected penalty, it might have been necessary to explore the law in more detail, although we have some reservation as to whether it would have been relevant to our current jurisdiction. As we see it, the only relevant question for us is whether the respondents applied the law correctly when they issued their decision letter of 26 November 2009. This particular ground of appeal also fails.
 Dr Banks made the point that this was an isolated incident and involved one animal out of 750. More generally, he submitted that the loss of 3% of Single Farm Payment because of one failure to report was in and of itself disproportionate. Here again, there was no attempt to support the argument by any analysis of relevant jurisprudence and we are not satisfied that the size of a herd is relevant. Dr Banks’ point may have been that compliance is harder for a keeper of large numbers. No doubt it is easier to spot that an animal is missing from a small herd and easier to identify which animal it is. It was said that the appellants’ animals were held on a number of different holdings and that this created a problem in identifying which animal was missing. While that may possibly have been thought to have a bearing on the question of whether a failure to notify in certain circumstances was in fact a breach, we are not satisfied that it has a bearing on the issue of penalty. Keepers of large herds have to be appropriately equipped for the proper husbandry of such herds and we are satisfied that there is no obvious basis for a distinction according to size of herd. As we have seen, the relevant Regulations require attention to the effects of the non-compliance in question. The effect of failure to notify is the same, whether the animal is from a large or a small herd, as indeed would be the effect of an animal going missing in the first place.
 It may be added, viewing the matter more broadly, that we accept that there may be circumstances where a British court would be entitled to conclude that the strict application of European regulations might require to be disregarded because it produced a result which was demonstrably disproportionate. But we are satisfied that such occasions will be few and far between. Such a ground of challenge might almost inevitably require reference to the European Court of Justice in terms of art 234 of the Treaty. Dr Banks did not attempt to address us on the relevant European jurisprudence and it is sufficient to say that we are not persuaded that the circumstances of the present case fall into the category of disproportionate penalty. The start point is the obligation to report an event within seven days. That is rightly regarded as an important aspect of the overall goal of achieving a complete and accurate record of stock.
 We are satisfied that this ground of appeal must also be repelled.
 That disposes of the grounds of appeal. In the course of his submissions Dr Banks invited the Court to answer a number of other questions not dealt with above. However, our concern is with the grounds of appeal. An appellant is not entitled to an answer from a court to every question he chooses to put. Where the questions were incidental to the grounds, we hope they have been adequately covered above. It is not necessary for us to deal with the other questions. However, some broad comments can be made.
 Dr Banks’ presented his material with admirable clarity guiding us efficiently through the mass of documentation to which he referred. However, it was not always easy to identify his substantive propositions. In any event, we are satisfied that some of his contentions were flawed by reliance, express or implicit, on propositions which we do not accept. One underlying flaw in his analysis lay in the proposition that “as with all EU Legislation, Reg 1782/2003 and associated regulations have to be implemented into domestic (Scottish) Legislation”. Various questions posed by him relied implicitly on this proposition. As discussed above, we are satisfied that it is not well founded. He also contended that it was “everybody’s right to be provided with readily available clear information as to the legal basis of their actions”. He referred to the difficulties of obtaining a clear picture from the wealth of material provided by the respondents. We recognise these difficulties. The abstract picture painted by analysis of the material is one of confusion and change. But we are not persuaded that there is a difficulty in direct analysis in this case. The failure to report a death on 1 November 2008 was a breach of the Cattle Identification (Scotland) Regulations 2007 and of arts 6 and 7(1) of Reg EC 1760/2000. The implications of the breach were regulated by the provisions of art 7 of Reg (EC) 1782/2003. These provisions were repealed in 2009 but were re-enacted in the same terms by art 24 of Reg (EC) 73/2009. The same substantive provisions were in effect at all relevant times.
 Dr Banks was critical of the Review Report which displayed the common feature of making extensive reference to Regulations without explaining clearly which regulations were being relied on and for what purpose. However, criticism of the way the report was expressed does not of itself advance the grounds of appeal and does not require specific comment in the present context.
 The appellants’ submissions made reference to their undertakings in the applications under the IACS scheme and suggested that these created a contract with the respondents. However, we accept that our primary focus is on the provisions of the European Regulations, which are binding on both parties. We heard many criticisms of the advice and guidance provided by the respondents. It was said to be confused and misleading and criticism was made of the respondents’ apparent failures to communicate with the appellants. There was criticism of their inconsistency in dealing with other apparently similar cases. It is conceivable that somewhere in the range of criticisms made there might be the basis of some form of claim against the respondents. But our jurisdiction is solely to deal with the types of decision specified in the Schedule to the 2009 Appeals Regulations. The Ministers, themselves, as the competent authority for the purposes of the EC Regulations are obliged to comply with the Regulations and with the provisions of domestic law. The evidence of exchange of correspondence between the auditor and the Welsh authorities gives some indication of the difficulties which arise. To point to a failure by Ministers to provide clear information is not the same as pointing to a failure in any relevant duty.
 It must also be observed that our concern is with the facts of the case before us and the law applicable to such facts. If, in any case, we reach a conclusion which appears to be inconsistent with a decision by Ministers in another case, it can be concluded either that there was some relevant distinction between the cases or that we would take the view that the other decision was wrong. It is plain that we cannot tailor our judicial decisions to fit administrative decisions. In proceedings before a court, attempts to rely on administrative decisions in other cases are frequently misleading and almost inevitably lead to no more than a waste of expensive time.
 The effect of the foregoing is that the respondents’ decision cannot stand. In the circumstances of this case, the appropriate course seems to us to be to substitute our own decision in terms of Regulation 9(2)(c) of the 2009 Appeal Regulations.
 With some hesitation we have decided that, despite the concerns we have expressed about the respondents’ approach to aspects of the Payment Reduction Matrix, we can properly deal with the present case by giving effect to our decisions in relation to extent and permanence by applying them to the existing Matrix. The result of the change, to treat the effects as rectifiable as opposed to “permanent” while retaining, though for different reasons, the respondents’ classification of extent, is that the penalty becomes 1%. We are satisfied that this is a proper level of penalty in all the circumstances.
 Following our usual practice we have allowed parties 14 days in which to lodge motions in relation to expenses.
For the appellants: Buchan Agricultural Consultants Ltd, Peterhead
For the respondents: Bryan Heaney, Advocate; Scottish Government Legal Directorate