Decision of the Scottish Land Court

James W Farquharson (Appellant) v The Scottish Ministers (Respondents)

Case reference SLC 7/16
before
Lord Minginish, Chairman, and Tom Campbell
9 March 2017

Note:

[1] The appellant is James Watson Farquharson who farms at Horn Farm, Errol, Perthshire.

[2] On 4 June 2015 he applied to the respondents for an allocation of entitlements for 2015 under the Basic Payment Scheme (BPS) which was then in course of replacing the Single Farm Payment Scheme (SFPS) as the means by which European Union aid for farmers was to be delivered.

[3] On 1 July 2015 the respondents’ Perth office wrote to him to advise that his application had been rejected because “You received an automatic allocation of standard and setaside entitlements in 2005 so therefore are ineligible”. The letter having said that he could have that decision reviewed if he wished, he applied for a review and it was held at Perth on 24 September 2015. By letter dated 16 November 2015 he was informed that the review had been unsuccessful.

[4] That letter enclosed a report of the review in which the reason for refusal was explained as follows:

“Although the business did obtain SFPS entitlements in 2014, the business was allocated standard and set-aside entitlements under the SFPS in 2005. The business is not therefore eligible for an allocation of entitlements under the National Reserve – Specific Disadvantage.”

[5] The letter also informed him of his right to appeal to this court and the appellant did so by application lodged on 15 January 2016. The case has been sisted for most of the time since then in the hope that it might be resolved. The appellant, who drafted and submitted the application himself although Thorntons LLP were stated as being his solicitors, later instructed Gillespie MacAndrew LLP to act for him but dispensed with their services when a hearing on the application was fixed in terms of our order of 23 November 2016. Since the case has been sisted for most of the time during which they were instructed, the result is that the appellant has, to all intents and purposes, been unrepresented in the preparation and presentation of the appeal. Thus at the hearing of the appeal here in Edinburgh on 6 February 2017 he represented himself, assisted in the way of helping with the handling of papers by his son, whilst the respondents were represented by Mr Alasdair Burnet, advocate.

[6] The grounds of appeal, as contained in the initial application, were, essentially, that, contrary to the respondents’ conclusion, the appellant was eligible for 2015 Basic Payment entitlements on two grounds: (i) that there was an automatic right to an allocation of entitlements for businesses active in 2013, who had been paid on Single Payment entitlements in 2014 and who had declared land in 2015, and (ii) as an active farmer in 2013.

[7] An extension of the sist having been refused in terms of our order of 23 November, the respondents lodged answers to the appeal on 15 December. These contained a denial of the appellant’s contention that he was eligible both as someone entitled to an automatic allocation of entitlements and as an active farmer in 2013. The respondents’ position was that he was eligible under neither category, nor under the “national reserve – specific disadvantage” category referred to in the original decision letter.

[8] Before we come to the evidence and submissions presented at the hearing it is convenient to set out the relevant law.

Legislation

Regulation (EU) No 1307/2013 (The “Direct Payments Regulation”)

Article 24

First allocation of payment entitlements

1. Payment entitlements shall be allocated to farmers who are entitled to be granted direct payments in accordance with Article 9 of the Regulation provided that:

(a) they apply for allocation of payment entitlements under the basic payment scheme by the final date for submission of applications in 2015 to be set in accordance with point (b) of the first subparagraph of Article 78 of Regulation (EU) No 1306/2013, except in case of force majeure or exceptional circumstances; and

(b) they were entitled to receive payments, before any reduction or exclusion provided for in Chapter 4 of Title II of Regulation (EC) No 73/2009, in respect of an aid application for direct payments, for transitional national aid or for complementary national direct payments in accordance with Regulation (EC) No 73/2009 for 2013.

The first subparagraph shall not apply in Member States applying Article 21(3) of this Regulation.

Member States may allocate payment entitlements to farmers who are entitled to be granted direct payments in accordance with Article 9 of this Regulation, who fulfil the condition provided for in point (a) of the first subparagraph and who:

(a) did not receive payments for 2013 in respect of an aid application as referred to in the first subparagraph of this paragraph and who, on the date fixed by the Member State concerned in accordance with Article 11(2) of Commission Regulation (EC) No 1122/2009 for the claim year 2013:

(i) in Member States applying the single payment scheme:

- were producing fruits, vegetables, ware potatoes, seed potatoes or ornamental plants, and did so on a minimum area expressed in hectares if the Member State concerned decides to adopt such a requirement, or

- were cultivating vineyards, or

(ii) in Member States applying the single area payment scheme, had only agricultural land that was not in good agricultural condition on 30 June 2003 as provided for in Article 124(1) of Regulation (EC) No 73/2009;

(b) in 2014, are allocated payment entitlements from the national reserve under the single payment scheme pursuant to Article 41 or 57 of Regulation (EC) No 73/2009; or

(c) never held owned or leased-in payment entitlements established under Regulations (EC) No 73/2009 or Regulation (EC) No 1782/2003 and who submit verifiable evidence that, on the date fixed by the Member State in accordance with Article 11(2) of Regulation (EC) No 1122/2009 for the claim year 2013, they produced, reared or grew agricultural products, including through harvesting, milking, breeding animals and keeping animals for farming purposes. Member States may establish their own additional objective and non-discriminatory eligibility criteria for this category of farmers as regards appropriate skills, experience or education.

Article 30

Establishment and use of the national reserve or regional reserves

1. Each Member State shall establish a national reserve. …

7. Member States may use their national or regional reserves to:

(b) allocate payment entitlements to farmers in order to compensate them for specific disadvantages;

The Common Agricultural Policy (Direct Payments etc.) (Scotland) Regulations 2015 2015 No 58

National Reserve

15 (1) For the purposes of Article 30(7)(b) of the Direct Payments Regulation, the Scottish Ministers must use the national reserve to compensate a farmer for a specific disadvantage arising from any of the circumstances mentioned in paragraph (2).

(2) The circumstances are that –

(a) the farmer –

(i) did not receive payment entitlements in the first year of application of the single payment scheme under Title III of Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers; and

(ii) commenced agricultural activity on or after 16th May 20015; or

(b) the farmer only received such payment entitlements as a result of the application of –

(i) Article 42(3) of that Regulation; or

(ii) Article 21(1) of Commission Regulation (EC) No 795/2004 laying down detailed rules for the implementation of the single payment scheme provided for in Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers.

Evidence

[9] The appeal hearing took the form of the leading of evidence followed by submissions. Prior to the hearing it had become apparent that the parties were relying on the same witnesses, save for the aftermentioned Mr Endicott, who was not on the respondents’ list but whom they helpfully arranged to attend, knowing that he was required by the appellant. At the outset of the hearing we obtained the agreement of parties that once the appellant had given his evidence, for ease of presentation, Mr Burnet would lead all of the other witnesses and they would be cross-examined by the appellant. These other witnesses were Mr David Clive Barnes, at the material time Chief Agricultural Officer in the respondents’ Rural Payments and Inspections Directorate (SGRPID), Mr Ian Simon Davidson, Head of Agricultural Development in SGRPID, Mr Brian Endicott, now retired but at the material time Deputy Scheme Manager for the relevant EU scheme within SGRPID and Mr David Lambie Imlay, Higher Agricultural Officer with SGRPID based at their Perth office.

James Watson Farquharson (79)

[10] The appellant gave evidence that he had been farming at the Horn since February 1957. He was now in his eightieth year and had been an active farmer for 60 of those. He had another farm at Meikle Coull, Angus, which he farmed in a 50-50 partnership with his son, Graeme. He had always operated Horn Farm as a sole trader.

[11] In 2005 he had been given an allocation of SFP entitlements for Horn Farm but in 2006 he had transferred those to Meikle Coull, so that they came to be owned by the partnership there. That had been done for financial reasons, to stabilise that business. Meikle Coull also had its own allocation of SFP entitlements which had now been replaced by BPS entitlements whereas the ones transferred from Horn Farm had “disappeared”.

[12] In 2014 he had bought other SFP entitlements for Horn Farm. In 2015 he had applied for an allocation of BPS entitlements. Production 18 was an application form which had been completed on his behalf by Emily Gordon, of the Scottish Agricultural College (SAC), Forfar. However there had been an earlier attempt to apply for entitlements in the new system online. That had been done by Euan Hart, also of the SAC, Forfar, but it had failed.

[13] The only section on the paper application, production 18, under which entitlements had been claimed was under the category of Special Disadvantage. Mr Hart had got bogged down after two hours of attempting to complete the electronic form. It had later come to light, however, that the form, incomplete though it was, had in fact been received at SGRPID’s Perth office. Meantime the paper application had been completed and submitted by Emily Gordon. The paper application claimed only under the categories not covered on the electronic version. Neither form was complete, because it had proved impossible to complete the online version and everything other than the Specific Disadvantage section had been left blank (as opposed to marked “Not Applicable”) on the paper copy. Yet neither form had been returned by SGRPID, despite the very clear statement in bold print on the front of production 18 that all incomplete forms would be returned. Although the online form had never been successfully submitted, Mr Farquharson was clear that it had contained a claim under the automatic entitlement category and the active farming in 2013 category.

[14] Of all the categories applied for, Specific Disadvantage was the least attractive and he had never instructed a claim to be made under that category: instead it had been done by his agent on her own initiative. His own preferred routes were routes 1 and 2, automatic entitlement and active farming.

[15] Asked by the court as to why he considered himself entitled to an automatic allocation of entitlements, Mr Farquharson said that the literature produced by the Scottish Government indicated very lucidly that he was entitled. He identified productions 5 and 35 as examples. Production 5 appears to be a compilation of pages taken from different documents, all of them intended to explain the new Common Agricultural Policy and “what it means for you”. On the third page, under the heading “Direct Payments” and subheading “Eligibility and area of land” it says “Farmers will be able to apply for entitlements to the new Basic Payments if they are able to demonstrate agricultural activity, for example, by having activated a Single Farm Payment (SFP) entitlement in 2013, or by having other verifiable evidence of farming activity” [emphasis added]. Production 35 also seems to be a compilation of pages taken from other documents, all of them produced by the respondents for the purpose of guidance. The same page about Direct Payments also appears in this production but so also does the following, under the heading of “Basic Payment Scheme” and subheading of “Who is eligible?”:

He was clearly eligible for entitlements under both of these criteria. He did not hold SFP entitlements in 2013 and had never claimed otherwise but he had been actively farming in 2013, he had been paid on 2014 entitlements and had declared land in 2015. Likewise, although he had not applied under the SFPS in 2013 he had ample evidence that he had been engaged in agricultural activity during that year. He had relied on that guidance: he was not a lawyer but had no reason to disbelieve the Scottish Government.

[16] Referred by the court to production 18, he confirmed that the answer to the question at 2.14 asking whether he had received an automatic allocation of “standard”, “set aside” or “PESC” type entitlements in 2005 “probably should have been yes”, rather than no, but the form had been completed by Emily Gordon on his behalf. He confirmed that the signature at page 8 was his but said that he had not checked through the form before signing it and taking it to the respondents’ Perth office. He had not even noticed that the other sections of the form had not been completed. He had simply followed the instructions he had been given by the SAC: he had signed the form and delivered it to Perth. He never expected it to be anything other than correct.

[17] According to a statement in the Question and answers page of production 35 there was supposed to be a question 5(c) on the form for claiming entitlements which was to be completed by people eligible to receive a payment under the SFPS or the Scottish Beef Scheme Support (SBSS or SBS) in 2013 but it never appeared on the electronic form. This question was shown on production 32 which was a paper version of the 2015 SAF which he had obtained from the respondents’ Perth office in January 2016 but he was registered on the online system by then and the question did not appear on the online version of the form. That was, he felt, an important omission. However the use of the word “eligible” was significant. He had been eligible to claim under the SBSS in 2013 although he had not made a claim. He had been registered under the Scottish Beef Calf Scheme (SBCS, part of the SBSS) from 2005 to 2012 and had claimed under it annually throughout that time. The reason he had not claimed under it in 2013 was that “the bull didn’t do what a bull is supposed to do” that year. But you did not need to claim in order to be eligible to claim. For example, the fact that he did not have a bus pass did not mean that he was not eligible for one. That word “eligible”, whose meaning he had checked in the dictionary, was vital to his case. The Scottish Ministers were not entitled to rewrite the English language.

[18] Mr Farquharson summarised his case as follows. In 2013 he had been advised to go online by the Scottish Government for the purpose of submitting claims. Acting on that advice he had employed Euan Hart of the SAC to complete and lodge his 2014 SAF application. That had been done successfully and he had received his SFP for that year. By 2015, when he and Mr Hart had attempted to repeat the process, the Scottish Government was using a new, and supposedly better, online system. However it was incompatible with the system Mr Hart was using, resulting in an incomplete SAF form being received by the SGRPID Perth office. That had been in April. In June Emily Gordon had used a paper application form to complete the application. That form was intentionally not complete in itself: its purpose was to claim for things which it had proved impossible to claim online. Taken together the two forms were to represent the totality of his claim. However Mr Imlay had processed only the paper form; in other words had processed only a claim under route 3 for an allocation of entitlements out of the National Reserve on the ground of Specific Disadvantage. There was no trace of his online claim for routes 1 and 2 having been processed. Following the decision to refuse him an allocation of entitlements, he had been advised by Mr Imlay to ask for a review. That review had proved to be “the most undemocratic waste of time [he] had ever taken part in”. After the review Mr Petrie and Mr Imlay had directed him to the Land Court.

[19] The court explored with the witness the significance of question 5(c). Production 32, the blank SAF for 2015 was put to the witness. It has question 5(c), in the following terms: “If you were eligible to receive Single Farm Payment and/or Scottish Beef Scheme support in 2013, do you wish to use this as your route to an allocation of Basic Payment entitlements in 2015. Tick to confirm.” Mr Farquharson explained that this form had been sent out to applicants not yet online but that by 2015 he was already online and his point was that this question did not appear on the online version of the 2015 SAF.

[20] At the close of examination-in-chief Mr Farquharson said that he did not want to argue the specific disadvantage claim. He had not instructed such a claim and he thought it was hard to argue. Rather his claim was that he had been eligible under the SBCS in 2013. He objected to it being said that he was no longer an active farmer by 2013. We nevertheless obtained his agreement that we should leave this claim standing so that eligibility under all the available categories could be assessed in this appeal.

[21] In cross-examination production 19 was put to the witness. This was said to be a compilation of screenshots of the appellant’s online 2015 SAF. With some difficulty, because of the size of the print, it was ascertained that the box indicating that he wished to claim under the BPS was ticked and that the next box, which asked whether he wished to use eligibility to receive SFP and/or SBSS in 2013 as a route for claiming an allocation of BPS entitlements, was not. Mr Farquharson maintained that the form was incomplete and should have been returned. The option to tick that box remained open until such time as the form had been completed and submitted.

[22] Asked whether he had raised his eligibility under routes 1, 2 and 3 with Mr Petrie at the review, Mr Farquharson reiterated that the review had been a complete and utter waste of time. Mr Petrie had quite obviously been defending his fellow officer. He had acted as lawyer, judge and jury. He (Mr Farquharson) had brought along to the review a file of documents showing he had been actively farming in 2013 but he had been told he need not open it. Outwith the review, he had spoken to Mr Imlay about being entitled under routes 1 and 2 but Mr Imlay had said the online form had been incomplete and had not been taken into account.

[23] Production 3, the report of the review meeting, was put to the witness. He accepted that it did not contain any evidence of his having applied for entitlements via the automatic route, route 1, although his memory of the meeting was that they had discussed all the options. Unfortunately, he pointed out, there was no minute of the meeting in the sense of who said what. He accepted that he knew of the existence of the three routes to entitlement at the time of that meeting. Asked whether he had suggested to Mr Petrie that he was entitled under routes 1 and 2, he said that route 1 was so simple that he should have qualified automatically. If the online system had been working as it should have been “we would not have been here today”.

[24] Production 24, being the full version of guidance which had already been referred to in part in the form of production 5, was put to the witness. He accepted again that he had held no SFP entitlements in 2013 but pointed out that he had ample other verifiable evidence of farming activity in that year.

[25] Returning to the applications which had been lodged on his behalf, Mr Farquharson saw the second application as, in effect, completing the first. What had proved impossible to cover in the online application was covered by the paper copy.

[26] Production 25, being a Direct Payments Guide for the new CAP in Scotland was put to the witness. Reference was made to the following statement which appears at page 14:

“I didn’t claim SFP in 2013. What are my options in order to be able to establish entitlements in 2015?” Mr Farquharson pointed out that he had been eligible under the SBCS in 2013. He was taken through the three possibilities listed there whereby those who hadn’t claimed SFP in 2013 might, nevertheless, obtain entitlements in 2015. He agreed that he was neither a new entrant nor a young farmer, so option 1 did not apply. He did not contend that the Private Contract Clause (allowing a claim where land had been bought or leased from someone who had claimed SFP in 2013) applied to him, so option 2 was ruled out. Pressed as to whether option 3 – allocation of entitlements to those who had not previously held SFP entitlements but could provide evidence of agricultural productivity on 15 May 2013 – applied Mr Farquharson complained that the guidance was misleading. The prohibition from participation of those who had previously held SFP entitlements contradicted what was said elsewhere in the guidance to the effect that he was eligible: production 25 was the most misleading document he had ever seen.

[27] In response to counsel pointing out that production 24, at page 5, said that more information and guidance for farmers would be produced when all the detailed rules were known, the witness responded that farmers could not be expected to keep up with European law.

[28] Mr Farquharson accepted that he had not claimed under the SBSS in 2013 but argued that that did not mean that he had not been eligible. Questioning then turned to the paper form which had been completed on his behalf (production 18) but he resisted all questions relating to it on the basis that it was incomplete and therefore null and void. For that reason nothing could be implied from its terms; its silence on route 2 eligibility therefore meant nothing. Route 2 would have been used on the electronic system had the system been capable of handling his online form.

[29] The Court then took the witness through production 18 to see what the answers relating to route 2 would have been, had that part of the form been completed. Part 1.2 of the form, headed “Agricultural activity in 2013” proved the critical part. It asks, first, whether the applicant had ever owned or leased-in SFP entitlements from 2005 to 2014, to which his answer would have been “Yes”. At that point the form says “If yes, you are not eligible under this category”. The second (and only other) question is this section asks whether on 15 May 2013 the applicant had been producing agricultural products, to which his answer would also have been “yes”. It was on that basis, said the witness, that he was claiming eligibility. At this point Mr Burnet intervened to say that his understanding was that if the first question was answered in the affirmative that was an end of the matter and it did not matter what the answer to the second question would have been. Mr Farquharson doubted whether that was so.

David Clive Barnes (53)

[30] Mr Barnes gave evidence that he, along with Ian Davidson, had attended an NFU seminar as part of the AgriScot event at Ingliston in November 2015. He had been there to support the government minister who had been speaking at the event. Questioning centred on a conversation he and Mr Davidson had had with Mr Farquharson who had approached them to discuss his eligibility for BPS entitlements. The witness said that no definitive view had been expressed by him or by Mr Davidson. That would have had to be done by the local office in Perth on the basis of the full information. His recollection was of a scenario being put to them of a business which had held SFPS entitlements and been claiming on them throughout, a scenario which would have led to an automatic allocation of BPS entitlements. If he was mistaken about that, as Mr Farquharson emphatically suggested he was, he apologised. But he was absolutely clear that he had not been told that the SFP entitlements had been transferred out of the business. Such a transfer would have jeopardised eligibility for BPS entitlements. Following the conversation he had asked Douglas Petrie to get his staff into active contact with Mr Farquharson if that was not already the case.

[31] He was content that the view he had given on the basis of the information he had had at the time was the correct one but equally confident that the Perth office’s decision, made on the fuller information available to them, was also correct.

[32] Questioned about eligibility under the SBCS as a basis for BPS entitlements, he thought that was irrelevant. On his understanding, claiming SBCS payments had no bearing on eligibility for the BPS. There were no such things as entitlements under the SBCS.

Ian Simon Davidson (64)

[33] Mr Davidson spoke of the same meeting as Mr Barnes. It had taken place on the 18th of November 2015. He had asked Mr Farquharson whether he had received SFP payments in 2013 and had been told that he had. On that basis he had said that he could not understand why Mr Farquharson had not been allocated entitlements. His recollection on this matter differed from that of Mr Farquharson. Likewise he denied having taken any papers away from the meeting. What he had done was undertaken to “take the conversation away” and find out why the application had been refused.

Brian Endicott (62)

[34] Mr Farquharson put production 39 – a letter from the witness to Mr Farquharson dated 21 November 2014 - to the witness and suggested on the strength of it that at least someone in the Scottish Government had thought Mr Farquharson was going to be allocated BPS entitlements. The witness denied this. The purpose of the letter had been to advise of amendments to the recipient’s SFPS entitlements and the implications of these changes going forward into the new scheme. There was no implication that BPS entitlements would actually be awarded. As at November 2014 a number of “implementation issues” still required to be settled.

David Imlay (54)

[35] Mr Imlay had written the rejection decision letter of 1 July 2015, production 1. It and his subsequent letter of 29 July had advised of the possibility of a review of that decision. The decision had been made on the basis of the paper application of 4 July 2015 which claimed an allocation of entitlements only on the Specific Disadvantage basis. When processing this application he had not been aware of any other application for BPS entitlements having been made by Mr Farquharson.

[36] He did not know Mr Farquharson’s business well enough to know whether he was likely to have been eligible for BPS entitlements via routes 1 and 2, albeit no claim was made under those categories on the application the witness had been considering. Since the form was silent as to these categories it had been assumed that no claim was being made under them. When processing the application he had checked SGRPID records and found out that the business had received an automatic allocation of SFP entitlements in 2005. Because of that the business had not been eligible for BPS entitlements under the Specific Disadvantage category in 2015.

[37] It was only later, after his decision on the paper application, that he had become aware that there had also been an online application. Even if that form had been considered, route 1 would have been ruled out for the same reason as the Specific Disadvantage application. Similarly, the grant of an automatic allocation of entitlements in 2005 ruled out eligibility via route 2: the questions at part 1.2 of production 18 were not cumulative. Once the first question (about ever having held SFP entitlements from 2005 to 2014) was answered in the affirmative, that was an end of the matter, in his view: the applicant was not eligible for entitlements via route 2.

[38] In response to a question from Mr Campbell, of the court, to the effect that it was hard to lodge an incomplete form online, the witness replied that the online form was not incomplete: it was complete, it was just that it did not claim entitlements under any other route. This view was challenged by Mr Farquharson in cross-examination, when it was pointed out that various boxes on production 33 had been left blank rather than being completed “N/A” as required by the instructions. The witness explained that, given the volume of applications which had to be processed, it had been decided not to return forms only on the basis that boxes had not been marked “N/A”.

[39] Questioned about eligibility under the SBCS in 2013, Mr Imlay said that there would have had to have been an application under that scheme in 2013 otherwise he and his colleagues would not have known the applicant was eligible under that scheme. Told that the reason there had been no such application was that there had been no calves, the witness thought that in itself rendered the applicant ineligible under the scheme in 2013.

Douglas James Petrie (39)

[40] Mr Petrie confirmed having carried out the review of the rejection decision and identified production 3 as the review report. The review had proceeded, as the rejection decision had, only on the basis of the paper application form, production 18, and had not involved any online application.

[41] It had been Mr Farquharson’s case at review that he had been an active farmer in 2013 and therefore had a right to BPS entitlements. He, the witness, could not recall whether there had been discussion of all the routes by which entitlements could be claimed. Mr Farquharson’s focus had been very much on active farming in 2013 and he had produced evidence to that effect. The response to that had been that because the business had held SFP entitlements in 2005 it was not eligible for BPS entitlements under the “farming in 2013” category. There was no dispute that Mr Farquharson had been farming in 2013 but he was, nevertheless, disqualified for the foregoing reason. The witness’s own focus at review had been on the Specific Disadvantage route because that was the only category which had been claimed for on the application before him. When coming to his decision he had, nevertheless, considered Mr Farquharson’s eligibility under each route. Mr Farquharson had been ineligible under route 1 because he had not claimed, and had therefore not received payments, under either the SFPS or the SBCS in 2013. To have been eligible under the latter there would have had to be an eligible claim and eligible animals. By the latter was meant calves - beef bred animals that had reached 30 days of age – born that year. He denied that it was enough to be eligible in the sense of conforming to scheme criteria: a claim under the scheme would have to be made.

[42] In cross-examination Mr Farquharson put to the witness a receipt he had obtained for his online 2013 SAF application. He had not meant to deny that his office had received an online form. He could not remember any involvement arising out of Mr Farquharson’s contact with his MSP, Mr John Swinney.

[43] Under reference to production 15, a letter from the witness to Mr Farquharson in response to a request for additional information as to why his application had been rejected, his understanding of the absence of question 5(c) on the online form was that those who were not eligible would not have been offered that option on the electronic version of the form. It was a way of avoiding invalid claims. The purpose of this letter had been to give Mr Farquharson additional information in relation to routes 1 and 2.

[44] As to eligibility under the SBSS in 2013 his understanding was that what was required was eligibility for payment in that year.

[45] In response to criticism of the way he had conducted the review, the witness defended himself by saying he had followed the required procedure.

[46] Asked what the rationale was for refusing BPS entitlements to an active farmer, it was that a business previously allocated SFP entitlements had chosen to dispose of them.

[47] In response to the court, he accepted that in hindsight the tripwires in the way of applicants may not have been clear enough. However, as the new scheme had evolved and taken shape, it had been possible to add detail. He confirmed that it was possible for farmers who had not been eligible for an allocation of entitlements at the outset of the new scheme to buy entitlements.

Resolving issues of fact

[48] We found all of the witnesses to be credible and, subject to the discussion below, reliable and, as it turned out, much of the evidence was uncontroversial. The only matter on which there was a factual conflict was as to what Mr Farquharson had told Mr Davidson and Mr Barnes at the Agri-Scot event at Ingliston in 2015. We accept Mr Farquharson’s evidence that he did not tell these gentlemen that he had held SFP entitlements in 2013. That is because he was in a better position to recollect this than they were. It meant a great deal to him whereas it is possible that Mr Davidson and Mr Barnes were distracted by their other duties. Moreover, there would have been no point in Mr Farquharson misrepresenting the situation in this way: the position was easily checked from SGRPID records. But we also accept that the evidence given by Mr Davidson and Mr Barnes was their bona fide recollection of what had been said. We also accept Mr Barnes’s evidence that they were not told that the original SFP entitlements had been disposed of. That being so, it may simply have been a matter of inference on their part, as opposed to positive assertion on Mr Farquharson’s, that the entitlements were still held in 2013. The reason we accept Mr Davidson’s and Mr Barnes’s evidence on this latter matter is that it was not challenged by Mr Farquharson and we therefore have no reason to doubt it.

[49] Another aspect of the evidence has left us in some doubt. Production 19 seems to be Mr Farquharson’s 2015 SAF, or at least screenshots therefrom. It may or may not be the form attempted to be lodged by Mr Euan Hart as spoken to by Mr Farquharson in evidence. We did not understand there to have been any problem with Mr Farquharson’s 2015 SAF: we understood him to have been paid on it. This raises the question whether the form attempted to be lodged by Mr Hart was a different form; an application specifically for BPS entitlements, the online equivalent of production 18, the paper form for that purpose completed by Emily Gordon. If so it has not been identified and lodged as a production.

[50] In any event, Mr Farquharson attached great importance to the absence of “question 5c” from the online version of the 2015 SAF. Question 5c is referred to in the Questions and answers document which is part of production 35. It says that farmers who had been eligible under the SFPS or the SBSS in respect of scheme year 2013 need not complete an allocation of (BPS) entitlements form but should, instead, apply for an allocation by completing question 5c on their SAF from 2015. Mr Farquharson claimed that no such question appeared on the online SAF. However, on the first page of that form (production 19) there is a box which, although not numbered 5c, is to be ticked if the applicant was eligible to receive SFP and/or SBSS in 2013 and wishes to use that as a route to allocation of BPS entitlements in 2015. On the appellant’s form the box is not ticked. It seems, therefore, that no attempt was made to claim BPS entitlements via that route in his online SAF or, as would be consistent with Mr Farquharson’s account of the difficulties experienced by Mr Hart, that any such attempt was unsuccessful. Whatever the reason for that, the resulting position was that the only application for an allocation of BPS entitlements which the respondents ever received from the appellant was one confined to an allocation of entitlements out of the National Reserve on the basis of Specific Disadvantage.

[51] Ultimately, however, this does not matter because the respondents are not taking a stand on this appeal being decided in relation to production 18 on its own. They are content for us to assess Mr Farquharson’s eligibility for entitlements under all the categories or routes which were available to applicants in 2015.

Findings in fact

[52] In addition to the narrative of events at paras [1] to [7] above we found the following facts admitted or proved:

(i) The appellant, who is 79 years of age, has been farming at Horn Farm since 1 February 1957.

(ii) In 2005, following the introduction of the Single Payment Scheme, he was farming there as a sole trader and obtained an automatic allocation of SFPS entitlements.

(iii) In or around 2006, for certain commercial reasons, he transferred those entitlements to another business in which he and his said son were equal partners and which farmed, and continues to farm, at Meikle Coull, Forfar.

(iv) Thereafter, until 2014, he farmed Horn Farm without the benefit of SFP.

(v) Although he made no application for SFP during these years he annually applied for and was paid subsidy under the respondents’ SBCS (part of the SBSS), save for 2013 when no calves were produced at Horn Farm.

(vi) In 2013, notwithstanding the non-production of calves, he was, on the ordinary meaning of the word, “actively” farming Horn Farm as he had being doing since 1957 and has been doing since.

(vii) In 2014 he purchased new SFP entitlements as a sole trader at Horn Farm and claimed and was paid on those entitlements in 2015.

(viii) Sometime in April 2015 a Mr Euan Hart at the Scottish Agricultural College in Forfar, acting on behalf of the appellant, attempted to complete an online application for an allocation of entitlements in the new BPS. It is uncertain whether this was as part of that year’s SAF or on an online equivalent of production 18. In any event it failed in that the respondents never received an online form of any kind applying for BPS entitlements.

(ix) The attempt at online application having failed, a paper application was prepared by a Ms Emily Gordon, also of the SAC at Forfar, and sent to the appellant who signed it and hand delivered it to the respondents’ Perth office on 4 June 2015. This was the only application for entitlements which was received by the respondents and, therefore, the only one processed by them.

(x) There were three categories under which one might apply for BPS entitlements in 2015. They were referred to in the evidence as routes 1, 2 and 3. Route 1 entitled those in receipt of SFP or SBSS payments in 2013 to an automatic allocation of entitlements. Route 2 was for those who did not qualify for automatic entitlement but could show that they had been actively farming in 2013, provided they had not previously held SFP entitlements. Route 3 was for those who did not fall within routes 1 or 2 and involved application to the National Reserve on the basis of specific disadvantage.

(xi) The only route by which the paper copy of the application completed by Emily Gordon applied for entitlements was route 3; an allocation from the National Reserve on the basis of specific disadvantage. The questions relating to other categories were all left blank. The nature of the specific disadvantage being relied upon was that the applicant had not received an automatic allocation of standard, set aside or PESC type entitlements in 2005, a claim which was factually wrong.

(xii) Another way of applying for BPS entitlements in 2015 was to do so on one’s SAF for that year. That was restricted to route 1 applicants; those who had been eligible to receive a payment under the SFPS or SBSS in 2013. They were entitled to an automatic allocation of BPS entitlements without need of a separate application. (For all of this see said Questions and answers document which is part of production 35 which is not said to be inaccurate in this respect although it may be in others, as to which see the next finding in fact.) Production 19 is a copy, or partial copy, of the applicant’s SAF for 2015. It contains no application for an automatic allocation of BPS entitlements.

(xiii) When the BPS was being introduced the respondents published material intended as guidance for farmers and crofters wishing to enter the new scheme. Some of it turned out to be wrong. For example a CAP Reform 2015 Guidance for applicants document stated that there was an automatic right of allocation for businesses who were active in 2013, paid on 2014 entitlements and declared land in 2015 and that farmers who were able to supply evidence that they had engaged in agricultural activity in 2013 were eligible (production 26, page 4). Another example is that the Questions and answers document published on 6 March 2015 (production 35) indicated that “producing, rearing or growing of agricultural products, including through harvesting, milking, breeding animals and keeping animals for farming purposes on 15 May 2013” was enough to satisfy the “Activity in 2013” requirements. If this “guidance” was intended to be provisional and, therefore, liable to change, we have not been referred to anything in the documentation which warned of that.

Submissions

(i) for the appellant

[53] The appellant’s closing submissions were brief. The failure of the online application system was the “obvious and unacceptable” reason for this debacle. He referred to criticisms of it made by Ruth Davidson and others. The directives issued to farmers had proven to be inadequate and misleading. Both of his application forms had been incomplete yet neither had been returned to him for completion, contrary to the instructions for completing the forms, which insisted that incomplete forms would be returned.

[54] As to the validity of his claim for an allocation of BPS entitlements, he founded heavily on his eligibility under the SBCS in 2013. In order to be eligible for something it was not necessary that one actually claimed that thing. He repeated his analogy of a bus pass. By the same token, he submitted, the fact that he had not made a claim under the SBCS in 2013 did not affect his eligibility to take part in the scheme. That was so even although he had had no calves on which he could have claimed in that year.

[55] Although he felt that his eligibility to participate in the Beef Scheme in 2013 (which would have led to automatic entitlement to an allocation) was his strongest ground of entitlement and the claim for an allocation out of the National Reserve on the ground of specific disadvantage was the weakest, Mr Farquharson confirmed that he was maintaining entitlement under all three categories (the third being agricultural activity in 2013).

[56] Asked whether he had gone beyond the guidance issued by the respondents and looked at the relevant European legislation for himself, he explained that it would have been difficult to have done so. He had had a lawyer but had dispensed with his services. As to researching things for himself, that was difficult: broadband was poor in his area. In any event he thought his quibble was with the Scottish Government. Their guidance had been misleading and the review carried out into his case had been a complete waste of time.

(ii) for the respondents

[57] Mr Burnet was also brief. He invited us to confirm the respondents’ decision in terms of reg 9(2)(a) of the Rural Payments (Appeals) (Scotland) Regulations 2015. We should do so because on the basis of the facts, agreed or established, it was the correct decision. If we were not with him on that we should refer the matter back to the respondents under para (d) of reg 9(2).

[58] The only possible ground on which the appellant could succeed was if he was correct in saying he was eligible under the SBCS in 2013 even although he had not actually applied under the scheme that year. If that was right the Court would not be in a position to decide what should happen as a result and the matter would have to be reconsidered by the respondents. But his primary position was that the decision appealed against was correct. In that regard Mr Burnet adopted what was said in the respondents’ written answers.

[59] The primary piece of legislation was Regulation (EU) No 1307/2013 and the relevant articles were numbers 21, 24 and, in relation to the National Reserve, 30. Whatever the difficulties in the process of applying and of Mr Farquharson’s application being considered, unless he could establish that he would have been entitled under one of these routes the appeal must fail. The basic difficulty in the way of success via any of these routes was that Mr Farquharson had held SFP entitlements in 2005 but had disposed of them in 2006 and had not purchased any new entitlements until it was too late. It was no doubt unfortunate but the truth of the matter was that in the foregoing circumstances Mr Farquharson simply did not qualify under the European regulations.

[60] He (Mr Burnet) had come to the hearing expecting a kind of “legitimate expectations” claim, based on the guidance issued by the respondents but no such claim had been made and, in any event, the respondents could only pay out in accordance with the relevant regulations. Some of the guidance had admittedly not been crystal clear but the situation had been evolving as the new support system was being introduced. He accepted on behalf of the respondents that the situation was not ideal but fundamentally there had been no error of fact or law in coming to a decision on the appellant’s case. The appeal must therefore fail.

Discussion

[61] Having heard that the appellant was no longer legally represented, we sought to assist him to focus on what he had to prove at the forthcoming hearing of the appeal. Thus we instructed Mrs Irving, one of our clerks, to write to him to explain that it would not be enough to show that some of the guidance produced by the respondents was inaccurate and, therefore, misleading. What he had to show was that, in terms of the relevant law, he had been entitled to an allocation of BPS entitlements in 2015. Mrs Irving did so by email on 19 January 2017, attaching, for his convenience, copies of what we considered to be the relevant legislation. He has not heeded that advice. Hence, when he made his closing submissions, he made no attempt to address the requirements of the European legislation; instead explaining that his “quibble” was with the respondents. Likewise he made much of the shortcomings of the respondents’ online system in 2015.

[62] Although we entirely understand Mr Farquharson’s frustration at having been misled by some of the respondents’ guidance and although it is within this court’s judicial knowledge that the respondents’ online system as it was in 2015 came in for widespread condemnation, this appeal requires to be decided on the law and it is to the law we now turn.

[63] The governing Regulation is (EC) Regulation 1307/2013 which replaced (EC) Regulation 73/2009 as the Regulation governing direct payments to farmers in Member States of the EU with effect from 1 January 2015.

[64] Article 24 of the 2013 Regulation deals with two situations. The first paragraph, including its sub-paragraphs, deals with automatic qualification for payment entitlements under the new scheme. The second part, comprising the rest of the article, sets out additional situations in which Member States can allocate entitlements to applicants who do not qualify automatically.

[65] The requirements for automatic allocation are a timeous application by someone who has been entitled to direct payments under Regulation (EC) No 73/2009 in 2013. Mr Farquharson was not eligible for SFP payments in 2013 because he had no entitlements. His claim is based on eligibility for SBCS payments. We heard little about this scheme and its requirements in the course of the hearing. Mr Barnes thought the SBCS had no bearing on the question: that it was irrelevant. If that is so, the guidance produced by the respondents is inaccurate in that respect also; see, for example the Question and answers document, part of production 35, which says “If you were eligible to receive a payment under the Single Farm Payment Scheme or the Scottish Beef Scheme in respect of scheme year 2013 you should apply for an allocation of payment entitlements by completing Question 5c on your Single Application Form 2015”. No one else questioned eligibility under the SBCS as setting up automatic BPS entitlement, so we proceed on the basis that it was indeed a direct payment scheme under Regulation 73/2009.

[66] What the question comes to in this case is whether actual eligibility for payment in 2013 was required. We heard nothing of the precise requirements of the scheme but we consider that we can answer that question on the basis of Article 24 (1)(b) itself because its wording is quite clear: it refers to farmers who “were entitled to receive payments … in respect of an aid application for direct payments ... in accordance with Regulation (EC) No 73/2009 for 2013” [emphasis added]. Clearly therefore it was not enough that Mr Farquharson had a general eligibility under the scheme which he had, and has, exercised in each year before and after 2013: an actual application and payment on that application in 2013 was required. Accordingly Mr Farquharson was not entitled to an automatic allocation of BPS entitlements on the strength of his participation in the SBCS before and after 2013.

[67] The second category under which the appellant claims eligibility is that of active farming in 2013. However, being an active farmer in 2013 did not, in and of itself, qualify one for a first allocation of entitlements. Sub-paragraphs (a) to (c) of the second sub-paragraph of Article 24(1) form a list of additional requirements, at least one of which has to be satisfied in order for a claimant to be eligible.

[68] Looking at these requirements, subparagraph (a) does not apply because the appellant was not engaged in any of the activities listed there nor did he hold only agricultural land which was not in good agricultural condition on 30 June 2003; subparagraph (b) does not apply because, although the appellant acquired entitlements in 2014 it was by way of purchase, not allocation from the national reserve; and subparagraph (c) does not apply because he owned or leased-in SFPS entitlements in 2005.

[69] Article 24 is dealing with the first allocation of entitlements. But Member States could also make allocations out of the national reserve under Article 30 which lays down principles and rules according to which national and regional reserves are to be administered. One such situation is in order to compensate farmers for specific disadvantages; para 7(b). It appears to leave it to Member States to decide the sorts of specific disadvantages which should be compensated for and on what conditions.

[70] In Scotland, flesh is put on the bones of Article 30(7)(b) by regulation 15 of the Common Agricultural Policy (Direct Payments etc.) (Scotland) Regulations 2015, which constitute the domestic legislation implementing the Basic Payment Scheme in Scotland. It is set out above. It contemplates two situations. The first is the farmer who did not receive payment entitlements in the first year of the Single Payment Scheme (2005) and who began farming after 16 May of that year. The appellant is ineligible in respect of both requirements: he received payment entitlements in 2005 and he had commenced agricultural activity long before 2005.

[71] The second category comprises those who received payments as a result of Article 42(3) of Regulation 1782/2003 (farmers who commenced their agricultural activity after 2002 or in 2002 but without receiving direct payments that year) or Article 21(1) of Regulation 795/2004 (farmers who had invested in production capacity or purchased land in accordance with certain conditions before 29 September 2003). The appellant has been farming for 60 years, so does not qualify under the former of these and he does not claim to qualify under the second. Accordingly our conclusion has to be that he is not eligible for an allocation of entitlements from the national reserve on the ground of specific disadvantage.

[72] The appeal must therefore be refused. In doing so we would express considerable sympathy for the appellant. He has been actively farming at Horn Farm continuously since 1957. Part of his undoing has been his decision, for sound business reasons, to transfer the SFPS entitlements he held in 2005 to the other family business. He could not have foreseen then that this was going to lead to his exclusion from the successor scheme. Moreover, the information supplied by the respondents gave him every reason to believe that all he had to do in order to be eligible for the new entitlements was show “verifiable evidence of farming activity” in 2013 (Scottish Government CAP Reform document dated June 2014 entitled “The new Common Agricultural Policy in Scotland – An introduction to what it means for you” , page 6; production 24). Would that it were that simple. A closer look at the relevant law, as opposed to guidance, quickly reveals that it is not. In fact, as has been seen, eligibility is hedged about with a variety of restrictions one or other of which blocks the appellant at every turn. His crowning misfortune was that, of all the years when the bull might not have done what a bull ought to do, no calves were produced on Horn Farm in 2013.

Expenses

[73] Following our usual practice we have allowed 21 days for motions and submissions on the expenses of the appeal.