The High Court has ruled that a 1983 farm plan prepared for Laois farmer James Kavanagh must be treated as a three-year plan when calculating compensation linked to the State's earlier handling of milk quotas.
Ms Justice Laffoy delivered judgment on April 24, 2009, in long-running proceedings involving farmers seeking damages following a mistake of law previously identified by the Supreme Court in litigation against the Minister for Agriculture.
Kavanagh, the 40th named plaintiff, farmed with his mother at Luggacurran, Portlaoise. The immediate issue was not whether he was entitled to compensation, but how a 1983 production plan should be interpreted when determining the additional milk quota he might notionally have received in 1984 or 1985.
The plan had been prepared under the Reduced Interest Scheme, or RIS, which was introduced in 1982 to assist potentially viable farmers experiencing severe financial difficulties. Participants could receive reduced interest charges on qualifying farm borrowings for three years.
Kavanagh argued that his plan should be treated as lasting four years because it contained a heading referring to proposals for the next four years and mentioned a target of 80 cows producing 800 gallons each, equivalent to 64,000 gallons.
The defendants argued that the detailed livestock and cash-flow projections stopped at 1986. Laffoy J agreed.
She held that the plan's purpose was to demonstrate that the farming enterprise would be viable by the end of the three-year RIS period. Detailed projections were provided for 1984, 1985 and 1986, but not for 1987.
The judge found that the 1987 figure was an aspiration rather than part of the financial reconstruction programme required by the scheme. She therefore fixed the relevant targeted production at 52,500 gallons, based on 70 cows producing 750 gallons each in 1986.
The ruling resolves that discrete factual issue for Kavanagh's damages assessment. Other assumptions underlying the calculation, including his eligibility for and formal acceptance into the RIS, remained open to possible later challenge.