THE HIGH COURT
		1990 No. 2528 P
BETWEEN
FINTAN DUFF, LIAM FINLAY, THOMAS JULIAN, JAMES LYONS, CATHERINE MALONEY, MICHAEL MCCARTHY, PATRICK MCCARTHY, JAMES O'REGAN AND PATRICK O'DONOVAN
		PLAINTIFFS
AND
THE MINISTER FOR AGRICULTURE AND FOOD, IRELAND AND THE ATTORNEY GENERAL
		DEFENDANTS

Judgment of Ms. Justice Laffoy delivered on the 3rd day of June, 1999

THE CLAIMANT

	In this judgment I will assess the damages suffered by the second named Plaintiff, Liam Finlay (Mr. Finlay), as a result of the mistake of law of the first named Defendant (the Minister) as found by the Supreme Court, in accordance with the order of that Court dated 7th March, 1997.  
	Mr. Finlay farms 76 acres of land near Portarlington, Co. Laois.  He is a married man with five sons now ranging in age from 8 years to 19 years. 
	In 1982, Mr. Finlay commenced a five year plan under the Farm Modernisation Scheme then in force.  The focus of his plan under the Scheme was dairying.  In his plan, Mr. Finlay was classified in the "Development" category.  At the time in 1982, he was milking 14 cows and the plan envisaged that by 1983 he would be milking 34 cows, that his cow numbers would increase to 44 in 1984 and to 48 in 1985 and that at the end of his plan in 1986 he would be milking 50 cows.  The infrastructural investments envisaged under the plan included the erection of a milking parlour and the installation of a bulk tank, milking machine and ancillary equipment.  Other investments were also envisaged: the erection of a shed and lean-to with appropriate accommodation works; the erection of a silage slab; and the installation of an effluent tank.  Reclamation of 10 acres of land was also envisaged.
	Mr. Finlay duly embarked on the implementation of the plan.  He completed the works provided for in the plan, which were funded by means of bank borrowings and State grants.  The new milking parlour was completed in the first year of the plan and Mr. Finlay started milking in it on 1st July, 1983.  The new milking parlour and the other infrastructure installed by Mr. Finlay were planned for dairy milk production with 50 cows.  On the evidence, I am satisfied that, had the super-levy regime not intervened, Mr. Finlay would probably have been producing in excess of 50,000 gallons of milk by the early 1990's.  
	At the commencement of the super-levy regime in 1984, Mr. Finlay was allocated a milk quota of 17,220 gallons, which was based on his actual deliveries in the calendar year 1983, which were somewhat in excess of 16,500 gallons.  Subsequently, in the quota year 1986/87, he was allocated an additional 5,000 gallons by Avonmore, the dairy to which he supplied his milk, which allocation was with retrospective effect to the commencement of the super-levy regime.  Accordingly, in effect, in the first three years of the super-levy regime, Mr. Finlay was supplying milk to Avonmore against a quota of 22,220 gallons.  Mr. Finlay has never, at any time, acquired any further permanent quota but, in common with all other milk producers, over the years he has been subject to quota reductions and in one year he received the benefit of a reserve allocation.  In the last quota year, 1998/99, and in the previous six quota years his quota has been 20,742 gallons.  
	During the first four years of the super-levy regime Mr. Finlay was working towards meeting the targets in his development plan and, while he did not meet the targeted number of cows, his production was increasing and by 1986/87 he had exceeded the planned production for the year end of his plan, which was 35,000 gallons.  
	In each of the first four years of the super-levy regime, Mr. Finlay's deliveries to Avonmore exceeded his quota to a considerable extent but it was only in the fourth year, 1987/88, that he suffered a super-levy penalty.  Towards the end of that quota year he was fined £5,000 and that amount was withheld from his milk cheques.  The fine was adjusted around June 1998 and he recovered roughly half the fine.  He recovered most of the balance, except £300, in January 1990.  
	I have no doubt the imposition of that penalty had a devastating effect on Mr. Finlay and it is understandable that it should have had: in the year ending 31st December, 1987, the accounting year affected, his accounts showed a net profit of only £7,223 on his farming enterprise and in the same year he incurred bank interest charges of £2,231.  Having felt the effect of the super-levy regime, as Mr. Finlay put it himself, it was a case of "once bitten, twice shy" and he was not going to risk the imposition of a super-levy penalty again.  In the ensuing quota year he cut back substantially on his milk production.  In the next two years he availed of a device to produce milk considerably in excess of quota without incurring a penalty by entering into an arrangement with a neighbouring supplier of Avonmore, Messrs. Behan, to supply milk to Avonmore in the latter's name.  In every subsequent year commencing in the quota year 1991/92 Mr. Finlay cut back on milk production.  Mr. Finlay has not incurred a super-levy fine since 1987/88.
	However, Mr. Finlay embarked on an alternative farming enterprise which he could conveniently operate in conjunction with his dairying enterprise - rearing friesian heifers and selling them as replacements in the market.  Initially, he got financial assistance from his brother to start up this alternative enterprise.  He himself acknowledges that in the early years of this decade there was a good trade for friesian heifer replacements because farmers who were going back into milk in consequence of the decision in the Mulder case were stocking up.  On the evidence, I am satisfied that over the years Mr. Finlay has utilised the spare capacity on his farm to the extent that could be reasonably expected.  
	It is against that background that I must assess the damages to which Mr. Finlay is entitled.

FORMULA FOR ALLOCATION OF ADDITIONAL QUOTA

	In my judgment in these proceedings delivered on 25th March, 1999 I determined, as a matter of probability, the formula according to which the Plaintiffs and other farmers who had invested heavily in milk production, including Mr. Finlay, would have been allocated additional quota in 1984/85 if the Minister had not committed the error of law found by the Supreme Court in its judgment.  I held that the formula is:-

	"50% of the difference between:-
	(a)	targeted milk production (based on the product of projected cow numbers and projected milk yield) for the end of plan; and
	(b)	the quota actually allocated for production in 1983, if any."

Since that judgment I have clarified that the base line in the formula, the wording of which may not have been as clear as it might have been, is quota actually allocated in 1984/85, which was based on production in the year 1983, that is to say, actual deliveries in 1983 together with, in the case of producers with deliveries of under 14,000 gallons, 497 gallons and, in the case of producers with deliveries over that threshold, 3.55% of 1983 deliveries.
	In the course of the hearing of Mr. Finlay's claim, on 13th May, 1999, I ruled on the amount of the additional quota to which Mr. Finlay is entitled on the basis of that formula.  It is 6,390 gallons, that is to say, 50% of the difference between his targeted milk production under his 1982 plan for the end year of plan, 35,000 gallons, and the quota actually allocated to him, albeit not from the outset but in the quota year 1986/87, effective from the start of the super-levy regime, namely, 22,220 gallons.  

ASSESSMENT OF DAMAGES - GENERAL APPROACH

	There is a considerable degree of consensus between the parties as to the approach the Court should adopt in assessing the damages to which Mr. Finlay is entitled on account of the Minister's mistake of law.  It is agreed that what the Court has to do is to identify the loss suffered by Mr. Finlay flowing from the fact that he did not have the additional quota in each quota year from 1984/85 to date.  It is also agreed that the additional quota would have been varied from time to time over the years because of quota reductions and one reserve allocation.  The amount of the additional quota in each relevant quota year is agreed, as is the total amount of his quota had the additional allocation been made.  On the evidence it is clear that Mr. Finlay was not affected by the super-levy regime until the quota year 1987/88 and that it was only at the end of that quota year that he had to start curtailing his expansion of milk production.  It follows, therefore, that Mr. Finlay suffered no loss by reason of non-availability to him of the additional quota until the quota year 1988/89.  Mr. Clarke, on behalf of Mr. Finlay, accepts, as he must do on the evidence, that, accordingly, the Court's task is to assess Mr. Finlay's loss on account of not having the additional quota in each quota year from and including 1988/89.  It is also agreed that the primary issue in assessing the financial loss flowing from the non-availability of the additional quota to Mr. Finlay is identifying the additional production which Mr. Finlay might have had, as a matter of probability, in 1988/89 and in each subsequent year if he had had the additional quota.  That is the most difficult issue on this assessment and, unfortunately, it is an issue on which the parties diverge significantly.
	It is agreed that once the additional production which has been forgone by reason of the non-availability of the additional quota has been identified, the quantification of the financial loss resulting therefrom involves the following exercises:-

(a)	identifying for each year the appropriate profit margin to apply to the loss of production, taking into account the extent to which that production would involve a financial charge in any year because it exceeded Mr. Finlay's total quota coupled with his entitlement to flexi-milk in that year, and the amount of such charge; 
(b)	giving credit or making allowance in each year for the profits of the alternative use of his farm facilitated by his inability to engage in the additional milk production, which Mr. Finlay actually engaged in, or ought to have engaged in in order to mitigate his loss; and
(c)	giving credit in each year for any savings which actually accrued to Mr. Finlay by reason of his reluctance to sell surplus milk to Avonmore, lest he incur a super-levy fine again.

There is a considerable measure of agreement between the parties in relation to each of those exercises.  There is also agreement as to the approach the Court should adopt as to Mr. Finlay's tax liability, if any, in respect of loss of profit to date.  
	In Mr. Finlay's case, it is agreed that there is only one element of capital loss to be considered, which arises in connection with the allocation to him of shares in Avonmore Foods Plc. on its flotation.  
	The other heads of damage which fall to be considered are:-
(i)	the saving on bank interest on his indebtedness which would have accrued to Mr. Finlay had the profits from the additional production been available to him over the years since 1988/89;
(ii)	future loss, if any; and
(iii)	general damages.

I propose considering each of the foregoing issues in turn.

ADDITIONAL PRODUCTION

	The Minister's position is that had the additional quota been allocated to Mr. Finlay in 1984/85, as a matter of probability, his additional milk production in 1988/89 and in each subsequent year would have been in an amount equivalent to the additional quota.  On behalf of the Minister, Ms. Finlay submitted that, in assessing the evidence, the Court must distinguish between the effect on Mr. Finlay and his farming enterprise of the introduction of the super-levy regime, on the one hand, and the Minister's failure to allocate the additional quota to him, on the other hand.  
	Mr. Finlay's position is that not only would he have filled the additional quota in every year since 1988/89 but, by reason of having it, he would have expanded further on two fronts.  First, in each year from 1989/90 onwards, as Dr. Bielenberg put it, he would have "filled the hotel", in other words, he would have increased his production by a further amount equivalent to the additional quota, the 50% missing from the formula.  Secondly, in every year from 1990/91 onwards there would have been a further graduated increase on his base production in 1989/90 the cumulative effect of which would have been an increase of 58.4% between 1990/91 and 1998/99.  Both propositions are flawed.  The "filling the hotel" proposition fails to take account of the fact that Mr. Finlay's actual production was well in excess of quota in most years post 1988/89.  The 58.4% cumulative increase was extrapolated from National Farm Survey data published by Teagasc.  Mr. Clarke, on behalf of Mr. Finlay, acknowledged, properly in my view, that he could not fully stand over an assertion of a 58% average increase in milk production on a national basis between 1990/91 and 1998/99.  However, he did argue forcibly that Mr. Finlay had, both in personal terms and infrastructural terms, the capacity to achieve the additional production he contends for.  He also submitted that the Court should not attach too much weight to the fact that since 1988/89 Mr. Finlay has not acquired either on a temporary basis or on a permanent basis any additional quota, because Mr. Finlay was in a position of very considerable uncertainty throughout that period because of his claim in this litigation, his expectations of the outcome of the litigation and the long period of time in which it has taken to resolve the litigation.
	The extent of the divergence between the Minister's position and Mr. Finlay's position can be illustrated by reference to two years, 1992/93 and 1995/96.  As regards the year 1992/93, the Minister's position is that Mr. Finlay's additional production would have been 5,933 gallons, that is to say, an amount equivalent to the amount of the additional quota for that year, which together with his actual deliveries in that year, 28,148 gallons, would have brought his total production to 34,081 gallons, which would have been 7,406 gallons in excess of his total quota.  Mr. Finlay's position is that his total production would have been approximately 12,000 gallons higher, at around 46,000 gallons or almost 20,000 gallons over total quota.  As regards the year 1995/96, the Minister's position is that the additional production of 5,933 gallons together with Mr. Finlay's actual deliveries of 24,494 gallons would have brought Mr. Finlay's total production up to 30,427 gallons or 3,752 gallons in excess of total quota.  Mr. Finlay's figure for total production for that year is approximately 20,000 gallons higher, at around 50,000 gallons, which would have been around 23,000 gallons over total quota.
	What underlies the huge divergence between the Minister's position and Mr. Finlay's position is that Mr. Finlay's position fails to take into account the impact of the super-levy regime would have had on Mr. Finlay's production even if he had been allocated the additional quota in 1984/85.  Mr. Finlay started out from a base production in the year 1983 of approximately 16,500 gallons.  At that juncture, the infrastructure in which he invested under his plan was just in place.  Over the next 4 years, he reaped the benefit of his investment in that in the quota year 1986/87 he produced just short of 36,000 gallons of milk, although the following year he fell back to just over 32,000 gallons.  I do not doubt that if the super-levy regime had not been introduced, he would be producing 50,000 to 60,000 gallons of milk today.  However, from the introduction of the super-levy in 1984/85, the expansion of his production was subject to the constraints imposed by that regime.  Subject to the availability and the allocation to him of flexi-milk in any year, his ability to produce milk beyond the level of his quota in any year without incurring a super-levy penalty was contingent on him acquiring quota.  In the relevant years there were four means by which quota could have been acquired: under the temporary leasing schemes which were in force every year since 1988/89; under the restructuring schemes which were in force every year since 1988/89, with the exception of 1992/93; by acquiring land with quota; or by leasing land with quota.  It is implicit in Mr. Finlay's position that by 1992/93 he would have been in a position to acquire at least 17,000 gallons of quota and by 1995/96 at least 20,000 gallons by one or a combination of those means.  
	On behalf of the Minister, Ms. Finlay submitted that if one looks at Mr. Finlay's claim at a macro level, national trends in milk production since 1988/89 do not suggest that the increase in 1984/85 of Mr. Finlay's quota from 22,220 gallons to 28,610 gallons would have resulted in the expansion he contends for.  The evidence supports this submission.  In the period from 1990 to 1997, the total quota held in Ireland fell by 40,000,000 gallons, just over 3%.  While in the same period there was a certain amount of redistribution of quota under the various temporary leasing and restructuring schemes, prioritisation under those schemes was biased in favour of producers with quota under 30,000 gallons up to 1996/97 and up to 35,000 gallons thereafter.  In my view, it is not probable that a producer with a quota of around 28,000 gallons in 1988/89 could have increased his quota by 17,000 gallons by 1992/93 or by 20,000 gallons by 1995/96 under those schemes.
	Some account must also be taken of the fact that, had the Minister not made the mistake of law which the Supreme Court found he had made and had quota being allocated to producers in the investment category according to the formula which I have determined would have been applied as a matter of probability in 1984/85, the milk production "landscape" would have been somewhat different.  The allocation to producers outside the special categories provided for in Article 3 of Council Regulation EEC/857/84 would have been less.  It is probable that this would have resulted in due course in there being less quota available for temporary leasing and for restructuring and, in the fullness of time, less unused quota and, in consequence, less flexi-milk available.  I think it is probable that unlike, say, the small producers, who historically have gone out of milk production since the introduction of the super levy regime, producers in the investment category would have held on to their quota and utilised it to the full.  It is also probable that the investment category would have been treated less favourably than it actually was in prioritising entitlement to flexi-milk and under temporary leasing and restructuring schemes.
	When one has regard to Mr. Finlay's particular circumstances since 1988/89 and, in particular, his milk production in that period, in the light of the foregoing factors, one must conclude that it is highly improbable that he would have achieved the level of production contended for by him on the basis of the additional quota, which represents an increase of 28.75% on the quota originally allocated to him.  On the other hand, provided one does not lose sight of the uncertainty which surrounded his dairying operation throughout that period and his own explanation for his failure to acquire more quota, his expectation that he would eventually be allocated more quota, one can conclude that it is probable that his additional production based on his additional quota would have been somewhat in excess of the increase which the Minister asserts is probable.
	I have tabulated the additional quota and its probable effect on Mr. Finlay's production in the table in Appendix A attached to this judgment.  My assessment of Mr. Finlay's total milk production in each year since 1988/89 on the basis of his increased quota is set out in Column (6).  The extent to which that production would have exceeded his total quota is set out in Column (7).  The additional production is set out in Column (8).  It will be clear from the table that I have come to the conclusion that it is probable that in the years 1988/89 to 1993/94 inclusive, Mr. Finlay's additional production would have been equivalent to his additional quota but that from 1994/95 onwards his additional production would have exceeded his additional quota and would have been sufficient to arrest the decline in production which actually occurred.  I have reached that conclusion for the following reasons:-

(A)	Even if he had the additional quota in the years in which he made deliveries by arrangement with and under the name of Messrs. Behan, I think it improbable that his production would have exceeded his actual deliveries plus the amount of the additional quota in those years, 40,527 and 41,520 gallons respectively, which would have been 13.340 and 14,335 gallons respectively over total quota.

(B)	At the beginning of 1988/89, Mr. Finlay's indebtedness to his bank was in the region of £17,000.  That indebtedness arose in connection with his infrastructural investment under his plan.  By the commencement of the 1992/93 quota year that indebtedness had risen by about £10,000 to £27,000.  In the interim, Mr. Finlay had further developed his farm by the installation of a slatted tank and shed, which he was obliged to install to comply with environmental regulations.  Even with the benefit of increased income from increased production as a result of the additional quota, because of the indebtedness he had incurred in developing his farm, I think it is improbable that Mr. Finlay would have been in a position to acquire permanent quota before 1994/95.  Therefore, in so far as flexi-milk was not available and allocated to him in the years up to 1994/95, he would have had to lease quota under the temporary leasing schemes to avoid a super-levy penalty.  

(C)	Mr. Finlay's production started to decline in 1994/95 and continued to decline in the subsequent years.  Mr. Finlay is undoubtedly a hard working, resourceful farmer.  I think that by 1994/95, if he had had the benefit of the income of the additional production attributable to the additional quota for ten years, he would have made inroads into his bank liabilities.  His overall financial circumstances would have been such that the advantage of acquiring permanent quota under a restructuring scheme would have been obvious to him and I believe that he would not have been deterred from participating in such a scheme by either financial constraints or an expectation of being allocated more quota.  I think it is probable that he would have acquired 6,000 gallons of permanent quota under the restructuring scheme in 1994/95 and that he would have paid for it on the deferred payment basis arranged by Avonmore with the banks over the next 6 or 7 years.  By a combination of his entitlement to flexi-milk, the acquisition of 6,000 gallons of permanent quota and leasing under the relevant temporary leasing scheme, I think it probable that in each of the five years from 1994/95 to 1998/99 inclusive Mr. Finlay would have been able to produce up to a level of 35,000 gallons without incurring a super levy fine.  In my view, it is improbable that Mr. Finlay, on the basis of the additional quota, could have increased his production beyond 35,000 gallons.  It is a mere coincidence that my estimate of Mr. Finlay's probable production in the last five years, had he had the additional quota, corresponds with the projected production provided for in his plan.  The factors which inform my estimation are his actual production, his financial status by reason of his investment in his farm and the terms governing availability of flexi-milk and participation in temporary leasing and restructuring schemes in the relevant years.
 
(D)	On the evidence, I think it improbable that Mr. Finlay would have been in the market for leasing land with a quota or purchasing land with quota attached at any material time.  

I think I should emphasise that the table in Appendix A is for convenience of illustration only, as are the other tables I will refer to later.  In the final analysis the very difficult task which the Supreme Court has remitted to this Court can only be performed on an estimated basis on the balance of probabilities.  The semblance of precision which the tables may convey is illusory.  

CALCULATION OF LOSS ATTRIBUTABLE TO LOST ADDITIONAL PRODUCTION

	Broadly speaking, following the approach adopted by the Minister, I have adopted an "Income and Expenditure Account" approach to this calculation.  
	The "Income" element for each year is tabulated in Appendix B attached to this judgment.  There are two components in the "Income" element.  The first is the compensation which Mr. Finlay would have received on account of reductions in the additional quota over the years.  Mr. Finlay accepts the Minister's calculation of this compensation, which is set out in Column (2) of the table.  The second component is the margin which would have been achieved by Mr. Finlay on the additional production.  The Minister accepts the margin suggested by Dr. Bielenberg for each year, which is extrapolated from the "Summary of guideline gross margins for use in farm planning" published annually by Teagasc, although the Minister has not conceded his point of principle that, notwithstanding that what is at issue is the appropriate margin for additional production, there should be some netting down of gross margin to take account of additional overhead expenses.  At any rate, the accepted gross margin per gallon is set out in Column (4) of the table in Appendix B and the margin on the additional production is calculated in Column (5).
	The "Expenditure" element of the account for each year is tabulated in Appendix C and comprises the following components:-

(1)	The cost of acquiring/leasing additional quota to avoid incurring a super-levy penalty.  
	This calculation involves, first, an assessment of how much flexi-milk would have been available and allocated to Mr. Finlay in each year.  The evidence adduced on behalf of the Minister is that in the altered "landscape" of the Minister having catered for the investment category in 1984/85 in accordance with the formula, it is probable that there would have been 1,500 gallons of flexi-milk allocated to Mr. Finlay in each year up to and including 1994/95 and 1,000 gallons in each subsequent year.  While Mr. Clarke suggested that more flexi-milk might have been allocated to Mr. Finlay, he acknowledged that it would not have been of a huge order of magnitude.  I have estimated that Mr. Finlay would have been allocated 2,000 gallons of flexi-milk in each of the 7 years between 1988/89 and 1994/95 and 1,500 gallons in each of the 4 subsequent years, if he required it.  This would have represented a total allocation of 20,000 gallons over 11 years which, I think, is sustainable given that what actually happened, in fact, was that in the same period Mr. Finlay was able to avail of in excess of 50,000 gallons of flexi-milk, albeit on the basis that his quota was below the relevant priority threshold at all material times.  The quantum of quota which would have had to be leased or bought in, after allowing for the availability of flexi-milk, is set out in Column (2)(A).  

	The second assessment which has to be made in this calculation is the unit cost of leasing or acquisition.  I consider that the appropriate figure to use each year is the cost per gallon under the temporary leasing schemes operated by Avonmore.  Although this quantification of damages assumes that Mr. Finlay would have purchased 6,000 gallons of quota under a restructuring scheme in 1994/95 and paid for it on the deferred payment basis, on the basis of the evidence, I think it is reasonable to assume that the deferred price per gallon over the relevant period under such restructuring scheme would not have been materially different from the cost per gallon of temporary leasing in the same period.  The relevant figures for unit cost are set out in Column (2)(B) and the total cost for each year is calculated in Column (2)(C).  

	In relation to the quota year 1988/89, the evidence adduced shows that an Avonmore producer who produced 33,721 gallons that year against a quota of 28,836 gallons incurred a final super-levy fine of £1,485.95.  I think that the Minister's assumption that in that year Mr. Finlay, had he produced 32,980 gallons against a quota of 27,755 gallons in the altered "landscape", would have incurred a fine of £1,500 is correct.  However, on the evidence, I think it is fair to cavil at the Minister's further assumption that, as a matter of probability, Mr. Finlay would have produced up to the level of 32,980 gallons without acquiring quota under the temporary leasing scheme or the restructuring scheme introduced in 1988/89 and would have subjected himself to a fine of £1,500 in that year.  I think it is reasonable to infer that, in the altered "landscape", the additional quota would not have insulated Mr. Finlay against the effects of the super levy regime in 1987/88.  Therefore, in Column (2), 1988/89 is treated in the same manner as the succeeding 6 years.

(2)	The credit to be given for the income which Mr. Finlay derived from the alternative farming enterprise which Mr. Finlay was able to and did conduct alongside his milk production enterprise, because his milk production enterprise was not operating to capacity.  

	Mr. Clarke implicitly accepted the Minister's methodology for assessing this credit, which methodology has the virtue of simplicity, and the Minister has accepted the appropriateness of the profit margin figures in respect of a livestock unit extrapolated by Dr. Bielenberg from the Teagasc data.  The calculation is set out in Column (3) of the table and the methodology is explained in the preamble to Appendix C.

(3)	The credit to be given for the savings on calf milk replacer which Mr. Finlay would have forgone if he had not fed surplus whole milk to his calves, which he did rather than deliver it to Avonmore and risk incurring a super levy fine.

	The Minister accepts Dr. Bielenberg's assessment of this saving, which is set out in Column (4).

	In Appendix D, the net income before tax on the additional production is calculated.   As will be clear from the table, I calculate the total net income before tax which Mr. Finlay would have earned on the additional production attributable to the additional quota between 1988/89 and 1998/99 at £20,067.  I think it is instructive to consider the net income per gallon on the basis of the figures I have used in that calculation, which for the most part are agreed, in various years.  To take 1991/92 for the purposes of illustration, from the gross margin of 58p must be deducted a temporary leasing cost of 20p.  If one assumes that one livestock unit is equivalent to 1 dairy cow producing 1,000 gallons of milk, the credit for the alternative use to be deducted is 19p which leaves a net income of 19p without taking into account the saving on calf milk replacer.  A similar exercise yields a net income per gallon of 18p for 1995/96 and of 21p for 1998/99.  Accordingly, in the three years which I have instanced, on the basis of the figures I have used, the net income from an additional 1,000 gallons of milk would have been £190, £180 and £210 respectively.

TAXATION

	It is agreed by the parties that the Court need not address the issue whether tax is exigible on the damages which represent loss of income to date at this juncture, but that the Plaintiffs will seek a ruling from the Revenue Commissioners on the issue.  Any further consideration which the Court has to give to the matter in the light of the ruling of the Revenue Commissioners can be done at a later stage.  

CAPITAL LOSS

	The only issue between the parties in relation to the shares in Avonmore Foods plc., which were allotted to Mr. Finlay in 1988, is whether, if he had been in receipt of the additional income which the additional production attributable to the additional quota would have yielded, he would have held on to the shares.  On the evidence, it is clear that Mr. Finlay did what many beneficiaries of de-mutualisation or public flotation do: he realised his "windfall" when the share value appreciated.  I think it is improbable that Mr. Finlay would have acted otherwise if he had the additional income of £1,471 which I have calculated for 1988/89.  Accordingly, I find that the loss incurred in connection with the allotment of shares in Avonmore Foods plc. is £405, that is to say, the capital gain he would have made on the sale of the additional shares which would have been allotted to him, as a matter of probability, if he had the additional quota.

INTEREST

	It is accepted by Mr. Clarke, on behalf of Mr. Finlay, that the methodology adopted by the Minister for calculating the interest which Mr. Finlay would have saved on his indebtedness to his bank had he been in receipt of the additional income from the additional production attributable to the additional quota is appropriate.  One has to have some misgiving about that methodology, in that the saving is calculated on the basis of the simple interest which would have been earned on the sums in question in each year since they would have accrued, whereas, of course, if the additional income had been lodged by Mr. Finlay in each year he would have saved compound interest.  It seems to me that over a time span of 11 years there would be a significant difference between interest earned calculated each year on a simple interest basis and interest computed and compounded in accordance with banking custom saved because the account balance was being reduced annually.  Against that, however, the Minister's methodology makes a number of assumptions which are clearly particularly advantageous to Mr. Finlay, namely, that he would have appropriated all of the additional income in reduction of his indebtedness to his bank, that no tax would have been deducted from the additional income, and that in each year the additional income earned in that year would be available to save interest for that whole year.  
	Subject to the foregoing comments, I am availing of the parties' offer to recalculate the interest in accordance with the accepted methodology.

FUTURE LOSS

	In an open letter dated 6th May, 1999 from the Chief State Solicitor to Mr. Finlay's solicitors, Messrs. Lavelle & Coleman, the Minister has confirmed that in the event of Mr. Finlay accepting the Court's preliminary ruling and not appealing against the same, he is prepared to allocate to Mr. Finlay from the National Reserve an additional permanent quota of 5,851 gallons commencing in the quota year 1999/00.  In the open letter it has been further intimated that in the event of Mr. Finlay deciding to appeal to the Supreme Court against this Court's ruling on the preliminary issue, the Minister reserves the right to cross-appeal against such ruling and, in the event of the Supreme Court altering the formula, the Minister has confirmed that he will issue to Mr. Finlay a permanent quota of such amount as may be appropriate in accordance with such altered formula and having regard to the quota deductions and reserve allocations applicable.  It is agreed that the amount of 5,933 gallons should be substituted for 5,851 gallons.  Mr. Finlay proposes to accept the Minister's offer, as he must do to mitigate his loss.
	In the circumstances, the only basis on which Mr. Finlay can incur loss in the future by reason of the Minister's mistake of law is that he does not have the additional permanent quota in the amount of 6,000 gallons which I have found he would have been in a position to acquire and would have acquired in 1994/95 under the restructuring scheme then in force.  I think that the proper method of compensating Mr. Finlay for this loss is to award him damages in a sum which would enable him to acquire permanent quota under the current restructuring scheme.  The maximum price fixed by the Minister for quota offered under the Milk Quota Restructuring Scheme, 1999 is £1.55 per gallon.  Given that his total quota, including the additional permanent quota offered by the Minister from the National Reserve, will amount to only 26,675 gallons, which is under the priority threshold of 35,000 gallons provided for in the 1999 Scheme, I assume that Mr. Finlay will be allocated 6,000 gallons of quota under the Restructuring Scheme, if he applies for it.  The maximum cost of 6,000 gallons under the 1999 Scheme is £9,300, which is the figure I am allowing, ignoring that under the scenario postulated in this quantification of damages Mr. Finlay would probably not have fully paid yet for the quota he would have acquired in 1994/95 on a deferred payment basis.

GENERAL DAMAGES

	Ms. Finlay, on behalf of the Minister, accepts that the Court has jurisdiction where a tort has been committed, and she characterises the Minister's mistake of law as the commission of a tort, to award a sum for general damages where the wrong committed was such as to cause a level of anxiety and hardship which would not be adequately compensated by the special damages.  However, Ms. Finlay suggests that, as a matter of probability, it was the introduction of the super-levy regime rather than the Minister's failure to allocate an additional 6,390 gallons of quota to him in 1984/85 which was the root cause of any anxiety and hardship which he has suffered.  
	While I appreciate the distinction which Ms. Finlay draws, I consider that this is an appropriate case in which to award general damages.  The civil wrong in respect of which Mr. Finlay seeks redress was perpetrated 15 years ago and Mr. Finlay began pursuing his legal remedy 10 years ago.  His difficult financial circumstances during the past eleven years are undoubtedly partly, if not wholly, attributable to the absence of the additional quota.  I am satisfied that his financial difficulties were a source of very considerable upset and anxiety to him and were a serious blow to his self esteem and caused hardship to him and his family.  In fact, the most important years of his adult life, the years during which he was rearing his family, were blighted by financial worry and uncertainty.  In the circumstances, I think that the appropriate level of general damages is £10,000.

SUMMARY OF DAMAGES

	The award in favour of Mr. Finlay will be the aggregate of the following sums:-

(a)	£20,067 in respect of loss of income from the additional quota to date;
(b)	£405 in respect of loss in connection with the allotment of shares in Avonmore Foods plc.; 
(c)	the interest saving which the sums at (a) and (b) would have afforded which is to be calculated;
(d)	£9,300 in respect of future loss; and
(e)	£10,000 general damages.