Peter Strawson Ltd v Secretary of State for Environment Food & Rural Affairs

An error in a subsidy application may be an obvious error even though it is not apparent on the face of the form. The question depends on the whole context, including information revealed by database checks and published guidance. The assessment remains strict and case-specific. A public authority which makes a clear promise or adopts a practice directed to an individual must honour it unless departure is legally required or objectively justified as proportionate.

The claimant farm company sought judicial review of the Rural Payments Agency’s decision of 27 August 2009 rejecting its appeal concerning the 2007 Single Payment Scheme. It had entered 1 October 2006 as the start of the required 10-month period for nine fields acquired on 1 December 2006. The Agency later identified the discrepancy, accepted an amended date in correspondence, but refused payment and imposed a penalty.

The issues were whether the application contained an obvious error within Article 19 of Commission Regulation 795/2004, whether the application could otherwise be amended or withdrawn, and whether the Agency’s representations created a legitimate expectation that the amendment would be accepted.

The judicial review claim succeeded on both the obvious-error and legitimate-expectation grounds.

1. Declared and determined areas. The statutory scheme distinguishes the area declared from the area determined. The claimant could not avoid the reduction and penalty merely by arguing that the same land would have qualified under a different start date.
2. Article 15 amendment. Any ordinary amendment had to be notified in writing by 31 May 2007. The claimant therefore could not rely on Article 15 after that date. The court did not need to resolve the wider argument about whether the error was an irregularity.
3. Article 19. The test is strict, but the error need not appear on the face of the application. The relevant question is whether, in the context revealed by the application, correspondence and database checks, the competent official could conclude that a mistake had been made and identify the correction. The guidance is non-exhaustive and requires individual examination. Here the date selected could confer no benefit, exposed the claimant to loss and penalties, and was plainly an exceptional obvious error.
4. Legitimate expectation. A clear representation made specifically to an applicant that an identified error could be corrected may create a legitimate expectation. The Agency’s correspondence, internal note and surrounding communications indicated that the amended date would be used to determine the claim. Departure would require legal obligation or objective, proportionate justification. Because Article 19 permitted correction, the expectation did not require unlawful payment.
5. The payment claim was to be resolved in the claimant’s favour and the penalty cancelled, subject to agreement on the form of order and consequential matters.