High Court sets out scope of FSA’s powers under the meat regulations

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Food_Manufacture_Sponsors_2020_Business Leaders_781x285In the recent judicial review, R (on the application of Agro Foods (Ashford) Ltd) v Food Standards Agency [2019] EWHC 2718, the High Court had to look at the remit and scope of the power of the Food Standards Agency (FSA) under the Meat (Official Controls Charges) (England) Regulations 2009 (the Regulations).

Food business operators need statutory approvals and official controls from the FSA in order to lawfully operate establishments such as slaughterhouses. The FSA is permitted, pursuant to regulation 3(4) of the Regulations, to impose and collect charges for providing the official controls. The case is about the scope of the FSA’s powers in circumstances where charges have gone unpaid and a court judgment for their recovery has been obtained. It raises a question of statutory interpretation concerning regulation 4 of the Regulations, which provides as follows (with underlined emphasis added):

Regulation 4. Withdrawal of controls – Where the FSA has had judgment entered against an operator of any premises for any sum which is payable to it under regulation 3(4) and the operator fails within a reasonable time thereafter to satisfy the judgment, the FSA may (regardless of any other legal remedy open to it) refuse to exercise any further controls at those premises until the judgment has been satisfied.

The issue which the judge had to determine was whether the words “at those premises” confine the power so that the FSA is entitled to refuse to exercise further controls only at premises where the current operator is the same operator against whom “the judgment” was entered? Or is the power in that respect unconfined so that, in an appropriate case, the FSA is entitled to refuse to exercise further controls even though there is a successor operator against whom no judgment has been entered?

Charing Meats Limited (CML) was the original operator of the slaughterhouse. The FSA provided official controls from December 2015 and charges were notified to CML. CML failed to pay and eventually in 2018 judgment was entered against the company in the sum of £85,000. CML ceased trading and the assets were sold to Agro Foods (Ashford) Limited, which was in effect a ‘phoenix’ company which was controlled by the same director, Mr Ahmed. The FSA withdrew controls from Agro Foods claiming that it could refuse to exercise any further controls ‘at those premises’ until the judgment against CML was satisfied. The issue was whether the words ‘at those premises‘ confined the FSA’s powers to withdraw controls where the current operator was the same operator against whom the judgment had been entered or whether the power was unconfined.

The court found that Regulation 4 should be interpreted objectively, starting with the ordinary and natural meaning of the words. ‘At those premises‘ meant the same physical facility and so withdrawal of controls could be applied to a successor operator.  The court stated “it is relevant to have in mind the consequences of the competing interpretations. If regulation 4 were confined in its application to cases where the defaulting operator – against whom judgment has been entered – remains in operation and seeks continued official controls, the Agency would be at the mercy of ‘phoenix’ arrangements by which a controlling person behind a corporate entity could acquire a new corporate entity and insist on continuation – provided only that hygiene standards were met – leaving past charges for official controls unsatisfied.”

WM comment

The FSA will welcome the findings of this judicial review as it establishes that its powers are unconfined in relation to charging for control provisions.