Boucher and Dairy Adjustment Authority and Ors [2002] AATA 149 (21 February 2002)

Last Updated: 7 March 2002

DECISION AND REASONS FOR DECISION [2002] AATA 149

ADMINISTRATIVE APPEALS TRIBUNAL )

) Q2001/672,673

GENERAL ADMINISTRATIVE DIVISION )

Re NEVILLE and MARGARET BOUCHER

Applicant

And DAIRY ADJUSTMENT AUTHORITY

Respondent

And WILLIAM SALISBURY

ANNE SALISBURY

CHRISTOPHER PATRICK

SWASBRICK

JANE SALISBURY

Parties Joined

DECISION

Tribunal Mr. D.W. Muller, Senior Member

Date 21 February 2002

Place Brisbane

.............(Signed).................................

D.W. MULLER

SENIOR MEMBER

CATCHWORDS

DAIRY STRUCTURAL ADJUSTMENT PROGRAM - milk revenue - annualised value of lease - no general discretion

Dairy Produce Act 1986

Dairy Structural Adjustment Program Scheme

REQUEST FOR WRITTEN REASONS FOR DECISION

Mr. D.W. Muller, Senior Member

1. The Applicants, Neville and Margaret Boucher seek review of decisions by the Dairy Adjustment Authority that they are each eligible, subject to certain conditions, for a standard payment right with a face value of $238.29, whereas the Parties Joined are eligible for a total of $82,721.

2. The Applicants own a dairy farm at Finley, New South Wales. The farm has been their main source of income since 1984. They operated the farm until 1 August 1997.

3. On 4 July 1997, the Applicants executed a lease with the Parties Joined as lessees of the dairy farm. The rent was stated in the lease document to be an annual amount of:

(i) $52,000 for the period 1 August 1997 to 31 July 1998;

(ii) $55,000 for the period 1 August 1998 to 31 July 1999;

(iii) $58,000 for the period 1 August 1999 to 31 July 2000.

The lessees provided their own herd of cows.

4. The Dairy Industry Adjustment Package was developed to assist the dairy industry to adjust to deregulation, which took effect on 1 July 2000. One of the programs under the package is the Dairy Structural Adjustment Program (DSAP), which provides for dairy structural adjustment payments to be made to eligible entities on a quarterly basis over an eight year period which commenced on 1 July 2000. The Dairy Structural Adjustment Program Scheme (the Scheme) is formulated under Schedule 2 of the Dairy Produce Act 1986 (the Act).

5. The Dairy Adjustment Authority (DAA) was established under the Act to determine applications for payments under the Scheme.

6. The Scheme provides a framework for the grant of payment rights to entities who held an eligible interest in a dairy farm enterprise at 6.30pm on 28 September 1999. Under the Scheme there are three types of payment rights, but there is only one of relevance in this case, namely, "standard payment rights".

7. Under the Scheme the face value of a standard payment right is calculated by reference to the dairy farm enterprise's "overall enterprise amount". The overall enterprise amount is calculated by reference to the volume of milk delivered by the enterprise in the 1998/1999 financial year. Each entity with an eligible interest in the enterprise shares in the overall enterprise amount in accordance with the provisions of the Scheme.

8. The method of calculating the face value of standard payment rights under the Scheme depends on the category into which the dairy farm enterprise falls. In the case of the Applicants and Parties Joined, the dairy farm enterprise was in the category "an enterprise that is subject to an eligible leasing arrangement".

9. The Applicants submitted a joint application which claimed a standard payment right under the Scheme, in their capacity as lessors in relation to the dairy farm enterprise.

10. In a separate application the Parties Joined claimed a standard payment right as lessees of the dairy farm enterprise.

11. The Act and the Scheme treat lessors of dairy farms as only peripherally involved in the dairy industry. They are treated more as investors. As a result of applying the various formulae to the Applicants, the face value of their standard payment rights was $238.29 each.

12. There was some minor discussion about whether:

(i) The term "milk revenue" meant total income from milk or whether it meant total income from milk minus compulsory levies; and

(ii) Whether the "annualised value of the lease" should have been $58,000, or the lesser sum actually paid by the lessees after some legal proceedings. The figure of $238.29 was arrived at by taking "milk revenue" to mean total income from milk without reference to the levies and the "annualised value of the lease" to be $58,000.

13. The Tribunal agreed with the approach taken by the Dairy Adjustment Authority.

14. The Applicants did not challenge the method by which the figures were calculated, nor the actual calculations. They did not claim that the Act or Scheme had been misinterpreted. Their claim was that the legislation treated them unfairly. It did not take into account the amount of physical effort, money and years that they put into their farm. They compared what they will get out of the Scheme with what their lessees will get and believe that the resultant inequality is unjust. They claimed that, as a result of deregulation, it has been harder to find lessees for their farm, rents are not as good as they once were and they have not been compensated for this factor.

15. The Tribunal is in no position to resolve a dispute as to whether or not lessors who receive significant rentals should receive benefits from the Act and the Scheme equivalent to those received by lessees who work the farms and pay the rents. Those investigations and conclusions would have been made by experts in the industry before the legislation was drafted.

16. The Dairy Adjustment Authority and the Tribunal are bound to apply the legislation as it stands. There is no scope or discretion to apply a different set of rules which may reflect some notion of "justice" harboured by an individual.

17. The Applicants had no case for setting aside the decisions under review.

18. The decisions under review were affirmed.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member

Signed: .....................................................................................

B. Hitchcock, Personal Assistant

Date/s of Hearing 21 February 2002

Date of Decision 21 February 2002

Request for written reasons 7 March 2002

Applicant Mr. & Mrs. Boucher

Counsel for the Respondent Mr. J. Pizer

Solicitor for the Respondent Mallesons Stephen Jaques