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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Wykeham (t/a Knightwood Kennels) & Anor v Minister Of State For Agriculture, Fisheries & Food  EWHC Admin 979 (19th November, 2001)
Cite as:  EWHC Admin 979
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IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
The Royal Courts of Justice
Strand, London WC2A 2LL
B e f o r e :
(1) (MICHAEL GODFREY WENMAN WYKEHAM
(trading as Knightwood Kennels) and
(2) THE QUARANTINE ASSOCIATION)
Claimants - against - THE MINISTER OF STATE FOR AGRICULTURE, FISHERIES AND FOOD Defendant
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr David Anderson QC and Mr Mark Hoskins (instructed by Legal Department, Ministry of Agriculture Fisheries and Food for the Defendant)
AS APPROVED BY THE COURT
Crown Copyright ©
Mrs Justice Rafferty:
“…it is not clear…whether this is a refusal to pay compensation…or ..a rejection of the proposed scheme to manage the transition of the old regime to the new one.
You will appreciate……..the Association’s…....claim under the ECHR and .a strict time limit. It would therefore be very helpful if you could answer this enquiry as a matter of urgency.”
“The Minister’s letter of 25th August made it clear that the Government would not compensate.….for any loss of business……before or following the introduction of the PPS. Furthermore, there is no money available to help finance the decommissioning scheme proposed by your client.
MAFF does not accept that …..the PPS will infringe any rights….under the ECHR or that the Convention entitles them to any compensation”
Thank you for your letters of 2 March and 10 April to Nick Brown about compensation for quarantine kennel owners in the light of quarantine reform.
The consideration of whether or not to include a compensation scheme in government legislation is made on a case by case basis, and takes into account the need to achieve a balance between the needs of individuals and the general public interest.
In determining whether or not the payment of compensation is merited in any one case, there are many factors which MAFF has to examine. We will need to consider, for example, whether an affected business, will, as a result of Government action, be closed down entirely and prematurely; whether it has had reasonable notice or knowledge of the intended action or whether the owners of the business in question will remain owners of tangible assets. The jurisprudence of the European Court of Human Rights (for example, the case involving the UK Pinnacle de-boners) also provides MAFF with guidance as to the principles which, in the opinion of that Court, should govern decisions on compensation.
Having given careful consideration to the relevant factors, MAFF has concluded that we cannot support the case for the payment of compensation to quarantine kennel owners.
Where the High Court considers that there has been undue delay in making an application for judicial review, the court may refuse to grant-
(a) leave for the making of the application; or
(b) any relief sought on the application,
if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.
“………at an oral hearing before Judge LJ today, our application for permission to appeal the decision of Mantell LJ…….refusing permission to claim for judicial review was granted..
During the course of his judgment Judge LJ expressly stated he was not deciding on the issue of the extension of time or whether there was delay but leaving that for the substantive hearing.”
8.4.99 Claimant to Defendant: good case for compensation were there a de facto expropriation of property
28.5.99 Defendant to Claimant: no compensation.
15.7.99 Claimant to Defendant: decommissioning plan
25.8.99 Defendant to Claimant: no money, no decommissioning
14.9.99 Claimant’s then solicitors to Defendant: please clarify 25.8.99
8.10.99 Defendant to Claimant’s then solicitors; no compensation
22.12.99 PPS Order made
17.1.00 Order into force
2.3.00 Claimant to Defendant: please give reasons:
10.4.00 Claimant to Defendant; ditto
9.5.00 Defendant to Claimant: reasons
2.8.00 Form 86A.
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
"The Court considers that it must look behind the appearances and investigate the realities of the situation complained of. Since the Convention is intended to guarantee rights that are `practical and effective`, it has to be ascertained whether that situation amounted to a de facto expropriation, as was argued by the applicants.
In the Court’s opinion, all the effects complained of (see paragraph 58 above) stemmed from the reduction of the possibility of disposing of the properties concerned. Those effects were occasioned by limitations imposed on the right of property, which right had become precarious, and from the consequences of those limitations on the value of the premises. However, although the right in question lost some of its substance, it did not disappear. The effects of the measures involved are not such that they can be assimilated to a deprivation of possessions. The Court observes in this connection that the applicants could continue to utilise their possessions and that, although it became more difficult to sell properties in Stockholm affected by expropriation permits and prohibitions on construction, the possibility of selling subsisted; according to information supplied by the Government, several dozen sales were effected (see paragraph 30 above).
There was therefore no room for the application of the second sentence of the first paragraph in the present case."
It remains to be ascertained whether or not the interference found by the Court violated Article 1.
That Article comprises three distinct rules. The third rule recognises that the States are entitled, amongst other things, to control the use of property in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose; it is contained in the second paragraph.
Being combined in this way, the two series of measures created a situation which upset the fair balance which should be struck between the protection of the right of property and the requirements of the general interest: the Sporrong Estate and Mrs Lonnroth bore an individual and excessive burden which could have been rendered legitimate only if they had had the possibility of seeking a reduction of the time-limits or of claiming compensation. Yet at the relevant time Swedish law excluded these possibilities and it still excludes the second of them.
“It has ….been a long-standing matter of settled public policy that no Government are under any obligation to pay compensation to a business for any loss of opportunity of carrying on that business which may arise from Parliament’s properly considered legislative decisions.”
"The Government take the view that the 1996 Orders did not amount to a deprivation of possessions, but that it was either a control of use or that it falls within the residual category in the first sentence of Article 1 of Protocol No 1..... They add that the Government were not acting as an economic operator in passing the 1996 Orders, but were responding to scientific advice which had rendered the measures inevitable. They also add that the applicants must have been aware of the possible risks inherent in handling bovine heads.
The applicants consider that, as they had made extensive investments in their businesses, and had obtained necessary approvals and licences, there was an implied representation that they would be able to carry on their businesses, subject to the Government’s right to take measures in the public interest and without subjecting the applicants to any excessive burdens. They claim that the prohibition on the use of bovine heads without any compensation was disproportionate and excessive, however the interference is labelled.
The applicants’ businesses in March 1996 comprised their stock at that time, the assets of the businesses, and the goodwill, or the “present value of the future income stream which the company can be expected to derive”.
The applicants also claim that the 1996 Order effectively revoked the applicants’ licences under the 1992 Regulations and the Specified Bovine Offal Order, leaving the applicants with specialised plant and premises which it is difficult or impossible to use for other purposes.
The Commission notes that by the entry into force of the 1996 Order on 29 March 1996, a number of factors were present which must have had a considerable impact on the market for beef meat in general and head meat in particular.
The Commission thus considers that whilst the applicants’ businesses were affected by the 1996 Orders, it cannot accept the applicants’ contentions as to the extent of their losses as the market for those businesses must have been seriously depressed by the state of the beef market in general and the offal market in particular.
Whilst it is true that some of the applicants have now ceased their businesses as cattle head deboners, the Commission notes that they remain owners of their tangible assets, and that those assets can either be used in new or related businesses, or they can be sold. Further, in respect of eligible beef stocks held on 9th April 1996, the applicants have in fact received compensation totalling over £430,000.00."
"The Government has always accepted that, if the number of animals entering quarantine were to fall for whatever reason, the number of quarantine premises could be expected to fall in line with the size of the market. But the Government has never seriously contemplated abolishing quarantine altogether (although it is accepted that this was one of the options of which the AGQ was asked to calculate the risk). Accordingly, the Government has always believed, and still believes, that there will be a demand for quarantine accommodation for the foreseeable future. It is accepted, however, that changes to Government policy have resulted in a decline in the size of the market for which the authorised quarantine premises are competing.
The Treaty of Amsterdam itself contains no requirement to pay compensation in the circumstances described. However, in that Treaty, the Member States of the EU affirmed that, in the application of the law, regard must be had to the fundamental principles of the European Convention on Human Rights (“the ECHR”). Article 1 of the First Protocol to the ECHR, guarantees the right to enjoy peaceful enjoyment of possessions. The Government’s understanding of that article is that compensation is required generally where property is expropriated. However, where the state does not take away property, but instead alters the economic circumstances under which it is operated, there is no presumption that compensation is due. Therefore, given that quarantine kennel owners would still be in possession of their premises, and still have available a market for their business, or the option of conversion to boarding premises, this article would not have the effect of requiring compensation to be paid, should Government legislation allow some pets to enter the UK without having to undergo quarantine.
The issue of whether to reform quarantine was debated in the House of Commons on 29th October 1998. In his closing speech, Elliot Morley MP, Parliamentary Secretary (Commons) at the then Ministry of Agriculture, Fisheries and Food made clear the Minister’s view that, because the market for quarantine would continue to exist, compensation was not payable. I exhibit the Official Report (Hansard) report of Mr Morley’s closing speech at Tab 18."
"The elimination of one of the “bundle of rights” comprising ownership will not usually be sufficient to deprive a person of ownership: but such an infringement may amount to a control of the use of property. Such control may be effected by the state either by requiring positive action of individuals or by imposing restrictions upon their activities. Restrictions include planning controls, environmental orders, a prohibition on construction, rent control, suspension of eviction from residential property, import and export laws, economical regulation of professions, the seizure of property for legal proceedings, or inheritance laws, forfeiture provisions for the enforcement of laws relating to the use or possession of property and forfeiture proceedings to seize or confiscate property in criminal proceedings as a preventative or interim measure. A refusal to grant planning permission will not be an interference but a planning enforcement notice will be. "
"(d) Justification and the `fair balance test`
It is now clear that when considering whether an interference with the peaceful enjoyment of possessions is justified:
This approach is taken whichever of the three rules applies. However, the detailed application of the `fair balance` test will not be the same in all circumstances.
In order to satisfy the `fair balance test` two conditions must be fulfilled:the interference must have a `legitimate aim`;there must be a reasonable relationship of proportionality between the means employed and the aim pursued.
Two factors are of particular importance in deciding whether there is a `fair balance`. First, whether the property owner is entitled to compensation for the interference. This was a significant factor in Sporrong and Lonnroth v Sweden and has been prominent in other cases. Thus, the administration of a scheme for the consolidation of agricultural holdings in the interest of their economic exploitation was found to be in violation of Article 1: 16 years after the scheme had been implemented it had still to be concluded and no means of redress for interim losses of the applicants had been provided."
“The effect …….would be ….that, when next we felt there was a need to improve public safety through legislation, whether in respect of furniture, the pharmaceutical industry, the transport industry or firearms control, Governments and the House would always be constrained and often prevented from making decisions in favour of public safety by the enormous cost involved…….”
" ..... the Commission’s view [is that] such a right to compensation is not inherent in the second paragraph......"
"This does not exclude that the the law may provide for compensation in cases where a regulation of use may have severe economic consequences to the detriment of the property owner. The Commission is not required to establish in the abstract under which circumstances Article 1 may require that compensation be paid in such cases. When assessing the proportionability of the regulation in question it will be of relevance whether compensation is available and to what extent a concrete economic loss was caused by the legisaltion."
Duty to give reasons.