Gilmore and Dairy Adjustment Authority
[2005] AATA 259
•18 March 2005
CATCHWORDS – PRACTICE AND PROCEDURE – extension of time – Dairy Structural Adjustment Program Scheme – granted standard payment right – amount challenged – whether proper recognition given to market milk and manufacturing milk supplied by dairy farm enterprise – whether scheme gave preference to one State or part thereof over another State or part thereof contrary to s. 99 of the Constitution – whether reasonable prospects of success – extension refused.
Acts Interpretation Act 1901, s. 46
Administrative Appeals Tribunal Act 1975 ss. 29 and 37
Commonwealth of Australia Constitution Act s. 99
Dairy Industry Act 1992 (SA) s. 26
Dairy Industry Adjustment Program cll. 2, 3, 5, 6, 7, 10, and 12
Dairy Produce Act 1986 s. 125A
Dairy Produce Legislation Amendment (Supplemental Assistance) Bill 2001
Dairy Produce Levy Act (No. 1) Act 1986
Dairy Structural Adjustment Program 2000 ss. 9 to 11, 21 to 24, 30 and 31
Dairy Structural Adjustment Program Scheme 2000 Amendment (No. 3) s. 30
Primary Industries (Excise) Levies Act 1999
Supplementary Dairy Assistance Scheme 2001
Bouvet v Secretary, Department of Social Security [1992] FCA 216
Comcare v A’Hearn (1993) 45 FCR 441
Dickinson v Comcare (1998) 52 ALD 86
Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 58 ALR 305
Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121
Maynard v Secretary, Department of Social Security [1993] FCA 698
Secretary, Department of Social Security v Van Den Boogaart (1995) 37 ALD 619
Windshuttle v Deputy Commissioner of Taxation (1993) 46 FCR 235
Zizza v Federal Commissioner of Taxation (1998) 55 ALD 451
DECISION AND REASONS FOR DECISION [2005] AATA 259
ADMINISTRATIVE APPEALS TRIBUNAL )
) S2003/525
GENERAL ADMINISTRATIVE DIVISION )
Re BYRON GILMORE
Applicant
AndDAIRY ADJUSTMENT AUTHORITY
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 18 March 2005
Place: Adelaide
Decision:The Tribunal has decided to refuse the applicant’s application to extend the time within which to lodge an application to seek review of the respondent’s decision dated 7 December 2000.
S A FORGIE
Deputy President
REASONS FOR DECISION
Mr Byron Gilmore is out of time to lodge an application to the Tribunal to review a decision by the respondent, the Dairy Adjustment Authority (“DAA”), to grant him a standard payment right with a face value of $76,298 under the Dairy Structural Adjustment Program 2000 (“DSAP Scheme”). The DAA made its decision on 22 September 2000 and confirmed it on 7 December 2000. It had also granted a similar standard payment to Mr Gilmore’s wife, Mrs Patricia Gilmore, with whom he operates a dairy farm known as Morella at Eight Mile Creek in the South East of South Australia (“South East”). The Supplementary Dairy Assistance Scheme 2001 (“SDA Scheme”) was introduced to provide for additional payments to be made. On 19 May 2003, the DAA decided that Mr and Mrs Gilmore were not entitled to any additional payments. On 1 September 2003, Mr Gilmore lodged his application in this Tribunal with respect to the DAA’s earlier decision under the DSAP Scheme. I have decided that Mr Gilmore’s application should not be granted. He should not be granted an extension of time to seek review of DAA’s earlier decision under the DSAP Scheme.
At the hearing, Mr Morcombe with Mr Tokley of counsel represented Mr Gilmore while Mr Almond QC with Mr Pizer of counsel. The documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 (“T documents”) were admitted in evidence together with witness statements by Mr Gilmore, his solicitor (Mr Timothy James Hall), DAA’s solicitor (Mr Reilly), Mr Stephen John Rice (Chief Executive Officer of the Dairy Authority of South Australia), Dr John Patrick Drinan (consultant and farmer) and Mr Daryl Gifford (General Manager, DAA).
THE ISSUE
The issue in this case is whether Mr and Mrs Gilmore should be granted an extension of time within which to lodge their applications.
THE LEGISLATIVE SCHEME
An outline of the Dairy Industry Adjustment Program
On 1 July 2000, the dairy industry was deregulated. The Dairy Industry Adjustment Package (“the package”) was developed to assist the dairy industry to adjust to deregulation. The Dairy Produce Act 1986 (“the Act”) provides for one element of that package. That element is the Dairy Industry Adjustment Program (“Program”) and it is set out in Schedule 2 of the Act (s. 125A). Clause 1 of Schedule 2 sets out a simplified outline of it:
“This Schedule and Part 9C of the Farm Household Support Act 1992 provide a framework for the implementation of the Dairy Industry Adjustment Program.
The main object of the Dairy Industry Adjustment Program is to help the dairy industry or dairy communities adjust to deregulation by providing for 4 types of grants, as follows:
(a)DSAP payments (made under this Schedule);
(b)SDA payments (made under this Schedule);
(c)dairy exit payments (made under Part 9C of the Farm Household Support Act 1992);
(d)payments under the Dairy Regional Assistance Programme (see cl. 86).
Generally, DSAP payments are calculated by reference to 1998-1999 milk deliveries at a rate of 46.23 cents per litre for market milk and national average rate of 8.96 cents per litre for manufacturing milk.
Dairy exit payments are available for farmers who choose to leave agriculture.
The Dairy Adjustment Authority will administer DSAP payment rights.
The Dairy Industry Adjustment Program will be funded by a dairy adjustment levy on milk products.
The levy will be paid into a Dairy Structural Adjustment Fund, and DSAP payments, SDA payments and dairy exit payments will be paid out of that Fund.”
An outline of the DSAP Scheme
A “DSAP payment” is a payment under the DSAP Scheme (Program, cl. 2). The DSAP Scheme is the scheme formulated in writing by the Minister for the grant of payment rights to entities holding an eligible interest in a dairy farm enterprise at 6.30pm on 28 September 1999 and satisfying other requirements set out in the DSAP Scheme (Program, cl. 10(a)).
Payments under the DSAP Scheme
The DSAP Scheme came into operation on 14 April 2000. There was no suggestion in this case that it has not been appropriately formulated by the Minister or that it is not consistent with the policy objectives set out in the Act. The DSAP Scheme establishes three types of payment rights: standard payment rights, exceptional events supplementary payment rights and anomalous circumstances payment rights (DSAP Scheme, ss. 9 to 11 and see also Program, cl. 12(2)). Only one, the standard payment right, is relevant in this case.
The basic eligibility criteria for a standard payment right are:
“An entity is eligible to be granted a standard payment right in respect of a dairy farm enterprise if:
(a)the entity held an eligible interest in a dairy farm enterprise at 6.30pm on 28 September 1999; and
(b)the enterprise delivered milk during the base year.” (DSAP Scheme, s. 9)
DSAP Scheme: an “entity”
Payment rights are conferred on an “entity”. An “entity” is defined in broad terms to include an individual, a body corporate, body politic or a trustee of a particular trust estate. A person may act in a number of different capacities and be regarded as an entity in each (Program, cll. 2 and 5).
DSAP Scheme: a “dairy farm enterprise”
The payment rights are in respect of a “dairy farm enterprise”. That expression is not defined in the DSAP Scheme but it is defined in cl. 2 of the Program. The Program is found in Schedule 2 of the Act and so forms part of the Act. The DSAP Scheme is formulated under cl. 10 of Schedule 2 of the Act. As there is no suggestion in the DSAP Scheme that the same meaning should not be given to the expression as it has in the Act, it should be given the same meaning in both (Acts Interpretation Act 1901, s. 46). Clause 2 of the Program defines the expression “dairy farm enterprise” as “… a business in Australia that delivers market milk and/or manufacturing milk” (Program, cll. 2 and 6).
DSAP Scheme: “an eligible interest”
An entity must hold “an eligible interest” in a dairy farm enterprise. It does so when it is a party to an eligible dairy sharefarming arrangement, an eligible dairy leasing arrangement, or when it is carrying on the enterprise (Program, cl. 7). Only the third is relevant in this case.
Clause 6(4) of the Program provides that, for its purposes, “… the continuity of a business or a dairy farm enterprise is not affected by: (a) any change in the identity of the entity or entities who carry on the business or enterprise; or (b) any change in the ownership of the business or enterprise.”
DSAP Scheme: “manufacturing milk” and “market milk”
Returning to the definition of a “dairy farm enterprise”, the business must deliver market milk and/or manufacturing milk. The term “manufacturing milk” is defined to mean, in so far as it relates to a producer, “… relevant dairy produce delivered by a producer to a manufacturer during a month ending before 1 July 2000, in respect of which a domestic market support payment has been paid under section 108A as in force before the conversion time.” (Program, cl. 2) The expression “market milk means milk on which levy was imposed by whichever of the following is applicable … paragraph 5(1)(a) of the repealed Dairy Produce Levy Act (No. 1) 1986 and paragraph 6(1)(a) of the Primary Industries (Excise) Levies Act 1999.” (Program, cl. 2) The “base year” to which reference is made is the financial year beginning on 1 July 1998 (Program, cl. 3).
DSAP Scheme: calculation of payment right
The face value of an entity’s right is calculated in accordance with Part 4 of the DSAP Scheme. The method of calculating the face value of a standard payment right varies according to whether a dairy farm enterprise is subject to a sharefarming arrangement, a leasing arrangement, to both or to neither (DSAP Scheme, ss. 21 to 24). In the case of a dairy farm enterprise that is not subject either to a sharefarming arrangement or a leasing arrangement and only one entity has an eligible interest in that dairy farm enterprise, the face value of a standard payment right is equal to the overall enterprise amount (DSAP Scheme, s. 21(2)).
Abnormal market pool distributions
In its original form, s. 30 of the DSAP Scheme provided that:
“(1) This section applies if, in the base year, 1 or more dairy farm enterprises in a pooling jurisdiction did not receive payment at the market milk rate for the same proportion of their milk deliveries as other dairy farm enterprises in the jurisdiction.
(2) However, this section does not apply to:
(a)a dairy farm in South Australia that was not bound by the voluntary price equalisation scheme known as the South Australian Market Milk Equalisation Agreement approved under section 26 of the Dairy Industry Act 1992 of South Australia; or
(b)a dairy farm enterprise in Victoria that does not deliver milk to an authorised agent within the meaning of section 49 of the Dairy Industry Act 1992 of Victoria.
(3) If this section applies, the DAA must determine, for each dairy farm enterprise in relation to which 1 or more claims for payment rights have been received:
(a)the amount of market milk that the enterprise would have delivered if it had received payment at the market milk rate for the same proportion of its eligible milk deliveries during the base year as other dairy farm enterprises in the jurisdiction; and
(b)the amount of manufacturing milk that the enterprise would have delivered if it had received payment at the market milk rate for the same proportion of its eligible milk deliveries during the base year as other dairy farm enterprises in the jurisdiction.
(4) The sum of the amount of market milk and manufacturing milk that the DAA determines an enterprise would have delivered during the base year must be equal to the amount of milk that the enterprise actually delivered during the year.
(5) For the scheme, each enterprise is taken to have delivered, during the base year, the amount of market milk, and the amount of manufacturing milk, determined under subsection (3).
(6) In this section:
eligible milk deliveries means deliveries of milk that satisfies the requirements for market milk under the law of the State or Territory in which the milk is delivered.
pooling jurisdiction means a State or Territory in which enterprises were not required to hold quota to deliver market milk during the base year.”
The Minister amended s. 30 of the DSAP Scheme with effect from 17 August 2000 when he made the Dairy Structural Adjustment Program Scheme 2000 Amendment (No. 3). He added s. 30(3A) and amended s. 30(4) so that they now read:
“(3A) For subsection (3), do not count the amount of milk deliveries of market milk that were not covered by State pooling arrangements embodied in, or that operated under:
(a)the voluntary price equalisation scheme known as the South Australian Market Milk Equalisation Agreement approved under section 26 of the Dairy Industry Act 1992 of South Australia; or
(b)the Dairy Industry Act 1992 of Victoria; or
(c)the Dairy Industry Act 1994 of Tasmania.
Note Deliveries of market milk not covered by these State pooling arrangements are dealt with under other provisions of this scheme.
(4) The sum of the amount of market milk and manufacturing milk that the DAA determines an enterprise would have delivered during the base year, together with milk not counted because of subsection (3A), must be equal to the amount of milk that the enterprise actually delivered during the year.”
BACKGROUND
The SAMME Scheme
On the basis of the evidence of Mr Rice, I find that in or about 1995, three processors, Kraft Foods Pty Ltd (“Kraft”), Dairy Vale Foods Ltd (“Dairy Vale”) and National Dairies SA Ltd (“National Dairies”), entered an agreement with the South Australian Dairy Farmers’ Association Inc (“SADF Association”) and the South Australian Market Milk Equalisation Committee Limited (“Company”). Their agreement was known as the South Australian Market Milk Equalisation Agreement (“SAMMEA”). It remained in force until the de-regulation of the dairy industry in 2000.
Clause 2 of SAMMEA established a state wide market milk equalisation scheme known as the South Australian Market Milk Equalisation Scheme (“SAMME Scheme”). The South Australian Minister for Agriculture approved the SAMME Scheme as an authorised price equalisation scheme. He did so on 30 June 1995 under s. 26(1) of the Dairy Industry Act 1992 (SA) (“DI Act”) that was then in force. It was a statewide scheme whose purpose was to ensure that the proceeds from the sale of market milk in South Australia were shared equitably amongst producers who delivered their milk to processors who were parties to the SAMME Scheme.
A “producer” was defined to mean any person, organisation or company, other than a co-operative, licensed under the DI Act as a dairy farmer and supplying Milk to a processor or to a co-operative (SAMMEA cl. 1). The Company could also determine that a dairy farmer in a State other than South Australia could be brought into the SAMME Scheme.
“Milk” was defined to mean bovine milk produced by a producer and processed in South Australia as well as meeting the quality prescribed in Annexure C to the SAMMEA. The SAMMEA distinguished between “Market Milk” and “Manufacturing Milk”. “Manufacturing Milk” was defined to mean “… Milk that is processed into products other than Market Milk including without limitation Milk that is processed into UHT milk or flavoured milk”. UHT milk or flavoured milk is also known as “non-white milk” (SAMMEA. cl. 1). “Market Milk” has the same meaning as in the DI Act “… but excludes Milk that is processed into UHT or flavoured milk and Milk that is purchased directly or indirectly from a person who is not a Producer or Co-operative” (SAMMEA, cl. 1).
Under cl. 3.1 of SAMMEA, each processor paid the Company the Farm Gate Price for each litre of Market Milk it had sold during the preceding month. The Farm Gate Price was the farm gate price set by the Minister for Agriculture under the DI Act (SAMMEA, cl. 1). The Company deducted an administration fee from the amount paid to it by the processors (SAMMEA, cl. 3.2). Using Annexure B to SAMMEA as required by cl. 3.3, the Company calculated the Market Milk Percentage for each month by dividing the total volume of Market Milk in litres sold by the processors in the previous month by the total volume of Milk in litres purchased by processors in that month. The Market Milk Rate for each month was calculated by dividing the amount received by the Company under cl. 3.1 by the figure reached by multiplying the Market Milk Percentage by the total kilograms of protein for the total volume of Milk purchased by the processors from the producers. The Company also calculated the Freight Adjusted Market Milk using Annexure E (SAMMEA, cl. 3.5). A Freight Adjusted Market Milk was set for each of the four regions, including the South East, into which South Australia had been divided.
Each month while the SAMME Scheme operated, the Company then paid each of the processors the Freight Adjusted Market Milk Rate for the preceding month. It did so on the basis of the total kilograms of protein in the Milk supplied to that processor by producers and co-operatives in each region during the preceding month as was equal to the Market Milk Percentage for that month (SAMMEA, cl. 3.5).
In 1997, the SAMMEA was amended. At the same time, Kraft ceased to be a party to the agreement but the following processors became parties to it in addition to National Dairies and Dairy Vale: The Warrnambool Cheese & Butter Factory Company Holdings Ltd (“Warrnambool”), Murray Goulburn Co-Operative Co Limited (“Murray Goulburn”) and De Cicco Industries Pty Ltd (“De Cicco”). The SADF Association and the Company continued to be parties as well but no dairy farmer was a party to the SAMMEA. At the same time, the definition of “Milk” was amended to delete the requirement that it be processed in South Australia.
In the financial year ending 30 June 1999, most, but not all South Australian producers delivered their Milk to a processor who was a party to the SAMMEA (“SAMMEA processor”). Those producers who did deliver Milk to a SAMMEA processor could be divided into two groups. In the first, were those delivering milk used in the production of non-white milk for sale on the domestic market (“UHT producer group”). In the second, were those who delivered milk other than non-white milk for sale on the domestic market (“Non-UHT producer group”). During the financial year ending 30 June 1999, all of the producers delivering Milk to a SAMMEA processor had approximately 19% of their Milk paid for under the SAMME Scheme at the Market Milk rate.
Additional payments under the Dairy Produce Levy Act (No. 1) Act 1986 and the Primary Industries (Excise) Levies Act 1999
The Dairy Produce Levy Act (No. 1) Act 1986 and the Primary Industries (Excise) Levies Act 1999 were administered by the Australian Dairy Corporation. Under them, all farmers paid a monthly levy on the volume of Drinking Milk they supplied to processors. “Drinking Milk” was a term used to describe market milk, UHT and flavoured milk. On the basis of Dr Drinan’s evidence, I find that market milk levy was generally deducted by the processor before it paid the balance to the dairy farm enterprise that supplied the milk.
On the basis of the evidence of Mr Rice, I find that the processors paid a monthly levy on all Drinking Milk (i.e. all white and non-white milk) sold by them in Australia. The money raised by the levy was returned to farmers who sold manufacturing milk in the form of a Domestic Market Support payment (“DMS payment”). The practical outcome was that the producers received a higher price for their manufacturing milk than they would otherwise have received. At the same time, the DMS payments were intended to support export returns and avoid domestic discounting in manufactured dairy products.
Mr and Mrs Gilmore’s role in the dairy industry and their applications
Mr Gilmore, I find on the basis of his evidence, has been involved in the dairy industry for over 40 years. As a boy and young man, he milked cows on his father’s property. In 1971, he purchased a property next door to that of his father. He continued to milk on his father’s property until 1978 when he and his wife built a dairy on the neighbouring property.
In earlier days, he and his father supplied milk to the Mt Gambier Cooperative, which was taken over by Dairy Vale in 1991. In the financial year ending 30 June 1997, Mr and Mrs Gilmore milked approximately 128 cows and produced 793,960 litres of milk. Dairy Vale collected that milk from Mr and Mrs Gilmore’s dairy farm and took it to its factory at Mt Gambier. At its factory, Dairy Vale makes products such as cheese and butter as well as non-white milk.
Before the beginning of the following financial year, Mr and Mrs Gilmore attended presentations by Murray Goulburn, Dairy Vale and De Cicco to help them decide to whom they should sell their milk. Mr and Mrs Gilmore believed that the price paid by each of the processors was not determined by whether the milk would be become non-white milk or not.
On 1 July 1997, Mr and Mrs Gilmore began to supply De Cicco. That company produced predominantly manufactured milk products such as cheese and did not produce any significant quantities of UHT and flavoured milk products. In the financial year ending 30 June 1999, they milked approximately 135 cows and produced 964,765 litres of milk. De Cicco collected the milk from his property and took it to its factory at North Coburg in Victoria.
Mr Gilmore joined other producers in the South East to form the South East Dairy Farmers Action Group (“SEDFA Group”). SEDFA Group has been actively involved in seeking to increase the share of payments made under the DSAP Scheme to South East producers. The SEDFA Group made various submissions at the Commonwealth and the State ministerial and executive levels.
In 2000, Mr and Mrs Gilmore applied for a standard payment right under the DSAP Scheme. They used a standard letter prepared by Mr Hall. Their letter asked the DAA to make a determination under s. 31 of the DSAP Scheme to apply the South Australian market milk share of 29% uniformly to all South Australian producers. The figure of 29% accorded with the figure shown by the Minister for Agriculture, Fisheries and Forestry in a Media Release but Mr and Mrs Gilmore’s Milk Production Statement showed a market milk share for their dairy enterprise of approximately 19%. The discrepancy between the two figures arose from the difference in definition between Market Milk in the SAMME Scheme and the definition of market milk in the DSAP Scheme.
On 22 September 2000, the DAA decided that Mr and Mrs Gilmore were each eligible for a standard payment right. Each standard payment right had a face value of $76,298. On 19 October 2000, they asked the DAA to review its decision on the basis that the proportion of market milk shown on their Production Statement should have been increased from 19% to 29-32%. The essence of their position was that all South Australian dairy farmers should have received similar adjustment packages as each received similar net returns for their dairy farms under the SAMME Scheme in the year ending 30 June 1999. DAA confirmed its decision on 7 December 2000.
It sent a document setting out the decision and the reasons for decision
under a covering letter. The penultimate paragraph of the letter reads:
“Can You Appeal?
Yes. If you are dissatisfied with the decision confirmed, you may, subject to the Administrative Appeals Tribunal Act 1975, apply to the Administrative Appeals Tribunal for review of the decision. Further details are set out in the attached Notice of Decision Following Reconsideration.” (T documents at 33)
Paragraph 20 of the Notice of Decision Following Reconsideration reads:
“If you are dissatisfied with the decision confirmed, you may apply, subject to the Administrative Appeals Tribunal Act 1975, to the AAT for review of the decision. Such an application must be made within 28 days after the day on which you receive this Notice of Decision Following Reconsideration.” (T documents at 30)
On 21 December 2000, Mr Hall sent members of the SEDFA Group a copy of an advice he had prepared regarding their rights to seek review of decisions in terms similar to that made in relation to Mr and Mrs Gilmore. Neither Mr nor Mrs Gilmore applied to the Tribunal for review of the DAA’s decision. Instead, Mr Gilmore and other members of SEDFA Group decided that they would pursue other courses. One of those was to lobby the South Australian Government to provide additional assistance to South East producers as the West Australian government had provided additional assistance to its producers.
Before the DAA granted the standard payment right, it required Mr and Mrs Gilmore to complete a Commonwealth Support or Adjustment Payments Declaration and a Farm Business Assessment Declaration. Mr and Mrs Gilmore completed the Commonwealth Support or Adjustment Payments Declaration on 25 January 2001 and, as required, a qualified financial adviser completed the Farm Business Assessment Declaration on 2 February 2001. The declarations were lodged with the DAA before its deadline of 19 February 2001. On 23 February 2001, the DAA notified Mr and Mrs Gilmore of the units they had been allocated.
In the meantime, in January 2001, the Australian Bureau of Agriculture Research Economics (“ABARE”) had released its report entitled The Australian Dairy Industry – Impact of an Open Market in Fluid Milk Supply. On 8 February 2001, Mr Hall wrote to the author of the report, Mr Vernon Topp, querying the methodology he had adopted as well as other aspects that he considered misleading. In March 2001, Mr Hall sent a copy of a discussion paper he had prepared to State Parliamentarians arguing that the South Australian Parliament should establish a joint committee to report on the impact of deregulation on the dairy industry in South Australia.
On 8 April 2001, Mr Hall wrote to Mr Brett Cox whom he understood was an employee of the Department of Agriculture, Fisheries and Forestry Australia (“AFFA”) involved with the development of an additional financial package for dairy farmers most affected by de-regulation. Mr Hall asked that AFFA consider the position of dairy farmers in the South East in developing the package.
On 21 May 2001, the Commonwealth Government announced an additional $140 million in assistance to producers. It was ultimately provided under the SDA Scheme. Before it was introduced and while its form was still being considered, the solicitors acting on his behalf and on behalf of SEDFAG made oral and written submissions to the Rural and Regional Affairs and Transport Legislation Committee on the Dairy Produce Legislation Amendment (Supplemental Assistance) Bill 2001. That Bill had been introduced in the House of Representatives on 24 May 2001. Those submissions were made on 6 and 12 June 2001 respectively.
Following those submissions, the South Australian Parliament established a Joint Committee to report on the impact of dairy de-regulation on the South Australian dairy industry. The SEDFA Group’s solicitor made written submissions to that committee on 11 September 2001. Mr Tim Hall, Mr Purvis and Mr Gilmore made oral submissions to the committee on 29 October 2001 and 11 December 2002.
Mr Gilmore discussed the SDA Scheme with other producers early in 2002. They all decided that Mr and Mrs Purvis should make an application under that scheme. If the DAA made a decision favourable to Mr and Mrs Purvis, the other members of the SEDFA Group would apply. Mr Gilmore learned that Mr and Mrs Purvis had been unsuccessful. Mr Hall made two trips to Mount Gambier; one in April and the other in June 2002.
In October or November 2002, Mr Gilmore became aware that the SDA Scheme had been amended to prevent any application for a discretionary payment right’s being made after 31 December 2002. Mr and Mrs Gilmore applied for a discretionary payment right under that scheme. They did that on 16 December 2002 but the DAA advised them on 17 February 2003 that their applications had been refused. It confirmed its decision on 19 May 2003.
Between March and July 2003, Mr Hall sought advice from counsel. Mr Gilmore gave him legal instructions to make an application to extend the time within which he could apply to review DAA’s decision in relation to his application under the DSAP Scheme.
The members of the SEDFA Group met in Mt Gambier on 17 June 2003. Their solicitor, Mr Hall, told them of their rights to ask the Tribunal to review the DAA’s decision to refuse them discretionary payment rights. At the same meeting, Mr Hall told them to consider lodging an application to review the DAA’s decision under the DSAP Scheme. On 10 September 2003, Mr Hall lodged an application in the Tribunal. The application asked for extension of the time within which Mr Gilmore could lodge an application for review of DAA’s decision regarding his application under the DSAP Scheme.
THE EVIDENCE
Delivery of milk to SAMMEA producers and others
During the financial year ending 30 June 1999, Mr Rice said, most South Australian dairy farm enterprises delivered their milk to a processor who was a party to SAMMEA. At the end of that year, the Annual Report by the Dairy Authority of South Australia (“DASA”) shows that there were 714 licensed dairy farmers in the State. There were also 35 licensed processors of whom five were supplying at least some of their milk to the five processors who were parties to SAMMEA. Three of the dairy farm enterprises delivered their milk to their own processing businesses. At least three further dairy farm enterprises either did not deliver milk to a processor that was a party to SAMMEA or delivered only some of their milk to such a processor. The 30 licensed processors that were not a party to SAMMEA, purchased their milk from another processor on a wholesale basis or purchased it directly from one or more dairy farm enterprises. Mr Rice also said that in the year ending 30 June 1999, all producers and co-operatives delivering their milk to a processor under SAMMEA had 18.8% of that milk paid for under the SAMME Scheme.
Rates paid for non-white milk
Mr Gilbert said that, for Milk sold as non-white milk, the processors paid the producers a percentage of the Farm Gate Price. Up to December 1996, the rate for both UHT and flavoured milk was about 67% of the Farm Gate Price for Market Milk. It was increased to approximately 75% after approximately January 1997. From 1 December 1997, the rates paid for UHT milk and flavoured milk were no longer the same. The rate for flavoured milk became 67% and for UHT milk 75%. These figures were consistent with the evidence given by Mr Rice and both referred to the price control orders made by the Minister for Agriculture over the period from 1 January 1996 to 1 September 1999.
Mr Rice gave evidence to the effect that the rate paid by processors to producers for Manufacturing Milk was a matter for individual processors. From time to time, they reviewed their rate.
Mr Rice explained that it was difficult to compare directly the price paid by particular processors of manufacturing milk with the prices paid for non-white milk because:
the price for manufacturing milk was typically calculated by reference to the respective masses of butter fat and protein in manufacturing milk received from the producer but the prices for non-white milk were set by the Minister of Agriculture by reference to the volume of manufacturing milk;
in their payment notices to producers, the processors usually did not specify the exact volumes of milk supplied by the producer and sold by the processor as non-white milk. Instead, they usually recorded that a specified sum, representing 75% of the farm gate price for UHT milk and 67% of the farm gate price for flavoured milk, was included in the total payment to the producer for manufacturing milk.
DAA’s processes and resources
Mr Gifford is DAA’s General Manager. He said that he is generally aware of the issues raised by dairy farmers in the South East with both the DAA and at political levels. In particular, he was generally aware that they were disappointed by the decisions that the DAA had made on their applications under the DSAP Scheme. He understood that they were disappointed with its calculation of the overall enterprise amount for their various dairy farm enterprises but was not aware that they wished to challenge the decision. On the contrary, he said, he had thought that they accepted the decision because dairy farmers in the South East were progressively returning the Commonwealth Support or Adjustment Payments Declaration and the Farm Business Assessment Declaration to enable them to be paid under the DSAP Scheme. Mr and Mrs Gilmore were among those who did. Mr Gifford had also thought that Mr and Mrs Gilmore would seek further assistance under the SDA Scheme. As a consequence, he had sent them a discretionary payment information pack on 26 September 2001 so that they could apply under the SDA Scheme if they wished.
Mr Gifford gave evidence regarding the staffing situation in DAA. As at 7 December 2000, 71 people worked for the DAA. Four of them were employed to deal with requests for reconsideration and applications to the Tribunal to review decisions under the DSAP Scheme. By the end of January 2001, DAA’s staff had increased to 80 with seven engaged in the review process under the DSAP Scheme. By the middle of 2003, there had been a progressive reduction in DAA’s workload with a consequent reduction in its staff. It had a staff of five with only two engaged in the review process on a part time basis. Mr Gifford had expected that the staffing numbers at the DAA would have reduced to no more than three by mid September 2003 but that has not proved to be the case principally because of the DAA’s work in processing applications under the SDA Scheme made by dairy farmers in the South East.
Mr Gifford said that the DAA made 1,544 internal review decisions under the DSAP Scheme. Of the applicants affected by those decisions, 1,438 did not apply to the Tribunal for review. Of those 1,438, 164 were applicants who had claimed an entitlement under the DSAP Scheme on the basis that they had an eligible interest in a dairy farm located in the South East. Were Mr Gilmore’s application for extension of time to be granted, Mr Gifford said, he would expect that many of the remaining 163 South East producers in Mr Gilmore’s position would also want to apply for an extension of time. In addition, some of the 1,274 producers not located in the South East might want to do the same.
Milk production statements
Mr Gifford said that the DAA obtained information about the milk delivered by Mr and Mrs Gilmore’s in the financial year ending 30 June 1999 by using the following steps:
the DAA obtained information about the milk Mr and Mrs Gilmore had supplied to processors from the records of its predecessor, the Australian Dairy Corporation (“ADC”); and
the ADC had assigned a dairy licence number to, among others, Mr and Mrs Gilmore’s dairy enterprise. Using that number and having regard to De Cicco’s records supplied to the ADC, the DAA obtained details of the milk Mr and Mrs Gilmore supplied to De Cicco in the year ending 30 June 1999.
Mr Gifford said that the DAA then prepared a milk production statement for Mr and Mrs Gilmore’s dairy enterprise. That statement showed the total milk deliveries made to De Cicco together with the total litres of market milk sales and the total kilogrammes of milk fat and protein in manufacturing milk. The references in the table to SAMMEC are references to the SAMME Scheme.
| Period | Total Milk Deliveries | Total Farm | Market Milk Sales | Manufacturing Milk | |||||
| Milk Fat (2) | Protein (2) | SAMMEC (3) | Non-SAMMEC (4) | Total | Milk Fat (5) | Protein (5) | |||
| 1998/99 | Litres | Kilograms | Kilograms | Litres | Litres | Litres | Kilograms | Kilograms | |
| July | 85,510 | 3,139 | 2,703 | 20,316 | 0 | 20,316 | 2,393 | 2,061 | |
| August | 106,555 | 3,759 | 3,401 | 21,016 | 0 | 21,016 | 3,017 | 2,730 | |
| September | 116,040 | 4,174 | 3,853 | 19,684 | 0 | 19,684 | 3,466 | 3,199 | |
| October | 120,580 | 4,418 | 4,031 | 18,349 | 0 | 18,349 | 3,745 | 3,418 | |
| November | 101,580 | 3,911 | 3,403 | 15,460 | 0 | 15,460 | 3,317 | 2,887 | |
| December | 80,690 | 3,282 | 2,617 | 13,566 | 0 | 13,566 | 2,731 | 2,177 | |
| January | 72,990 | 3,058 | 2,390 | 12,524 | 0 | 12,524 | 2,533 | 1,979 | |
| February | 53,715 | 2,232 | 1,808 | 10,786 | 0 | 10,786 | 1,784 | 1,445 | |
| March | 45,870 | 1,962 | 1,587 | 10,170 | 0 | 10,170 | 1,527 | 1,235 | |
| April | 39,700 | 1,686 | 1,400 | 8,148 | 0 | 8,148 | 1,340 | 1,113 | |
| May | 63,435 | 2,523 | 2,136 | 13,418 | 0 | 13,418 | 1,990 | 1,684 | |
| June | 77,850 | 2,997 | 2,527 | 16,791 | 0 | 16,791 | 2,351 | 1,982 | |
| Volumes for application from Section 6 | 964,765 | 180,228 | 30,194 | 25,910 | |||||
Following the chart was an explanation of the figures it showed:
“Explanation of Figures Presented
(1)Volume of total milk deliveries ex-farm as shown on regular company payment statements.
(2)Volume of total milk fat and protein deliveries ex-farm as shown on regular company payment statements.
(3)Volume of milk deliveries determined by applying SAMMEC pool percentage to farm’s share of eligible milk production during month.
(4)Additional milk deliveries that were subject to market milk levy payments as a result of company sales outside SAMMEC pool. Note these volumes may not appear on your regular company statements as drinking milk.
(5)Total fat and protein deliveries ex-farm less the fat and protein content of total market milk sales.” (Exhibit 4G at “DMG-3”)
On the Milk Production Statement, Mr Gifford said, “market milk” referred to Market Milk as it was defined in cl. 1 of the SAMMEA. The figures for manufacturing milk were calculated on the basis of the total milk fat and protein in the milk delivered from Mr and Mrs Gilmore’s dairy farm enterprise less the milk fat and protein content of the total market milk sales. The market milk sales were divided into:
the volume of milk deliveries determined by applying what is described as the SAMMEC (i.e. the SAMME Scheme) pool percentage to the dairy farm’s eligible milk production; and
the additional milk deliveries that were not regarded as Market Milk under the SAMME Scheme but were regarded as market milk under the DSAP Scheme and were subject to market milk levy payments as a result of De Cicco’s sales outside the SAMME Scheme. Mr Gifford said that Mr and Mrs Gilmore’s dairy farm enterprise did not deliver any milk outside the SAMME Scheme.
Mr Gifford said that the DAA based its calculations under the DSAP Scheme upon the volume of milk on which Commonwealth levy was paid (i.e. market milk under the DSAP Scheme) delivered by each dairy farm enterprise in the financial year ending 30 June 1999. Assessing the volume of market milk in this way meant that:
for those dairy farm enterprises in the South East that supplied milk to a processor that then sold it as UHT milk or flavoured milk, on average, approximately 32% of the milk they delivered was regarded as market milk under the DSAP Scheme; and
for those dairy farm enterprises in the South East that did not supply milk to a processor that did not sell it as UHT milk or flavoured milk, approximately 19% of the milk they delivered was market milk under the DSAP Scheme.
Mr Gifford said that the DAA’s records maintained in its Dairy Entitlements System (“DES”) show that, in the financial year ending 30 June 1999, approximately 646.3 million litres of milk were delivered by South Australian dairy farm enterprises. Commonwealth levy was imposed on approximately 185.7 million litres of milk delivered by South Australian dairy farmers.
Once the volumes of market milk and manufacturing milk had been determined, the DAA determined the overall enterprise amount by adding together:
the total litres of market milk delivered by the dairy farm enterprise multiplied by 46.23 cents per litre;
the total litres of milk fat content of manufacturing milk delivered by that enterprise multiplied by 76.03 cents per litre; and
the total litres of protein content of manufacturing milk delivered by that enterprise multiplied by 178.77 cents per litre.
In the case of the dairy farm enterprise operated by Mr and Mrs Gilmore, DAA calculated the overall enterprise amount to be $152,595. As Mr and Mrs Gilmore were equal partners in the enterprise, they were each entitled to half of the overall enterprise amount.
Dr Drinan said that, as far as the DAA is aware, De Cicco did not produce any UHT milk or flavoured milk in the financial year ending 30 June 1999. That is to say, it was a white milk only producer in that year while other processors who did produce those milks were described as non-white milk processors. DAA determined that approximately 19% of the milk delivered by producers to white milk only processors under the SAMME Scheme was market milk in that year. It determined that approximately 32% of the milk delivered by producers to non-white milk processors under the SAMME Scheme was market milk.
In both cases, the DAA determined what was market milk under the DSAP Scheme by reference to the milk in respect of which a levy had been imposed in the year ending 30 June 1999. Levy was paid on both white milk and non-white milk. Approximately 19% of milk delivered to white milk only processors and non-white milk processors was plain white drinking milk. As non-white milk delivered to the non-white milk processors and sold on the domestic market was approximately 13% of the milk delivered to those processors, the DAA regarded dairy farm enterprises that delivered milk to non-white milk processors to be delivering 32% of their milk as market milk.
Steps taken by Mr Gilmore in relation to the payment he received under de-regulation
Mr Hall has acted for Mr Gilmore and a number of other dairy farmers in the South East since approximately July 2000. Since then, he has prepared a Discussion Paper on Abnormal Market Milk Pool Distribution, prepared various letters to the Minister for Agriculture, Fisheries and Forestry and had telephone discussions were representatives from the AFFA and DAA.
After his clients had received the DAA’s decisions confirming its decision not to make a determination under s. 30 of the DSAP Scheme, Mr Hall said that he prepared two advices regarding their appeal rights. After considering his advice and a meeting of the SEDFA Group, Mr Gilmore and others decided to explore alternative options. Those alternative options were explored for the next three years by making oral and written submissions to various parliamentary committees and government departments as well as assisting dairy farmers to make further applications to the DAA. Mr Hall’s activities included:
on 8 February 2001, Mr Hall summarised his concerns regarding the report issued by the Australian Bureau of Agriculture Research Economics (“ABARE”) in January 2001 and entitled The Australian Dairy Industry – Impact of an Open Market in Fluid Milk Supply. His concerns centred on aspects of the methodology that had been used and that he considered to be misleading;
in March 2001, Mr Hall sent a Discussion Paper to a number of State Parliamentarians proposing the establishment of a joint committee of State Parliament to report on the impact of the deregulation of the dairy industry in South Australia;
on 8 April 2001, Mr Hall sent a letter to Mr Brett Cox, whom he understood worked for AFFA and was involved in the development of an additional financial package for dairy farmers most affected by dairy de-regulation. He asked that AFFA consider the South East dairy farmers’ reduced DSAP payments in developing the eligibility criteria for an additional package.
after the Federal Government had announced an additional $140 million of assistance for dairy farmers most affected by deregulation of the dairy industry, Mr Hall made a written submission dated 6 June 2001 to the Rural and Regional Affairs and Transport Legislation Committee of the Senate regarding the Dairy Produce Legislation Amendment (Supplemental Assistance) Bill 2001. He also made an oral submission and made both on behalf of Mr Gilmore and other members of the SEDFA Group; and
also on behalf of Mr Gilmore and other members of the SEDFA Group, Mr Hall made written submissions to the joint committee of State Parliament dated 14 September and 19 October 2001. With various members of the SEDFA Group, Mr Hall made oral submissions to that joint committee on 22 and 29 October and 11 December 2002. Mr Gilmore accompanied him on two occasions.
Notice of Mr Gilmore’s application for extension of time
Between January and November 2002, Mr Hall said, he was aware that members of the SEDFA Group had applied under the SDA Scheme. He lodged such an application on Mr Gilmore’s behalf on 16 December 2002. In February 2003, he was sent DAA’s decision refusing Mr Gilmore’s application. On 24 March 2003, he asked DAA to review it and later received notice of its decision to confirm its decision.
Mr Hall said that, between March 2003 and July 2003, he sought advice from counsel and instructions from Mr Gilmore to make an application seeking to extend the time permitted to apply for review of DAA’s decision under the DSAP Scheme. According to his recollection, he first advised Mr Reilly of the prospect of there being an application to review the DAA’s decision under the DSAP Scheme in mid June 2003. The application was not prepared and lodged until September 2003 because the preparation of the test cases brought on behalf of Mr and Mrs Purvis, Mr Clark and Mr Telford (see Decision No. [2005] AATA 233) (“Group of Four”) had proved complex. In addition, arranging and executing the agreements between DAA and each of the members of the SEDFA Group to be bound by the Tribunal’s decision in the test cases had proved to be a lengthy process.
Mr Hall’s recollection is that he first told DAA of the prospect of Mr Gilmore’s making an application for extension in June 2003. He did so in telephone discussions with Mr Brendan Reilly from its solicitors, Mallesons Stephens Jacques (“Mallesons”). Mr Hall also prepared applications for extension on behalf of other members of the SEDFA Group while also preparing the applications in the matters relating to the Group of Four. There was some complexity in the negotiation of the agreement between the members of the SEDFA Group and DAA to agree to be bound by my decision in relation to the applications by the Group of Four. Consequently, Mr Gilmore’s application and the supporting documents were not prepared until late August 2003.
Mr Reilly practises as a senior associate in the Melbourne office of Mallesons. He has acted for the DAA since late March or early April 2003 in a number of applications. Included in those are applications made by the Group of Four.
Mr Reilly said that he had many discussions with the group of four’s solicitor, Mr Hall. From them, Mr Reilly understood that their counsel wanted to apply for review of the internal review decisions made under the DSAP Scheme. He also understood Mr Hall to say that “counsel had come up with a different way of looking at ‘market milk’”. Mr Hall went on to tell him that he did not know which of his clients had sought review of decisions made in respect of them under the DSAP Scheme and asked for a list of them. He also explained to Mr Reilly that he intended to use Mr and Mrs Purvis’s application as the “test case”.
Mr Reilly said that he did not believe that Mr Hall had ever raised with him the possibility of Mr Gilmore’s seeking review of the DAA’s decision under the DSAP Scheme. The first he was aware of Mr Gilmore’s wishing to do so occurred in September 2003 when he received a copy of his application for an extension of time.
CONSIDERATION
The power to extend the time to lodge an application
Pursuant to s. 29(2) of the AAT Act and unless varied by another enactment, a person has 28 days within which to apply for review of a decision. There was no variation of the time period effected by the Act. A person may apply for extension of the time allowed to lodge an application pursuant to s. 29(7) of the AAT Act and may do so even though the time for an application has expired (s. 29(8)).
In considering applications to extend time in various jurisdictions in the Tribunal, regard has been had to the principles set out by Wilcox J in Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 58 ALR 305. Without intending to set out an exhaustive list, his Honour set out a number of principles to guide a court in reaching a decision on an application for extension of time. The essential features of those principles are set out in the head note to the case which reads:
“(a) the fact that the applicant bears the onus of rebutting the prima facie rule that no ... proceedings commenced outside the prescribed period will be entertained by the court by showing an ‘acceptable explanation of the delay’ and that it would be ‘fair and equitable in the circumstances’ to extend the time;
(b) any action taken by the applicant, apart from the actual making of an application for review under the ADJR Act, which continues to make the decision-maker aware that the finality of his decision is being contested;
(c) any prejudice to the respondent which may have resulted from the delay;
(d) any unsettling of people, other than the respondent, or of established practices;
(e) the merits of the substantial ... application;
(f) considerations of fairness as between applicants and other persons in like positions: it is not only prejudice vis-a-vis the parties but against the wider public interest which must also be taken into consideration.”
These principles have been developed in later cases such as Comcare v A’Hearn (1993) 45 FCR 441 (Black CJ, Gray and Burchett JJ), Secretary, Department of Social Security v Van Den Boogaart (1995) 37 ALD 619 (Kiefel J) and Dickinson v Comcare (1998) 52 ALD 86 (Finn J). In Comcare v A’Hearn, for example, the Full Court of the Federal Court said that, although it will normally be expected that the applicant will give an explanation for his or her delay in lodging an application, such an explanation is not an essential pre-condition to the Tribunal’s exercising its discretion (at 444). At the same time, it is clear that the fact that the lack of a satisfactory explanation for the delay (even if it appears credible) may, in some circumstances, strongly weigh against the grant of an extension of time (Security, Department of Social Security v Van Den Boogaart at page 621).
In Maynard v Secretary, Department of Social Security [1993] FCA 698 (unreported, 26 August, 1993) Northrop J pointed out:
“An unfettered discretion conferred by statute cannot be fettered by decisions of a court. In exercising the power conferred by s 11 of the Judicial Review Act, the Court must act judicially and on relevant facts. If it is wrong, an appeal court can put the trial judge right. The reference to other authorities may be interesting but essentially they are illustrations of other cases, in most cases the facts of which are completely different to the facts before the Court. They may be helpful in understanding what may be relevant. They are not binding in any sense at all and to that extent it is often unwise to refer to too many cases because it detracts from the real issue that the Court must decide on the facts before it.
What is necessary to keep in mind is that the statute does impose a limitation period but at the same time there is a power to extend that period. The extension can be made before or after the expiration of the time. Having regard to that clear intention of the Legislature, the Court must consider the facts and determine whether there has been proof of sufficient matters to justify the granting of the indulgence to the person seeking the extension of time. Involved in this, a number of matters must be considered, including any explanation as to why the matter was not brought within the prescribed time, the effect on the applicant if the time is not extended and the effect on other persons, including the respondent or third parties who could be affected if leave is granted and the application succeeds in due course. Often some of these features are referred to as what is fair and reasonable, sometimes referred to as prejudice, but essentially what is to be considered is the effect of either making or refusing to make an order for the extension of time.” (pages 3-4)
It is also clear from the authorities, however, that the time within which an application may be lodged will not be extended if there is no possible hope of the application’s succeeding if it were to be reviewed on the merits (Bouvet v Secretary, Department of Social Security [1992] FCA 216 (Unreported, Northrop J, 7 April, 1992). This aspect was also considered by von Doussa J in Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121 when he said:
“One of the principal considerations to be addressed in deciding whether it is fair and equitable in all the circumstances to extend time is whether the merits of the proposed appeal are such that if an extension of time is granted there is some prospect of success in the appeal. If a consideration of the merits indicates that there is no question to be agitated on the appeal, and there is no prospect of success, it would be futile to grant an extension of time and most unjust to the respondent to subject the respondent to the costs of defending a pointless appeal. …” (at 122)
Although noted by von Doussa J as “one of the principal considerations to be addressed” (emphasis added), it is even clearer from the judgement of Katz J in Zizza v Federal Commissioner of Taxation (1998) 55 ALD 451 at 460-461 that the merits of the substantive application are not to be ranked ahead of other considerations.
Katz J considered Wilcox J’s reference to “any prejudice to the respondent which may have resulted from the delay” in Windshuttle v Deputy Commissioner of Taxation (1993) 46 FCR 235. His Honour first quoted a passage from Wilcox J’s judgment:
“ The kind of prejudice which is relevant [in extension of time applications] is prejudice that could arise to the opposing party in properly and fairly dealing with the subject matter of the dispute that will require determination if the extension of time is granted. Relevant matters will be whether witnesses have disappeared or their recollections have faded (provided of course that the evidence of the witnesses would have been material: Ulowski v Miller [1968] SASR 277 at 283-4 and cannot be refreshed: Wedesweiller v Cole (1983) 5 ALN N137; 47 ALR 528; 71 FLR 256 at 261); whether avenues of useful inquiry have dried up or become difficult to pursue; and whether material documents have been destroyed. In a case like the present it may be open to the party potentially entitled to recover money to establish that by reason of the delay, the financial resources of the applicant have so altered for the worse that the chance of recovery of whatever sum is ultimately found to be due has seriously diminished. But as Bray CJ observed in Ulowski v Miller above, at 284 and also in Victa Ltd v Johnson (1975) 10 SASR 496 at 504, a court (or tribunal) should be slow to infer something to the existence of which the party asserting it is unwilling to depose. So, if a party against whom an extension of time is sought, intends to oppose that extension on the ground of prejudice, that party should adduce evidence which shows the nature and extent of that prejudice. In the present case no cause for prejudice beyond those matters listed above was asserted or deposed to.
…
… Furthermore, as the AAT found that there was no satisfactory explanation for that delay, and brought that lack of explanation into the balance as a factor against the applicant in the exercise of the discretion, there would have been a serious risk of ‘double counting’ the dilatory behaviour of the applicant if prejudice to the commissioner had been inferred simply from the fact of the delay, and from the failure to bring to the commissioner’s attention the fact that the applicant disputed the basis for the assessment prior to December 1991.” (at 457)
Should an extension of time be granted?
On the basis of Mr Gilmore’s evidence, I am satisfied that he made a conscious decision not to apply to the Tribunal for review of the DAA’s decision when it was made on 7 December 2000. He chose instead to put his efforts into attempting to change the policy behind the package and pursuing his application under the SDA Scheme. He pursued those other courses for somewhere between two and three years. During that time, I think it reasonable to expect that the DAA would have known that he was not happy with the outcome of his application under the DSAP Scheme. At the same time, I find that Mr Gilmore’s actions would have led it to conclude that he would not seek review of the decision. DAA certainly knew that the dairy farmers in the South East were not content with the payments they had received under the package and Mr Gilmore was among those who made submissions and on whose behalf submissions were made. Knowing that he was not content and that he was seeking change by those responsible for the policy behind the package is, however, a different matter from knowing that he wished to seek review of the decision itself. Had Mr Gilmore and other members of the SEDF Association been able to effect a change in policy, that change could have affected the structure of the package itself and so perhaps changed the payment to which he was entitled. On the other hand, a review of the decision made in relation to him cannot change the structure of the package. It can lead, at best, only to a change in the application of the existing package to his situation.
I find that well over two years between the day DAA made its decision on Mr Gilmore’s application under the DSAP Scheme and the day it became aware that he was thinking about asking the Tribunal to review it. Even on Mr Hall’s memory of events, the DAA did not have any notice of Mr Gilmore’s wish to seek review of its decision until about June 2003. On Mr Reilly’s memory of events it was September 2003 before DAA had any inkling. In the overall scheme of things, a three month difference between the dates makes little difference. For at least 2½ years, the DAA was left with the impression that the matter was at an end. Not only had Mr Gilmore not lodged an application but he and his wife had completed and returned a Commonwealth Support or Adjustment Payments Declaration and a Farm Business Assessment Declaration. That effectively confirmed their acceptance of the decision and they did that in January 2001.
Mr Almond conceded that the DAA would not be prejudiced if an extension of time were granted in one sense. The witnesses it would need to call and evidence it would need to lead would still be available to it. I accept that it would be prejudiced, though, in the sense that the DAA and its resources have been diminished as its role has, by virtue of the very nature of the DSAP Scheme and its limited lifespan, been diminished. Of its staff of five, only two part time staff members are available for the review process. If Mr Gilmore were successful, it is possible that others dairy farmers in the South East or, indeed, other producers outside the South East might want to apply for an extension of time. While it is a possibility, I am not in a position to estimate its likelihood with any certainty and do not take them into account.
The merits of the application that Mr Gilmore would make are another matter that I need to take into account. He has challenged DAA’s decision on two grounds. First, he has challenged the correctness of the Milk Production Statement where it has referred to Non-SAMMEC milk. As can be seen from the Milk Production Statement, “Non-SAMMEC” appears under the general heading of “Market Milk Sales”. Also grouped under that heading are “SAMMEC” and “Total”. On the face of the document, the three columns are intended to refer to all of the market milk sales made by Mr and Mrs Gilmore’s dairy enterprise whether they were made under SAMMEC or not. That recognised that Market Milk under SAMMEC (or the SAMMEA Scheme) did not include non-white milk (UHT or flavoured milk) and yet non-white milk is included in the definition of market milk under the DSAP Scheme because levy was paid on it. Even though the Milk Production Statement distinguished between whether milk was delivered under the SAMMEC or not, it did not, on it face, exclude milk that was properly market milk under the DSAP Scheme. Even if it were not clear from the table, which I think that it is, it is clear from the explanation that appears at the foot of the table. It is also consistent with Mr Gifford’s explanation of the process that the DAA followed.
The Dairy Production Statement was prepared on the basis that Mr and Mrs Gilmore’s dairy enterprise had not sold any non-white milk outside the SAMME Scheme. That is consistent with the evidence for there is only general evidence in his case that De Cicco, to whom he delivered milk, produced non-white milk. In his statement, Mr Gilmore said that De Cicco “… did not produce significant quantities of non-white milk” but there was no further evidence as to whether any that they produced was quantifiable. There was no evidence that De Cicco had paid Mr and Mrs Gilmore for any non-white milk and none that they had paid a levy on non-white milk. Taking these matters into account, I have concluded that the first ground on which Mr Gilmore challenges the DAA’s decision does not have reasonable prospects of success.
Mr Gilmore’s second challenge to DAA’s decision is based on s. 30 of the DSAP Scheme. This section was challenged by the Group of Four on the basis that it offends s. 99 of the Commonwealth of Australia Constitution Act (“Constitution”). They also contended that it should be interpreted as referring to market milk under the DSAP Scheme and not to Market Milk under SAMMEC. In my reasons for the decision I have given in relation to their case, I considered its validity according to s. 99 of the Constitution. In doing so, I considered the interpretation of the section. The essence of my reasons is set out in the following paragraphs from that decision but I rely on the whole of those reasons:
“148. Does s. 30(3) of the DSAP Scheme offend s. 99 of the Constitution whether the narrower or wider interpretation is given to the words ‘one State or part thereof over another State or any part thereof’? Having regard to the Second Reading Speech delivered on the introduction of the Dairy Industry Adjustment Bill 2000 to amend the Act, it appears that that the DSAP Scheme is intended to ensure that dairy farmers were better able to adjust to the deregulation of the dairy industry. The structure of the program and of the DSAP Scheme as well as its particular provisions show that it intends to do that by making payments to dairy farmers. Those payments are not intended to be arbitrary but are based on the milk that was delivered to processors in the base year and, in effect, the use that the processor made of that milk. I say “in effect” because the payments are based on whether a levy was paid on the milk or whether the producer received a DSP payment. Whether a levy was paid was determined by reference to whether it was used for Drinking Milk be it white milk or non-white milk in the sense of UHT milk or flavoured milk. All the milk was regarded as market milk for the DSAP Scheme and the remainder, on which a DMS payment was made to the dairy farmer, as manufacturing milk.
149. Section 30(3) only applies if: (1) a dairy farm enterprise is located in a State or Territory in which enterprises are not required to hold quota to deliver milk during the base year; (2) if, the dairy farm was located in South Australia, it was bound by SAMMEA or, if in Victoria, delivered its milk to an authorised agent; and (3) it did not receive payment at the market milk rate for the same proportion of their milk deliveries as others in the jurisdiction. The effect of s. 30(3) is to ensure that those dairy farm enterprises are treated as if they had all delivered the same proportion of their ‘eligible milk deliveries’ as market milk and the same proportion as manufacturing milk under the pooling arrangements. It is important to note that the expression ‘eligible milk deliveries’ does not refer to all of a dairy enterprise’s milk deliveries. It refers only to those that satisfy ‘… the requirements for market milk under the law of the State or Territory in which the milk is delivered’ (s. 30(6)). Taking the SAMME Scheme as an example, this meant that the dairy farm enterprises were treated as delivering the same proportion of Market Milk (i.e. white milk but not non-white milk be it UHT or flavoured milk) as other dairy farms subject to the that State agreement. The “market milk rate” to which s. 30(3) refers must be a reference to the rate paid for milk satisfying ‘… the requirements for market milk under the law of the State or Territory in which the milk is delivered’. Again taking the SAMME Scheme as an example, that must mean the rate paid for milk that was Market Milk under the SAMME Scheme and that was a rate set by the State Minister. Market Milk under the SAMME Scheme, of course, is not all of the milk that satisfies the definition of ‘market milk’ under the DSAP Scheme. The effect of s. 30(3) is not to exclude that other amount from the calculations that the DAA must otherwise make. That can be gleaned from the provision in its context but is clarified by s. 30(3A). Section 30(4) makes it clear that the dairy farm enterprise cannot be credited with more milk than was actually delivered during the base year.
150. Given that the definition of ‘Market Milk’ under the SAMMEA did not include UHT milk or manufacturing milk but the definition of ‘market milk’ in relation to the DSAP Scheme does include non-white milk, there may be instances in which the operation of s. 30(3) on its own might lead to an entity’s being credited with a lower amount of market milk than the amount on which it paid a levy. It is clear from the overall operation of the DSAP Scheme, however, that each entity operating a dairy farm enterprise is credited with a volume of market milk equivalent to that on which it paid a levy. Even the Note to s. 30(3A) makes it clear that separate account is taken of milk delivered outside a pooling arrangement. For all practical purposes, all that s. 30 does is ensure that dairy farm enterprises in a pooling jurisdiction are treated as they were intended to be treated according to the rules of their pooling jurisdiction. That does not lead to the conclusion that s. 30(3) has given a preference to ‘one State or part thereof over another State or any part thereof’ contrary to s. 99 of the Constitution. Whether or not s. 30(3) has any application at all let alone whether it is given a preference depends on the particular circumstances of the dairy farm enterprise whose market milk and manufacturing milk is being considered. It has nothing to do with its locality in a particular State or part of a State. Any differences, and any possible preferences, arise as a result of the particular circumstances of the dairy farm and in any differences between pooling schemes and not as a result of s. 30(3). It is not a law that contravenes s. 99 of the Constitution.”
It follows that I do not consider that Mr Gilmore’s second challenge has reasonable prospects of success. Taking into account the merits of the application together with the other considerations to which I have referred, I have decided that I should not grant Mr Gilmore’s application to extend the time within which he may seek review of the DAA’s decision.
For the reasons I have given, I refuse the applicant’s application to extend the time within which to lodge an application to seek review of the respondent’s decision dated 7 December 2000.
I certify that the eighty one preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie,
Signed: ...sgd. Nathaniel Wills................................
Nathaniel Wills Associate
Dates of Extension of Time Hearing 15, 16, 17 and 18 March 2004
Date of Decision 18 March 2005
Counsel for the Applicants Mr N. Morcombe QC with Mr A. Tokley
Solicitor for the Applicants Mellor Olsson
Counsel for the Respondent Mr P. Almond QC with Mr J. Pizer
Solicitor for the Respondent Mallesons Stephen Jaques
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