The State could face a legal bill of several million pounds following the failure of the Minister for Agriculture in 1984 to allocate adequate milk quotas to 100 farmers.
One of the farmers - Mr Liam Finlay (44), of Tierhogar, Portarlington, Co Laois - was awarded damages yesterday worth more than £50,000 by the High Court arising out of that ministerial "mistake in law".
Ms Justice Laffoy found the farmer's difficult financial circumstances over the past 11 years were "undoubtedly partly, if not wholly, attributable to the absence of the additional milk quota".
The most important years of his adult life, the years during which he was rearing his family, "were blighted by financial worry and uncertainty", she said.
The award to Mr Finlay is the first in an expected series of awards. The judge will assess the amount of damages to be paid to another farmer on June 11th.
Mr Finlay, a father of five who farms 76 acres, is among nine farmers who initiated legal action against the State in 1988 over the milk quota issue.
He was among those small farmers who borrowed money in the early 1980s, with State encouragement, to expand their farms, expecting to be able to expand milk production. But, when the milk super-levy was introduced in 1984, farmers still at the development stage were pegged at the 1983 milk quota allocation.
The Supreme Court held in 1997 that because the then Minister for Agriculture divided the entire national quota between dairies and co-operatives and created no reserve, there was nothing to assist the development farmers. In those circumstances, the Supreme Court said the farmers were entitled to be compensated and asked the High Court to assess damages.
Ms Justice Laffoy was asked in March last to decide as a preliminary issue whether the compensation should start at the time the farmers joined the development scheme or when the minister announced details of the milk superlevy scheme in 1984 and made the "mistake in law".
The judge rejected a formula proposed by the State for compensating the farmers affected and produced an alternative formula. She decided that, as a matter of probability, the development farmers would have been allocated additional quotas in 198485 by getting 50 per cent of the difference between the targeted milk production for the end of their development plan and the actual quota they received in 1983, if any.
The judge later heard evidence from the State and on behalf of Mr Finlay for the purpose of assessing damages. During the hearing she ruled, on the basis of her formula, that the amount of additional quota to which Mr Finlay was entitled was 6,390 gallons.
Delivering her reserved judgment on the damages issue yesterday she said it was clear that Mr Finlay was not affected by the super-levy regime until the year 1987-88.
In her view, the appropriate level of general damages was £10,000. She also awarded £20,067 for loss of income from the additional quota to date and £405 for loss connected with the allotment of shares in Avonmore Foods plc. The interest savings - estimated to be about £10,000 - which these would have afforded was also awarded. She awarded £9,300 in respect of future loss.
The judge noted that Mr Finlay proposed to accept an offer from the Minister for Agriculture of an additional permanent quota of 5,933 gallons from the National Reserve in the quota year 19992000.
Lawyers reckoned this could be worth up to £10,000.
She also assumed that he would be allocated 6,000 gallons of quota under the Restructuring Scheme if he applied for that. The maximum cost of those 6,000 gallons would be £9,300 and she had allowed for that in her award in respect of future loss.
Following her judgment, Ms Justice Laffoy said she would defer the making of her order pending calculation of the interest aspect of the award. She adjourned the matter to June 11th when the court will begin assessing damages due to another of the plaintiffs. Costs were also reserved.
