Simmons and Dairy Adjustment Authority - [2002] AATA 1125

DECISION AND REASONS FOR DECISION [2002] AATA 1125

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2001/1408

GENERAL ADMINISTRATIVE DIVISION       )
           Re      ADRIAN LEON SIMMONS
  Applicant
           And    DAIRY ADJUSTMENT AUTHORITY
  Respondent

DECISION

Tribunal Mr RP Handley, Deputy President

Date1 November 2002
PlaceSydney

Decision The Tribunal affirms the decision under review.

..............................................
RP Handley
Deputy President
CATCHWORDS
DAIRY ADJUSTMENT AUTHORITY – Dairy Structural Adjustment Program Scheme 2000 – eligibility for standard payment right – whether Applicant on behalf of the Trustees of a deceased Estate held an "eligible interest" in the dairy farm enterprise – examination of the history of the dairy farming arrangement – examination of the nature of "quota" – held there was a dairy farming enterprise being carried on - decision of the Respondent affirmed.
Dairy Produce Act 1986
Dairy Produce Legislation Amendment (Supplementary Assistance) Act 2001
Dairy Structural Adjustment Program Scheme 2000
Gardner v Dairy Industry Authority of NSW (1977) 1 NSWLR 505
Giumelli and Anor v Giumelli (1999) 196 CLR 101

REASONS FOR DECISION

1 November 2002 Mr RP Handley, Deputy President

This is an application by Adrian Leon Simmons ("the Applicant") for a review of a decision of a delegate of the Dairy Adjustment Authority ("the Respondent") made on 10 August 2001 that the Applicant and his brother, Warren Eric Simmons, as trustees of the Estate of their mother, Edna Eileen Ruby Simmons, are eligible for a standard payment right with a face value of $4,014.25 under the provisions of the Dairy Structural Adjustment Program Scheme formulated under the Dairy Produce Act 1986.
At the hearing, the Applicant was represented by John Armfield, of Counsel, and the Respondent was represented by, Jason Pizer, of Counsel. The evidence before the Tribunal comprised the documents provided pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the T Documents"), together with the exhibits tendered by the parties. Adrian Simmons, Warren Simmons, Christopher Clark and James Forsyth gave evidence in person, and Anthony Judge gave evidence by conference telephone.
BACKGROUND
Norman Simmons, who died on 19 February 1995, and his wife, Edna Simmons, who died on 22 October 1996, had two children, Adrian, who was born on 10 August 1939, and Warren, who was born on 10 March 1942. On 3 September 1946, Norman and Edna Simmons acquired a property known as "Lynwood", Salisbury Road, Salisbury via Dungog in NSW, as joint tenants. "Lynwood" is a farm of approximately 165 acres.
From 1950 to 1956, Norman and Edna Simmons operated a dairy farm ("the Enterprise") at "Lynwood". In 1956, Warren Simmons left school and joined his parents in the running of the Enterprise. In 1978, Norman Simmons retired from the Enterprise and, thereafter, it was carried on principally by Warren Simmons. Between 1978 and 1992, Warren Simmons substantially improved the Enterprise through the purchasing of plant and equipment and additional stock which increased the milk production of the Enterprise. At the time of Norman Simmons' death in 1995, further purchases of land by Norman solely, or by Norman and Edna as joint tenants, had increased the total landholding to approximately 430 hectares. Norman bequeathed his share in the property which he and Edna held as joint tenants to Edna. This included "Lynwood", the property on which the Enterprise was carried out. Other land held by him solely he bequeathed equally to Adrian and Warren Simmons.
"Lynwood" was registered in Edna's name on 5 September 1995. Following her death on 22 October 1996, Probate of her will (T9, p134) was granted to Adrian and Warren Simmons, whom she appointed co-executors of her estate and to whom she bequeathed the whole of her estate in equal shares.
Until the deregulation of the Australian Dairy Industry on 1 July 2000, dairy farmers sold milk according to a quota system, designed to determine payments made to dairy farmers for milk consigned to market. Farmers might be allocated a quota for their consignment of milk or might acquire a quota or additional quota by purchase or otherwise from another registered dairy farmer. A dairy farmer was paid for milk consigned according to milk accepted under his or her quota.
A quota for milk attached to the particular farm. However, for each farm delivering milk there also had to be a registered dairy farmer. In the period until Norman Simmons' death in 1995, he remained the registered dairy farmer for the Enterprise. In order to expand the Enterprise's milk production and sales, in about 1970 Warren Simmons purchased additional milk quotas from neighbouring farms. However, because Warren was not the owner of the farm, the additional quota was not registered in his name, but attached to the farm.
After Norman Simmons died on 19 February 1995, Edna Simmons, by letter dated 24 April 1995 (T3), requested that she and Warren be registered as the dairy farmers for the Enterprise. By authority dated 6 June 1995 (T7, p102), she and Warren authorised the NSW Dairy Corporation to pay any money due for milk supplied to the Corporation by the Enterprise as to 95% to Warren Simmons and 5% to Edna Simmons. On 7 June 1995, Warren and Edna Simmons were registered as the dairy farmers in respect of the Enterprise (T7, p105) and, by letter dated 14 June 1995, the NSW Dairy Corporation notified them that they had been allocated the quotas in respect of the Enterprise (T7, p104).
After Edna Simmons' death on 22 October 1996, Warren Simmons continued to run the Enterprise and 5% of any money due from the NSW Dairy Corporation was paid to the Estate of Edna Simmons. Adrian Simmons had no personal involvement in the running of the Enterprise.
There is no dispute that as at 6.30pm on 28 September 1999, Warren Simons was the dairy farmer and ran the Enterprise, and that in the financial year beginning 1 July 1998, the Enterprise delivered milk to the NSW Dairy Corporation.
On 1 July 2000, the Australian Dairy Industry was deregulated. The Dairy Industry Adjustment Package was developed to assist the dairy industry adjust to deregulation. The Dairy Industry Adjustment Scheme was one of the programs in that package which provided for payments to be made to "eligible entities" by the Respondent.
On 4 August 2000, the Applicant lodged an application for a standard payment right on behalf of the Estate of Edna Simmons, on the basis that the Estate was the lessor of the farming property "Lynwood", noting that only the Applicant had signed the application and acknowledging that there was a dispute between the Applicant and Warren Simmons, the lessee of "Lynwood", as to their respective entitlements. On 20 July 2000, Warren Simmons lodged a separate application for a standard payment right on behalf of the Estate (T4, p83). On 14 May 2001, a delegate of the Respondent notified the Applicant that the Estate was eligible to a standard payment right with a face value of $29,947 (T21). On the same date, the delegate notified Warren Simmons that the total value of his standard payment right, in respect of the Enterprise was $50,337.
By letter dated 13 June 2001 (T31, p193), Warren Simmons requested that the Respondent reconsider its decision in respect of his application. On 10 August 2001, a delegate of the Respondent advised both the Applicant and Warren Simmons that the original decision of the Respondent had been varied. The effect of this variation was that the Estate of Edna Simmons was eligible for a standard payment right with a face value of $4,014 and Warren Simmons was eligible for a standard payment right with a face value of $76,271.
On 19 September 2001, the Applicant lodged an application for review by the Tribunal.
APPLICABLE LAW
The Dairy Industry Adjustment Program is set out in Schedule 2 of the Dairy Produce Act 1986 ("the Act"). Clause 10 of Schedule 2 of the Act requires the Minister to formulate a Dairy Structural Adjustment Program ("DSAP") Scheme for the grant of payment rights to entities who held an eligible interest in a dairy farm enterprise at 6.30pm on 28 September 1999 and who satisfy certain other conditions.
Section 7 of the DSAP Scheme states there are three types of payment rights under the Scheme:
(a) standard payment rights;
(b) exceptional events supplementary payment rights;
(c)anomalous circumstances payment rights.

Section 9 states that to be eligible for a standard payment right in respect of a dairy farm enterprise, an entity must, first, have held an eligible interest in the enterprise at 6.30pm on 28 September 1999, and, second, the enterprise must have delivered milk during the base year. The word "milk" is defined in s 3 as meaning "market milk or manufacturing milk". Market milk is that supplied for drinking purposes while manufacturing milk is that supplied for processing or manufacturing purposes. The expression "base year" is defined in s 3 as meaning "the financial year beginning on 1 July 1998".
The expression "dairy farm enterprise" is defined in clause 6 of Schedule 2 of the Act to mean "a business in Australia that delivers market milk and/or manufacturing milk". An entity will have an "eligible interest" in a dairy farm enterprise if the criteria set out in clause 7 of Schedule 2 are met. Clause 7 states:
7.        Eligible interest in a dairy farm enterprise
(1)For the purposes of this Schedule, an entity has an eligible interest in a dairy farm enterprise if:
(a)       both:
(i)under the DSAP scheme, the enterprise is not taken to be subject to an eligible dairy sharefarming arrangement or an eligible leasing arrangement; and
(ii)the entity carries on the enterprise (whether alone or together with one or more other entities); or
(b)       both:
(i)under the DSAP scheme, the enterprise is taken to be subject to an eligible dairy leasing arrangement; and
(ii)under the DSAP scheme, the entity is taken to be a party to that arrangement; or
(c)       both:
(i)under the DSAP scheme, the enterprise is taken to be subject to an eligible dairy leasing arrangement; and
(ii)under the DSAP scheme, the entity is taken to be a party to that arrangement.
The meaning of the expression "eligible dairy sharefarming arrangement" is set out in section 4 of the DSAP Scheme:
(1)An eligible dairy sharefarming arrangement is an arrangement between 2 or more entities:
(a)       under which each entity is entitle to:
(i)a fixed percentage share of the milk revenue of a dairy farm enterprise; or
(ii)a fixed percentage share of the milk revenue of a dairy farm enterprise in relation to the sale of each type or amount of milk produced by the enterprise; and
(b)       where at least 1 of those entities has no proprietary interest in:
(i)the land on which a milking shed used by the enterprise is situated; and
(ii)       quota under which the enterprise delivers market milk.
(2)A dairy farm enterprise is subject to an eligible dairy sharefarming arrangement if the milk revenue of the enterprise is shared under the arrangement.
(3)an entity is a party to an eligible dairy sharefarming arrangement if the entity is entitled to a share of the enterprise's milk revenue under the arrangement.
The meaning of the expression "eligible dairy leasing arrangement" is explained in s 5(1) of the DSAP Scheme which provides relevantly:
(1) A dairy farm enterprise is subject to an eligible dairy leasing arrangement:
(a)if quota was required for the delivery of market milk by the enterprise in the base year, and the owner of quota used by the enterprise leases some or all of the quota used by the enterprise to 1 or more other entities for the purpose of delivering milk produced by the enterprise; or …

Section 5(2) states:

(2) An entity is a party to an eligible dairy leasing arrangement if the entity is the lessor or lessee of quota or land mentioned in this section.

If an entity is eligible for a standard payment right, the Respondent must determine the "face value" of that right. There are two stages to this: first, the Respondent must determine the "overall enterprise amount" for the dairy farm enterprise as defined in clause 2 of Schedule 2 of the Act; second, the Respondent must determine the face value of the amount to which a particular entity is entitled in accordance with ss 21 to 24 of the DSAP Scheme.
THE PARTIES CONTENTIONS
The Applicant
First, the Applicant contends that under the scheme administered by the NSW Dairy Corporation a milk quota attached to the dairy premises and not to the dairy farmer. The Applicant submits that Warren Simmons had no proprietary interest in the quota relating to "Lynwood" because he was not the owner or co-owner of "Lynwood".
Secondly, the Applicant contends that Warren Simmons and the Estate of Edna Simmons were not carrying on the Enterprise jointly: Warren Simmons was the sole occupier of "Lynwood", he was the sole registered dairy farmer, and was carrying on the Enterprise utilising the dairy farm and quota attaching to it owned by the Estate of Edna Simmons.
Thirdly, the Applicant contends that Warren Simmons and the Estate of Edna Simmons were parties to an eligible dairy sharefarming arrangement: each was entitled to a fixed percentage share of the milk revenue from the Enterprise, and Warren Simmons had no proprietary interest in "Lynwood" on which the milking shed was situated, or in the quota attached to the dairy premises.
Fourthly, in the alternative, the Applicant contends that Warren Simmons and the Estate of Edna Simmons were parties to an eligible dairy leasing arrangement. Warren Simmons was the occupier of "Lynwood" as a licensee.
The Respondent
First, the Respondent contends that quotas were a special form of property and, at the relevant date, the quota for the Enterprise was allocated to Warren Simmons and the Estate of Edna Simmons who were, therefore, the owners of the quota and had a proprietary interest in it. Alternatively, if Warren Simmons did not own quota by virtue of quota being allocated to him, he held an equitable interest in some of the quota as a result of his having purchased additional quota prior to the death of Norman Simmons. Finally, the Respondent contends that Warren Simmons owned or co-owned (with the Applicant) two parcels of land which, in addition to "Lynwood" were used in the Enterprise. Thus, Warren Simmons owned part of the farm.
Because both Warren Simmons and the Estate had a proprietary interest in the quota under which the Enterprise delivered milk, the Enterprise was not subject to a dairy share farming arrangement.
Secondly, the Respondent contends that the Enterprise was not subject to an eligible dairy leasing arrangement because the owners of the quota at the relevant date – Warren Simmons and the Estate of Edna Simmons – had not leased any part of the quota to any other entity.
Thirdly, the Respondent submits that if the Tribunal finds the Estate of Edna Simmons was not carrying on the Enterprise with Warren Simmons, then it should find that the Estate is not eligible for a standard payment right. Alternatively, if the Tribunal finds the Estate was carrying on the Enterprise with Warren Simmons, then it should find that the Estate is eligible for a standard payment right with a face value of $4,104.
Evidence
Adrian Simmons (the Applicant)
Mr Simmons, who is an earth moving contractor, said in a written statement dated 3 October 2002 (A1) that following the death of his mother, Edna Simmons, his brother, Warren Simmons, was permitted to remain in occupation of "Lynwood" and continued to produce and sell milk from the property from livestock owned by him. Payments by the NSW Dairy Corporation for milk accepted as market milk continued until 30 June 2000 in the proportions 95% to Warren Simmons and 5% to the Estate of Edna Simmons. Warren Simmons also received all monies from the factory at Hexham for manufacturing milk.
In oral evidence, Adrian Simmons acknowledged that his brother had paid for some of the milk quota attached to the property. He agreed that in 1980 his brother had been thinking of buying a farm in the Hunter Valley, but he refuted a suggestion that his father would have permitted Warren to take the milk quota with him to such a property if this had been permitted by the Dairy Industry Authority, as recorded in a report by an Authority supervisor on 1 July 1980 (part of A2). His father would never have let the milk quota off the farm.
In cross-examination, Adrian Simmons agreed that the Estate of Edna Simmons was carrying on the Enterprise with Warren Simmons. Nevertheless, Warren Simmons owned all the cows on the farm as at 6.30pm on 28 September 1999 and Adrian Simmons was not involved in the running of the farm.
Adrian Simmons said that he had never sought to persuade his brother to enter into a lease of "Lynwood" and had not discussed this with him. However, he had tried to persuade Warren to pay more than the 5% share of the milk revenue paid to the Estate of Edna Simmons. His brother had not agreed.
Warren Simmons
Mr Simmons, who is currently a farm labourer, provided a statement dated 14 October 2002 (R2). In his statement, he said that because the Enterprise was his livelihood, he tried "to build it up a bit more". The most efficient way to increase the income generated by the Enterprise was to increase the milk quota. Thus, when two neighbours wanted to sell quota, Warren and his parents agreed to purchase this and Warren provided half the funds for this purpose. Despite the fact that his father remained the official owner of quota, Warren said he regarded that part of the quota he paid for as his asset. In addition to the quota he paid for, the NSW Dairy Corporation also allocated additional quota at no charge because the Enterprise had delivered a volume of milk above the quota for the previous 12 months.
Mr Simmons said between 1978 and 1992, he purchased additional cows. The result of having more dairy cows and of the additional quota was that milk production increased from a quota of 1,982 litres in 1978 to 3,394 litres in 1992.
Mr Simmons said he lived with his parents at "Lynwood" until he married in 1978. Over the next few years, he and his wife lived in a few different places nearby so that he could continue running the dairy farm. He and his parents agreed that he would pay them $240 per month to cover such items as rates and they had no involvement in running the Enterprise from that time. Mr Simmons did not regard this as a leasing arrangement. He made various improvements to the farm for which he paid, such as purchasing a tractor, purchasing two silos and associated equipment, building a feed shed, installing a calf pen, loading race and cattle crush, purchasing an irrigation engine, water winch and other irrigation equipment, together with undertaking fencing and ongoing maintenance.
Mr Simmons said in 1982 he purchased a block of 21 acres at Largs which he used to grow lucerne for the purpose of feeding the dairy cows. In 1959, he and his brother Adrian had purchased a nearby parcel of 252 acres known as "Cameron's Block". Warren used his portion of the block for paddocking dry heifers for the Enterprise.
Mr Simmons said after his father died in 1995, his mother wrote to the NSW Dairy Corporation requesting that Warren should be registered as the dairy farmer for the Enterprise and requesting that the quota should be in both their names. He said his mother recognised that he paid for quota on the understanding that it was his property. After receiving a letter from the Dairy Corporation dated 14 June 1995, he believed he was the registered owner of quota. Since he had proprietary interests in some of the land used by the Enterprise, and also owned the milking herd and had updated and owned all the plant and equipment used by the Enterprise, he regarded himself as co-owner (with his mother who owned "Lynwood") and sole operator of the Enterprise. Warren Simmons acknowledged that his father had erected the milking shed on "Lynwood" but said he had carried out improvements to it. He did not regard himself as a sharefarmer. In cross-examination, Mr Simmons was referred to his father's application for registration as dairyman dated 14 April 1993 (A2). Warren Simmons' name is included in the application and beside it appears the word "sharefarmer". Mr Simmons said this was not his signature or handwriting – he thought his mother had inserted his name.

When his mother died in 1996, Mr Simmons believed that since his parents wanted him to remain on "Lynwood", he would inherit "Lynwood" while Adrian would inherit the beef and cattle paddocks. If there was a discrepancy in value, they would adjust it between themselves.
In oral evidence, Mr Simmons said in about 1980 he had considered purchasing a property at Muswellbrook in the Hunter Valley with a view to taking all the quota with him. His father had agreed to his taking the quota if this was possible. Mr Simmons said he was not aware that in order to be able to transfer quota to another property, he had to be an owner of the first property. He denied ever seeing or being aware of a letter to his father, apparently from the NSW Dairy Industry Authority, dated 24 July 1980 (A2), advising that a transfer of quota could only be approved if both he and his father were part owners of both properties. Mr Simmons said that, ultimately, no steps were taken with a view to transferring quota to the Muswellbrook property because he did not proceed with the purchase.
Mr Simmons said he ceased dairying on 29 June 2000 because of de-regulation of the industry, because of the need to upgrade the dairy for de-regulation, and because of problems over his mother's Estate. From the time of his mother's death in 1996 until he ceased dairying, Mr Simmons continued to pay 5% of the milk revenue to his mother's Estate.
Christopher Clark
Mr Clark, the Corporate Services Manager for the Dairy Farmers Milk Company, provided a statement dated 9 October 2002 (A4). Mr Clark served as an administrator in the NSW Dairy Industry from 1963 to early 2002, including as Manager of Quotas and Supply of the NSW Dairy Corporation from about 1990. He was seconded to the Respondent as Claims Manager from June 2000 to April 2001.
Mr Clark said the person registered as a dairy farmer in respect of a property:
was required to meet the production requirements of any quota allocated in respect of the property and was responsible for complying with all building, health and hygiene matters referrable to the dairy premises and otherwise complying with the Dairy Industry Act and Reputations.
Mr Clark said the official policy of the Dairy Corporation was that quota is not a form of property and no one could own quota. However, this view was not universally accepted and the Corporation was aware that farmers bought and sold quota: quota was of value to dairy farmers and essential to their viability. The owner of a farm was effectively the owner of quota because it attached to the farm, even though quota was allocated to the registered dairy farmer who might be a person other than the owner of the farm. The registered dairy farmer could sell or transfer quota but only with the written consent of the landowner unless one lessee transferred quota to another lessee in respect of the same land. Similarly, the landowner could not dispose of quota without the consent of the registered dairy farmer.
Mr Clark said the Dairy Corporation encouraged parties to enter into written agreements at the commencement of leasing or sharefarming arrangements so that, at the appropriate time, the landowner would sign the necessary documents related to a disposal or transfer of quota. The Corporation issued some suggested conditions for inclusion in a lease or sharefarming arrangement (T40, p316).
Mr Clark said the registration of Warren and Edna Simmons as the registered dairy farmers for Lynwood after the death of Norman Simmons did not change the "ownership" of quota which attached to the dairy premises and was available for use by the holder of the Certificate of Registration.
Anthony Judge
Anthony Judge, an Administration Officer with Safe Food Production NSW, provided a written statement dated 4 October 2002 (A5). Mr Judge was formerly the Quota and Supply Officer with the NSW Dairy Corporation, reporting to the Manger of Quotas and Supply, Christopher Clark.
Mr Judge said the Dairy Corporation maintained a quota database by reference to particular farms. A quota was attached to particular land and could be used by the registered dairy farmer for that land. A quota was not a form of property and, according to the Corporation's policy, no one could own quota. If a registered dairy farmer purchased quota, it would be up to him/her to protect him/herself in the event that the lease/sharefarming arrangement ended. However, quota could be transferred to another farm if the landowner consented.
Mr Judge could not explain the letter from the Dairy Corporation to Warren and Edna Simmons dated 14 June 1995 (T7), although he accepted that, on the face of it, the letter stated that they had been allocated quotas.
James Forsyth
Mr Forsyth, who has worked in the dairy industry since 1949 and who has been an industry representative member of the Respondent since April 2000, provided a statement dated 14 October 2002 (R1). He was the delegate who made the decision under review.
Mr Forsyth said:
although the Milk Board and its successor the NSW Dairy Corporation did not officially make quota available to farmers unless they also owned the farm, they recognised that arrangements were occurring between owners and sharefarmers and lessees whereby the latter were paying for the purchase of quota, but were not recorded as the official owners. Accordingly, over a period of time a practice grew up whereby the Milk Board would keep records of these private arrangements and ensure that neither the owner of the farm (the official "owner" of the quota) or the lessee or sharefarmer (the unofficial "owner" of the quota) could sell quota without the permission of the other.
From the mid 1980s, the Dairy Corporation introduced an auction system known as the "Quota Exchange" so that farm owners could buy and sell quota. Despite the Corporation's Quota Policy, quota "was regarded as property and as something of value".
In giving oral evidence, Mr Forsyth confirmed that quota was allocated to particular properties. He said file evidence indicated that Warren Simmons paid for approximately 50% of the quota allocated to "Lynwood". Where such evidence exists, it is the policy of the Respondent to accept this.
Consideration of the Law and Findings
The issue for the Tribunal to determine is the eligibility of Warren Simmons and the Estate of Edna Simmons for a standard payment right under the DASP Scheme. There is no dispute that the Enterprise delivered milk during the base year. Thus, the outstanding issue under s 9 of the DSAP Scheme is whether Warren Simmons and the Estate of Edna Simmons held an "eligible interest" in the Enterprise at 6.30pm on 28 September 1999. An entity will have an eligible interest in a dairy farm enterprise if either paragraphs (a), (b) or (c) of s 7(1) of the Act are satisfied.
Much of the written and oral evidence before the Tribunal concerned the nature of "quota". Both parties accept that despite the official policy of the NSW Dairy Corporation to the contrary, quota is a form of property. This is supported by the evidence of Mr Clark and Mr Forsyth who both have a long history in the NSW dairy industry. The arrangements they describe as to the purchase and transfer of quota, which is confirmed by the evidence of Warren Simmons, lead the Tribunal to conclude that quota should be regarded as property. The parties referred the Tribunal to the decision of the NSW Court of Appeal decision in Gardner v Dairy IndustryAuthority of NSW (1977) 1 NSWLR 505 at 513, where Hutley JA found quotas to be incorporeal property.
Recognising that quota is property, the relevant question in this case is who had a proprietary interest in the quota allocated in respect of the Enterprise? In particular, did Warren Simmons have a proprietary interest in the quota?
The evidence of Mr Clark, Mr Judge and Mr Forsyth is that quota attached to particular land and could be used by the registered dairy farmer for that land who was responsible for complying with the relevant regulatory requirements, for example as to heath and hygiene. In practice, as was recognised the NSW Dairy Corporation, registered dairy farmers who were not the owners of the land they farmed, could purchase additional quota but could only sell or transfer quota with the consent of the landowners. Mr Clark stated that the Corporation encouraged sharefarmers or lessees to include conditions in their agreement or lease to protect themselves (T39) and he provided a copy of the suggested conditions (T40).
The Tribunal is satisfied from the oral and documentary evidence (R2) that Warren Simmons paid for part of the quota attached to "Lynwood". The Tribunal accepts his evidence that he did so on the understanding that his part of the quota was his property. Over many years, he acquired additional quota and produced and delivered a significantly larger volume of milk to the NSW Dairy Corporation and its predecessor. After the death of his father in 1995, his mother, Edna Simmons, applied for the registration of Warren and herself as the dairy farmers for the property (T7). The Dairy Corporation approved their registration and informed them: "You have been allocated quotas as detailed on the attached computer print out" (T7, p104). Warren Simmons said he believed this to mean that he was the registered owner of quota.
In the Tribunal's view, the evidence supports a finding that Warren Simmons had a beneficial interest in at least a part of the quota attaching to "Lynwood" by virtue of his acquiring additional quota while he farmed the property. There appears to have been an implied or resulting trust arising from the conduct of his parents and his expectation that, after their deaths, he would become the owner of the property.
The Tribunal is also satisfied, on the basis of Warren Simmons' evidence, that he owned or co-owned parcels of land used in the Enterprise. His evidence was that in 1982 he purchased a parcel of 21 acres at Largs which he used to grow lucerne for the purpose of feeding the dairy cows. In 1959, he and Adrian had purchased a parcel of 252 acres known as "Cameron's Block" and Warren used his portion for paddocking dry heifers for the Enterprise.
Warren Simons said that after his father's death he regarded himself as co - owner with his mother of the Enterprise. Apart from his interest in the quota and some of the land, he also owned the milking herd, the plant and equipment, and had made improvements to the milking shed.
The Applicant submitted that Warren Simmons was party to an eligible dairy sharefarming arrangement, pointing, in particular, to the fixed percentage share of the milk revenue from the Enterprise. There is no dispute that at the relevant date milk revenue was shared as to 95% to Warren Simmons and 5% to the Estate of Edna Simmons. However, the Tribunal has found that Mr Simmons had a proprietary interest in the quota attached to "Lynwood" which specifically excludes the arrangement from being an eligible dairy sharefarming arrangement by virtue of the definition in s4 of the DSAP Scheme. The Tribunal therefore rejects the Applicant's submission.
The Tribunal attached no weight to Norman Simmons' application for registration as a "dairyman" signed on 14 April 1993 (A2) in which the word "sharefarmer" appears beside the name "W E Simmons". Warren Simmons said this was not his signature or handwriting. He thought his mother had inserted this on the form.
The Tribunal also rejects the Applicant's submission that Warren Simmons was party to an eligible dairy leasing arrangement. There is no evidence that Warren Simmons is the lessee of quota or land so as to bring the arrangement within the definition of "eligible dairy leasing arrangement" in s 5 of the DSAP Scheme. In evidence, Adrian Simmons said that he had never sought to persuade his brother to enter into a lease of "Lynwood". What he wanted was that his brother should pay more than 5% of the milk revenue to the Estate of Edna Simmons (Transcript p29). Adrian Simmons also agreed that the Estate of Edna Simmons was carrying on the Enterprise with Warren Simmons (Transcript p23).
Thus, with reference to clause 7 of Schedule 2 of the Act, the Tribunal concludes that as at 6.30pm on 28 September 1999, Warren Simmons satisfied the requirements of clause 7(1)(a) in so far as the Enterprise was not subject to an eligible dairy sharefarming arrangement or an eligible leasing arrangement, and that he was carrying on the Enterprise with the Estate of Edna Simmons. The arrangement between Warren Simmons and the Estate of Edna Simmons whereby Warren continued in occupation of the property as a licensee, utilising the quota attached to "Lynwood" in generating milk revenue, is sufficient grounds to find that Warren was carrying on the Enterprise with Estate of Edna Simmons.
There has been no challenge to the calculation of the "overall enterprise amount" (as defined in clause 2 of Schedule 2 of the Act) for the Enterprise or to the calculation of the face value of the standard payment rights in accordance with s 21 of the DSAP Scheme. Since the Respondent's assessment appears to accord with s 21(3), the Tribunal, in the light of its other findings, affirms the decision under review.

I certify that the 66 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President
Signed:         .....................................................................................
  Associate
Date of Hearing   14 October 2002
Date of Decision   1 November 2002
Counsel for the Applicant         Mr J Armfield
Counsel for the Respondent    Mr J Pizer