In an earlier post, I raised the question of whether the State could recover overpayments made to farmers under EU schemes. To begin to answer that question, I established the principle associated with Auckland Harbour Board v R [1924] AC 318; [1923] UKPC 92, [1923] NZPC 3 (18 December 1923) [Auckland] and Attorney General v Great Southern and Western Railway Company of Ireland [1925] AC 754 (HL) [GSWR]. In particular, I argued that the Auckland/GSWR principle has two limbs. First, State payments must be authorised (this is the authorisation limb of the principle). Second, unauthorised State payments can be recovered if they can be identified (this is the restitution limb of the principle).

Both Auckland and GSWR quote both limbs of the principle, and each neatly illustrates one limb on its facts. On the one hand, GSWR illustrates the authorisation limb, finding that the liability of the Government of the Irish Free State under a series of contracts entered into by the British Government with Irish railway companies in 1917 and 1918 was authorised by the the Irish Free State (Agreement) Act, 1922 (compare Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198, [1924] HCA 5 (21 March 1924); New South Wales v Bardolph (1934) 52 CLR 455, [1934] HCA 74 (30 November 1934); and see now Williams v Commonwealth of Australia (No 1) (2012) 248 CLR 156, [2012] HCA 23 (20 June 2012); see, generally, Enid Campbell “Commonwealth Contracts” (1970) 44 Australian Law Journal 14; Enid Campbell “Federal Contract Law” (1970) 44 Australian Law Journal 580; Sue Arrowsmith “Government Contracts and Public Law” (1990) 10 Legal Studies 231; Nick Seddon “The Interaction of Contract and Executive Power” (2003) 31 Federal Law Review 541; Cheryl Saunders and Kevin K F Yam “Government Regulation by Contract: Implications for the Rule of Law” (2004) 15 Public Law Review 51; Cheryl Saunders “Intergovernmental Agreements and the Executive Power” (2005) 16 Public Law Review 294).…

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The Times reported last week that the taxpayer has been hit with a €70m bill for overpaid farmers. Under various schemes, farmers are entitled to claim payments via the exchequer from the EU Commission based on the amount of land they own. From 2012, high-resolution aerial photography provided accurate measurements of farms; and it transpired that, between 2008 and 2014, paper maps had overstated the size of some farms, so that some farmers had been overpaid (see here | here | here). After protracted negotiations, the State repaid €68.9million to the EU Commission (see Department of Agriculture press release (pdf)), of which €4 million has been recovered from overpaid farmers. According to The Times, the Minister for Agriculture, Simon Coveney, “expressed his ‘clear preference’ that the repayments should be funded through the exchequer” rather than recovered from the overpaid farmers. A spokesman for the Department told the Times:

Due to the passage of time and the protracted process of opposition to a flat-rate correction with the commission, this cannot be collected from individual farmers.

There may be some factual difficulties in assessing who was overpaid and by how much, but there are no difficulties whatsoever with the legal principles underpinning the State’s claim to recover the overpayments from the overpaid farmers.…

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