Gallasch and Dairy Adjustment Authority
[2003] AATA 1047
•16 October 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1047
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2002/228
GENERAL ADMINISTRATIVE DIVISION ) Re ANTHONY IAN GALLASCH Applicant
And
DAIRY ADJUSTMENT AUTHORITY
Respondent
DECISION
Tribunal Deputy President D G Jarvis Date16 October 2003
PlaceAdelaide
Decision The decision under review is affirmed. D G Jarvis
(Signed)
Deputy President
CATCHWORDS
DAIRY ADJUSTMENT SCHEME - whether entitled to discretionary payment right - dairy farm adversely affected by spillage of poison and by power being cut off - lack of evidence as to numbers of cows in dairy herd - no evidence of diminution in milk delivered due to significant events or crises, or significant anomalous circumstances - decision affirmed
Dairy Produce Act 1986 s125A and Schedule 2
Dairy Industry Adjustment Act 2000
Dairy Produce Legislation (Supplementary Assistance) Act 2001
Supplementary Dairy Adjustment Scheme, s8(3) and s8(5)REASONS FOR DECISION
16 October 2003 Deputy President D G Jarvis 1. This is an application by Anthony Ian Gallasch for a review of a decision made on 21 February 2002 by the respondent, the Dairy Adjustment Authority (“DAA”), to the effect that the applicant is not eligible for a discretionary payment right. The applicant applied for an internal review of that decision, and on 17 May 2002 the DAA affirmed its original decision.
2. In the proceedings before this Tribunal the applicant appeared in person. Mr J Pizer of Counsel, instructed by Mr B Reilly of Mallesons Stephen Jaques, represented the respondent.
3. Oral evidence was given by the applicant, his wife Mrs Coral Gallasch, his son Mr Benjamin Gallasch, and Mr John Sharp, another rural financial counsellor. The respondent called Messrs James Forsyth, Joseph Rice and Robert Butler as witnesses. In addition, the Tribunal received into evidence the following documents:
(a) Livestock trading accounts (exhibit A1);
(b) Sales of stock records (exhibit A2);
(c) Summary of sales of stocks in 2000 and 2001 (exhibit A3);
(d)Photo of a dairy cow and a beef cow from “Principles of Animal Production” by C.P. McMeckan (exhibit A4);
(e)Note of observations at visit to Gallasch farm by Mr John Sharp on 10 September 2003 (exhibit A5);
(f)Discretionary Payment Right brochure produced by the Dairy Adjustment Authority (exhibit A6);
(g)the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the “AAT Act”) (exhibit R1 : T Documents, T1 – T44);
(h)Dairy Farmer’s Licence Annual Returns for years 1996, 1997, 1998, 1999 and 2000 (exhibit R2);
(i)Gallasch herd test summary prepared by Herd Improvement Services of South Australia Co-operative Limited (exhibit R3);
(j)bundle of documents evidencing purchase of animals from 1998 to 1999 (exhibit R4);
(k)letter dated 28 January 2003 from the Dairy Adjustment Authority to Mr Gallasch (exhibit R5);
(l)truncated witness statement of James Richmond Forsyth (exhibit R6); and
(m)bundle containing a document headed “Business Guidelines Supplementary Dairy Assistance Scheme 2001 – Discretionary Payments” dated 19 February 2002 and a separate document dated 19 February 2002 headed “(D) Business Guidelines for Normal Year Milk” (exhibit R7).
The Issue
4. The issue in this matter is whether the applicant is entitled to a discretionary payment right in consequence of having been affected by “significant events or significant crises” or “significant anomalous circumstances” as those terms are defined in s8(3) and s8(5) of the Supplementary Dairy Adjustment Scheme (“the SDA Scheme).
Background and Findings of Fact
5. From the evidence before me I make the following findings of fact. The applicant was born on 15 November 1944 and is a fifth generation dairy farmer. He carried on the dairy farming enterprise at Verdun in South Australia in partnership with his wife. The total area of the farm is about 350 acres. Some years ago, on the advice of a consultant, he adopted some changed practices in the running of his dairy farm, namely the use of lime and liquid fertilisers instead of granular fertilisers, and he also started aerating his pastures. Apart from that, there was nothing unusual about the practices which he adopted in running his dairy farm. About 15 years ago the dairy was milking 150 cows, but then changed processors and the numbers dropped. However, in more recent years the enterprise commenced building up the herd again because the applicant intended that his son Benjamin Gallasch would work on the farm after he left school, and it was necessary to increase the number of milking cows in order to support another full-time employee.
6. The applicant suffered a brain haemorrhage in July 1999. It appears likely that this was caused or contributed to by stress resulting from two significant adverse events which occurred during the previous financial year. I will refer to these events below. The applicant said that his stroke has severely affected his memory, and this was apparent to me from the applicant’s evidence and the difficulty he had in recalling relevant matters. His speech is also somewhat impaired. I also note from his application for a discretionary payment right under the SDA Scheme (T14) that he says that his brain haemorrhage “resulted in a week in hospital, severe impairment to his balance, judgement, short-term memory, ability to make decisions and his capacity to do any physical or mental work”.. The form went on to say that the applicant was lucky to be alive and that he had one year off work. In view of the applicant’s difficulties, Mr Austin Reid, a rural financial counsellor from Fleurieu & Adelaide Hills Rural Counselling & Information Service Inc., attended the Tribunal hearing with the applicant, and assisted him to present his application.
7. In the financial year ended 30 June 1999, which is the “base year” for the purposes of determining eligibility for a discretionary payment right, the operations of the dairy farm were adversely affected by the following events.
(a)In July 1998 poison escaped from a railway corridor adjacent to the applicant’s dairy farm in the course of a vegetation control program carried out by Transfield Pty Ltd. This resulted in some 60 acres of grazing land being unavailable to the dairy farm enterprise. Transfield then fenced off the worst affected areas which comprised about 3 or 4 acres, and these remain fenced off. The applicant said that the areas poisoned were badly affected, and the ground was bare. He said that this was a particularly significant event, as there was a shortage of growth on the farm at that time, and the unavailability of the grazing land severely affected his ability to maintain his cows in good condition at that time. In a letter of 11 March 2002 in which the applicant sought an internal review of the original decision of the DAA (T31), the applicant said that the poisoning of the grazing land prevented the use of the 60 acres for a period of 2 months, whereas in giving evidence, he estimated that the period was 3 or 4 months. In view of my decision in this matter, it is not necessary for me to determine which of these periods is correct.
(b)The applicant further said some animals, both cows and calves, died following the poisoning episode, and some calves were deformed in various ways. He said he was unsure how many animals had died. According to notes of a telephone conversation on 26 March 2002 between the applicant and an officer of the DAA (T33), he advised the DAA then that 2 or 3 cows had died and 10 to 12 calves were stillborn as a result of the poisoning. Once again, in view of the conclusion I have reached in this matter, it is not necessary for me to determine the adequacy or correctness of the evidence as to the number of cows and calves affected by the poison.
(c)In December 1998 the Electricity Trust of South Australia (“ETSA”) inadvertently removed the power lines serving the dairy farm, and this prevented the enterprise from irrigating 30 acres of the property.
This area had not been irrigated during the years when the number of milking cows had been reduced, but because it had been decided to increase the herd, the applicant fertilised and re-seeded this area with the intention of irrigating it again during the summer of 1998 to 1999. However, because of the removal of power this area could not be irrigated, and the enterprise was restricted to irrigating a much smaller area of 5 acres from a dam on the property. This meant that they were forced to use hay for a number of months, which the applicant estimated at 3 to 4 months or as long 4 to 5 months. He said that the hay was not of sufficient quality to enable the cows to produce good milk, and production was adversely affected because the herd did not have access to green feed. The applicant said that the difficulties caused by ETSA’s mistake were exacerbated because ETSA kept reassuring him that they would be able to reconnect the power within a short space of time, but this did not happen.
8. The applicant’s son commenced working at the dairy farm early in 1998 after leaving school, but in consequence of the misfortunes which affected the farm and its ability to support another full-time employee, he stopped working at the farm in early 1999, and he commenced a university course. The applicant said that he and his wife subsequently gave up dairy farming a few years ago. It appears from the evidence of Mrs Gallasch, and I find, that this occurred at about the end of June 2001.
9. It was common ground in the proceedings before the Tribunal that the total volume of milk delivered by the enterprise for the financial years ended 30 June 1996 to 30 June 2000 was as follows:
1995/96 1996/97 1997/98 1998/99 1999/00 Total volume of milk delivered (litres)
136,355
152,449
195,415
216,504
232,738
It is noteworthy that the volume increased each year over this period.
Legislative Framework
10. On 1 July 2000, the dairy industry was deregulated. The Dairy Industry Adjustment Programme (“DIAP”) was included as Schedule 2 to the Dairy Produce Act 1986 (the “Act”) by virtue of s125A of the Act. That section and Schedule 2 were inserted into the Act by the Dairy Industry Adjustment Act 2000. Schedule 2 is part of a framework for the implementation of the DIAP. According to the simplified outline in clause 1 of Schedule 2, the main object of the DIAP is to help the dairy industry or dairy communities adjust to deregulation by providing for four types of grants. These include Dairy Structural Adjustment Program (“DSAP”) payments made under Schedule 2, and Supplementary Dairy Assistance (“SDA”) payments made under the Supplementary Dairy Assistance Scheme (“the SDA Scheme”). Provision for the SDA Scheme was introduced pursuant to the Dairy Produce Legislation (Supplementary Assistance) Act 2001. This Act added a new Division 1A to Schedule 2 of the Act, which provides for additional assistance to farmers. Under the simplified outline of Division 1A, the Minister for Agriculture, Fisheries and Forestry (“the Minister”) is required to formulate a scheme for the grant to entities of certain types of payment rights, including discretionary payment rights.
11. The DAA was established pursuant to Division 6 of Schedule 2. Under clause 56 of Schedule 2, it has such functions as are conferred on it by or under the DSAP Scheme or Schedule 2 itself, and it may do anything incidental to or conducive to the performance of any of its functions. The DAA is required to administer the SDA Scheme, as the delegate of the Minister.
12. The SDA Scheme was formulated by the Minister and is dated 30 July 2001. Section 8 of the SDA Scheme provides for the circumstances in which an entity is eligible for a discretionary payment right. In the present matter, it is common ground that the applicant held a relevant interest in a dairy farm enterprise at the relevant time. Under s8(1)(b), the applicant is eligible for a discretionary payment right if:
(a)he was taken to be affected by “a significant event or a significant crisis” because of s8(3); or
(b)he was taken to be affected by “significant anomalous circumstances” because of s8(5).
13. Section 8(3) provides relevantly, in effect, that an entity is taken to be affected by a significant event or a significant crisis if:
· the event or crisis comprises the disease or death of one or more dairy animals kept by the enterprise that had a detrimental affect on the production or delivery of milk during the 1998-1999 financial year or constituted an “exceptional” event (s8(3)(b));
· there was a “significant reduction in the volume of milk delivered by the dairy farm enterprise … during the base year compared to the enterprise’s normal year volume of milk” (s8(3)(c)); and
· the Minister is satisfied that the reduction was attributable to the event or crisis (s8(3)(d)).
Section 8(4) goes on to provide:
“(4)For the purposes of paragraph (3)(c), but without limiting that paragraph, if the volume of milk delivered by an enterprise during the base year is less than 70% of the enterprise’s normal year volume of milk, the reduction may be taken to be significant.”
The word “milk” is defined in s3 of the DSAP Scheme to mean “market milk or manufacturing milk”.. In the present matter it is common ground that the applicant delivered market milk within the meaning of these definitions. The expression “base year” is defined in s3 to mean the financial year beginning on 1 July 1998. The expression “normal year volume of milk” is defined in s8(7) of the SDA Scheme. In essence, it is a figure calculated by taking the average of the total number of litres of market milk and manufacturing milk delivered by the enterprise in the three financial years immediately before the base year. If that figure does not, however, fairly represent a normal year’s volume of milk in the DAA’s opinion, then the DAA may use a figure that does, in the DAA’s opinion, fairly represent a normal year’s delivery for the enterprise.
14. Section 35 of the SDA Scheme provides that the Minister may delegate all or any of his or her powers under the SDA Scheme to the DAA. The Minister has delegated to the DAA his powers in relation to discretionary payment rights under s8, s13 and s16 of the SDA Scheme, by instrument of delegation dated 23 August 2001. A copy of that instrument of delegation appears as T44 in exhibit R1.
15. Under s8(5) of the SDA Scheme, an entity is taken to be affected by significant anomalous circumstances if relevantly the Minister (or the DAA as the Minister’s delegate) determines that a change or an atypical feature in the management of the entity “significantly and adversely affected the entity’s eligibility for a payment right under the DSAP Scheme, or significantly and adversely affected the face value of such a payment right” (see s8(5)(a)(iii)). Counsel for the DAA submitted that the same test of significance should apply to this subparagraph as applies to s8(3)(c). I acknowledge the force of this submission, but it is not necessary for me to determine this issue in view of the conclusion I have reached on the effect of the evidence before me. There are also other preconditions to the application of s8(5), but these are not relevant in the present matter. Section 13 of the SDA Scheme confers on the Minister (or the DAA, as the Minister’s delegate) a discretion to decide:
(a) whether an entity is eligible for a discretionary payment right;
(b) if the entity is eligible, whether to grant the right; and
(c)if the DAA decides to grant the right, the face value and the time at which the right is granted.
If an entity is entitled to a discretionary payment right under s8 of the SDA Scheme, the Minister (or the DAA, as the Minister’s delegate) decides the face value of that payment right in accordance with s16 and s17 of the SDA Scheme.
The Review by the DAA
16. In view of the applicant’s assertion that the number of milking cows in the herd was being increased, the DAA, when reviewing the original decision:
(a)calculated the average volume of milk produced by each of the enterprise’s cows in 1997-98, by dividing the milk delivered in 1997-98 by the average number of cows in the herd in that year, which the DAA calculated on the basis of information provided to it by the applicant;
(b)multiplied the average volume of milk delivered by each of the enterprise’s dairy cows in 1997-98 by the average number of cows in the milking herd in 1998-99 (ie the base year for calculating whether the applicant was entitled to a discretionary payment right) in order to establish a normal year’s delivery of milk for the enterprise; and
(c)compared the volume of milk actually delivered in 1998-99 with the normal year volume of milk calculated in accordance with paragraph (b) above.
The above calculations indicated that in the base year of 1998-99, the volume of milk delivered was 86.27% of the enterprise’s normal year volume of milk. The DAA accordingly decided that as the volume of milk delivered by the enterprise in the base year was only 13..73% less than the normal year volume of milk, the reduction in milk delivered was not regarded as significant having regard to the 70% criteria applicable to the significant event or significant crisis criterion referred to in s8(3) of the SDA Scheme, and so the applicant was not entitled to a discretionary payment right under that section. The DAA further decided that the death of 2 or 3 cows would not have caused a reduction of 13.73% in production, and as the applicant’s stroke did not occur until after the end of the base year, it did not affect production in that year.
17. As regards the applicant’s claim in respect of significant anomalous circumstances, which was based on the loss of production from the poisoning and the removal of power by ETSA, the DAA further found on review that because the volume of milk delivered in the base year was only 13.73% lower than the normal year volume of milk, these events did not constitute a significant effect for the purposes of s8(5)(a) of the SDA Scheme.
Consideration of Issues Arising and Findings
18. In the present matter, as appears from paragraph 9 above, the milk delivered in the base year exceeded the milk delivered in each of the preceding years, and indeed the volume of milk delivered increased steadily in each of the financial years from 1996 up to 2000. On the applicant’s evidence, this was because the number of cows had been increased by the enterprise in anticipation of his son becoming a full-time employee of the enterprise. In order to determine whether the applicant is entitled to a discretionary payment right, it was necessary to determine the effect of the adverse events which occurred in the base year, ie the 1999 financial year. If the extent of the increase in the number of cows could be determined over the years preceding the base year, it would be possible to calculate the normal year volume of milk, and then to compare that with the volume of milk delivered in the base year, by making calculations based on the volume of milk delivered by a cow in the “normal” year. This is the way the DAA approached the matter when it reviewed the original decision. In the circumstances of the present matter, it was therefore necessary for the applicant to produce evidence of the number of milking cows in the enterprise’s herd in the various relevant years.
19. The applicant expressed concern about the manner in which the DAA investigated his claim for a discretionary payment right. He said that an inquiry made by the DAA as to the number of milking cows at the beginning of the 1998 financial year was made verbally, and he thought that it should have been made in writing. He said that his estimate of 60 to 70 cows in response to this verbal inquiry was not a considered response, as it would have been if the relevant information had been requested of him in writing. He referred in this regard to exhibit A6, being the information brochure regarding claims for a discretionary payment right, and in particular to a paragraph under the heading “Request for Further Information by the DAA”, which reads:
“If further information is required to assess your case, the DAA will send you a letter requesting the required information.”
In this regard, the witness John Sharp drew my attention to clause 38 of Schedule 2. This clause provides, in effect, that the DAA may obtain information and documents relevant to the DSAP Scheme or the SDA Scheme by giving written notice to the person from whom the information or documents are sought. Clause 38(5), in effect, makes it an offence for a person who has been given a notice under clause 38 not to comply with it. However, I do not interpret this clause as preventing the DAA from seeking information in a less formal way. Clause 38 merely provides a mechanism under which the DAA can compel the production of information or documents.
20. In answer to the applicant’s concern, counsel for the respondent referred to the fact that the applicant repeated his estimate of the number of milking cows in the 1998 financial years in a fax dated 2 April 2002 (T35) in which the applicant said, in part:
“During 1998 about 60 to 70 cows milked with a further 21 purchased (from tax records) to increase milk volume to support a new full-time worker”.
The applicant said that when he gave the estimate of 60 to 70 cows in this fax, he simply repeated the verbal information he had previously given. He also pointed out that his fax made no reference to natural increases in the herd, and said that heifers were not sold in the period when it was planned that his son would come to work at the farm. Having regard to the effects on the applicant of the brain haemorrhage and his difficulty in understanding and dealing with his claim for a discretionary payment right, it would undoubtedly have been better in this case if the DAA had made the relevant inquiry as to cow numbers in writing. The applicant said that he was confused as to what was required in order to formulate his claim to a discretionary payment right, and I find that the effect of his brain haemorrhage is likely to have exacerbated his difficulties in obtaining necessary information and providing it to the DAA. However, I am satisfied that in the proceedings before this Tribunal, the applicant was given a proper opportunity to produce whatever evidence was available of the number of milking cows in the herd during the relevant years. I am also mindful of the applicant’s evidence that at one stage he had good records until he entered into an arrangement with a share farmer for 5 years, but that person left after 18 months and from then on the applicant went from a good record keeper to a very “approximate” record keeper. The inadequacies in the applicant’s record-keeping might therefore have pre-dated the applicant’s stroke.
21. Various documentary records were tendered in relation to the number of milking cows in the herd in the years from and after the financial year 1996, and I refer to these in turn.
(a)Under a summons to produce documents, the witness Stephen Rice, the Chief Executive Officer of the Dairy Authority of South Australia, produced annual returns in respect of the enterprise’s dairy farmer’s licence for the financial years 1996, 1997, 1998, 1999 and 2000. The returns included provision to advise numbers of stock on hand as at 30 June in each of the above years. The figures shown on these returns (which are exhibit R2) are as follows:
As at 30/06/96 As at 30/06/97 As at 30/06/98 As at 30/06/99 As at 30/06/00 Milking cows (in milk & dry)
60
78
85
80
60
Heifers
5
9
10
10
8
Some of the annual returns were signed by the applicant alone and others were signed by the applicant and also his wife. However, the applicant said that these figures were only estimates and he did not place any importance on the numbers of stock shown in the annual returns, which did not affect the licence fee payable by the enterprise. The applicant said further that he did not count the number of cows before filling in the annual returns. I accept this evidence and therefore find that the annual returns do not constitute a reliable record of the number of cows in the herd at the respective dates referred to in the returns.
(b)The applicant’s wife, Mrs Coral Gallasch, gave evidence that she had always attended to the accounting part of the enterprise and kept tax and accounting records, but she was not involved in helping in the dairy, except after the applicant had had his stroke and after their son had left the farm to go to university. Mrs Gallasch produced a copy of livestock trading accounts which were attached to the enterprise’s tax returns for the financial years 1996 to 1999 inclusive, and these were admitted as exhibit A1. However, there were both dairy cows and beef cattle on the farm, and whilst the livestock trading accounts clearly showed the movements in the total number of livestock, they did not differentiate between cows and beef cattle, either in terms of the closing numbers or movements which occurred during the financial years in question. These records are therefore of no assistance in the present proceedings.
(c)Mrs Gallasch produced further records showing the sales of stock in the years 1997 and 1998, being exhibit A2. She also produced records of sales of dairy cattle in the 2001 financial year, being exhibit A3. However, whilst these exhibits contain evidence which in itself is of some relevance, they do not enable me to determine the average number of milking cows in the herd during each of the relevant years.
(d)Mrs Gallasch also produced a bundle of documents evidencing the purchase of milking cows and heifers in the 1998 calendar year, and these were admitted as exhibit R4. These show purchases of 2 calves and 8 cows in May 1998, 7 heifers in August 1998, and 1 heifer in October 1998 (as well as 1 bull in January 1998 and 1 bull in November 1998). I find that these documents constituted a satisfactory record of stock purchased in 1998. However, once again they do not enable me to determine the average number of milking cows in the herd in the relevant financial years.
(e)The witness Robert James Butler is the Manager of the Herd Test Department of the Herd Improvement Services of South Australia Co-Operative Limited (“HISCOL”). He gave evidence that HISCOL collected milk samples from dairy farms and determined from those samples the individual yield of dairy cows. He produced a record headed “Gallasch Herd Test Summary” and a further record headed “Gallasch Cow Production Summary”, containing HISCOL’s records of samples provided by the applicant’s enterprise to HISCOL for testing purposes. These records are exhibit R3. However, the applicant gave evidence that he did not take one sample from each cow, but rather took samples from particular cows which he suspected of suffering from mastitis, and in some cases, took samples from each of a cow’s quarters. In those circumstances, Mr Butler agreed that the data which he produced, which included a heading “Cows Tested”, constituted a record of the samples tested, but did not constitute an accurate record of the actual number of cows on the dairy farm at any one time. I find that this is the case, and accordingly exhibit R3 is of no assistance in determining cow numbers.
22. The applicant called his son, Mr Benjamin Gallasch, who gave evidence that he started working in the dairy for his parents full time when he finished school, essentially from the start of calendar year 1997. He said that at that time there were approximately 100 cows being milked, and there may have been 80 in the herd at the start of that year and by the start of the winter of 1997 the numbers had built up to around 100. He said that he left the farm for approximately 6 months from January 1998 to June or early July 1998 and then he went back to the farm and was there again full time until early 1999. He then left because of lack of pay from the farm, and he commenced a university course. He said there was no change in the number of milkers from the winter of 1997, and after that the number remained pretty steady at about that number for quite some time, up until when he left to start his university course. On this evidence, and on the assumption that the number of cows continued to remain constant until the end of the 1999 financial year, there is no basis on which I can find that the volume of milk delivered in the base year (ie the 1999 financial year) was adversely affected by the events referred to by the applicant, since as appears from paragraph 9 above, the volume of milk delivered in that base year exceeded the volume of milk delivered in the 1997 and 1998 financial years.
23. The witness John Douglas Sharp gave evidence that he is a rural financial counsellor, and he went through the figures of production from the farm and endeavoured to draw some conclusions about why certain changes were occurring in the level of production. He concluded from the farm’s production records that there were more cows being milked in 1998/99 than there were in 1997/98, and he thought from the production figures that some cows were most probably brought into the herd in May and June of 1998 so that in the first two months of the 1999 financial year they would have been reaching the peak of their lactation. He also pointed out that apart from the age and numbers of cows, other factors such as nutrition and environmental factors can affect productivity if one year’s results are being compared with another year’s results. However, he could not comment on the position in South Australia in the 1999 financial year, because he was working in South Gippsland then. He further gave evidence that he had counted the number of dairy cattle on the property on 10 September 2003, and he was able to differentiate between dairy cattle and beef cattle. He understood from Mr Gallasch that when the herd was finally disposed of, the purchaser subsequently agisted the herd on the dairy farm, with the exception of some cows which the purchaser sold and brought in himself. Mr Sharp concluded from his analysis that of the cows he counted, there were 62 out of the 87 which were dairy cows, and the remaining 25 of the animals he counted were beef cattle. However, he admitted that he could not say how many cows were milked in 1998/99 because he was not there. He said that the person who would have had the best idea of the number of cows in the herd was the person who milked the cows at the relevant time.
24. The witness James Richard Forsyth gave evidence that he is a member of the DAA as an industry representative, and has held this position since the DAA was formed in April 2000. He obtained a Diploma in Dairying from Hawkesbury Agricultural College in 1953. He has substantial experience through employment in the dairy industry, with various dairy industry entities. He said that he recommended to the DAA on 16 May 2002 that its original decision that the applicant was not eligible for a discretionary payment right be confirmed. He explained how the DAA had assessed the applicant’s claim, and the significance of the applicant’s estimate of the number of cows in the herd is apparent from his explanation. Mr Forsyth further said that notwithstanding the provisions of s8(4) of the SDA Scheme, the DAA had set a benchmark of a loss of production of 20% in the base year in order to establish an entitlement to a discretionary payment right. Reference was made in this regard to exhibit R7, the Business Guidelines prepared by the DAA. Mr Forsyth further said there had been very few instances where the DAA authorised a discretionary payment right on percentages below 20. This flexibility in determining the relevant extent of the “significant reduction” in the volume of milk delivered is, I think, authorised by the wording of s8(4) of the SDA Scheme, which in effect requires the diminution in the volume of milk delivered during the base year to be in excess of 30% of the enterprise’s normal year volume of milk for the reduction to be significant, but this prescription is qualified by the words “but without limiting that paragraph”, ie paragraph 8(3)(c), which requires there to be a significant reduction in the relevant volume of milk delivered. Of course, departmental guidelines or policies are not accorded the same weight as ministerial policies, and have been described as relevant only as forming part of the background of facts of which the Tribunal ought to be informed when making its decision (see Re Lumsden and Secretary, Department of Social Security (1986) 10 ALN N225).
25. As regards the applicant’s circumstances, Mr Forsyth said that he thought that the feed provided by the applicant for his herd would have offset the loss of irrigation, and he noted that the milk production for the six months to the end of June 1999 was approximately 10% higher than for the corresponding period ending in June 1998. He accordingly considered that the applicant had been able to overcome the lack of irrigation for the 30 acres reasonably well. He further expressed the opinion that the loss of 60 acres through the escape of poison would not have impacted very greatly on milk production because the normal procedure on a dairy farm is to rotate paddocks for grazing purposes, and the applicant still had approximately 300-odd acres in which he could rotate and graze his cattle, and this was in winter months so that the growth from the paddock in question would not have been excessive. The applicant disputed Mr Forsyth’s opinion. Having regard to the applicant’s knowledge of his own property, his farming practices and his knowledge of the quality of the hay which he was able to feed to his cattle, I find that Mr Forsyth tended to under-estimate the significance of the unfortunate events which occurred in the 1998 financial year, and I prefer the applicant’s assessment that the effect of the relevant events was more significant than Mr Forsyth supposed. However, in order to be entitled to a discretionary payment right, it is necessary for the applicant under the SDA Scheme to quantify the effect of the relevant events on the volume of milk delivered, and the applicant’s description of the adverse effect of the relevant events does not of itself establish an entitlement to a discretionary payment right.
26. After Mr Benjamin Gallasch had given evidence, the respondent withdrew from the approach adopted by the DAA when the original decision was reviewed. Instead, counsel for the respondent contended that on that evidence, the number of cows in the 1998 financial year was the same as the number of cows in the 1999 financial year, and even if the average milk delivered in those two financial years was taken to be the normal year volume of milk, it was less than the actual milk delivered in the base year, being the 1999 financial year. In the course of his submissions, the applicant indicated that he thought that his son had been mistaken when he gave evidence as to cow numbers. As far as it went, Mr Benjamin Gallasch’s evidence was clear. However, he did not work at the farm after he commenced his university course in early 1999. He was therefore not in a position to say whether the number of cows remained constant for the remainder of the 1999 financial year. Instead, the fact that milk delivered increased in the financial year 1999 compared with 1998, notwithstanding the adverse impact on the farm of the events described by the applicant, tends to contradict any inference from his evidence that the number of cows remained constant for the whole of those two financial years. For these reasons I find that the evidence of Mr Benjamin Gallasch does not enable me to find that the average number of milking cows in the herd during the 1998 or 1999 financial years remained constant at the figure of 100, being the figure which he said was reached by the start of the winter in 1997. Even if his recollection of the year in which the herd was increased from 80 to 100 was incorrect, and that occurred between January 1998 and the winter of 1998 (not, in each case, 1997), that increase would not be sufficiently significant to result in a finding that the relevant events in the 1999 financial year had caused a sufficient diminution in the volume of milk delivered to satisfy the criteria referred to in sections 8(3)(c), 8(4), 8(5)(a)(iii) or the 20% figure referred to in the DAA Business Guidelines (exhibit R7).
27. In order to establish the number of milking cows in the herd in a particular year, it was necessary for the applicant to provide evidence of the number of cows at the beginning of the year, the number added to the herd by natural increase or purchases during the year, the number of cows sold, and the number of cows which died during the year. The applicant has not provided that evidence in the proceedings before me. I am also mindful from the evidence of Mr Sharp that in order to compare the base year with a normal year volume of milk, it would be relevant to consider the composition of the herd in the two years, as well as nutrition and environmental factors, as these matters may also affect the productivity of the herd. The DAA apparently did not attempt to carry out this more sophisticated analysis. However, there is no satisfactory evidence before me which enables me to make any finding as to the number of cows in the herd during the relevant years, or as to any of the other factors referred to by Mr Sharp. The applicant has therefore not established an entitlement to a discretionary payment right under the provisions of the SDA Scheme.
28. The applicant’s ability to recall relevant facts, produce information and present his case before the Tribunal has clearly been severely affected by his impaired condition in consequence of his brain haemorrhage. It occurred to me following the conclusion of the hearing that another approach might have been to have selected the financial year 2000 as the normal year volume of milk (even though the applicant suffered the brain haemorrhage early in that year, and his resulting incapacity no doubt affected the productivity of the farm adversely). If the milking cow numbers referred to in the annual returns lodged with the Dairy Authority of South Australia could be accepted as reliable, there were some 25% less milking cows as at 30 June in 2000 compared with the number as at 30 June 1999, but the volume of milk delivered was greater in that year than in 1999. On these figures there would have been a significant diminution in the volume of milk delivered in the base year compared with a normal year’s delivery, if that were to be calculated by reference to the volume of milk delivered in the year 2000. However, as mentioned above, on the applicant’s evidence the figures in the annual returns are not reliable, and there appears to be no other reliable evidence as to the number of cows in the herd in the financial year 2000. Further, it follows from my findings that there is also no reliable evidence of the average number of cows in financial year 1999, so that there is no basis for making the necessary comparison with the volume of milk delivered on the base year, even if the year 2000 were selected to determine the normal year volume of milk. It therefore appears that the selection of the year 2000 would not assist the applicant.
29. It was apparent to me that the applicant found the task of presenting his case to the Tribunal very stressful, and it is unfortunate, having regard to the very difficult circumstances in which the applicant finds himself through no fault of his own, that he has not been able to establish his claim. Indeed, I note that counsel for the respondent said in his closing address that the DAA had not reached its conclusion that there was no entitlement with “any happiness”, and that the DAA had endeavoured at every turn to see if there was a way in which the applicant could “get over the line” and be eligible, but at every stage the lack of information had led to the conclusion that there was no eligibility, or the information provided led to that conclusion (transcript p 103). I think that this approach by the DAA is consistent with the purposes of the SDA Scheme and the enactment authorising it. The beneficial purposes of the Dairy Produce Legislation Amendment (Supplementary Assistance) Bill 2001 was referred to by the Minister in the second reading speech, when he said:
“The … Bill sets out the framework for the new measures. As with the earlier assistance provided by the Commonwealth, this assistance is not about providing compensation or income support. It is to help with adjustment by those farmers who are most in need, thereby easing their transition to a deregulated market and providing wider public benefits to regional communities.”
However, even though the legislation is beneficial or remedial, and should therefore be construed so as to give the fullest relief which the fair meaning of its language will allow, it is nevertheless not permissible to stretch the provisions of the legislation or the language in which it is expressed (see Repatriation Commission v Hayes (1982) 43 ALR 216, at 219 per Keely J). Regrettably, there is insufficient evidence before me to enable me to find that there was a significant reduction in the volume of milk delivered by the enterprise during the base year compared to the enterprise’s normal year volume of milk (as required by s8(3)(c) of the SDA Scheme) or that the escape of poison or the loss of power significantly and adversely affected the face value of a payment right under the DSAP Scheme (as required by s8(5) of the SDA Scheme).
Findings and Determination
30. For the above reasons, I affirm the decision of the DAA dated 21 February 2002, as confirmed by the decision of the DAA dated 17 March 2002.
I certify that the 30 preceding paragraphs are a true copy
of the reasons for the decision herein
of Deputy President D G JarvisSigned: .......................................................................................
N. Quirke Associate
Date/s of Hearing 11 and 12 September 2003
Date of Decision 16 October 2003
Counsel for the Applicant In person
Solicitor for the Applicant -
Counsel for the Respondent Mr J Pizer
Solicitor for the Respondent Mr B Reilly, Mallesons Stephen Jaques
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