Supreme Court dismisses appeal challenging milk quota regulations as unconstitutional property interference.

THE SUPREME COURT

Keane C.J.

Denham J.

Murphy J.

Murray J.

Fennelly J.

340/2000

BETWEEN:

NICHOLAS PHILIP (OTHERWISE MARTIN) MAHER,

MALACHY BRETT AND RITA RYAN

Appellants

and

THE MINISTER FOR AGRICULTURE, FOOD AND RURAL DEVELOPMENT, IRELAND AND THE ATTORNEY GENERAL

Respondents

JUDGMENT delivered on the 30th day of March 2001 by Keane C.J.

Introduction

What has become known as the milk quota system has given rise to much litigation, both at the level of the member States and in the

Courts of Justice of the European Communities. The present case arises out of the making by the first named respondent (hereafter

“the Minister”) of the European Communities (Milk Quota) Regulations 2000 (S.I. No. 94 of 2000) (hereafter “S.I. 2000”). These

provided for certain changes in the system which I shall endeavour to summarise at a later point. The validity of S.I. 2000 is

challenged by the appellants on the ground that it constitutes the exercise of legislative power by the Minister contrary to Article

15.2.1º of the Constitution, violates the property rights of the applicants guaranteed by the Constitution and is not afforded immunity

by the provisions of Article 29.4.7 of the Constitution, providing for the consequences of our accession to the European Economic

Communities. The appellants’ claim was dismissed in the High Court in a reserved judgment by Carroll J. and they have now appealed

from that judgment and order to this court.

The milk quota scheme was first introduced in 1984 by the Council of EEC in order to cope with problems which had arisen from the

implementation of the Common Agricultural Policy (hereafter “the CAP”) established under the Treaty of Rome as it affected the

market in dairy products. The measures establishing the scheme were, accordingly, part of the common organisation of the market in

the milk sector in the EEC, deriving from the CAP and known as the COM.

One of the features of the COM was a guaranteed price for milk producers throughout the EEC. This ultimately had it as its

consequence a supply of milk and milk products throughout the EEC which was hugely in excess of the demand, resulting in massive

costs to the community and severe downward pressure on milk prices. Attempts to deal with the problem in other ways having proved

abortive, the scheme adopted in 1984 provided for a ceiling on milk production in each of the member States and the allocation to

individual producers of a ceiling on their annual production. This was effected by the imposition of what was described as a “super

levy” on any producer who exceeded the ceiling which would render uneconomic the production of any milk in excess of the relevant

figure. This was done by the allocation of what were called “reference quantities” to the individual producers which became known as

“quotas” and it will be seen that it was an essential part of the scheme that the total of the quotas in any member State, including

Ireland, should not exceed the quota allocated by the EEC to the member State in question.

The scheme was originally intended to run for five years up to the 31st March 1989, but was in fact successively extended up to the

31st March 1993. A new, but substantially similar, system was then adopted which expired on 31st March 2000.

While the scheme achieved its objective of halting the growth in milk production in the EEC, the quota was initially set at a level

which was substantially above the consumption of milk and milk products in the EEC. Accordingly, there continued to be a surplus of

milk in the community. Various methods were adopted by the EEC of dealing with the resultant problems. Eventually, what was called

“Agenda 2000” was adopted by the EEC Commission with a view to preparing the dairy sector for the further problems which would

arise from the enlargement of the European Union and the liberalisation of trade within the World Trade Organisation. The latter

developments would mean, not merely a new threat of surpluses in milk production, but also an undermining of the effectiveness of

the quota regime in maintaining milk prices.

Agenda 2000 proposed to continue the milk quota regime for six years to March 2006 and also envisaged other proposals which were

of particular relevance to the present proceedings. These related to what was seen by the Commission as a particular problem, i.e.

the extent of quotas held by persons who were no longer actively involved in the production of milk. Under the scheme as originally

introduced, the milk quota was attached to the land and could only be transferred to another person if the land to which it was

attached was being transferred to that person. An exception was introduced, however, in 1987 which enabled producers to lease any

part of the quota which he or she did not intend to utilise in a particular year until the end of the milk quota year.

The new measures adopted by the EEC to give effect to Agenda 2000 required the member States to adopt detailed rules as to what

was to happen in relation to the transfer of quotas. It also conferred certain discretions on the member States as to provisions which

might or might not be included in any such detailed rules. The relevant rules in Ireland are contained in S.I. 2000 which is challenged

in these proceedings.

The effect of S.I. 2000 is that, subject to certain exceptions, it is no longer possible for persons who are not actively engaged in milk

production to transfer their quota with the land by way of sale. Nor, again, subject to certain exceptions, is it possible to lease a

quota with the land. While a quota can be transferred upon the renewal of a lease of lands, a person who has not been involved in

milk production for three years or more, can make a temporary lease or transfer of the quota for one further year and no more. The

regulations also provided for a “restructuring scheme” under which a quota holder can offer all or part of his or her quota to the

purchaser of the milk in return for payment. The maximum price is to be determined by the Minister. There are exceptions to these

various requirements when the lands were being sold, leased, given to or inherited by a spouse or family member.

The first applicant in an affidavit said that he was the owner of 130 acres of land in Cashel, Co. Tipperary and that there was a milk

quota attached to the lands which amounted to approximately 28,170 gallons. He said that as a result of borrowings which he had to

make at high interest rates in the 1970s to develop his dairy business and the wiping out of his dairy herd by brucellosis between May

and September 1980, he found it necessary to earn an income outside dairy farming. He and his wife, accordingly, in 1986 started up

an oil distribution company and in the year 1996 he leased his lands and milk quota to one Maurice Ryan: the lease expired on the

31st March 2000. He said that, as a result of the introduction of S.I. 2000, if he wished to retain his quota, he had only three

options:

(a) to resume milk production;

(b) to renew the lease to Mr. Ryan;

(c) to lease the quota temporarily for one year.

He said that neither of the first two options were available to him and the third would only enable him to retain the quota for a year.

However, if he were to dispose of the milk quota, his options would be to sell it under the restructuring scheme at the maximum price

fixed by the Minister of £1.36 per gallon or do the same in a year’s time, after temporarily leasing it for one year. He would also be

entitled to sell it to his former lessee, Mr. Ryan, but the latter was not interested in acquiring it. He said that the figure fixed by the

Minister did not represent the market value of the milk quota. He said that his two children were aged 14 and 16 and that he wished

to retain his milk quota so that they could take up dairy farming in a few years’ time if they so chose.

The second applicant said that he was the joint owner with his wife of lands and premises at Fethard, Co. Tipperary together with the

milk quota attaching to the lands: the lands comprised approximately 77 acres and the milk quota amounted to approximately 24,404

gallons. He said that some years ago he began to suffer from ill health and it became necessary for him to cease milk production and

sell his cows. Since then most of his income had been earned from leasing some of the lands together with part of his milk quota and

temporarily leasing the balance of the milk quota. He said that his only options as a result of the introduction of S.I. 2000 were to

resume milk production or sell his quota under the restructuring scheme. He said that, as he was now nearly 76 and no longer in full

health, he was not in a position to resume milk production. As to the sale of his quota under the restructuring scheme, his complaints

were the same as those of the first applicant.

The third applicant is the owner of 20 acres of land at Clonoulty, Co. Tipperary together with the milk quota attaching to the lands

amounting to 11,844 gallons. She said in her affidavit that for a number of years she had temporarily leased the quota to the local

creamery and that most of her income had come from that temporary lease. Her only other income was the sale of weanling calves

born in the winter/spring months and sold the following autumn/winter. As in the case of the other two applicants, she said that her

only options as a result of S.I. 2000 were to resume milk production or sell her milk quota under the restructuring scheme and that

she was not in a position to resume milk production as she could not afford the cost of installing a new milking parlour. Her complaints

as to the option of selling under the restructuring scheme were to the same effect as those of the first and second named applicants.

The regulatory framework

The relevant EEC Regulations are Council Regulation (EEC) No. 3950/92 of 28th December 1992 as last amended by Council Regulation

(EC) No. 1256/99 of 17th May 1999 (hereafter “the EC Regulations”).

Article 6 requires member States, before a specified date, to authorise for a twelve month period temporary transfers of individual

reference quantities which producers who were entitled thereto do not intend to use. It also provides that the member States may

vary transfer operations depending on the category of producers or dairy production structures, may limit them at the level of the

purchaser within regions and may determine to what extent transfer operations may be renewed. It also permits a member State to

decide not to comply with this requirement, on the basis of certain criteria. The last mentioned discretion was not exercised in the

case of Ireland.

Article 7.1 provides that

“Reference quantities available on a holding shall be transferred with the holding in the case of sale, lease or transfer by

inheritance to the purchasers taking it over in accordance with the detailed rules to be determined by the member States

taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement

between the parties.

“Any part of the reference quantity, which is not transferred with holding, shall be added to the national reserve ...”

As already noted, the detailed rules in Ireland are set out in S.I. 2000. However, Article 8a of the EC Regulations provided that

“Acting in compliance with the general principles of community law, member States may take the following measures, with the

aim of ensuring that reference quantities are solely attributed to active milk producers: ...

(b) member States may decide not to apply the provisions on transfer of reference quantities in Article 7(1).”

The Minister availed of this power by providing as follows in Article 5(1) of S.I. 2000:-

“Subject to the exceptions provided for in Regulations 6, 7, 8, 9, 10 and 11, where any holding, or part thereof, is transferred

the milk quota attached to that holding or part thereof shall not be transferred to the person to whom that transfer is made.”

Sub-paragraph (2) goes on to provide that, where there is a transfer of land to which the milk quota attaches, the milk quota is to be

added to the “national reserve” unless one of the relevant exemptions in the regulations has been availed of. The concept of the

“national reserve”, which has been a feature of the EEC milk quota scheme since its inception in 1984, means in effect that, where a

milk quota ceases to be attached to a particular farm, it may remain available as part of the total quota to which the member State is

entitled. Under S.I. 2000, such milk quotas become available to active milk producers, with priority being given to small and medium

producers.

The exemptions provided for under S.I. 2000 from Article 5(1) must next be considered. Article 7, in effect, enables the Minister to

grant a certificate of entitlement to transfer a milk quota to a person who satisfies him that he has been actively engaged in the

production of milk for the previous three years. Article 6 enables the quota to be transferred to the spouse and defined members of

the family of the transferor. Article 9 enables the lessee of land and a quota to purchase the leased quota with or without the land

from the lessor on the termination of the lease, provided he or she is a producer. Article 10 provides for the transfer of the quota on a

renewal of the lease. Article 12 provides for the transfer of the quota to the lessor where a lease of land which the milk quota

attaches terminates.

Article 8 of the EC Regulations provides that

“With a view to completing restructuring of milk production or to environmental improvement, member States may take one

or more of the following actions in accordance with detailed rules which they shall lay down taking account of the legitimate

interests of the parties ...”.

There follow five options which were available to the member States. That contained in sub-paragraph (b) was availed of by the

Minister in S.I. 2000 and was as follows:-

“... determine on the basis of objective criteria the conditions under which producers may obtain, in return for payment, at

the beginning of a twelve month period, through allocation by the competent authority or by the body designated by that

authority, of reference quantities released definitively at the end of the preceding twelve month period by other producers in

return for compensation in one or more annual instalments equal to the above mentioned payment ...”

Article 26 of S.I. 2000 enables the Minister, pursuant to Article 8(b), to introduce a scheme called the “milk quota restructuring

scheme” for the surrender of a milk quota at the end of each milk quota year and its reallocation at the beginning of the following

year. Sub-paragraph (5) provides that the maximum payment for a surrendered quota and the reallocation price is to be set by the

Minister.

The Minister also availed of the power conferred on the member State by Article 6.1 of the EC Regulations as to the temporary

transfer of quotas which producers who were entitled thereto did not intend to use. Article 27 of

S.I. 2000 provides inter alia as follows:-

“(2) A person may, subject to paragraphs (3) and (4), offer for temporary transfer such part of his or her milk quota as he or

she does not intend to use during that milk quota year.

(3) The holder of a quota who neither made milk deliveries to a purchaser, or sold milk or milk products directly for

consumption, during any three successive milk quota years since 1st April 1997 and who made a temporary transfer of his or

her quota under Regulation 16 of the Regulations of 1995 or under paragraph (2) during each of the three milk quota years in

question shall not be entitled to make a temporary transfer under paragraph (2).

(4) A person who neither made milk deliveries to a purchaser or sold milk or milk products directly for consumption, has leased

his or her land and milk quota for a period of three successive years or more, since April 1st, 1997 shall be entitled to make a

temporary transfer of his or her quota under paragraph (2) for one year only.”

There follow provisions enabling the Minister to authorise a temporary transfer of the quota for one further milk quota year in

“exceptional circumstances”.

Finally, it should be noted that recital (6) of the EC Regulation sets out the rationale of the relevant provisions of the EC Regulations

as follows:-

“Whereas the experience with the additional levy scheme has shown that the transfer of reference quantities through legal

constructions such as leases which do not necessarily lead to a permanent allocation of the reference quantities concerned to

the transferee, can be an additional cost factor for milk production hampering the improvement of production structures;

Whereas in order to strengthen the reference quantities’ character as a means of regulating the market of milk and milk

products, the member States should be authorised to allocate reference quantities, which have been transferred through

leases or comparable legal means, to the national reserve for redistribution, on the basis of objective criteria, to active

producers in particular, to those who have used them before;

Whereas member States should also have the right to organise the transfer of reference quantities in a different way than by

means of individual transactions between producers;

Whereas it should be explicitly provided, in particular with a view to taking account adequately of existing legal rights, that,

when using these authorisations, member States are to take the necessary measures to comply with the general principles of

community law ...”

The factual background in Ireland against which the Minister, in purported exercise of the powers conferred on the member States,

made S.I. 2000, was set out in an affidavit by Mr. Patrick Evans, an assistant principal officer in the milk policy division of the

department of the Minister. He said that Ireland had had particular difficulties in relation to the milk quota scheme due to the large

number of small and medium scale producers in the dairying sector. Of 31,500 active producers engaged in milk production in Ireland,

68% of the total had a milk quota of less than 35,000 gallons. He said that in view of the fact that milk production was far more

profitable than beef, sheep or pig production, producers were constantly seeking to expand their dairying enterprise and that, as a

result, the demand for milk quota in Ireland far exceeded the supply of such quota.

Mr. Evans said that this situation was compounded because of the leasing of land and quota, which represented between 9% and

10% of the national quota. A further 6% of the national quota was leased temporarily without land on an annual basis. In the result, a

significant portion of the profit from milk production was transferred from the milk producer to the owner of the quota who, in most

instances, was no longer involved in milk production. This was likely to increase because of the number of producers ceasing milk

production and resulted generally in a less efficient dairying industry characterised by a lack of certainty and higher production costs.

He said that it was standard practice for member States to consult with the Commission beforehand on the measures they might

propose to adopt for the application of the milk quota regime in their respective territories and this procedure had been fully observed

by Ireland.

Mr. Evans further deposed that the Minister had consulted with organisations representing the dairy industry and other interested

parties before making a decision on the changes that should be introduced. He said that there was a general consensus that

(i) the new regime should reinforce the position of active milk producers;

(ii) the interests of small and medium scale producers should be favoured;

(iii) the permanent transfer of quota should be facilitated;

(iv) quota should be allocated at a reasonable cost.

Mr. Evans said that the Minister, in implementing the new regime by way of S.I. 2000, was of the view that the provisions were

necessary in order to ensure that the objectives contained in the EC Regulations were achieved in Ireland. In particular, the changes

were intended to ensure, as provided in Article 8a of the EC Regulations, that quotas were solely attributed to active milk producers.

Mr. Evans said that the first and second named appellants had benefited to the extent of approximately £70,000 and £46,000

respectively from their quotas, during periods when they were not active milk producers.

The applicable law

Article 32 of the Treaty of Rome under the title “Agriculture” provides that the common market is to extend to agriculture and trade in

agricultural products and must be accompanied by the establishment of a common agricultural policy. The objectives of the CAP are

set out in Article 33 as follows:

“(a) To increase agricultural productivity by promoting technical progress and by ensuring the rational development of

agricultural production and the optimum utilisation of the factors of production, in particular labour;

(b) Thus to ensure a fair standing of living for the agricultural community, in particular by increasing the individual earnings of

persons engaged in agriculture;

(c) To stabilise markets;

(d) To ensure the availability of supplies;

(e) To ensure the supplies for each consumer is at reasonable prices.”

Article 33.2 requires account to be taken of the particular nature of agricultural activity, resulting inter alia from the “social structure”

of agriculture, in working out the CAP.

Article 34 provides for the establishment of a common organisation of agricultural markets and under Article 2 may include the

measures required to attain the objectives set out in Article 33, including in particular the regulation of prices.

Article 5 provides that

“Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations

arising out of this Treaty or resulting from action taken by the institutions of the community. They shall facilitate the

achievement of the community’s tasks.

“They shall abstain from any measure which could jeopardise the attainments of the objectives of this Treaty.”

Article 189 establishes what might be called the legislative machinery of the community. It provides that

“In order to carry out their task, the Council and the Commission shall, in accordance with the provisions of this Treaty, make

regulations, issue directives, take decisions, make recommendations or deliver opinions.

“A regulation shall have general application. It shall be binding in its entirety and directly applicable in all member States.

“A directive shall be binding, as the result to be achieved, upon each member State to which it is addressed, but shall leave to

the national authorities the choice of form and methods ...”

Article 29.4.3º of the Constitution provided inter alia that the State might become a member of the European Economic Community

established by the Treaty of Rome. Article 29.4.7º, as amended, provides that

“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are

necessitated by the obligations of membership of the European Union or of the communities [including the European Economic

Community], or prevents laws enacted, acts done or measures by the European Union or the communities or by institutions

thereof, or by bodies competent under the treaties established in the communities, from having the force of law in the State.”

Following the accession by Ireland to the European Communities, the European Communities Act 1972 (hereafter “the 1972 Act”) was

enacted by the Oireachtas. Section 2 provided that

“From the 1st day of January 1973, the treaties governing the European Communities and the existing and future acts

adopted by the institutions of those communities shall be binding on the State and shall be part of the domestic law thereof

under the conditions laid down in those treaties.”

Section 3 provided that

“(1) A Minister of State may make regulations for enabling s. 2 of this Act to have full effect.

(2) Regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the

Minister making the regulations to be necessary for the purpose of the regulations (including provisions repealing, amending or

applying, with or without modification, other law, exclusive of this Act).

(3) Regulations made under this section shall not create an indictable offence.”

Section 4, as substituted by section 1 of the European Communities (Amendment) Act 1973, provided that regulations under the Act

were to have statutory effect, but could be annulled where the Joint Committee on the Secondary Legislation of the European

Communities so recommends to the Houses of the Oireachtas and also enables one-third of the members of Dáil Éireann or Seanad

Éireann to requisition a meeting of either House where regulations are made and the Dáil and Seanad, as the case may be, stands

adjourned for a period of more than ten days.

In Meagher .v. Minister for Agriculture, (1994) 1 IR 329 it was held by this court that s. 3 of the 1972 Act was not invalid having

regard to the provisions of the Constitution.

The law of the European Communities can have legal effect in Ireland because of the making of Regulations which are directly

applicable in each of the member States. The EC Regulation, on foot of which the Minister purported to make S.I. 2000, is such a

regulation. It is, accordingly, to be distinguished from Directives, which have binding force as to the result to be achieved for each

member State to which they are addressed, but which leave the member States free to choose the form and methods for

implementing the directive. The jurisprudence of the Courts of Justice of the European Communities has, of course, established that

the law of the communities, whether embodied in regulations or directives, must be given primacy, where it is applicable, over the

domestic law of the member States.

It is claimed on behalf of the applicants in the present proceedings that S.I. 2000 was made in violation of certain provisions of the

Constitution and that its making was not necessitated by the obligations of membership of the European Union or of the communities

within the meaning of Article 29.4.7º of the Constitution. The first article relied on is Article 15.2.1º which provides that

“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority

has power to make laws for the State.”

The second ground is that S.I. 2000 constitutes an unjust attack on the property rights of the applicants, in the form of their

respective milk quotas, guaranteed by Articles 40.3.1º and 2º and 43 of the Constitution.

It was conceded on behalf of the appellants that, if the making of S.I. 2000 was necessitated by the obligations of Ireland’s

membership of the Communities within the meaning of Article 29.4.7º of the Constitution, the applicants could not succeed, even if

the regulations were otherwise in violation of the Constitution.

The High Court judgment

In the High Court, the learned High Court judge held that the discretions which were left to the member States were within the

principles and policies determined by the Council of Ministers in the organisation of the milk market in the European Union and that S.I.

2000 did not go beyond what was required by those principles and policies. She said that the decision of the Minister that quotas

should go to active milk producers was in accordance with the stated policy of the Regulations. She was of the view that S.I. 2000

was necessitated by the obligations of membership of the EU. However, she was also of the view that, because the choices made in

S.I. 2000 were within the principles and policies of the milk quota scheme, it could also be regarded as valid secondary legislation

which was not contrary to Article 15.2.1º of the Constitution.

As to the claim that S.I. 2000 was in breach of the property rights of the appellants, the learned High Court held that it was clear

from the jurisprudence of the European Court of Justice that the right to property safeguarded by the community legal order did not

include the right to dispose for profit of an advantage such as a milk quota. She concluded that the nature of the milk quota, which

was created by European law, must bear the same meaning in domestic law as in the legal order of the European Union.

The learned High Court judge had been urged by counsel for the appellants to have regard to the Dáil Debates on the Eleventh

Amendment of the Constitution Bill in determining what was meant by the expression “necessitated by the obligations of membership

...” in Article 29.4.7º. She rejected the submission that she was entitled to have regard to what was said during the course of the

Oireachtas debates, but had regard de bene esse to the fact that during the passage of the Bill through the Oireachtas the word

“necessitated” was substituted for the word “consequent on”. However, she was also of the view that that did not assist the

arguments advanced on behalf of the applicants as to the validity of S.I. 2000.

As already noted, the appellants have appealed from the judgment and order of the High Court. The respondents have served a

notice to vary the judgment in so far as it could be construed as allowing the court to have regard to the amendment effected to the

Eleventh Amendment of the Constitution Bill during its passage through the Oireachtas.

Submissions of the parties

Mr. Gerard Hogan S.C., on behalf of the applicants, did not invite the court to overrule its previous decision in Meagher to the effect

that s. 3 of the 1972 Act was not invalid having regard to the provisions of the Constitution. He submitted, however, that in

determining whether S.I. 2000 was itself “necessitated” by the obligations of EC membership and thus immune from constitutional

scrutiny, the court should not follow in its entirety the reasoning by which the court arrived at its conclusions in that case. (It should

be pointed out at this stage that the court in Meagher, having ruled on the constitutionality of s. 3 of the 1972 Act, went on to

consider whether the specific regulations challenged in that case were intra vires and unanimously concluded that they were.) He

said that, in so far as any of the judgments in that case suggested that the word “necessitated” should be equated to “convenient”

or “desirable”, that reasoning should not now be followed. He submitted that the word “necessitated” clearly indicated that Article

29.4.7º allowed for the transfer of legislative, executive and juridical sovereignty to the European Union and the Communities only

where this was a legal obligation resulting from membership of the EU and the Communities.

Mr. Hogan submitted that this approach to Article 29.4.7º was reinforced by the parliamentary history of the Third Amendment of the

Constitution Bill, 1971: the words “consequent upon” originally used in the Bill had been replaced by “necessitated” at the committee

stage. In the present case, the issue, accordingly, was as to whether the making of S.I. 2000 by the Minister in purported exercise of

the powers conferred by s. 3 of the 1972 Act was a legal obligation deriving from our membership of the Communities and not simply a

consequence of that membership.

Mr. Hogan further submitted that this construction of Article 29.4.7º was supported by the terms of Article 29.4.6º which provided

that

“The State may exercise the options or discretions provided by or under Article 1.11, 2.5 and 2.15 [of the Amsterdam Treaty]

and the Second and Fourth Protocols set out in the said Treaty but any such exercise shall be subject to the prior approval of

both Houses of the Oireachtas.”

He submitted that this provision in the Constitution would have been quite unnecessary if legislative sovereignty could be surrendered

to the European Union in the manner suggested by some of the reasoning in Meagher. Mr. Hogan further submitted that, having

regard to the wide range of choices which a member State could make under the relevant Articles of the EC Regulation, it could not

be said that, even adopting the reasoning of the court in Meagher, legislation in the form of a ministerial regulation was necessitated

in this case by the obligations of EC membership and he cited in particular passages in the judgment of the court and of Denham J. in

that case. He also cited the decision of Murphy J. as a High Court judge in Green .v. Minister for Agriculture (1990) 2 IR 17.

Mr. Hogan submitted that, assuming that S.I. 2000 was not shielded from constitutional scrutiny by virtue of Article 29.4.7º, it clearly

violated Article 15.2.1º of the Constitution, since it constituted delegated legislation which went significantly further than simply

giving detailed effect to principles and policies contained in a parent Act. He relied particularly in support of this proposition on the

decisions of this court in Cityview Press Ltd. .v. AnCO, (1980) IR 381, O’Neill .v. Minister for Agriculture, (1997) 2 ILRM 435 and

Laurentiu .v. Minister for Justice, Equality and Law Reform, (2000) 1 ILRM 1 and of the High Court in McDaid .v. Sheedy, (1991) 1 IR

1 and Lovett .v. Minister for Education, (1997) 1 ILRM 89.

Mr. Hogan submitted that, in determining whether S.I. 2000 was constitutionally valid, as being no more than the detailed

implementation of principles and policies contained in parent legislation, it was immaterial that S.I. 2000 had been made in purported

exercise of a power conferred by an EC Regulation, as distinct from a Directive, citing observations of the Court of Justice in Case

230/78 SPA Eridania - Zuccherifici. Mr. Hogan said that, while Mr. Evans in his affidavit had laid stress on the provisions of the

Regulation enabling member States to take measures “with the aim of ensuring that reference quantities are solely attributed to milk

producers”, it is nowhere said that this is a community objective which the regulation requires member States to implement: on the

contrary, it simply enables member States who wish to pursue this policy objective so to do.

Mr. Hogan urged that it was clear from S.I. 2000 that the Minister had elected to make substantial and important policy choices, of

which the most significant in practical terms was the effective breaking of the link between land and quota, save for family

transactions. He said that the jurisprudence of the Court of Justice made it clear that, in areas where common rules applicable to all

the member States are not laid down by a particular regulation, the member States in implementing the regulation in those areas are

entitled to act in accordance with the procedural and substantive rules of their own national law, citing the decision of the Court of

Justice in Kjell Kirllson .v. Svenska Jordbruksverket, Case C-292/97 (2000) ECR 1-2737. He also relied on Case C-258/93

Dominikanerinnen-Kloster altenhohenau, (1995) ECR 1-4069.

As to the claimed violation of the applicants’ property rights, Mr. Hogan accepted that the Court of Justice had generally taken the

view that milk quotas do not constitute a property right so far as community law is concerned and referred in this context to R. .v.

Ministry of Agriculture, xp. Bostock, Case C-2/92 (1994) ECR 1-955. However, that case was concerned with the right to dispose of a

quota for profit, whereas the present case involved what was effectively a form of compulsory acquisition by the State of a quota at

a price substantially less than the prevailing market value. He said that, in these circumstances, a milk quota might qualify for

protection as a property right which the member States were obliged as a matter of community law to protect, citing the comments

of the Advocate General in Damand .v. Haubtzollampt Trier, (KC-186/96) 1998 ECR 1-8529, 8541.

Mr. Hogan further submitted that, in any event, the dicta in Bostoch did not prevent such a right from being regarded as a property

right for the purposes of Irish constitutional law. He pointed out that in Duff .v. Minister for Agriculture (KC-63/93 (1996) ECR 1569,

the Advocate General had pointed out that the fact that the plaintiff’s legitimate expectations at community law level had not been

infringed by the actions of the Minister did not prevent such a requirement being founded on principles of national law and that, in the

event, that passage had enabled the plaintiff to succeed when the case returned to this court.

Mr. Hogan submitted that there was no valid reason why an intangible but valuable right such as a milk quota should not be regarded

as a property right and, as such, it had been unquestionably violated by S.I. 2000.

On behalf of the respondents, Ms. Mary Finlay, S.C. submitted that, even if it were assumed that the making of S.I. 2000 by the

Minister was not “necessitated” by the obligation of Ireland’s membership of the European Communities within the meaning of Article

29.4.7º of the Constitution, it was intra vires s. 3 of the 1972 Act as representing the detailed implementation of principles and

policies set out in parent legislation, in accordance with the law as found by this court in Cityview Press Ltd. .v. AnCO and Laurentiu

.v. Minister for Justice, Equality and Law Reform.

Ms. Finlay submitted that the EC Regulations, which had direct effect in Ireland, were the equivalent of parent legislation in that they

enabled the member States to exercise certain discretions in regard to the implementation of the milk quota scheme generally

throughout the European Union.

Ms. Finlay submitted that, in the context of the common organisation of the market in milk and milk products, it was recognised that

the position of producers varied in different areas throughout the Community and that this required different responses in different

areas. It was for that reason that the Regulations empowered the member States to take certain limited decisions as to the precise

way in which the COM was to be implemented in each member State. Such discretions had, however, to be exercised at all times in

accordance with the Regulations and with a view to achieving the overall objectives and aim of the COM and in such a way as to

avoid discrimination between producers in different parts of the Community.

Ms. Finlay submitted that s. 3 of the 1972 Act authorised the Minister to make regulations for the purpose of enabling the EC

Regulations as to the milk quota and super levy scheme to have full effect in Ireland and that was the sole purpose of S.I. 2000.

Accordingly, prima facie, S.I. 2000 was intra vires the powers conferred on the Minister by s. 3 of the 1972 Act.

Ms. Finlay submitted that the super levy/milk quota regime was established by EC regulations and that the respective roles of the

Council of Ministers and EC Commission on the one hand and the member States on the other hand in the COM was analogous to the

respective roles of the Oireachtas and the Executive in relation to purely domestic legislation. All the essential policies and principles

relating to the COM were determined by the Council of Ministers and what was left of the member States were detailed implementing

rules and limited permissible variations. The position of the Minister was thus not the same as that of the relevant ministers in O’Neill

.v. Minister for Agriculture and Laurentiu .v. Minister for Justice and the making of S.I. 2000 complied with the test laid down in

Cityview Press Ltd. .v. AnCO.

Ms. Finlay submitted that it was not correct to say that the break in the link between land and quota “effected by the 1999 EC

Regulation” and S.I. 2000 was a radical new departure, as suggested on behalf of the applicants. Since the introduction of the

general rule in 1984 that quota should transfer with the land, a series of exceptions had been created and those introduced by the

1999 Regulation were only the last in the sequence. She further submitted that Article 7(1) expressly obliged the member States to

lay down detailed rules: S.I. 2000 were such detailed rules. As to the decision not to provide for the automatic transfer of quotas

with land, this could only be done for the purpose of ensuring that quotas were solely attributed to active milk producers and this was

what S.I. 2000 was intended to achieve.

Ms. Finlay submitted that restructuring schemes had also been authorised in the member States by EC law since 1987. The actions

that could be taken by member States with a view to completing restructuring of milk production were exhaustively set out in Article

8 of the EC Regulation and in making the detailed rules the member States were constrained by the express provisions of that

Regulation and the overall aims and policies of the CAP, COM in milk and milk products, the additional levy scheme and the relevant EU

instruments. Ms. Finlay submitted that in making Regulation 27 relating to the temporary leasing of quota, the Minister was acting in

accordance with the express obligation under Article 6.1. It was merely the precise terms of a detailed temporary leasing scheme

which were left to be specified by the member State and this was what had been done in S.I. 2000.

As to the submission that Article 40.3.2º and 43 had been violated by S.I. 2000, Ms. Finlay submitted that it was clear that a milk

quota was not a property right and the opinion of the Advocate General in Duff .v. Minister for Agriculture was not authority for the

proposition that the nature of the rights conferred by a milk quota on the appellants were different in Irish law.

Ms. Finlay submitted that there was no question of anything in the nature of a compulsory acquisition by the State of a quota at less

than the prevailing market price. The quota was not acquired in any sense by the State: in the present case, the applicants were all

persons who were no longer engaged in active milk production and who were entitled to release their quota, which would then be

reallocated to an active producer who would pay them the specified price. Each of the applicants was simply endeavouring to earn a

greater profit from the milk quota currently held by them than was permissible under the S.I. 2000 and were not seeking to use the

quota for the purpose for which it was intended, i.e. the production of milk up to the amount of the quota.

If, contrary to the submissions, it was found that any of the provisions of S.I. 2000 prima facie violated the Constitution, it was

submitted that they were “necessitated” by the obligation of membership of the European Union or of the Communities and hence

were entitled to the protection of Article. 29.4.7º of the Constitution. Ms. Finlay submitted that it was clear from the decision of this

court in Meagher that the fact that the member State had been left some element of choice or discretion as to the precise form a

particular measure should take was perfectly consistent with the measure being necessitated by the obligations of EC membership.

Thus, in Meagher, although the relevant directive contained no express provision as to the creation of sanctions, the court accepted

that the nature of the sanctions to be imposed, including the penalties, were properly determined by regulation. She submitted that

the somewhat broader approach to the construction of the phrase “necessitated by the obligations of membership” than that being

contended for on behalf of the appellants was also consistent with the decision of this court in Crotty .v. An Taoiseach (1987) IR

713.

Ms. Finlay said that the respondents strongly resisted the proposition advanced by the appellants that the reasoning in Meagher

should be reconsidered at this stage by the court. Meagher had been a decision on the constitutionality of s. 3 of the 1972 Act and

had been continuously relied on since then by the State, approximately 498 statutory instruments having been made by various

ministers under s. 3 of the 1972 Act.

As to the notice to vary, Mr Paul Gardiner S.C. on behalf of the respondents submitted that the decision of this court in People (DPP)

.v. McDonagh (1996) 1 IR was not authority for the proposition that the parliamentary history of a particular bill was an admissible aid

to the interpretation of an amendment of the Constitution effected by way of referendum. He said that to hold otherwise would be to

derogate from the primary role of the people in determining whether the Constitution should be amended which had been emphasised

in two recent decisions of this court, McKenna v. An Taoiseach (No 2) (1995) 2 IR 10 and Hanafin .v. Minister for the Environment

(1996) 2 IR 321. He submitted that it followed that the court was not entitled to have regard to the fact that the words “consequent

upon” originally used in the Third Amendment of the Constitution Bill had been replaced by “necessitated” at the committee stage.

Conclusions

It is accepted in this case that, if the making by the Minister of S.I. 2000 was “necessitated” by the obligations of membership of the

European Union or the European Economic Community, it could not be successfully challenged by the appellants. It would seem to

follow that this should be the first issue to be addressed by this court.

As a result of the passage of the Eleventh Amendment of the Constitution, Article 29.4.3º empowered the State to become a member

of inter alia the European Economic Community established by the Treaty of Rome. Article 29.4.5º ensured that laws enacted, acts

done or measures adopted by the State which were necessitated by the obligations of membership of inter alia the EEC were not

invalidated by any other provision of the Constitution. Section 2 of the 1972 Act, which provided that the treaties governing the

European Communities and the existing and future acts adopted by the institutions of the communities were to be binding on the

State and be part of its domestic law under the conditions laid down in the treaties, was clearly necessitated by the obligations of

membership of those communities.

The result was a historic transfer of legislative, executive and judicial sovereignty to the European Communities and, as a result of

further referenda, the European Union. In particular, the exclusive roles hitherto enjoyed by the Oireachtas in the legislative field and

the courts in the administration of justice were significantly abridged. The developing jurisprudence of the European Court of Justice

also made it clear that there existed effectively an autonomous European legal order and that the member States were obliged to

acknowledge the primacy of Community law over national law in areas where it was applicable.

It was also, moreover, clear that the Member States envisaged that the communities established by treaties were to be dynamic in

their nature and that the obligations of membership referred to in Article 29.4.5º would not be static.

In the result, a significant new volume of legislation became applicable in Ireland and binding on all the citizens either in the form of

Directives which the State, as a result of its membership, was obliged to implement in domestic legislation, or Regulations which were

directly applicable in Ireland and did not require such legislation for their implementation. Since, under the communities’ legal order,

the method by which a Directive was implemented, as distinct from its substance, was to be determined by the Member State, the

Directive itself would contain no indication as to which of the two normal methods employed in Ireland - an Act of the Oireachtas or a

ministerial regulation - was to be employed. The Directives, in short, did not contain the enabling provision, commonplace in domestic

Irish legislation, under which a minister or some other body so authorised by the Oireachtas can give detailed effect in the form of

regulations to policies determined by the Oireachtas. That was not necessarily the case with Regulations which, of their nature, did

not require implementation by either legislation or regulation. As the present case demonstrates, however, it was also possible for the

Council of Ministers to issue regulations having direct effect in a Member State such as Ireland which, in defined areas, required or

authorised the Member State to adopt its own rules whether by way of legislation or regulation. It is also, of course, obvious that in

some instances, in the case of both Directives and Regulations, their detailed implementation can be effected by administrative acts

rather than by legislation or regulation.

Accordingly, had s. 3 of the 1972 Act not been enacted by the Oireachtas, it would have been necessary for Directives to be

implemented by an Act of the Oireachtas, since there would have been no parent legislation in this country enabling it to be done by

way of regulations made by the appropriate minister. The same would apply to those Regulations in which the member States were

required or authorised to adopt rules themselves for the purpose of implementing the Regulations. Thus, although a Directive did no

more than require the member States to reduce or increase a tariff or duty by a specified sum, leaving no policy choice to be made by

the Oireachtas, it would have been necessary for an Act to be passed if Ireland was to fulfil its obligation as a member of the

community.

As already noted, s. 3 of the 1972 Act, giving Ministers the power to make regulations for the purposes of s. 2, was found to be

constitutional by this court in Meagher. The judgments in the case were cited frequently in the course of the arguments in the

present case and clearly require careful consideration.

The facts can be briefly summarised. Two Council Directives of the EEC prohibited the administration to animals of certain hormonal

preparations for fattening purposes. The second Directive required the member States to ensure that official on-the-spot random

controls were made for the presence of the prohibited substances and to conduct, through the appropriate authority, an investigation

at the farm of origin to determine the reason for the presence of the substances. The Minister, in purported exercise of the powers

conferred on him by s. 3 of the 1972 Act, made regulations providing that the possession of the proscribed substances was to be an

offence. They also enabled a judge of the District Court or Peace Commissioner to issue a search warrant where there was reasonable

ground for suspecting that a person was in possession of one of the prohibited substances. The Regulations further provided that the

time limit under the Petty Sessions (Ireland) Act 1851, under which proceedings for summary offences had to be instituted within six

months, was not to apply and that the proceedings could be commenced at any time within two years after the date of the offence.

The applicant was a farmer who was prosecuted under the regulations, following a search of his premises on foot of a search warrant

granted by a District Court judge. He instituted proceedings seeking, inter alia, a declaration that the provisions of s. 3 were invalid

having regard to the provisions of the Constitution, together with a declaration that the regulations were, in consequence, ultra

vires. It was held in the High Court that so much of s. 3(2) of the 1972 Act as entitled a Minister by regulation to repeal or amend a

previous law was unconstitutional and that, accordingly, the regulations were of no effect.

The Minister and the Attorney General then appealed to this court. The court considered first the constitutionality of s. 3 of the 1972

Act and allowed the appeal of the Minister and the Attorney General, the judgment of the court being delivered by Finlay C.J. It then

went on to consider an alternative argument advanced on behalf of the applicant that, assuming s. 3 to be constitutionally valid, the

regulations were nonetheless ultra vires.

Giving the judgment of the court, Finlay C.J. said that the obligation of membership would necessitate the facilitating of laws enacted,

acts done or measures adopted in some instances at least - and possibly in a great majority of instances - by the making of

ministerial regulation rather than legislation of the Oireachtas. In the result the power to make regulations conferred by s. 3(2) was

immune from constitutional challenge.

There follows a passage in the judgment which is of critical importance in the context of the present case:

“Insofar as it may be possible to point to hypothetical instances of certain types of laws, measures or acts of the Community

or Union which in their implementation or application within the national law might not, as to the method of implementation or

application, be necessarily carried out by ministerial regulation, but rather should have been carried out by enactment of law

by the Oireachtas, the court is satisfied, without deciding that such instances do occur, that the principles laid down by this

court in the decision of East Donegal Co-operative Livestock Marts Limited v. Attorney General (1970) IR 317, must be applied

to the construction of the impugned subsection in the manner in which it was applied by the decision of this court in Harvey v.

the Minister for Social Welfare (1992) IR 232 to the construction of the section of the statute impugned in that case, namely,

s. 75 of the Social Welfare Act, 1952. That principle is that it must be implied that the making of regulations by the Minister,

as is permitted by the section, is intended by the Oireachtas to be conducted in accordance with the principles of

constitutional justice, and therefore that it is to be implied that the Minister shall not in exercising the power of making

regulations pursuant to the section, contravene any provisions of the Constitution.

“If therefore in such an instance challenge were to be made to the validity of the ministerial regulation, having regard to the

absence of necessity for it to be carried out by regulations instead of legislation and having regard to the nature of the

content of such regulation, it would have to be a challenge made on the basis that the regulation was invalid as ultra vires

being an unconstitutional exercise by the Minister of the power constitutionally conferred upon him by the section.”

As that passage indicates, there are two broad categories of cases in which a regulation made in purported exercise of the powers

conferred by s. 3 might be found to be ultra vires the powers conferred on Ministers by s. 3. The first category would be cases in

which the making of the regulation was found not to be “necessitated” by the obligations of membership referred to in Article 29.4.5º

and to have violated some constitutional right of the plaintiff. The challenge in such a case would be no different from the challenge

mounted to an Act of the Oireachtas allegedly necessitated by the obligations of membership which prima facie violated a

constitutional right of the plaintiff. The second category of cases in which such a challenge could be successfully mounted to a

Regulation is where the implementation of a Directive or defined parts of an EC or EU Regulation by ministerial regulation rather than

an Act of the Oireachtas would be in conflict with the exclusive legislative role of the Oireachtas under Article 15.1 and would not be

saved by the provisions of Article 29.4.5º. That would arise in a case where the ministerial regulation went further than simply

implementing details of principles or policies to be found in the Directive or Regulation in question and determined such principles or

policies itself and the making of the Regulation in that form, rather than in the form of an Act of the Oireachtas, could not be

regarded as necessitated by the obligations of membership. That this is what was intended to be conveyed by that passage in the

judgment of the court is, I think, made clear when one comes to consider the judgments of the court on the vires issue in that case

and, in particular, the judgment of Denham J.

Blayney J. (with whom Finlay C.J. and O’Flaherty and Egan JJ. agreed), pointed out in the first instance that the requirement in the

Directive for on-the-spot random controls could not be effected unless power was given to enable a compulsory search to be made of

farms where animals were kept. It followed that so much of the regulation as authorised the issuing of such warrants by the District

Court was necessitated by the provisions of the Directive.

As to the extended time limit for the institution of criminal proceedings and the amendment purportedly affected for that purpose by

the regulations of the time limit under the Petty Sessions Act, 1851, Blayney J. said that it was accepted that the creation of

offences by the regulations was required for the implementation of the relevant Directives. He also pointed out that there was

uncontested evidence that the six months’ limitation period for the institution of proceedings under the Petty Sessions (Ireland) Act,

1851 would in many instances be too short and he said that it followed that the Minister had power to provide for a longer period and

so had power to extend the six months to two years.

Blayney J. went on to reject a submission by Counsel for the applicant in that case that, because Article 189 of the Treaty of Rome

left to the State the choice of the form and methods of implementing a directive, what was done by way of implementation was not

necessitated by the State’s obligation of membership. In a passage of some significance in the context of the present case, he

added:-

“The article obliges the State to implement the directive and equally obliges the State, in exercise of the discretion given to it,

to choose an appropriate method of implementation. If the State were free not to implement the directive, then clearly, if it

were to do so, it would be a voluntary act not necessitated by the obligations of membership and would not be protected by

Article 19.4.5º of the Constitution. But the State is not free. It is obliged to implement the directive and so is obliged to

choose a method of implementation and, provided the method it chooses is appropriate for the purpose of satisfying the

obligation of the State and the measures it incorporates do not go beyond what is required to implement the directive, it is

correctly characterised as being necessitated by the directive.”

In her judgment, Denham J, with whom Finlay C.J., O’Flaherty J. and Egan J. also agreed, said that the fact that the creation of a

right of search and the amendment of the Petty Sessions (Ireland) Act, 1851 were “necessitated” under the Directive, was not the

end of the matter. Article 189 left to the national authorities the choice of form and method and, in choosing the form or method, the

Minister must have due regard, not merely to Article 29.4.3º of the Constitution, but also to Article 15.2. The learned judge went on:-

“If the Directive left to the national authority matters of principle or policy to be determined, then the ‘choice’ of the Minister

would require legislation by the Oireachtas. But where there is no case made that principles or policies have to be determined

the national authority, where the situation is that the principles and policies were determined in the Directive, then legislation

by a delegated form, by regulation, is a valid choice ...”

She went on to point out that the appropriate test was as set out by O'Higgins C.J. in Cityview Press. She added:-

“Applying the test to this situation the test is whether the ministerial regulations under s. 3 of the Act of 1972 are more than

the mere giving effect to principles and policies of the said Act and the Directives, which are part of domestic law as to the

result to be achieved.”

In a passage which is again of significance in the context of the present case Denham J. said:-

“In the Directives herein the policies and principles have been determined. Thus there is no role of determining policies or

principles for the Oireachtas. While the Directive must be implemented there is no policy or principle which can be altered by

the Oireachtas, it was already binding as to the result to be achieved.

“That being the case the role of the Oireachtas in such a situation would be sterile. To require the Oireachtas to legislate

would be artificial. It would be able solely to have a debate as to what has already been decided, which debate would act as a

source of information. Such a sterile debate would take up Dáil and Seanad time and act only as a window on community

directives for the members of the Oireachtas and the nation. That is not a role envisaged for the Oireachtas in the

Constitution.”

It follows that, in the present case, the first enquiry must be as to whether the implementation of the EC Regulation by legislation,

whether in primary or secondary form, was necessitated by the obligations of membership within the meaning of Article 29.4.5º of the

Constitution. It is clear that it was.

Article 7.1 expressly required the making of detailed rules by the member States as to the transfer of quotas with a holding in the

case of its sale, lease or transfer by inheritance to purchasers. To that extent at least, Ireland was under an obligation to adopt such

detailed rules and it was not contended on behalf of the appellants that this could have been achieved by administrative decisions,

rather than legislation, either primary or secondary in form, which was binding in law on all those affected whether as persons entitled

to quotas, producers of milk or purchasers of milk or milk quotas.

The second enquiry in the present case is as to whether, given that the making of detailed rules in legislative form, to at least that

extent, was necessitated by the obligations of membership, their being made in the form of S.I. 2000 other than by an Act was in

conflict with the exclusive legislative role of the Oireachtas under Article 15.1 and was not necessitated by the obligations of

membership.

As the submissions on behalf of the parties demonstrate, there are two routes by which a conclusion can be reached on this issue.

One can initially decide whether the making of the regulation in the form of a statutory instrument rather than an Act of the

Oireachtas was “necessitated” by the obligations of membership. If it was, then it is clearly unnecessary to consider whether it is in

conflict with Article 15.2 or, for that matter the Articles guaranteeing the private property rights of the applicants. Alternatively, one

can determine first whether it violates either Article 15.1 or the private property rights or both of them. If the latter course were

adopted, and the conclusion were reached that no breach of the Constitution had been established, it would be unnecessary to

consider whether enactment in the form of a regulation rather than by an Act was necessitated by the obligations of membership.

Ultimately, however, it is immaterial which of these alternative approaches is adopted, because it is almost beyond argument that the

choice of a statutory instrument as a vehicle for the detailed rules rather than an Act was not in any sense necessitated by the

obligations of community membership. There would appear to be no difference in principle between the obligation on a member State

to implement a Directive and the corresponding obligation under a Regulation, such as the EC Regulation in the present case, to adopt

detailed rules for the implementation of specified parts of the Regulation. In each case, while the member State is obliged to

implement the Directive or the specified part of the Regulation, the choice of form and method for implementation is clearly a matter

for the member State.

The law was stated as follows by the Court of Justice in Eridania .v. Minister of Agriculture and Forestry:

“The fact that a regulation is directly applicable does not prevent the provisions of that Regulation from empowering a

community institution or a member State to take implementing measures. In the latter case the detailed rules for the

exercise of that power are governed by the public law of the member State in question; however, the direct applicability of

the measure empowering the member States to take the national measures in question will mean that the national courts

may ascertain whether such national measures are in accordance with the content of the community regulation.” (Emphasis

added.)

I have already referred to the submission advanced on behalf of the appellants in this case that, in so far as the reasoning in Meagher

suggested that the power to make Regulations under s. 3 of the 1972 Act could be availed of by a Minister where it was “convenient”

or “desirable” so to do, it should not be followed. I am satisfied, however, that neither the judgment of the court nor the judgments

of Blayney J. and Denham J. on the vires issue lend any support to the proposition that, in cases where it is convenient or desirable

for the community measure to be implemented in the form of a Regulation rather than an Act, the making of the Regulation can for

that reason alone be regarded as “necessitated” by the obligations of membership. Thus, while it appears from the judgment of the

court that an argument was advanced on behalf of the respondents in that case that the necessity for “expedition” in the

implementation of a Directive would justify its implementation in the form of Regulation rather than an Act, such a submission, as a

general proposition, would, in my view, be unsustainable and derives no support from the judgments in Meagher. Doubtless, where no

policy choices are left to the member State, expedition is one of the factors which may legitimately be taken into account in deciding

to opt for the making of a Regulation rather than the enactment of primary legislation, but it would be a serious overstatement to say

that it justifies the making of regulations rather than the enactment of an Act in the case of every Directive or EU Regulation and

again that is clearly not consistent with what was held by this court in Meagher.

I have reached these conclusions without regard to the change of wording in the relevant bill from “consequent on” to

“necessitated”.

It follows that, in the present case, it could not be said that the making of the rules in the form of S.I. 2000 rather than an Act was

necessitated by the obligations of membership and the essential enquiry must be as to whether the Minister in making S.I. 2000 was

in breach of Article 15.1 of the Constitution.

In determining that issue, it is accepted that the appropriate test is as set out by O’Higgins C.J. in Cityview Press where he stated:-

“In the view of this court, the test is whether that which is challenged as an unauthorised delegation of parliamentary power is

more than a mere giving effect to principles and policies which are contained in the statute itself. If it be, then it is not

authorised; for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so

under the Constitution. On the other hand, if it be within the permitted limits - if the law is laid down in the statute and details

only are filled in or completed by the designated Minister or subordinate body - there is no unauthorised delegation of

legislative power.”

However, in applying that test to a case in which the regulation is made in purported exercise of the powers of the Minister under s. 3

of the 1972 Act, it must be borne in mind that, while the parent statute is the 1972 Act, the relevant principles and policies cannot

be derived from that Act, having regard to the very general terms in which it is couched. In each case, it is necessary to look to the

Directive or Regulation and, it may be, the treaties in order to reach a conclusion as to whether the statutory instrument does no

more than fill in the details of principles and policies contained in the EC or EU legislation.

Thus, there are no doubt many cases, of which Meagher was one, where no choice has to be made by the member State as to the

appropriate policy to be implemented: the policy in that case was unmistakably the outlawing of the hormonal substances in question

and the giving of the necessary powers of search and prosecution to the competent authorities in the member States. Nor had the

State any discretion as to whether any particular part of the impugned Regulation was to be omitted. In the passage I have cited,

Blayney J. emphasises that the implementation of the Directive in that case was in no sense a voluntary act by the member State.

In the present case, the EC Regulations, as already noted required the member States to adopt detailed rules as to the transfer of

quotas with land and it also required the authorisation of temporary transfers of quotas which producers who were entitled thereto

did not intend to use. However, in three areas, it was left to the member States to decide whether they elected to pursue specified

courses of action. First, they could effectively derogate from the provisions of Article 7.1 by providing that quotas were not to be

automatically transferred with a holding. They could only do so, however, in order to ensure that quotas were solely attributed to

active milk producers. The Minister decided to make use of this option by providing in S.I. 2000 that, subject to certain exceptions,

quotas were not to be automatically transferred with the land. Since one of the exceptions was in favour of active milk producers,

there can be no doubt that the Minister, in making the Regulation in that form, could not be accused of having effected an

impermissible derogation from the general provisions of Article 7.1. S.I. 2000 also allowed for exceptions in the case of sales or

transfers to specified members of the family of the person entitled to the quota.

The member States were also entitled under Article 6 to determine to what extent transfer operations might be renewed. This was

availed of by the Minister so as to restrict persons entitled to quotas who had leased their quotas for three successive years from

making more than one further lease of the land and quota. Finally, Article 8 enabled the member States to take one or more of five

courses of action with a view to completing restructuring of milk production or environmental improvement. One of these was availed

of by the Minister to introduce the milk quota restructuring scheme.

It seems clear that, had the Minister taken the view that, in the Irish context, the number of persons leasing quotas was so

insignificant that regulations designed to eliminate the practice were unnecessary and would only create hardship with little or no

corresponding benefit to the operation of the COM in Ireland, he would have been making a valid choice in terms of the EC Regulation

and, indeed, of the general policy of the CAP and the COM. If that were not the case, and the elimination of such practices was to be

of universal application throughout the Community, no such option would have been afforded to the member States. The same

considerations apply to the options as to restricting temporary leases and introducing a milk quota restructuring scheme. It is, of

course, the case that, as the evidence of Mr. Evans demonstrates, the election by the Minister to make the choices that he did

resulted from the fact that, whatever be the position in other member States, in Ireland the prevalence of the leasing practice was

resulting in a less efficient dairying industry with higher production costs.

It is undoubtedly the case that the milk quota/super levy scheme is intended to be tightly regulated by the EC institutions and that

the manner in which it operates in all the member States is regularly monitored by the Commission. However, that does not alter the

fact that, in specific areas, the EC has decided that the manner in which it is to be implemented in the member States is to be left to

the member States to determine.

As I have already indicated, a Directive, or in this case a Regulation, can be equated to the parent statute in which, in the case of

domestic legislation, one would expect to find principles and policies laid down which were then to be implemented in detail by a form

of delegated legislation. There is, however, manifestly a significant difference between a Directive or Regulation, which is applicable

throughout the fifteen member States of the European Union, and an Act of the Oireachtas the effect of which is confined to a

relatively small and homogeneous area within the European Union. In the case of a Regulation which is intended to apply in a number

of different regions throughout the European Union in which the conditions of the dairying industry may vary widely, it is not surprising

to find that the Regulation, in specified areas, leaves choices as to the nature of the implementing measures to be introduced by the

member State. The issue in this case is as to whether the choice of the appropriate measures can be regarded as involving no

determination of policy or principle, as that expression has been used in previous decisions of this court.

I have experienced some difficulty in arriving at a conclusion as to how this issue is to be resolved. Applying the reasoning which

found favour in Meagher, it seems self-evident that there are choices to be made by Ireland, as a member State, in determining how

it will implement the Regulation in those areas where it has been afforded a discretion. Once it is acknowledged that rules of this

nature may be implemented in a manner requiring parliamentary scrutiny and that implementation by ministerial regulation is not

necessitated by our membership of the European Union, it gives rise to natural misgivings to find that there is no role for the

democratically elected institutions of the State, other than the limited one under s. 4 of the 1972 Act. I am, however, persuaded by

the analysis carried out by Fennelly J. in the judgment that he will deliver that, in the case of the operation of the super levy scheme,

the choices as to policy available to the member States have in truth been reduced almost to vanishing point. As he points out, the

scheme which has given rise to these proceedings was essentially the creation of the European Union and, if one seeks to determine

the principles and policies which underlie it, one must look, not to any parent legislation in Ireland, but to the treaties of the European

Union and the Regulations and Directives which have established the complex machinery of the CAP and the common market in milk. It

follows that the making of the Regulation was not an impermissible exercise of the legislative role of the Oireachtas and that the

appellants’ contentions to the contrary are not well founded.

There remains the question as to whether the Regulations also constituted an unjust attack on the alleged property rights of the

applicants in contravention of Articles 40.3.1º and 2 and 43 of the Constitution. I have no doubt that the Regulations do not violate

any property rights within the meaning of the relevant articles of the Constitution. Even if one were to adopt the most expansive view

of what is meant by a right of property within the meaning of those articles and extend it beyond the well accepted species of

property under our law - real and personal property, including, under the latter category, choses in action - it could still in no sense

be equated to a right of property.

It seems to me unnecessary in this context to consider whether rights in the nature of licences conferred by the law in relation to

particular property, such as planning permissions or licences for the sale of alcohol, constitute property rights. The quotas to which

the applicants were entitled in this case are not licences or permits which may enhance the value of property which they own or

occupy. The applicants may produce as much milk as they please and require no licence from any authority so to do.

The attempts by the EEC to redress the consequences of the policy of guaranteeing the price of milk in the Community led to the

super levy scheme, a regulatory regime intended to redress the imbalance in the market brought about by the guaranteed price

policy. That in turn resulted in milk producers, including the applicants, being entitled to sell their milk up to a specified level without

incurring the super levy which would make production uneconomic. Manifestly, such a regulation of the market in milk products could

always be altered to the economic disadvantage of those, who, like the applicants, had previously benefited from it, but it is a

singularly inapt use of language to describe that result as a violation of property rights.

The fact that the right in question may effectively be disposed for cash does not mean that it is a property right. A person who is

standing in a queue to buy a particular commodity and gives up his place to someone else for cash would not appear to be doing

anything unlawful, but he is most assuredly not disposing of a property right, merely his right to occupy that particular place on public

or private land at that particular time. Nor do I find that any assistance is to be derived from comparisons with patents, trademarks or

copyright rights, which under our legal system are nowadays generically described as “intellectual property rights”. Systems of law in

developed societies invariably protect those who produce such intangible assets in the expectation of reward by creating a discrete

structure of legal protection, embodied in our case in the relevant statutes. They are not remotely comparable in my view to the

opportunities for profit presented by a regulatory scheme designed for the benefit of subsidised producers.

It is accordingly unnecessary, in this context, to consider whether, in any event, any supposed infringement of property rights under

Irish law was necessitated by the obligations flowing from membership of the European Union.

The position under community law must also be considered, since it is clear that whether the rights of property safeguarded by the

community legal order have been infringed in any particular case is a question to be determined in accordance with that law.

The law was made abundantly clear by the Court of Justice in R. .v. Minister of Agriculture, ex parte Bostock where it was said that:-

“The right to property safeguarded by the community legal order does not include the right to dispose, for profit, of an

advantage, such as the reference quantities allocated in the context of the common organisation of a market, which does not

derive from the assets or occupational activity of the person concerned.”

That statement of the law seems to me to accord in every important respect with the position under our Constitution. The comments

of the Advocate General in Damand .v. Haubtzollampt Trier suggesting a different approach have not been endorsed by the Court of

Justice.

Although it was urged on behalf of the applicants that Bostock did not wholly shut out the possibility of a claim based on what was

claimed to be a compulsory acquisition of the right in question, it is clear that, if the entitlement to a milk quota is not a right of

property, it is immaterial whether what was involved in this case constituted a compulsory acquisition of the right in question.

Moreover, in circumstances where, as here, the applicants were fully entitled to continue availing of their milk quotas if they resumed

milk production, however inconvenient or difficult that might have been in their individual circumstances, it could hardly be plausibly

contended that any property right they might have had had been compulsorily acquired. Nor is the right in any event necessarily

acquired by the State or any of its organs. While the Minister is entitled to fix a price for the transfer of the quota to another person

which is below what it would fetch in the market, the applicants are hardly in a strong position to complain of such an interference

with the forces of the market.

I would dismiss the appeal and affirm the order of the High Court.