Horvath, R (on the application of) v Secretary of State for Environment, Food and Rural Affairs

The Court of Appeal should set aside a preliminary-reference question only where the lower court took an incorrect view of Community law and the answer is clear. The appeal is not determined by a broad discretion or perversity test. Where the issue is unresolved and the court lacks complete confidence that it can resolve it, the reference should remain. Article 5 of Council Regulation (EC) No. 1782/2003 permits minimum agricultural and environmental requirements to be defined at national or regional level, on Arden LJ’s analysis. But it does not clearly answer whether different standards adopted by devolved bodies within one Member State require objective justification under the Community principle of non-discrimination. The appeal was therefore dismissed.

A farmer challenged paragraphs 26–29 of the Common Agricultural Policy Single Payment and Support Schemes (Cross Compliance) (England) Regulations 2004. The provisions attached possible reductions in Common Agricultural Policy payments to interference with, or inadequate restoration of, public rights of way and failure to maintain related structures.

Crane J ordered a reference to the Court of Justice under Article 234 of the Treaty. The first question concerned whether rights-of-way requirements could fall within Article 5 and Annex IV of the Council Regulation; no appeal was brought from that part of the order. The second concerned whether differing standards in England, Wales, Scotland and Northern Ireland could constitute unlawful discrimination. The Secretary of State appealed the decision to refer that question. The issue before the Court of Appeal was whether the point could confidently be resolved domestically.

1. Appeal dismissed. All three members of the court agreed that Crane J was entitled to refer the second question to the Court of Justice. The issue concerned the application of the Community principle of non-discrimination to different regional implementation of Article 5(1) of Council Regulation (EC) No. 1782/2003.
2. On an appeal against a reference, the question is whether the judge was wrong in law. If the domestic view of Community law was wrong and the answer was clear, the appeal could be allowed without relying on discretionary considerations about making a reference. This approach was supported by R v International Stock Exchange ex parte Else (1982) Ltd [1993] QB 534, H.P. Bulmer Ltd v J. Bollinger S.A. [1974] Ch. 401 and R (A) v Secretary of State for the Home Department [2002] EWCA Civ 1008.
3. May LJ held that the relevant authorities did not provide a sufficiently clear answer. He was not confident that Article 5(1) permitted implementation at devolved regional level without objective justification for differences between regions. He was also not confident that the Court of Justice would treat implementation by devolved authorities as implementation by the Member State for equality purposes. The absence of directly relevant authority was not an analytical reason for deciding the issue with confidence.
4. Arden LJ agreed that the appeal should fail. She considered that Article 5 permitted regional political bodies to define minimum requirements, but concluded that its wording did not clearly resolve whether differential implementation within one Member State required objective justification. The issue also raised developing questions concerning subsidiarity and the constitutional relationship between the Community and regional bodies. Those questions were better addressed by the Court of Justice.
5. The appeal was dismissed. The court declined to request an accelerated procedure. The parties were directed to consult the Registry of the Court of Justice and, if appropriate, prepare an agreed summary of the national judgments not exceeding fifteen A4 pages.

• Court of Appeal (Civil Division) — The appeal against the second question referred to the Court of Justice was dismissed. [2007] EWCA Civ 620
• Administrative Court — Crane J ordered a reference concerning the legality of the English cross-compliance provisions and referred two questions under Article 234 of the Treaty. The appeal concerned only the second question. [2006] EWHC Admin 1833