J & S.A. Wood (A Firm) v Intervention Board For Agricultural Produce

Under the European sheep-premium clawback regime, the averaging option applied to premium rates for the specified weeks. It did not permit adjustment of the exported animal’s weight, use of an average weight, or application of a further discount. The Commission had supplied the detailed mechanism, including the live-sheep coefficient, so the United Kingdom could not add its own coefficient.

Clawback was an export charge for the purposes of Regulation 1697/79. The three-year recovery period ran from the lawful incurring of the customs debt, after the amended provision became valid, the operator elected the option and was invoiced. It did not run simply from export. All appeals were dismissed.

The appellant sheep exporters challenged the respondent Board’s recovery of clawback under the former European Community sheep-premium scheme. Following earlier European litigation, the Board obtained summary judgment before Mr Justice Ian Kennedy on outstanding claims and counterclaims. The judge ruled that the exporters’ complaints concerning animal weight were impermissible attacks on the legislation and that the claims were not barred by the applicable limitation period.

The Court of Appeal considered whether the averaging option permitted adjustment for weight gained during quarantine, whether the Board’s claims were subject to the three-year Community limitation period, and whether Mr Feakins could rely on further evidence concerning exempt consignments.

Disposition

Lord Justice Simon Brown delivered the leading judgment. Lord Justices Mantell and Latham agreed. All appeals were dismissed with costs and the order of Mr Justice Ian Kennedy was upheld.

1. Construction of the averaging option. The reference to the amount of the premium for the relevant weeks meant the premium rate. It did not refer to the animal’s weight at the date of premium, its average weight, or a notional discounted weight. The reasoning in R v Lomas and Others [1992] ECR1-1781 concerned the earlier export-week calculation. The later decision in FMC v Intervention Board for Agricultural Produce [1996] ECR1-389 recognised that equivalence did not require exact equality for every transaction and that the averaging system neutralised the impact of the premium.
2. No regulatory lacuna. The Commission had adopted the necessary detailed mechanism, including the live-sheep coefficient of 0.47 under Regulation 2668/80 and its Annex 1. The United Kingdom therefore could not impose an additional coefficient or weight discount. The complaints were, in substance, matters to be raised against the Commission.
3. Limitation. Clawback fell within the concept of export duties in Regulation 1697/79, notwithstanding its function of offsetting the premium. The statement in R v Lomas and Others that clawback was not a charge having an effect equivalent to a customs duty did not decide that separate classification. The customs debt arose when the exporter became liable under a valid demand. For these claims, that occurred after the amended provision became valid, option 2 was elected and the exporters were invoiced. The export date and the original invalid demands did not start time running. Paragraph 48 of Hedley Lomas (Ireland) Limited v Commission [1997] ECR 2-1095 concerned clawback already paid and did not establish that unpaid clawback could be recovered under the original demands.
4. Further evidence. Mr Feakins had not reserved his factual position below and could, and should, have produced the evidence years earlier. The court refused leave to adduce it and dismissed his appeal, while inviting the Board to consider whether any ex gratia concession was appropriate.

• Court of Appeal (Civil Division) — dismissed all appeals with costs and upheld the order below.
• Queen’s Bench Division, Mr Justice Ian Kennedy — granted summary judgment for the Board in a reserved judgment handed down on 14 April 2000 and ruled on 23 June 2000 that the judgment was final.