Department for Environment Food & Rural Affairs v Feakins & Anor

Synopsis of headings in this Judgment: para no

The claimant (“Defra”) is the government department which sues (and is sued) as successor to the rights (and liabilities) of the Ministry of Food Agriculture and Fisheries (“MAFF”) and the Intervention Board for Agricultural Produce (“IBAP”). It is unnecessary to set out the steps by which this succession took place. For much of the period with which I am concerned the relevant body was MAFF rather than Defra. For convenience I refer to Defra as the relevant body throughout.

The first defendant, Mr Kevin Feakins (“KF”), is a farmer. In 1986 he and his first wife (“Sarah”) moved from Wiltshire and together bought Hill Farm, comprising a sizeable Georgian farmhouse with various agricultural buildings and farm land of approximately 250 acres in Herefordshire. Their business, conducted at first in partnership, and later through the medium of a limited company KA and SBM Feakins Ltd (“the company”) in which their eldest child Matthew was a 10% shareholder, prospered. By 1997 its turnover approached £6m per annum. In 1997, however, the first in what were to be a series of hammer blows of misfortune struck. One of the company’s major customers, the UK Halal Meat Company (“Halal”) failed leaving huge debts owing to the company. Thereafter, the company ceased to trade, remaining in existence solely for the purpose of seeking to realise the security which it enjoyed in respect of Halal’s indebtedness. The business was thereafter carried on either by KF and Sarah in partnership, by a new limited company KA & S Feakins & Sons Limited and, as from February 1998, by a further limited company, Garron Livestock Limited (“Garron”) which had an outside shareholder Mr S. W. Watkins.

From 1992 onwards KF and Sarah had been engaged in litigation in the High Court, along with others, against IBAP relating to the validity of payments received pursuant to what was known as the sheep premium clawback scheme. A reference to the European Court of Justice was one amongst other causes of that litigation becoming protracted. Eventually, however, on 23 June 2000 Mr Justice Kennedy gave judgment for IBAP against KF in the sum of £650,654.

In the meantime the relationship between KF and Sarah had broken down. Sarah commenced divorce proceedings against KF in the autumn of 1999. The financial negotiations between them eventually resulted in a Consent Order dated 25^th May 2000 pursuant to which KF agreed to pay Sarah £50,000 and to indemnify her against any adverse judgment in the IBAP litigation. In return, Sarah gave up her interest in Hill Farm, in the company and in KA & S Feakins & Sons Ltd. The mortgage liabilities in respect of Hill Farm in favour of National Westminster Bank plc (“NatWest”) were transferred into the sole name of KF.

By September 2000 Hill Farm with vacant possession seems to have been worth some £1.03m, subject to NatWest’s charge of in excess of £400,000. KF was hoping that an appeal against the judgment of Kennedy J would either extinguish or substantially reduce his liability thereunder. His plan, however, at this stage seems to have been to sell Hill Farm. He found potential purchasers at a price of £1.03m in the persons of a married couple, Mr Nechvatal and Ms Cloud (“the Nechvatals”), who were looking to retire from their respective careers in the financial sector and take up organic farming. They were able to agree terms subject to contract. KF was not, however, in a position to enter into a contract with the Nechvatals. On 22^nd September 2000 IBAP obtained a charging order nisi against Hill Farm in respect of its judgment debt and interest. Thereafter KF’s hopes of realising anything for himself from a sale rested either on his appeal being successful, or on his reaching some compromise with IBAP, or on finding a way of selling the farm free from the IBAP charge while leaving the net proceeds in friendly hands.

We do not know what advice KF had received as to his prospects on appeal. If the position had in fact appeared to him as bad as it turned out to be (the appeal was dismissed in October of the following year) his position was indeed bleak. On 14^th November 2000 Nat West made formal demand for the £202,832.51 owed to it by KF and for the £230,000 owed by the company and guaranteed by KF. The only potential string to his bow lay in the fact that KF and Sarah had, on 6^th March 1995, granted the company an agricultural tenancy of the land at Hill Farm, and had done so with the consent of NatWest. Through a recently instructed firm of solicitors The Robert Davies Partnership (“RDP”) he invited IBAP, by a letter dated 15^th November 2000, to consider the consequences if the bank were to sell subject to the tenancy (which would leave IBAP with nothing), and to interest them in the proposition that, if he were to procure a sale with vacant possession, the net proceeds might be split between IBAP and KF. Nothing came of this.

On 26^th February 2001 a case of foot and mouth disease (“FMD”) was diagnosed at Hill Farm. This was one of the earliest cases diagnosed in what was to prove to be the catastrophic epidemic which engulfed much of the country in the following months. One amongst many consequences which flowed from this was to throw KF into a closer association with the second defendant, Georgina Hawkins (“Miss Hawkins”). Miss Hawkins had rented stabling and grazing at the farm for her horses (it is not clear from whom, whether Garron, KF or the company) from late 1999, and rooms in the farmhouse for herself from January 2000. By May 2001 they had become engaged, and they married on July 25^th that year.

Another consequence was that Hill Farm was declared to be an “Infected Place” (“IP”) by Defra, and was thereafter subjected to a lengthy, and invasive, series of measures undertaken by Defra with a view to the eradication of FMD at the farm. This involved, inter alia, the slaughter and disposal of all the cattle and sheep at the farm and a consequent cleansing and disinfecting (C&D) operation at the farm.

By the end of July 2001 a plan was in place for the realisation of Hill Farm. NatWest was to sell as mortgagee to Miss Hawkins subject to the tenancy for a price of £450,000.00. That sale would overreach IBAP’s charge, and NatWest would swallow the proceeds under its charge. The company would then surrender the tenancy, leaving Miss Hawkins free to sell with vacant possession to the Nechvatals for £1.03m. This plan was then implemented. On 2^nd October 2001 NatWest exchanged contracts to sell the property subject to the tenancy to Miss Hawkins for £450,000.00. That contract was completed the following day with money borrowed by Miss Hawkins from KF’s brother Robin Feakins. Miss Hawkins then entered into a contract to sell to the Nechvatals for £1.03m, a deposit of £103,000 being paid, with completion fixed for 30^th November 2001. KF and Miss Hawkins then left the country for a four week holiday in Australia.

While the couple were still in Australia, Defra learned of the cancellation of its charge. On their return the couple had to face three unpleasant developments. The first was the receipt of a report (“the Fieldfare report”) into the environmental consequences of the operations undertaken by Defra on Hill Farm consequent on the FMD outbreak. The second was that the appeal against IBAP’s judgment had been dismissed. The third was a freezing injunction granted on Defra’s application by Gross J on 21^st November 2001 (and continued by Penry Davey J on 4^th December 2001).

Disclosure of the Fieldfare report to the Nechvatals led to the latter refusing to complete and claiming a return of their deposit. Proceedings have subsequently been started by the Nechvatals which are due to be heard later this year.

In these proceedings Defra claims to be entitled to relief against KF and Miss Hawkins pursuant to section 423 of the Insolvency Act 1986, alternatively on the basis that Miss Hawkins at all material times acted merely as KF’s nominee (“the Claim”). KF and Miss Hawkins counterclaim in respect of damage alleged to have been suffered as a result of the operations undertaken at Hill Farm by Defra following the outbreak of FMD (“the Counterclaim”).

Section 423 provides so far as material as follows: -

“(1)

This section relates to transactions entered into at an undervalue; and a person enters into such a transaction with another person if…(c) he enters into a transaction with the other for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by himself.

(2)

Where a person has entered into such a transaction, the court may, if satisfied under the next sub-section, make such an order as it thinks fit for – (a) restoring the position…and (b) protecting the interests of persons who are victims of the transaction.

(3)

In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose – (a) of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or (b) of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make…

(4)

…..

(5)

In relation to a transaction at an undervalue, references here and below to a victim of the transaction are to a person who is, or is capable of being, prejudiced by it.”

By section 436 it is provided that, except insofar as the context otherwise requires..

“transaction” includes a gift, agreement, or arrangement, and entering into a transaction shall be construed accordingly.

The principal way in which Defra advances its case under section 423 is by submitting that the deliberate engineering by KF of a situation, whereby Hill Farm was transferred to Miss Hawkins at a “subject to tenancy” valuation but in fact with vacant possession and with a view to realising its vacant possession value ostensibly for Miss Hawkins’ benefit, constituted a transaction at an undervalue entered into by KF. The main (but not the only) objection taken to that analysis is that KF was not a person who entered into any transaction at all: the sale of the freehold to Miss Hawkins was entered into by NatWest selling as mortgagee (“the mortgagee point”); and the surrender of the tenancy was effected by the company (“the company point”). Before addressing those points, I will first consider the contention advanced by Defra that the tenancy did not exist.

KF and Sarah granted the tenancy to the company on 6^th March 1995. It was a tenancy for one year and thereafter from year to year determinable by not less than 12 months notice in writing given by either party at a rent of £25,000 per annum payable quarterly in advance. The demised premises were the land of 250 acres and the farm buildings, but not the farmhouse and garden. There was a valid two months forfeiture clause covering non-payment of rent and liquidation.

The company appears to have traded from the property, and paid the rent due under the tenancy, until the Halal debacle in 1997. A report from Ernst &Young dated 22^nd April 1997, commissioned by Nat West, advised that the company’s directors were acting responsibly and were right not to seek any form of formal insolvency protection. The report further stated that some value for the leasehold property improvements could be obtained if the lease was sublet, but no value would be obtained if it were surrendered.

On 1^st May 1997, KF signed two letters on advice from his then accountants Martin & Co. The first was from KF, addressed to the directors and shareholders of the company. That letter recorded that the rent of £25,000 which was payable under the tenancy agreement would be temporarily suspended until the company could pay its rent and arrears and that the landlords would not try to finish the tenancy without prior agreement with the company and its directors. The second was a reply to the first letter accepting that offer, and saying “the company agrees to continue paying rent and also arrears when it is in a position to do so”.

The company thereafter ceased to trade, selling its stock and assets to KA & S Feakins & Sons Ltd. KF, by a series of arrangements recorded in the accounts of the company (but not elsewhere) ultimately assumed the liability to pay the price for those assets. From 1998, when Garron was formed, the land was in practice used by Garron for the purposes of its trade. Sarah did not have an interest in Garron. There was some documentary evidence of payments by Garron to the company, and KF claimed in re-examination that such payments had been made. His explanation for payments by Garron not having appeared in the company’s accounts was because Sarah’s solicitor had advised her not to consent to such payments being shown, from an apprehension that that might enable Garron to claim that it had an agricultural subtenancy. The company’s accounts for each of the years ended 31^st March 1997, 1998, 1999, and 2000 were drawn on the basis that liabilities under the tenancy continued. The 1998 accounts recorded the annual rental commitments of £25,000 as contingent liabilities. The 1999 accounts recorded that no rent had been paid since 25^th March 1997, and also as at 31^st March 1999 the company had “annual commitments under non-cancellable operating leases” of £25,000 for both 1998 and 1999. Those 1999 accounts were signed off on 31^st August 1999. According to KF’s evidence (which in this respect I accept) the continued existence of the tenancy was relied upon by him in his negotiations with Sarah over the divorce settlement in the period prior to its conclusion in the middle of 2000.

The accounts for the year ended 31^st March 2000, which were not signed off until 10^th January 2001, need to be looked at with greater scepticism than the earlier accounts. By that time the potential advantages in the company being able to assert the continued existence of the tenancy as against Defra and the Bank had become apparent. Those accounts record:

“Under a tenancy agreement dated 6^th March 1995 the company rents farmland from KA Feakins for a term of 15 years, originally at a rent of £25,000 per annum. Following the fraud suffered by the company no rent was paid in the period from 25^th March 1997 to 24^th March 2000. It was subsequently agreed that the company would pay a rent of £100 per annum back dated to 25^th March 1997 and therefore these accounts include a rent charge of £300.”

Defra’s pleaded case is set out in paragraphs 24 and 25 of the Amended Particulars of Claim as follows:

“Unenforceability of the agricultural tenancy

24.

The Claimant’s primary case is that aAt the time of the sale by Nat West to the Second Defendant, the agricultural tenancy was unenforceable and void as against Nat West and (following the sale) the Second Defendant. The Claimant will rely in particular upon the following facts and matters:

(1)

the tenancy agreement was entered into solely for accounting purposes. The parties to the agreement had no genuine intention of enjoying their respective rights, or performing their respective obligations, under the agreement;

(2)

the tenancy agreement required an annual rent of £25,000. This sum was not paid from March 1997. The financial statements of Feakins Limited for the year ended 31 March 2000 state that:

“no rent was paid in the period from 25^th March 1997 to 24^th March 2000. It was subsequently agreed that the company would pay a rent of £100 per annum back dated to 25^th March 1997 and therefore these accounts include a rent charge of £300.”

The Claimant is not aware that any sum was paid by the tenant company either Prior to March 1997 or after March 2000.

(3)

neither the First Defendant nor [Sarah] ever took steps to enforce the terms of the tenancy agreement, and in particular the requirements of rent set out in the agreement:

(4)

the tenant company, Feakins Limited, was at the time of the sale heavily in debt, with insufficient assets to satisfy its creditors. Had the company been declared insolvent, it could have had its tenancy determined forthwith pursuant to the Agricultural Holdings Act 1986, s.25(2)(a);

(5)

Feakins Limited had by 1997 ceased to trade and was therefore no longer farming the land from that time;

(6)

the tenancy was maintained by the First Defendant purely as a device to depress the value of Hill Farm and to induce Nat West to sell the farm at an undervalue to the Second Defendant;

(7)

in the premises, the tenancy agreement was a sham.

25.

Both the First Defendant and the Second Defendant knew at all material times that the agricultural tenancy was unenforceable and void as against Nat West and (following the sale) the Second Defendant.”

As appears from the above, the primary pleaded case was that the tenancy agreement had been a sham from inception. That case was rightly not pursued by Miss Lee in her closing submissions. She sought instead to argue that it had become a sham at least by the time at which it was surrendered, alternatively that it had been impliedly surrendered prior to that date. On behalf of the defendants Mr Jourdan objected that no case on implied surrender had been pleaded, and that the defendants had come to trial prepared only to deal with the case on sham as pleaded. In my judgment there is something, but not very much, in Mr Jourdan’s point. The proposition that a legal relationship, not initially a sham, has become a sham subsequently is possible if the reality of the matter is that the parties have agreed to abandon that relationship but to maintain to the outside world the appearance of its continued existence. In the case of a tenancy the reality of the abandonment can be established, and I think can only be established, by showing on the facts that there has been an express or implied surrender of the tenancy. Accordingly, to the extent that her pleading entitles her to argue that a sham emerged, she is entitled to argue that there was an implied surrender.

In Wilson –v- Hannah Blumenthal [1983] 1 AC 854 at p.914, Lord Brandon said:

“The concept of the implied abandonment of a contract as a result of the conduct of the parties to it is well established in law…. Where A seeks to prove that he and B have abandoned a contract in this way, there are two ways in which A can put his case. The first way is by showing that the conduct of each party, as evinced to the other party and acted on by him, leads necessarily to the inference of an implied agreement between them to abandon the contract. The second method is by showing that the conduct of B, as evinced towards A, has been such as to lead A reasonably to believe that B has abandoned the contract, even though it has not in fact been B's intention to do so, and that A has significantly altered his position in reliance on that belief. The first method involves actual abandonment by both A and B. The second method involves the creation by B of a situation in which he is estopped from asserting, as against A, that he, B, has not abandoned the contract.”

In the specific context of leases the recent authority of the Court of Appeal in Ealing Family Housing Association Ltd –v- McKenzie [2003] EWCA 1602 contains the following passages at paragraphs 14 and 15 of the judgment of Rimer J:

“[14] The essence of surrender by operation of law is thus dependent not on the parties' intention but on whether their acts give rise to an estoppel sufficient to prevent the assertion by either of them that the term of the tenancy had continued. In particular, a surrender cannot be effected by a mere oral agreement. As Brett LJ said in Oastler v Henderson (1877) 2 QBD 575, 579:

"There can be no estoppel by mere verbal agreement; there must be in addition to such agreement some act done which is inconsistent with the continuance of the lease. If after the agreement the landlord actually takes possession or does what virtually amounts to it, if he not only attempts to let, but actually does let, then there is a palpable act done with regard to the premises raising an estoppel . . ."

[15] The acts giving rise to such an estoppel will most commonly be the giving up by the tenant and the taking by the landlord of possession of the premises, although the estoppel may be created by other acts inconsistent with the continuance of the tenancy. A familiar example is the grant by the landlord and acceptance by the tenant of a new lease of the demised premises for a term commencing during the currency of the existing term. There would be an implied surrender of the current term in such a case because the landlord would have no estate enabling him to grant the new term unless the current term is regarded as having been impliedly surrendered immediately before the grant of the new one. ….”

In my judgment none of the matters pleaded in paragraph 24 of the Amended Particulars of Claim suffices, taken singularly or jointly, to establish a case of implied surrender. As to paragraph 24 (2), the non-payment of rent is explained by the exchange of letters on 1^st May 1997. That exchange necessarily has an artificial appearance given that it represented an agreement between KF acting on behalf of himself and Sarah on the one hand with the company which was owned by himself and Sarah on the other. That artificiality is, however, the result of the law allowing the concept of the one-man limited company. There is no reason to suppose that it was not an entirely genuine arrangement, although I find its purpose hard to discern. Having decided not to determine the tenancy (either as landlords by forfeiture or as owners of the company by notice to quit), but to leave it in place, it is not surprising that KF and Sarah took no steps to enforce its terms as alleged in paragraph 24(3). The fact that the insolvency of the company created an opportunity for KF and Sarah as landlords to determine the tenancy (an opportunity which they did not take) does not lead to the conclusion that they had accepted an implied surrender. The way in which the company’s accounts were drawn is inconsistent with such a conclusion. The fact that, as alleged in paragraph 24(5) the company ceased to trade and to farm the land as from 1997 is also not inconsistent with the continued existence of the tenancy. Sub-paragraph (6), which alleges that “the tenancy was maintained by [KF] purely as a device to depress the value of Hill Farm and to induce Nat West to sell the farm at an undervalue to [Miss Hawkins]” is no doubt true, but cannot by itself be relied on as a fact indicating that the tenancy had been impliedly surrendered: if anything it points the other way.

The position might well have been different had Defra pleaded and proved that the land had been let in the intervening periods to Garron or (in the case of the stabling and paddocks used by Miss Hawkins for her horses) to Miss Hawkins. That was not, however, pleaded. The evidence which emerged on the subject was, in any event, equivocal.

Accordingly, I do not find it possible to say that the tenancy had been impliedly surrendered. It was, however, an extremely fragile interest. The financial state of the company (as to which see paragraphs 46 and following below) meant that it was in no position to insist that it be kept alive for any appreciable period should the freeholder for the time being desire its termination. The only circumstance in which the tenancy potentially had an exploitable value as an asset of the company was one where the freeholder was contemplating a sale with vacant possession, and needed to be able to secure a surrender for the purpose of being able to give vacant possession. That this was correctly perceived by KF as being an asset of no significant value as an asset of the company is manifest from the fact that no attention was paid to the fact of the company’s potential position when the sale with vacant possession to the Nevchatals was being considered in the autumn of 2000. In cross-examination KF stated that the tenancy would have been released “..I presume, quite simply” (T 16.6.04 p.77). That was undoubtedly the case. Maintaining the existence of the tenancy in the context of the subsequent sale by NatWest was not done with a view to preserving an asset of the company but solely with a view to enticing NatWest to dispose of the property to Miss Hawkins at an undervalue.

So far as the mortgagee point is concerned, the facts concerning KF’s relationship with NatWest and its decision to sell Hill Farm to Miss Hawkins are as follows. On 21^st February 2001 KF had retained the services of a Mr Lovell, of Charles Lovell & Co, chartered accountants. In March 2001 he had a meeting with Mr Lovell at RDP’s offices at which Mr Lovell suggested that he seek the advice of insolvency specialists Poppleton & Appleby. It appears to have been Mr Terry Gumbley of the latter firm who suggested that the way forward was to propose to the bank that it should appoint him or his partner as LPA receivers to sell the property. The idea at this stage seems to have been that a “friendly” LPA receiver might sell the farm to Miss Hawkins subject to the tenancy, and that the family would either continue to farm it under the tenancy, or Miss Hawkins would sell it with vacant possession. There is an issue (to which I return below) as to whether a sale to the Nechvatals continued at this time to be a realistic possibility.

The proposal that the bank should appoint LPA receivers was put to Mr Dicks of NatWest (by that time in new ownership so that Mr Dicks was in fact an employee of Royal Bank of Scotland) at a meeting in late April or early May 2001, but he rejected it. He indicated that the bank would sell on the basis of two independent valuations from local valuers. He also indicated that, provided the valuations supported the sale price, it would not matter if the purchaser was a relative (“say, an aunty”) of KF.

On 15^th May 2001 KF wrote to Mr Dicks reiterating the proposal that NatWest should appoint an LPA receiver in the following terms:

“Further to our meeting, I am writing to you to set out our reasons for disposing of the farm via the use of an LPA receiver, and in particular, Poppleton & Appleby. These are as follows:

1.

Due to outbreak of foot and mouth, several farms in the area will be coming up for sale. I consider that it is important to achieve a sale quickly, as prices will probably be affected by the glut of sales.

2.

At present, the indications are that the value of the farm will settle the bank, pay the receivers and leave a small excess for the Intervention Board, about which you are aware.

3.

Currently, there is a buyer available, who will leave the tenancy in place, which will leave me earning a living, which is important to me.

4.

Such is our relationship with Poppleton and Appleby, we have confidence that they will deal with the transaction to the satisfaction of all parties, while avoiding any potential adverse publicity to the bank.

I look forward to hearing from you as soon as possible.”

On 8^th June 2001 KF, by now appreciating that NatWest was not going to appoint LPA receivers, wrote again to Mr Dicks a letter which included the following passages:

“When we visited your office four weeks ago it was to suggest a way of paying off the bank debt and also to leave my family and myself here as a tenant still with a viable business. As I explained to you there is a potential customer who has taken a liking to the farm, actually at present running a few horses here. They are interested in buying Hill Farm subject to the tenancy remaining in the company name and are happy to let us carry on living at Hill Farm renting the bulk of the land leaving them access to a small area of land and stables. I think I did write and inform Ian Cook of this very early on in the year.

Undue nationwide publicity at this stage, when our business is owed considerable money for our stock slaughtered here and in France because of the FMD, could spell the demise of our business as well as bringing unwanted publicity to the bank.

My legal advise from my family solicitor in Salisbury has been that the bank are able to sell under its mortgage by using at least two valuers who would put a correct valuation on the property for the bank taking into account the company tenancy and the remaining problems surrounding the FMD outbreak around here. The bank could then use these values to give instruction to a solicitor to sell to the interested party at what would then be the correct market price.

Two valuers of excellent reputation who did the valuation of Hill Farm for my divorce were Mr Gwyn Williams of Williams Parry Richards, Ross on Wye and Mr Robert Parry of G Herbert Banks, Worcester. Both know the farm intimately and could value the property again on behalf of the bank without falling foul of these (schedule A) FMD restriction, stopping people coming on to the farm. Robert Davies of Robert Davies Partnership whom as you know I used for the past year to try to sell Hill Farm without success, is a very competent solicitor. At present I understand he has the deeds and has done all necessary searches on the property and again with his knowledge of the farm could work for the bank probably a lot cheaper and a lot faster than another firm of solicitors who would have to start from scratch

…..I am mindful that when we advertised the farm nationally one year ago at considerable expense before the problems with the FMD we only found one customer whom as you know we have lost. I think we have been lucky to find a person who has stayed interested and would be prepared to purchase Hill Farm and effectively relieve RBS of the debt and I do not want to lose this client. All I want to do is get the bank cleared secure a home and a future for my family by keeping our business going and would only ask that we move towards this end as soon as is practically possible. Several valuable weeks have already passed by since I first came to Birmingham and we are aware that other properties are coming onto the market most of which do not have any restrictive problems with FMD.”

On 14^th June 2001, Mr Dicks wrote to KF. He said that he had instructed Hammond Suddards Edge (“HSE”) to act for the bank (thus rejecting KF’s suggestion that RDP should act) and would arrange valuations on a tenanted basis and then proceed with the sale. On 15^th June 2001, HSE wrote to D1 setting out the procedure that the bank proposed to take, saying that the bank would sell pursuant to the power for sale to a purchaser to be introduced by KF. It was envisaged that the farm would be sold subject to an existing tenancy, but the letter reserved the bank’s position as to whether any existing tenancy bound it.

By a letter dated 25^th June 2001 Miss Hawkins then introduced herself to HSE “as the client who is prepared to purchase Hill Farm”, informing them that she proposed to use RDP as her solicitors, and saying:

“I am prepared to purchase Hill Farm with the tenancy staying in place so that Mr Feakins can continue running his business from there. I have had the benefit of knowing the farm and its problems for some time now and have taken advice on the price that I shall offer. I am prepared to pay £450,000 for Hill Farm as it stands today. That price reflects on the company tenancy that exists on the farm and the problems with the Foot & Mouth disease. That money is available without the necessity of having to sell any properties”

It is far from clear that at that date Miss Hawkins did have the necessary money available. What is clear is that at least from a date very shortly afterwards what was in contemplation by KF and Miss Hawkins was that the purchase from NatWest would be followed by a sale by her to the Nevchatals: a manuscript note addressed by KF to RDP, made on a letter dated 3^rd July from HSE to KF, instructed RDP that

“you will need to draw up a legal document for [the company] to give up the tenancy when you sell from [Miss Hawkins] to [the Nevchatals].”

Moreover, in the course of July, in connection with Miss Hawkins’ (in the event unsuccessful) attempts to obtain bridging finance from Barclays, RDP was able to confirm to Barclays that the purchase and sale would be simultaneous. It is further clear (from correspondence between RDP and the Nevchatals’ solicitors Shawcross & Co in August and September) that the contemplation throughout was that the tenancy would be surrendered immediately following Miss Hawkins’ purchase in anticipation of the completion of the sale with vacant possession to the Nevchatals.

Two valuations of Hill Farm were then obtained by NatWest on the basis that an agricultural tenancy was in place. G Herbert Banks submitted a valuation on 10th July 2001 valuing the property (but not the house) subject to an agricultural tenancy at £516,000. The valuation made favourable comments about the repair and condition of the property. The valuer concluded that the property would “attract a reasonable level of interest if placed on the open market”, that inquiries for such properties were forthcoming on a regular basis, and that it would take no more than four months of marketing to achieve the best prices”. G Herbert Banks sent a revised valuation to Mr Dicks at the Bank on 13th July 2001 on the basis that the farmhouse was included within the agricultural tenancy, lowering the value to £455,000.

Williams Parry Richards submitted a valuation on 11 July 2001. The value placed on the property by Mr (Gwyn) Williams subject to the tenancy was £450,000.

The bank appears to have relied on these valuations in entering into the contract of sale to Miss Hawkins on 2^nd October 2001 for £450,000 subject to the tenancy, which sale was completed on the following day. In the event she was able to do so as a result of a loan made to her by Robin Feakins on commercial terms. Miss Hawkins exchanged contracts on the same day (3^rd October) for the sale of the farm with vacant possession to the Nevchatals for £1.03m. For a stated consideration of £1 the company (acting by KF’s daughters who had by this time been appointed directors) then (on 5^th October) surrendered the tenancy, thus putting Miss Hawkins in a position to complete her sale to the Nevchatals.

From the foregoing it is clear that KF was prepared to lie if necessary in order to persuade the bank to sell to Miss Hawkins, failing to reveal in his letter dated 25^th June that “the potential customer” was soon to be his wife, and claiming falsely that the property had been expensively marketed in the previous autumn. There are also substantial reasons to doubt whether by that time there was any real intention that he and his family should continue to farm the land. On 23^rd June 2001 the Nechvatals had shown a renewed interest in purchasing the farm and had visited it (despite the fact that it remained an IP), prompted to do so by a telephone call from Mr R B Williams of Williams Parry Richards (whom I was asked to believe had acted on his own initiative in inviting their renewed interest). Shortly afterwards they had signalled their willingness to proceed with the purchase at the price which they had agreed the previous autumn. I think it more probable than not that both KF and Miss Hawkins were of a mind by 25^th June 2001 that a sale to the Nechvatals was very much on the cards.

That said, the fact remains that it was the bank which made its own decision to sell to Miss Hawkins subject to the tenancy. That sale suited KF and Miss Hawkins very well: there can be no doubt that their purpose was to get Hill Farm into Miss Hawkins’ name, out of the reach of Defra as a secured creditor of KF, and to enable the vacant possession value to be realised in Miss Hawkins’ hands. The key legal issue, in my judgment, is whether it can be said to have been a “transaction” arrangement into which KF “entered” in any relevant sense, both words having the extended meaning given to them by section 436.

On behalf of the defendants Mr Jourdan submitted that this issue should be decided in their favour, relying on the decision of Jonathan Parker J, as he then was, in Re Brabon [2001] 1 BCLC 11. In that case Mr Brabon contracted to sell land to a company, Silver. Between contract and completion he was made bankrupt. His wife, who held mortgages over the relevant land, completed the sales as mortgagee. The trustee in bankruptcy argued that the sales had been “entered into” by Mr Brabon for the purposes of s.339 of the Insolvency Act 1986. Jonathan Parker J as he then was held that the relevant transactions were the completion of the sales, and that (at p. 34)

“[on] the plain words of the sub-section…the words ‘entered into’ by the bankrupt do not extend to a transfer by way of sale not by the bankrupt but by the bankrupt’s mortgagee.”

On behalf of Defra, Miss Lee submitted that Re Brabon was distinguishable. She pointed out that in that case the purchaser, Silver, was a bona fide purchaser from the mortgagee (see page 38a-b of the judgment) and the transaction in that case had not been calculated to confer any advantage or benefit on the debtor. I agree that there are those distinctions and that they are relevant ones. In that case the only “transaction” under attack was the sale by the mortgagee.

Miss Lee further submitted, and I accept, that given the purpose of s. 423 “the court should not strain to narrow the definition [of “transaction” in section 436] by judicial decision”: the quotation is from the judgment of Morritt LJ in Phillips v Brewin Dolphin Bell Lawrie Ltd [1999] 1 BCLC 714 at para 19. The question is what word one can read instead of “entering into”, in conjunction with “arrangement”, which aptly characterises KF’s conduct in relation to the sale and subsequent surrender?

The answer, in my judgment, is that it is permissible as a matter of statutory construction, and entirely consonant with the purpose of the section, to read “enter into a transaction” as “participate in an arrangement”, and to ask whether KF participated in the arrangement. That was not a question which had to be addressed in Re Brabon. The “arrangement” here whereby the asset was transferred at an undervalue consisted, in my judgment, of an agreement between KF and Miss Hawkins whereby they agreed that KF would introduce Miss Hawkins to NatWest as a potential purchaser subject to the tenancy but with KF’s commitment in advance to procure a surrender of the tenancy if and when NatWest took the bait. Miss Hawkins’ ability to purchase from NatWest was dependent on the existence of that prior commitment (since the only finance available to her was finance premised on a subsequent sale with vacant possession to the Nevchatals), and fulfilment of that prior commitment was the means by which value in excess of the £450,000 paid by her was effectively gifted to her. If that is the correct identification of the “arrangement”, then, subject to what there may be in the “company point”, I do not think that there is any difficulty in saying that KF participated in it: his ability to commit in advance to, and subsequently to procure, a surrender of the tenancy was central to it.

Mr Jourdan submitted that no such analysis of the transactions was possible. He submitted, first, that only two transactions could be identified, namely the sale by NatWest to Miss Hawkins and the surrender by the company of the tenancy to Miss Hawkins, secondly that KF was not a party to either of them, and, thirdly, that in any event it was not permissible to treat them together as one transaction for the purposes of applying section 423. As to the first two submissions I have already indicated why I regard the relevant arrangement as having encompassed more than the two individual transactions, and the way in which KF participated in that arrangement. In support of the third proposition Mr Jourdan sought support from the decision of the Court of Appeal in National Westminster Bank v Jones [2001] EWCA Civ 1541, [2002] 1 BCLC 55. In that case, farmers were advised to incorporate a company, and then grant a tenancy and transfer the farming assets to the company, in order to try and prevent the bank from obtaining possession of the farm. They followed that advice. The company was incorporated with the shares beneficially owned by the farmers. Two weeks later a tenancy was granted to the company and the farming assets sold to it. The bank applied to set aside the tenancy and sale under s.423. The farmers argued that the incorporation of the company and the tenancy and sale were a single transaction. As they owned the shares in the company, if the tenancy or sale were at an undervalue, the effect would be to increase the value of the shares, so that overall, the value of the consideration received by them was not significantly less than the value of the tenancy and assets to the company. Thus (so the argument ran) there was, looking at the matter in the round, no “transaction at an undervalue”. At first instance Neuberger J rejected that argument, holding that the acquisition of the company could not be said to be “part of the ‘transaction’ under consideration in the present case….not least because it was entered into between the defendants and third parties and related to the company as the subject matter of that transaction” (see [2001] 1 BCLC 98 at para 72). His decision was upheld in the Court of Appeal, but on the simpler basis that it was the sale and the tenancy which had been entered into by the defendants for the purposes of putting assets beyond the reach of the bank, and they were therefore the relevant transactions to be considered (see paragraph 26 of the Court of Appeal judgment). Nothing in the case can be read as authority for the proposition that it is impossible under section 423 to regard two or more linked transactions as one. On the contrary, if the reason behind the linkage of two or more individual transactions is to achieve by that means the object which the section is designed to frustrate, that may itself in my judgment be a justification for treating them as one composite arrangement for the purposes of the section.

I turn therefore to consider the company point, beginning with some relevant findings of fact in relation to the ownership and control of the company.

Following the conclusion of his divorce proceedings against Sarah in June 2000 the shareholdings in the company were held as to 90% by KF and as to the remaining 10% by his son Matthew. By that date it was (as it had been since 1997) hopelessly insolvent. Its balance sheet as at 31^st March 2000 (not in fact signed off until 10^th January 2001) showed current assets of £228,508 and creditors of £648,199. Of those creditors some £225,000 consisted of indebtedness to NatWest secured by KF’s guarantee. The assets represented the amount owed by KF to the company following the transfer to him of its assets and stock in the year ended 31^st March 1998. The shares in the company were accordingly plainly worthless.

At some point prior to 1^st August 2001, KF appears to have transferred his shareholding in the company to his daughters Kathleen and Charlotte, both of whom were then students. It is not clear when the shares were transferred, or why. As to the timing, no share transfers have been disclosed. The only evidence consists of an Annual Return form apparently signed on 1^st August 2001 recording 40 shares as having been transferred to Charlotte and 50 to Kathleen on 1^st September 2000. It seems doubtful however whether that return was ever made in the form in which it has been produced to me, since the form supplied by Companies House for completion the following year continued to show KF as holding 90 shares. However that may be the case before me has proceeded on the footing that the shares had been transferred by 1^st August 2001. The exact date is not important save insofar as establishing it may assist in tracing the evolution of KF’s thinking, and the advice which he received, in relation to a possible transfer of Hill Farm subject to the tenancy enjoyed by company. KF himself admits to have been considering various options in relation to this in the autumn of 2000, as indeed must be the case having regard to the letter sent to IBAP on 15^th November 2000. It seems probable that it was at this stage that it seemed expedient for KF to transfer the shares in the company to the daughters, and possible that he had already done so by the time the letter dated 15^th November 2000 came to be written: that would explain why in that letter RDP describe the tenant company as “effectively controlled” by KF. Mr Lovell gave some evidence, not altogether satisfactory, as to having been instructed in the following year to provide share transfers, but the explanation for that may have been (as he himself suggested) that there was uncertainty as to whether the previous accountants (Martin & Co.) had completed the documentation.

Given the insolvency of the company, I cannot see that there was any purpose in transferring the shares to the daughters except as part of a scheme to insulate the company from any association with KF (who faced bankruptcy) and to enable the company to assert the apparent tenancy at an appropriate moment as against both himself (as owner of Hill Farm) and NatWest (as a mortgagee bound by the tenancy) and thereafter, having achieved the purpose of a sale to Miss Hawkins, to surrender it.

As already indicated (see paragraph 28 above) the only way in which the company could, if at all, benefit from the existence of the tenancy was by cooperating with the vendor of the freehold of Hill Farm in realising the vacant possession price in exchange for a share of the marriage value, but this was never perceived as in fact being an asset of any significant value to the company. The reality is that the tenancy was throughout treated by KF as an asset disposable of by him for his own (and in the final play for Miss Hawkins’) benefit.

I heard evidence from both Kathleen (by video link from Australia where she now works as a portfolio manager) and from Charlotte who is a beauty therapist. Neither could remember much about why the shares had been transferred to them or when. Nor did either of them have a satisfactory explanation as to why they were appointed directors of the company on 1^st August 2001, how they came to be described as farmers in the annual returns, or what their thinking had been, as directors, in relation to the surrender of the tenancy in favour of their recently acquired stepmother for a consideration of £1 on 5^th October 2001. It is as plain as can be that their role in all these matters was simply to do their father’s bidding, a role which they dutifully performed. They cannot be criticised for any lack of filial loyalty.

Accordingly, I have no difficulty in holding that it was KF who procured the company to execute the surrender.

Those findings are, in my judgment, sufficient for me to be able to conclude that KF participated in an arrangement whereby his assets were transferred to Miss Hawkins at an undervalue and that he did so with the relevant purpose. That conclusion does not involve a piercing of the corporate veil of the company, although Miss Lee sought to persuade me that this was an appropriate case in which to pierce the corporate veil of the company, reliance being placed on Trustor –v- Smallbone (No. 2) [2001] 1 WLR 1177, and in particular the passage in the judgment of Sir Andrew Morritt V-C at paragraph 23 where he said:

“In my judgment the court is entitled to ‘pierce the corporate veil’ and recognise the receipt of the company as that of the individual(s) in control of it if the company was used as a device or facade to conceal the true facts thereby avoiding or concealing any liability of those individual(s).”

I was not, however, persuaded that such an approach is possible here. Insofar as the company (and its ownership of the tenancy) was being used as a device to achieve anything it was to persuade NatWest and its valuers that the company’s ownership of the tenancy justified a sale of the freehold for £450,000. I remain surprised that it was so persuaded since it knew (or at least had the means of knowing) what the financial state of the company was, and can be assumed to have known that KF controlled the company. All that it may not have known was the fact of KF’s commitment to Miss Hawkins to procure a surrender of the tenancy in her favour once the sale went through. I cannot however see that this allows one to say that the company was being used as a device to conceal the true facts.

On behalf of the defendants Mr Jourdan sought to maintain a “last ditch” position to the effect that the sale to Miss Hawkins for £450,000 was not a transaction at an undervalue even if one assumes the sale to have been with vacant possession. For this purpose, he argued that in addition to the £450,000 which she had paid she should be treated as having released rent arrears (calculated as £112,500) and the right to future rental until the earliest date when the tenancy could have been terminated (which he put at £31,250). He pointed out that there was in fact no valuation evidence before the court of the value of the farm as at 5^th October 2001. The agreed valuation at 30^th November 2001 on the basis of the defendants’ evidence as to contamination risks being accepted was £675,000. No reliance could be placed on the price agreed to be paid by the Nechvatals since, in the event, they did not proceed with the purchase.

In my judgment the premise that Miss Hawkins was contributing anything by releasing the rent arrears is flawed. Given the hopeless insolvency of the company, the value of its covenant either in respect of past or future rent was nil. Accordingly, even if Hill Farm with vacant possession was worth no more than £675,000, it was worth significantly more than Miss Hawkins paid for it.

As an alternative to its claim under section 423, Defra sought to maintain a case that, in purchasing the property, Miss Hawkins was at all times acting as the bare nominee of KF, and accordingly holds it on trust for him. The matters relied on were (1) the fact that Robin Feakins’ loan is likely to have been motivated by a desire to help his brother rather than Miss Hawkins (2) that the surrender of the tenancy was effected either by KF or his daughters, again more likely to have been motivated by a desire to further KF’s than Miss Hawkins’ interests and (3) that it was likely that, having achieved the purpose of avoiding Defra’s judgment debt, the intention was that KF would enjoy the fruits of the exercise. I did not find this convincing. So far as Robin Feakins’ loan was concerned it was made on commercial terms, and Miss Hawkins accepted its risk. Having married KF she no doubt wanted to help him, but the only way she could effectively do so (if the scheme worked) was to become the beneficial owner of the salvaged asset and, while that is not itself a reason for inferring that as having been the intention of all concerned, there is no real basis for drawing any other inference.

In my judgment Defra’s claim under section 423 succeeds and it is entitled to an order which restores its position to what it would have been had the transaction not been entered into. As at present advised, an order which has the effect of charging Miss Hawkins’ freehold interest with the amount previously secured by IBAP’s charging order would appear to be the correct solution: I understand that it is common ground between the parties that Robin Feakins’ charge would have priority in that event. It may, however, be argued that some other order would be more appropriate and I will hear further argument on this. In that connection I am open to persuasion that an order should also seek to reverse that part of the arrangement which consisted of the surrender by the company: amongst the consequences of so ordering would be to enable the creditors of the company to derive what advantage they might be able to negotiate from the technical existence of the tenancy and to claim any user damages in respect of trespasses by Defra during the intervening period.

The first case of FMD in the UK in the 2001 epidemic was identified and confirmed on 20^th February 2001. FMD is a highly infectious disease with a very short incubation period. The strain of FMD virus involved in the 2001 outbreak was exceptionally virulent. The epidemic was to prove unprecedented in its scale and its effects were catastrophic. By the end of the year some four million animals had been slaughtered in consequence.

On 25^th February animals from an FMD infected premises were traced to Hill Farm. A MAFF Veterinary Officer, Sylvia Wilson arrived at Hill Farm and imposed livestock movement restrictions by use of a Form D under Article 13 of the Foot and Mouth Disease Order 1983 (1983 SI 1950) (“the 1983 Order”). On the following day, she diagnosed FMD in animals at the farm, which was then declared to be an “infected place” (“IP”) by use of Form A (see Article 5 of the 1983 Order) and served a Form C (see Article 7 of the 1983 Order).

Slaughtering of animals commenced that day, and by the end of the following day was complete. In all 937 animals were slaughtered. 46 of them were calves belonging to a Mr Hendy which were being contract reared by Miss Hawkins in certain of the sheds at the farm. 32 were cattle belonging to a Mr Pugh which were kept in what was known as the Lowther Shed. 544 were sheep owned by Mr Watkins who was renting the field known as the roots field for them. The remainder (200 cattle and 115 sheep) belonged to Garron.

The procedures being followed by Sylvia Wilson were those set out in the Veterinary Instruction Procedures and Emergency Routines Manual (“VIPER”). VIPER required the animals to be slaughtered by captive bolt as the weapon of choice and “pithing”. Pithing involves the insertion of a flexible metal rod into the hole left in the animal’s head by the captive bolt, and so manipulating it as to ensure lethal damage to the cerebellum. There was a conflict in the written evidence as to whether pithing had taken place. The relevance lies in the degree of risk that the process of slaughter will result in the dissemination of “specified risk material” (“SRM”) either into the animal’s blood stream or into the immediate environment by seepage. (It is relevant to note that Article 5 of the TSE Decision (see paragraph 120 below) enjoined Member States to ensure that pithing was not used from 31^st December 2000). In the event, the experts (Mr Comer and Professor Duffus) were agreed that there was no evidence that pithing materially increased the risk of seepage from the wound into the immediate environment, and I therefore do not need to consider this point further.

The slaughter took place in a shed known as the Harlow Shed, the floor of which consisted of a layer of straw bedding over a surface of stone scalpings.

VIPER requires that the head and feet of every affected animal must be wrapped in polythene bags after slaughter. On the evidence this procedure was followed in the case of the 8 sheep and 2 cows slaughtered on 26^th February, but was not thereafter followed. The purpose of such bagging is to prevent FMD infected material from being spread. There was no evidence that the failure to bag had led to any increased risk of dissemination of SRM. Accordingly, no further consideration is given in this judgment to this aspect of the slaughter procedure.

VIPER provided that “carcases should be disposed of by the most expeditious means available and except in rare cases (see paragraph L12 below) they must be disposed of on the Infected Premises. Two methods are available under the Animal By-Products (Amendment) Order 1997 – burial or cremation, and the preferences should normally be for burial”. In this case an early decision was made to cremate.

Decisions had to be made about where to build the cremation pyre, where to bury the resulting ash, and how to deal with the run-off from the extensive cleaning and disinfecting (C&D) operation which was to ensue. A site for the pyre was identified on 27^th February with the assistance of Mr Simon Neale, a Hydrological Technical Advisor from the Environment Agency in the field (OS 0663) hereafter described as “the pyre field”. On the same day the Environment Agency issued an authorisation under Regulation 18(3)(a) of the Groundwater Regulations 1998 (“the Groundwater Regulations”) for the disposal of “the burnt remains of animal carcases by burial” at the chosen location.

On 28^th February, Mr Paul Brisbourne, a MAFF Animal Health Officer, arrived to supervise the construction of the pyre. It was lit in the evening of the following day. The MAFF team at the farm were joined on 1^st March by Mr Stephen Bell, an employee of ADAS Ltd (a consultancy and research organisation comprising the privatised former research and advisory service of MAFF). It was Mr Bell’s function to supervise the C&D operation, which was to be carried out by contractors, John Doyle (Midlands) Limited (“JDM”).

By 4^th March the C&D operation was getting under way. The weather was extremely wet. A decision was made, in consultation with KF, to construct a lagoon (“the Lagoon”) in the field below the buildings (OS 3135 “the root field”) to catch the effluent from the C&D operation. The Lagoon was lined with a silage sheet and tarpaulin supplied by KF. Thereafter the Lagoon was periodically pumped out and its contents dispersed on the root field. There is an issue as to whether the Lagoon was adequately lined. In addition to the C&D effluent, the contents of the sheep dip were disposed of in the Lagoon.

A decision was also taken during March to excavate a further pit for the disposal of general “rubbish” from the C&D operations on the farm. That pit (“the C&D pit”) was excavated near to the intended burial place for the ash (“the Ash Pit”) in the pyre field. The C&D pit was initially excavated on 6^th March and extended on 21^st March. There is an issue as to what went into the C&D pit. Mr Bell’s evidence was that it was a receptacle only for “metal fittings (gates, hurdles, etc.) plastics and a small amount of animal feed including mineral blocks”. The defendants’ case is that a wide variety of potentially toxic materials were buried there.

The Ash Pit was excavated on about 27^th March, and the remains of the pyre buried in it on 30^th March. There are issues as to how well the pyre had burned and whether matter other than ash was buried in the ash pit.

Also in late March steps had been taken to fumigate the tack room which formed part of the stable block where Miss Hawkins kept some of her horses. It is alleged that the method chosen resulted in damage to the contents of the tack room. This is the subject-matter of what is in a number of respects a distinct claim by Miss Hawkins (“the saddlery claim”).

There was a hiatus in the C&D operation between the end of March and the beginning of June. This was the result of indecision as to the steps to be taken in relation to one of the Harlow sheds which was thought unsafe to be entered by the contractors. That problem resolved, the operation resumed. An issue, which then fell to be decided, was what to do with the farmyard muck heap (“the FYM”). The FYM had originally been situated just north of the farmyard and to the west of the track leading to Llancloudy (OS 9324). At the beginning of March that site had been originally selected as suitable for a lagoon. The muckheap had therefore been moved under Defra’s direction to a new location in the pyre field. Later there was added to it all the muck and scalpings which had been removed from the buildings.

In June the FYM, now comprising both the original muck heap and the scrapings, etc, from the buildings, was dealt with by transporting the latter to a new location between the farm buildings and the Lagoon where it was spread and covered in a metre of topsoil, thus creating a raised area (“the Raised Area”).

On 16^th July 2001 a Form 7 Certificate of Disinfection was signed. On the same day MAFF served notices under Article 38 of the Foot and Mouth Disease Order 1983 prohibiting the emptying of the Lagoon or the movement of the FYM without an inspector’s licence. Forms E and B (withdrawing the Form D and Form A respectively) were not given until 19^th November 2001. By that time the defendants were in substantial dispute with Defra over claims for re-instatement of the farm and in respect of the saddlery. Defra made an offer on 1^st October 2001 to pay the cost (£820.00) of a contractor to reinstate the lagoon area, but the offer was declined (as KF, to whom it was made, did not wish at that stage to accept that nothing more was required in relation to the Lagoon other than its reinstatement, a reluctance which was fortified by his subsequent receipt of the Fieldfare report).

It is not difficult to imagine the distress which these events caused the defendants and KF in particular: the horror of the slaughter process, the impotence in the face of the loss of his business, and their confinement to the premises for an extended period were in themselves likely to be traumatising. Unlike other farmers who suffered similar experiences, KF had further grounds for complaint and resentment against Defra. He was labouring under the shadow of what he perceived to be the unfair IBAP judgment. Press reports in March 2001 identified him (apparently with Defra’s encouragement) as the farmer responsible for having exported FMD to France. The C&D operation took far longer than it might have done as a result of the indecision (on Defra’s part) in relation to the Harlow shed (see paragraph 71 above). He found himself in dispute with Defra over Garron’s entitlement to be paid for work done under Mrs Wilson’s authority. Later, Garron’s claim for compensation in relation to the slaughtered animals was only settled to Garron’s satisfaction by arbitration. His perception was that JMD’s operations had resulted in what he described as a “trashing” of the farm. To some extent his strong feelings of resentment against Defra coloured his evidence.

The defendants’ claims are claims for the most part in trespass. They are founded on the proposition that MAFF had no power:

It is claimed that the trespasses in connection with the Ash Pit, the C&D Pit and the Lagoon have caused a risk of pollution which diminished the value of the farm as at 30^th November 2001 by £425,000. Damages are also sought for use of the farm and orders sought for removal of the allegedly trespassing material.

In addition the defendants claim some £150,000 for damage done to the roads and buildings at Hill Farm. The claims under this head have been ordered to be tried separately and I do not further consider them.

On the first day of the trial Defra conceded that it had seized the FYM. That concession was in the following limited terms:

“1.

Defra acknowledges in light of all the evidence that, in this case, it (or its servants or agents) did seize the FYM at Hill Farm, in or about end of February 2001;

2.

Defra is prepared (as it has already stated in open correspondence) to take the unburied part of that FYM (and everything it is inextricably mixed up with) away from Hill Farm, at its own expense;

3.

Defra is prepared to pay a reasonable amount as compensation for the value of the unburied FYM as at end February 2001;

4.

Any such amount, to be assessed, is to be set off against the judgment debt.

5.

For the avoidance of doubt:

a.

Defra accepts no other liability in relation to the unburied FYM;

b.

continues not to accept any liability of any kind in respect of the FYM which (on Defra’s case) was buried by Kevin Feakins and so used by him to construct the Raised Area.”

That concession was made against the background of an offer made by Defra dated 24^th May 2004 that it would remove the (by then excavated) contents of the C&D Pit and the FYM from the farm and would fill in the Lagoon.

A large number of issues have been ventilated in connection with these claims. The defendants on the eve of the trial were able to identify 74 such issues. In the course of the trial I heard evidence from over 30 witnesses of fact. I also heard expert evidence on Transmissible Spongiform Encephalitis (“TSE”), on hydrogeology, and on valuation. In addition there were some 6 witness statements admitted without the need for oral evidence and a report by a jointly appointed expert on saddlery. At the heart of the case, however, lies an issue of law. Did Defra have the statutory authority to do all or any of the things of which complaint is made?

Defra submits that the necessary statutory authority is to be found either expressly or by necessary implication in the Animal Health Act 1981 (as amended by the Animal Health & Welfare Act 1984) and subordinate legislation made under it. There is no controversy as to the power to slaughter, which is contained in section 32 of the 1981 Act. The issues which arise are as to the existence of

The relevant express powers can be found in the legislation. Under s.34 of the AHA 1981:

“(2)

Where an animal has been slaughtered under this Act at the Minister's direction, the carcase of the animal shall belong to the Minister and shall be buried, or sold, or otherwise disposed of by him, or as he directs, as the condition of the animal or carcase and other circumstances may require or admit…

…

“(4)

Where an animal has been slaughtered under this Act at the Minister's direction, he may use for the burial of the carcase any ground in the possession or occupation of the owner of the animal and suitable in that behalf, or any common or unenclosed land”

S.35(1) AHA 1981, as amended by section 1(1) of the Animal Health and Welfare Act 1984, provided:

“The Ministers may by order make such provision—

(a)

for the seizure of anything, whether animate or inanimate, by or by means of which it appears to them that any disease to which this subsection applies might be carried or transmitted, and

(b)

for the destruction, burial, disposal or treatment of anything seized under the order,

as they may think expedient for preventing the spread of any such disease”.

FMD is one of the diseases to which s.35(1) applies: s.35(2).

One order made under s.35 (and under all other enabling powers, which includes the general power conferred by section 1) is the Diseases of Animals (Seizure) Order 1993, SI 1993 no. 1685. Paragraph 2 provides:

“(1)

An inspector or veterinary inspector shall have power to seize anything (other than a live animal) whether animate or inanimate, by or by means of which it appears to him that a disease to which section 35(1) of the Animal Health Act 1981 applies might be carried or transmitted.

(2)

An inspector or veterinary inspector exercising powers under this Order shall dispose of the thing seized by destruction, burial, treatment or such other method of disposal as he thinks expedient to prevent the spread of disease”.

The relevant provisions in relation to powers to clean and disinfect are contained in the Foot and Mouth Disease Order 1983, 1983 SI 1950. The following are material:

“ Article 9 Rules to be observed in an infected place (1) Any premises declared to be an infected place by a notice in Form A served under Article 5 above, and any person who is from time to time on those premises, shall be subject to the following rules, namely:—

Rule 1 No person shall move into or out of the infected place, or cause or permit to be so moved, any animal, animal product, fodder, litter, dung, slurry, utensil, pen, hurdle, vehicle or other thing, except under authority of a licence granted by a veterinary inspector and in accordance with such conditions as may be specified therein

Rule 2. The owner or occupier of the infected place shall—

(a)

on confirmation of disease, erect and maintain in a conspicuous place at the main entrance thereof an infected place notice supplied by the Ministry;

(b)

thoroughly disinfect, to the satisfaction of a veterinary inspector, any slurry or shed washings before permitting them to drain or escape from any part of the infected place in which an affected or suspected animal is kept or has recently been kept;

(c)

maintain a footbath containing an approved disinfectant in some convenient place at the exist from the infected place, and renew the disinfectant daily and whenever so directed by an inspector;

(d)

destroy, so far as he is able, any rats in the infected place; and

(e)

if required by an inspector, confine any animal on the infected place and, in any event, ensure that any animal in the infected place does not stray therefrom.

For the purposes of this sub-paragraph “animal” means any kind of four-footed beast.

Rule 3 No person shall enter or leave the infected place except under the authority of a licence granted by an inspector of the Minister, and in accordance with such conditions as may be specified therein.

Rule 4. No person shall—

(a)

enter any shed, field or other part of the infected place in which an affected or a suspected animal or carcase is kept or has recently been kept, unless he is wearing overall clothing and boots which are capable of being disinfected and which have been approved by an inspector; or

(b)

leave any such shed, field or other part of the infected place without first having thoroughly cleansed and disinfected his overall clothing, boots and hands.

Rule 5. Any veterinary surgeon or other person employed by the owner or occupier of the infected place to attend or treat any animal or poultry in any part of the infected place shall—

(a)

before entering the infected place, put on suitable overall clothing and boots made of rubber or other material impervious to liquid; and

(b)

before leaving the infected place, thoroughly cleanse and disinfect his overall clothing, boots and hands;

For the purpose of this rule, “animal” means any kind of four-footed beast.

Rule 6. Where an inspector so directs, a person shall, before leaving any shed, field or other part of the infected place in which an affected or a suspected animal or carcase is kept or has recently been kept, take off and leave his overall clothing, and thoroughly cleanse and disinfect his boots and hands.

(2)

A veterinary inspector may by notice in writing served on the occupier of the infected place direct that—

(a)

such additional rules as may be specified in the notice shall apply to the infected place….”

“Article 11 Cleansing and disinfection of premises

“A veterinary inspector may, by notice in writing served on the occupier of any premises in which an affected or suspected animal, or the carcase of such an animal, is being kept, or on which it has been kept at any time during the period of 56 days immediately preceding the date on which it is discovered to be an affected or suspected animal or the carcase of such an animal, require him to cleanse and disinfect such premises at his own expense or at the expense of the Minister in accordance with such of the provisions of paragraphs 1 and 2 of Schedule 2 to this order are specified in the notice, or in such other manner as may be specified in the notice, and within such time as may be so specified.” (emphasis added)

“Article 12 Cleansing and disinfection of vehicles

Where a vehicle—

(a)

is used or has at any time during the previous 56 days been used for the carriage of an affected or suspected animal, or the carcase of such an animal; or

(b)

is used for the carriage of any embryo, ovum, semen, litter, straw or other thing which has been on any premises on which there has been an affected or suspected animal, or the carcase of such an animal, during the previous 56 days,

an inspector may by notice in writing served on the owner or person in charge of the vehicle require him, as soon as practicable and before any animal or carcase or any fodder, litter or thing intended to be used in connection with, or for or about any animal is loaded therein—

(i)

to cleanse and disinfect the vehicle, and

(ii)

to cleanse and disinfect any apparatus or thing used in connection with the loading of an affected or suspected animal, or the carcase of such an animal, into, its unloading out of or carriage in, the vehicle,

in accordance with such of the provisions of paragraph 3 of Schedule 2 to this order as are specified in the notice, or in such other manner as may be specified in the notice and within such time as may be so specified.”

Article 40 Powers of Ministry officers and inspectors of local authorities in case of default

Schedule 2 of the Foot and Mouth Disease Order 1983 provides: -

“1.

Where under this Order premises are required to be cleansed and disinfected, such cleansing and disinfection shall be carried out in the following manner, that is to say –

(a)

the whole of the premises including the fittings shall first be thoroughly wetted with an approved disinfectant;

(b)

all dung, excretions and other discharges shall be removed from the walls, fittings and floors and the premises shall then be swept out. The sweepings and all other litter, dung, or other things which have been in contact with, or used about, any animal, shall be effectively moved therefrom and shall forthwith be burnt or thoroughly saturated with an approved disinfectant and effectively moved from contact with animals; then

(c)

the whole of the premises including the fittings shall again be thoroughly wetted with approved disinfectant.

2.

In the case of a field or other open space not capable of being treated in the foregoing manner, cleansing and disinfection shall be carried out so far as is practicable to the satisfaction of a veterinary inspector of the Minister.”

The 1981 Act makes specific provision for compensation for animals slaughtered (see Schedule 3 paragraph 3(2)). Pursuant to that provision Garron was paid some £72,000 (later increased at arbitration to some £100,000). Compensation is also payable under section 36 in respect of items destroyed or seized.

No claim is made by the defendants based on the proposition that there was no power to burn the carcases on the farm. It was, however, argued on their behalf that that was the strict position in law. The argument was based on the simple proposition that no such power is expressly conferred by the 1981 Act or by any of the subordinate legislation.

The point arose for express decision in R v. Secretary of State for Environment Food and Rural Affairs, ex parte Dixon [2002] EWHC 831 (Admin) (judgment of 10 April 2002). The issue in that case was whether Defra was obliged to pay Mr Dixon for the use of land on which cattle belonging to him had been burnt and buried in the course of the 2001 FMD outbreak. It was argued on Mr Dixon’s behalf (1) that there was no power to use his land for burning and burial and (2) alternatively, any implied power in that behalf was subject to a condition that compensation should be payable. Mr Jack Beatson QC (as he then was) rejected both arguments, holding (1) that the necessary power could be implied under section 34(4) and (2) that the detailed express provisions for compensation made in the Act for compensation precluded the implication of the condition contended for by the claimant.

In relation to the first point Mr Beatson said:

“..I accept the defendant’s submission on the interpretation of section 34(4), in particular in the context of severe restrictions on the rights of owners of land affected by foot and mouth and the provisions of the statute to control diseases in as expeditious manner as possible. The illogicality and undesirable result that would result from denying a power to burn when there is power to bury leads me to the conclusion that, although no doubt with hindsight the statute could have been clearer, the whole purpose and structure of the statute and the aim of allowing efficient and expeditious treatment of widespread disease justify such an implication as a necessity on the test as set out by Lord Lowry in McCarthy & Stone [Developments Ltd v. Richmond upon Thames LBC [1992] 2 AC 48]

…The regulatory and other constraints imposed under the 1981 Act are very broad and a conclusion as to necessity and what is necessary and what is reasonably incidental must be made in the light of the overall structure of the Act”

The relevant passage in Lord Lowry’s speech had read:

“The rule is that a charge cannot be made unless the power to charge is given by express words or by necessary implication. These last words impose a rigorous test going far beyond the proposition that it would be reasonable or even conducive or incidental to charge for the provision of a service.”

In arriving at that conclusion Mr Beatson QC did, however, reject two other arguments which had been advanced by the Secretary of State. These were, first, that the necessary power could be found in the power of disposal conferred by section 34(2). As to this, he held that the existence of section 34(4) showed that the power in section 34(2) could not itself confer the necessary power: section 34(4) would be unnecessary if section 34(2) had the wide meaning contended for. Secondly, he rejected the argument that the power to burn on the farmer’s land could be implied on the basis that burning was a preparatory step to burial, saying that:

“I do not accept that burning is necessarily preparatory and ancillary to burial.”

It was submitted on behalf of the defendants that the decision was per incuriam and wrongly decided, because (as it was put in the closing written submissions)

“(a)

Mr Beatson was not referred to the general principle of statutory interpretation set out in Bennion on Statutory Interpretation, 4^th ed., 2002, pp.705-9 and 723-8 and applied by the House of Lords in Hartnell v Minister of Housing and Local Government [1965] AC 1134. The principle is that “a statute should not be held to take away private rights of property without compensation unless the intention to do so is expressed in clear and unambiguous terms.” (see Hartnell: Lord Reid at 1157B-C, Lord Wilberforce at 1173B-D; see also para 25 above). Mr Beatson was referred to a different and much narrower principle that statutes should not normally be construed as permitting the levying of financial charges unless express provision for such charges is made. That principle, however, is not applicable to the question of whether s.34(4) gives an implied power to burn carcases without the consent of the landowner.

“(b)

It appears that Mr Beatson was not referred to s.55 which supports a restrictive interpretation of s.34(4), as it provides for the compulsory purchase of land needed for the purposes of the AHA 1981.

“(c)

Mr Beatson does not seem to have been referred to the Northumberland Report and to the fact evident from that report that burial, not burning, was the norm during the 1967 FMD outbreak. That Report made it clear that burial was the favoured option, and that burning was only used “in certain cases where burial is not practicable” (16A/d para 133) i.e. where land was unsuitable for burial, for example because of rock near the surface, the presence of a high water table, or where there was a risk of polluting water supplies (16A/13). There was, it seems, evidence before Mr Beatson that burning was very widely used in 2001, but he does not seem to have been aware that in the only major outbreak of FMD before the AHA 1981, burning was only used where burial was precluded.”

I do not consider that any of those matters shows the decision to have been per incuriam. The judge plainly had in mind the consequences, so far as private property rights were concerned, of implying the power to burn, and the principle relied on by the defendants (the requirement for clear and unambiguous terms in the statute) is no more rigorous than the test expounded by Lord Lowry in McCarthy & Stone. The fact that the 1981 Act provides for the possibility of compulsory purchase does not appear to me to be of particular significance if what is under consideration is simply the power to burn (involving a temporary use of the property) as opposed to a power to bury (involving a permanent use). I do not see why knowledge of the practices adopted in the 1967 outbreak (which, as the submission demonstrates did include burning in some instances) should have affected Mr Beatson’s reasoning or his conclusion.

It was not, as I understood it, any part of the defendant’s case that, the carcases having been (unlawfully) burnt on the farmer’s land, they had ceased to be “carcases” for the purposes of burial under section 34(4): as appears below (see paragraph 112) their arguments that the Ash Pit was a trespass were of a quite different kind. If one is simply concerned with whether the farmer’s land can be used for the purposes of burning the carcases, one is concerned with what may only be a temporary use of the farmer’s land. The 1981 Act (as originally enacted and as it stood in 2001) contains a number of instances where a temporary invasion of the farmer’s property is authorised as a matter of necessary implication. Thus, for example, the statutory power to slaughter (section 32 and Schedule 3 paragraph 3) is accompanied by no express power to enter and use private premises for the purpose of its exercise, nor has any subordinate legislation conferring such an express power been drawn to my attention. There are powers of entry but they are conferred in limited terms (see section 63). It seems to me quite impossible to say that the Act does not contemplate that the slaughter may take place at the place where the infected animal is found. That conclusion can only be reinforced when read with the movement and other restrictions imposed by the 1983 Order. The Act therefore contemplates that the slaughter process will take place on the IP. The slaughter having taken place, the animal belongs to the Minister and must then “be buried, or sold, or otherwise disposed of…as the condition of the animal or carcase and other circumstances may require or admit”. That cannot, in my judgment, mean that Minister is guilty of a trespass to land if he does not either immediately remove the carcases from the IP or bury them on the land under section 34(4). There may well be compelling FMD (or other disease control) reasons why the infected carcases should not be immediately so removed. The section necessarily contemplates the possibility of a period during which the slaughtered carcases may continue to be held at the IP pending final disposal, and that the IP may continue to be used by the Minister for the purposes of taking steps preparatory to that final disposal. If burning the carcases is seen as such a preparatory step, then it seems to me that use of the IP for that purpose is impliedly authorised.

That reasoning does not lead me to differ from Mr Beatson QC’s view that section 34(2) cannot, because of the existence of the express power in section 34(4), be construed as independently authorising both the burning and the burial on the private property. It does, however, enable me to reach the conclusion that section 34(2) necessarily contemplates, and therefore licenses, at least the temporary use of the property for steps which are taken with a view to the ultimate disposal of the carcases. Nor, I think, does it involve a departure from his reasoning that burning is not necessarily preparatory and ancillary to burial. The construction which I favour does not depend on burning being a necessary incident of the burial under section 34(4): it proceeds on the view that anything which is done on the premises with a view to the ultimate disposal of the carcases is impliedly authorised by section 34(2).

As appears from the extracts which I have quoted from the 1983 Order, the primary duty of cleaning and disinfecting is cast on the owner or occupier of the IP (see Article 9 and the Rules thereunder), which duty may be enforced, inter alia, by a notice under Article 11 (which may specify that it should take place either at the owner/occupier’s expense or that of the Minister). Article 40 provides a power for the Minister to cleanse and disinfect if the owner/occupier has failed to do that which is required of him either by the order or a notice served thereunder.

No notice under Article 11 was served on KF. The Form A which was served on him set out the Rules contained in Article 9 (although his evidence was that he did not bother to read these). Defra’s decision to undertake the responsibility itself of cleansing and disinfecting at its own expense appears to have been taken at a national level at the commencement of the outbreak having regard to the desirability of nationally co-ordinating the necessary activities and supplies and to the potentially crippling expenditure to which individual farmers would be exposed were there to be a strict insistence on compliance by them at their own expense under Article 9: see the witness statement of Mr Landeg at paragraph 160.

The defendants’ submission was that, in the absence of an Article 11 notice, there was no express power for Defra itself to cleanse and disinfect, and that, given the detailed scheme in the Act, there was no room for an implied power. That submission in my judgment overlooks the fact that the Article 40 power may be exercisable on a failure by the owner/occupier to comply with his duties under the Order or under a notice. The submission on behalf of Defra was that the relevant power could be implied because (I quote from paragraph 46 of their closing submissions):

“… its exercise was the inevitable result of having to deal with such an unprecedented outbreak of the world’s most contagious animal disease and, furthermore, because the implication of the power is necessary to give effect to the intention of Parliament (and the FMD Directives) in controlling and eradicating FMD as swiftly and effectively as possible, across the nation.”

To the extent that Defra’s submission depends on the proposition that the circumstances of the outbreak were such that it was necessary that it should have the power which it claims it had, I would reject it. A short visit to a dictionary of quotations will explain why, whether it is the terse “necessity knows no law” of Chancellor Hollweg on 4^th August 1914, the more florid “Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves” of William Pitt the Younger or the epigrammatic “Necessitas dat legem, non ipsa accipit” of Publilius Syrus. The doctrine is quite simply inconsistent with the rule of law. To the extent, however, that the submission was that the practical impossibility of expecting KF to comply with his duties allowed Defra to proceed under the express power in Article 40 on the footing that KF could be treated as having failed so to comply, I would accept it.

There was in any case, as was pointed out by Defra and accepted by KF in cross-examination, every reason why KF should stand aside and allow Defra at its own expense to undertake the required operations. It could only be in his interests that that should happen. It relieved him of a duty which he was not in a position to discharge. It potentially hastened the day when Hill Farm might be freed from FMD restrictions. It incidentally enabled him (or his companies) to earn money by assisting in the C&D operations. (A total of some £115,000 was paid by Defra in this way). The suggestion that Defra had no power to conduct the operation has not been accompanied by any concomitant suggestion that it had no power to make these payments. Given the degree of his participation in the C&D operations conducted there I have difficulty in seeing how, even if Defra had no statutory power to conduct the operation, it is open to him now to assert that Defra committed a trespass in conducting the C&D operation.

The purpose of the Lagoon was to catch the effluent created by the C&D operation. It was inevitable that such effluent, particularly from the cleansing part of the operation which consumed large quantities of water, would arise as a result of that operation. Something had to be done with it if it was not to be allowed to run in an uncontrolled manner according to the natural lie of the land with the potential to pollute watercourses or fields. The construction of a temporary trap of some sort where the effluent could be held pending its degradation, dilution and subsequent controlled dispersal on the land can in my judgment readily be seen as a necessary incident of a properly conducted C&D operation. The Lagoon was always conceived of as being a temporary trap of that nature. It was always the contemplation that at the end of the C&D operation Defra would at its own expense make provision for the lagoon to be emptied and the land made good. In my judgment its construction was not a trespass.

The reasoning in the previous paragraph was not the primary basis upon which Defra sought to justify the digging of the Lagoon. It relied on the power contained in paragraph 2 of the 1993 Order (see paragraph 84 above). I discuss this further below in considering the powers in relation to the C&D Pit. I am not persuaded that this provision has any direct relevance in relation to the Lagoon. The effluent held in the Lagoon can hardly be said to have been “seized”. Nor was it “disposed of” in the Lagoon: it was held in the Lagoon pending its disposal by spreading on the root field (in relation to which disposal no complaint is in fact made since, as the defendants’ expert Mr Hodson conceded (T29.6.04 pp78-79) the resultant attenuation degradation and filtration of the contents removes any resulting risk of contamination).

Defra relied on paragraph 2 of the 1993 Order as conferring the necessary power either expressly or as a matter of necessary implication. It was pointed out that a C&D operation would necessarily give rise to the production of waste products which it might be appropriate to dispose of by burial on the IP, and that, similarly, FMD infected or potentially infected material which was seized by the inspector under paragraph 2(1) of the 1993 Order might need to be so disposed of. That the legislation contemplated that the burial might be on the IP was reinforced by the fact that it was of the essence of the disease control measures contemplated by the legislation that there should be restriction of movement of, inter alia, materials off the IP: see for example Article 9 Rule 1 of the 1983 Order. One may also add that since the seizure contemplated by paragraph 2(1) is likely to take place on the IP, that is also being contemplated as the place of burial; and that the direction in paragraph 1(b) of Schedule 2 to the 1983 Order (that all the waste from the C&D operation “shall forthwith be burnt..”) is plainly authorising the use of the IP for that purpose.

On behalf of the defendants, Mr Jourdan submitted that that construction was not a possible one. He relied on the fact that in Dixon Mr Beatson had rejected the argument that section 34(2) could be construed as authorising burial of carcases on the IP having regard to the express provision in section 34(4). Read in that context, the 1993 Order (which closely tracks the language of section 35(1)) should not be construed as conferring what would amount to a power to requisition land.

In relation to this question (and more generally in connection with the principles upon which powers may be implied) a number of authorities were canvassed in argument, particular reliance being placed by Mr Harris on behalf of Defra on Allen v Gulf Oil [1981] AC 1001, Attorney-General v. Great Eastern Railway Co (1880) 5 App Cas 473, Potato Marketing Board v Merricks [1958] 2 QB 316, Re Northern Ireland Human Rights Commission [2002] HRLR 35, British Waterways Board v Severn Trent Water [2002] Ch 25. I do not find any it necessary to discuss those authorities in detail. While I have not found the point an easy one, I am persuaded at the end of the day by Mr Jourdan’s submission. To justify the permanent invasion of property rights which is the result of Defra’s construction the legislation should provide for it clearly and unambiguously, either by express words or as a matter of necessary implication (see Lord Lowry in McCarthy & Stone, supra, at paragraph 90). In my judgment paragraph 2 of the 1993 Order, read in the context of the immediately relevant enabling power, does not contain such language.

If the muck and scalpings which were eventually used to construct the Raised Area can be regarded as having been seized, and thus as having become the property of Defra, the subsequent burial of them under one metre of topsoil in the Raised Area was not, for the reasons given in relation to the burial of items in the C&D Pit, something which was authorised by paragraph 2 of the 1993 Order. The defendants accordingly submitted that the construction of the Raised Area constituted a continuing trespass in respect of which they were entitled to claim. Defra’s case was that any such trespass was negatived by KF’s consent to the construction of the Raised Area.

The factual evidence in relation to these issues was given by KF himself, and by Mr Steven Spilsbury and Mr James Beaven on behalf of Defra. Mr Spilsbury was at the material time (in early June 2001) the C&D officer with responsibility for the bio-security of Hill Farm, i.e. enforcing movement restrictions, working under the direction of the vet in charge who was by this stage Mr Woodham. He had had that role from about the beginning of May (by which time the Ash Pit and the C&D Pit had been filled in). At that time the farm’s muck heap stood in the Pyre Field where it had been transferred at the beginning of the C&D operation as mentioned in recounted in paragraph 71 above and to which had been later added the scrapings from the buildings consisting of the soiled bedding stone scalpings and other ancillary rubbish. The whole by then comprised “one large heap which was clearly discernible into two separate halves” (Spilsbury T 30.6.2004 p.64). The normal procedure for dealing with a manure heap in the course of an FMD clean-up operation would have been to disinfect it, and then after a period of time it would become available for muck-spreading on the fields (Mr Spilsbury’s second witness statement paragraph 12). KF explained to Mr Spilsbury that he was concerned that the presence of the scalpings would damage the muckspreading equipment. (In his witness statement Mr Spilsbury said that KF did not want the stone on his land anyway, but in cross-examination he said he could recall no such discussion in the sense of KF asking for the stone to be taken away. The two pieces of evidence can be reconciled if what KF was referring to was his desire that the scalpings should not be spread with the muck). This resulted in a proposal being made (Mr Spilsbury said in cross-examination that he thought it originated with Mr Woodham, which is consistent with Mr James Beavan’s evidence that burial would be the normal way to deal with yard scrapings in the course of an FMD clean up – see T 29.6.04 p 100) that the part of the heap which contained the scalpings should be buried in the Pyre Field. KF was horrified by this as he estimated there was some 6,000 to 8,000 tonnes of material and thought they would have to excavate a huge area of the farm. KF said that if the material had to be buried, the best place would be in the area which was already excavated and damaged around the lagoon, including the trenches that had been excavated to take the run off.

This proposal then fell to be considered by Mr Beaven, a Defra employed surveyor who visited Hill Farm on 16^th June in order to assess the suitability of the proposed site. He gave evidence, supported by a contemporary note, that (T 29.06.04 p 113)

“All I was concerned with was that, firstly, we did not do something that the farmer may have regretted in the future and, secondly, that we did not cause any pollution, because there was a certain amount of organic matter in these scrapings and I did not want anything draining into land drains, into water courses, and so those were the two areas that --”

Having satisfied himself on these points, Mr Beavan approved the proposal. It was then carried out with KF’s active co-operation.

Mr Beavan’s written evidence suggested that the proposal emanated from KF who particularly espoused it because he saw it as a way of improving that part of the farm. While Mr Beavan may have drawn that inference from what he was told prior to his visit, I am satisfied that, while the location was proposed by KF, the context in which it was made was a belief that the burial had to take place somewhere on the farm and KF chose the site which he did in order to make the best of a bad job rather than to achieve an improvement. Although the land is now flatter than it was before (a suggestion resisted by KF) I cannot see that it is a significant improvement on the pre-existing state of the land.

In the ordinary sense of the word KF undoubtedly consented to the deposit of the material and its burial in the agreed location so as to create the Raised Area. The question is whether his mistaken belief that Defra had power (which it would exercise in the absence of his consent) to insist on burial at some less (from KF’s point of view) desirable part of Hill Farm means that he is now entitled to say that Defra has trespassed on his land by adopting his proposal. I do not think that he is so entitled. He may have made a mistake in making the suggestion which he did, but he undoubtedly made it and it was acted on by Defra. I would add that, even if he was mistaken to believe that Defra could insist on burial he would not have been wrong to have regard to the equally powerful consideration that, unless and until authority was given under Rule 1 of Article 9 of the 1983 Order or the farm ceased to be an IP, the material in question would have had to remain unburied on Hill Farm. It was therefore in his interests that the burial should take place.

It was further submitted on behalf of the defendants that, even if KF is held to have consented to the creation of the Raised Area, that consent could not bind his mortgagee, or Miss Hawkins as purchaser from the mortgagee. I do not accept that submission. Nothing in the mortgage deprived him of the right to cause or allow to take place such physical alteration of the mortgaged land as is represented by the creation of the Raised Area. To construe what occurred as the grant of a licence by him, in breach of Clause 6 of the mortgage, to Defra to occupy the land by storing on it (or in it) materials belonging to Defra is a wholly artificial approach. It only works if the muck and scrapings are regarded as having been “seized” pursuant to the power contained in the 1993 order. The true analysis is that they were the product (the “litter dung or other things..”) of the C&D operation under paragraph 1 (b) of Schedule 2 to the 1983 Order.

Two distinct reasons are advanced in support of the argument that the Ash Pit and its contents constitute a continuing trespass. The first is that the ground was not “suitable in that behalf” within s 34(4). The second is that in relation to the non-Garron animals it was not “ground in the possession or occupation of the owner of the animal” within s 34(4).

Suitable in that behalf

Three distinct reasons are advanced for saying that the ground was not suitable, each of which relates to the application of relevant pollution control legislation. There are two relevant sets of measures:

The three reasons why the defendants contend that the ground was not suitable are as follows. First it is contended that the burning and burial of cattle born before 1^st August 1996 constituted a breach of the TSE Decision. Secondly, it is contended that the burial of the carcase ash constituted a breach of the Groundwater Directive even though that burial was authorised by the Environment Agency. Thirdly, it is said that the authorisation given by the Environment Agency did not in fact cover the burial which in fact took place, so that the burial involved a breach of section 89(1) of the Water Resources Act 1981. I will begin by addressing the TSE issues. The groundwater issues relevant to the question are addressed in paragraphs 199 and following below.

The AWD. This recited that animal waste, when not disposed of correctly, may spread pathogens in the environment; harmonized rules should be laid down for processing animal waste and placing on the market processed products resulting therefrom; and animal waste should be processed in an approved and supervised processing plant or disposed of in another suitable manner. Article 1 described the contents of the Directive as laying down, among other things, the animal and public health requirements for the disposal and/or processing of animal waste in order to destroy pathogens which might be present in such materials.

Article 2 contained definitions. Article 3.1 provided that high-risk material must be processed in a high-risk processing plant approved by the Member State in accordance with Article 4(1), or disposed of by burning or burial in accordance with paragraph 2. The “high-risk material” included “(c) animals which are killed in the context of disease control measures either on the farm or in any other place designated by the competent authority”. Article 3(2) provided that:

“ The competent authorities may where necessary decide that high-risk material must be disposed of by burning or by burial where:

•

Transport to the nearest high-risk material processing plant of animals infected or suspected of being infected with an epizootic disease is rejected because of the danger of propagation of health risks,

•

the animals are infected with or suspected of being infected with a serious disease or contain residues which would constitute a risk to human or animal health and which could survive inadequate heat treatment,

•

A wide-spread epizootic disease leads to a lack of capacity at the high-risk material processing plant,

•

The animal waste concerned originates from places with difficult access,

•

The quantity and the distance to be covered does not justify collecting the waste.

Burial must be deep enough to prevent carnivorous animals from digging up the cadavers or waste and shall be in suitable ground so as to prevent contamination of water tables or any environmental nuisance. Before burial, the cadavers shall be sprinkled as necessary with a suitable disinfectant authorised by the competent authority”

An epizootic disease is a disease affecting a large number of animals simultaneously throughout a large area and spreading with great speed.

In the present case the only conditions which have been relied upon by Defra are those contained in the first three indents, for convenience labelled “Propagation of Health Risks”, “Inadequate Heat Treatment” and “Lack of Capacity”.

Article 4 provided that Member States should approve high risk processing plants for the collection and processing of high risk material. Requirements for these plants were laid down by Annex II. Article 16 provided that the Annexes and, with particular regard for developments in scientific knowledge on controlling BSE, the provisions relating to the heat treatments provided for in Annex II Chapter II, points 6 (a) and (c), could be amended by the Council acting by a qualified majority on a proposal from the Commission.

The TSE Decision This came into force on 1 October 2000. It defined SRM at Annex 1 para 1 as including:

“i)

Throughout the EU, the skull including the brains and eyes, the tonsils, the spinal cord and the ileum of cattle aged over 12 months, and the same items (substituting the spleen for the ileum) of sheep and goats over 12 months or which have toothed;

ii)

In the UK, additional to the above the entire head excluding the tongue, including the brains, eyes, trigeminal ganglia and tonsils; the thymus; the spleen; the intestines from the duodenum to the rectum and spinal cord of cows aged over six months; and the vertebral column, including dorsal root ganglia, of cows aged over 30 months.”

The TSE Decision provided at Article 3 and Annex 1 para 2 that SRM was to be removed. Where SRM was not removed from dead animals not slaughtered for human consumption, the parts of the body containing the SRM or the entire body were to be treated as SRM. Annex 1 para 3 provided for how SRM was to be disposed of safely. Member States were to ensure that all SRM

“is stained with a dye and, as appropriate, marked with a marker immediately on removal, and is completely destroyed:

There are then set out effectively three alternative methods of destruction, namely:

“(a)

by incineration without pre-processing.”

“Pre-processing” refers to the process known as rendering, i.e. a process whereby the raw material is crushed or minced, followed by heat treatment to reduce moisture and kill micro-organisms, the liquid phase (tallow) then being separated by hydraulic pressing and the solid material (greaves) being potentially available for grinding into meat and bone meal (or MBM).

“(b)

provided that the dye or marker remains detectable, after pre-processing:

(i)

in accordance with the systems described in Chapters I to IV,VI and VII of Annex to Commission Decision 92/562/:

-

by incineration

-

by coincineration”

The systems described are processes of “ordinary” rendering.

The third method is:

“(b)

provided that the dye or marker remains detectable, after pre-processing:

…

(ii)

in accordance with at least the standards referred to in Annex I to Council Decision 1999/534/EC, by burial in an approved landfill site.”

The form of pre-processing referred to here is that known as “pressure cooking rendering” which requires heat treatment of at least 133ºC, at 3 bars for 20 minutes with a maximum particle size of 50mm. This special sort of rendering was first required for SRM by the TSE Decision. My attention was drawn to the fact that, as evidenced by the Regulatory Impact Assessment On The Specified Risk Material (Amendment) (England) Regulations 2001 (16/4621/30), the UK decided to delay putting that into effect by 6 months to give the renderers time to buy and install the pressure cookers and to avoid having to deal with the SRM by the expensive alternatives of incineration or storage in the mean time.

Annex 1 para 4 provided that

“Member States may derogate from the provisions of points 2 and 3 to allow the incineration or burial of specified risk material or entire bodies, without prior staining, or, as appropriate, removal of the specified risk materials, in the circumstances set out in Article 3(2) of [the AWD] and by a method, which precludes all risk of transmission of a TSE, and is authorised and supervised by the competent authority, in particular where animals have died, or have been killed in the context of disease control measures.” (emphasis added)

The following legal issues arise

The following factual issues arise:

The defendants’ case was that if they could demonstrate that burial of the pyre residue in the Ash Pit amounted to a breach either of the TSE Decision or of the Groundwater Directive the ground could not be said to be “suitable in that behalf”. Defra had three answers to this, namely (1) that neither the TSE Decision nor the Groundwater Directive had any relevance to the construction of section 34(4) AHA (see paras 124 to 132 below); (2) that the TSE Decision could not be invoked by the defendants in any event as a matter of European law, since as a Decision it was only binding on its addressee (see paras 132.iii) to 137 below); and (3) the Groundwater Directive having been fully implemented by the Groundwater Regulations had no relevance except as a guide to the construction of the Groundwater Regulations (see paras 138 and 201 to 227 below).

The argument that the European legislation is not relevant at all. Defra’s submission in essence was that the legislative provenance, scheme and purpose of the AHA, and in particular how it deals with an outbreak of FMD, do not lend themselves to interpretation by reference to independent, dedicated, specific, Community BSE/TSE legislation, nor to legislation dealing with the protection of groundwater; they should be interpreted by reference to the Community FMD Directives which are directly in point. Those Directives (Directive 85/511/EEC as amended by Directive 90/423/EEC) had the same objective, namely, the control and eradication of FMD and the consequent restoration of free trade in livestock and livestock products, as quickly as possible and emphasise the requirement for “immediate effective control measures”.

For this proposition reliance was placed on Marleasing SA v. La Comercial Internacional de Alimentacion SA [1990] ECR I – 4135 and reference made to Article 5(2) of the FMD Directive 85/511, which reads (in relevant part):

“… all animals of susceptible species on the holding shall be slaughtered on the spot under official supervision in such a way as to avoid all risk of spreading the foot-and-mouth virus… after being slaughtered, the aforementioned animals shall be destroyed under official supervision in such a way that there is no risk of spreading the foot-and-mouth virus…”

Accordingly it was submitted that “suitable” means suitable for destroying the FMD virus, and that it could not be contended that the burial in the Ash Pit was unsuitable according to that criterion: any ground in which there was sufficient soil to enable a pit to be dug, ash to be loaded in, and an adequate depth of soil to be replaced on top would thus be suitable under s. 34, because it would accomplish the objectives envisaged by the AHA of eradicating all risk from FMD.

In the development of that submission Mr Harris on behalf of Defra allowed that ground might not be suitable if its selection and use gave rise to a risk of contamination of water supplies, but this was not, as I understood his submissions, because of the groundwater legislation, whether contained in the Directive or the Regulations, but simply the result of a general view as to the meaning of “suitable”. In any event he submitted that here there had been no relevant contamination and the site had the benefit in any case of an Environment Agency (“EA”) authorisation issued under the Groundwater Regulations.

On behalf of the defendants Mr Jourdan submitted that this approach was unwarranted by any authority, and that the principle in Marleasing, as explained and applied in Webb v EMO Air Cargo (UK) Ltd [1993] 1 WLR 49 at 59E-60F, was that in applying national law, the national court is required to interpret national law, so far as possible, in the light of the wording and the purpose of any directive (whether adopted before or after the national law) in order to achieve the result pursued by the latter: if national legislation is open to an interpretation consistent with the Directive without distorting the meaning of the national legislation, the national legislation must be interpreted so as to achieve the result pursued by the directive.

That submission appeared to proceed on the basis that the Marleasing principle applied whether or not the Directive in question was concerned with the same field of subject matter as the national legislation. But Mr Jourdan argued that in any case both of the pieces of EU legislation relied on did concern the same field or category of subject matter as s.34(4) of the AHA 1981, namely the burial of carcases. He pointed out that the definition of “disease” in section 1 of the AHA included BSE, by virtue of orders made under s. 88(2) of the Act (referring me to the Bovine Spongiform Encephalopathy Order 1988, the Bovine Spongiform Encephalopathy Compensation Order 1988 and the Zoonoses Order 1988): the obligations in the TSE Decision in relation to carcase disposal plainly therefore, in his submission, concerned the same subject matter as the AHA 1981.

Similarly, he argued that the Groundwater Directive was concerned with issues of pollution and public health. Moreover, once it was accepted that water pollution issues were relevant considerations in determining whether ground was “suitable in that behalf” the obvious place to look was the Groundwater Directive.

On this point I have reached the following conclusions:

Legislative nature of the TSE Decision. Defra’s submission was that the TSE Decision was binding only on the United Kingdom and had no direct effect. As a “decision” under Article 249 of the EC Treaty it could only be binding on its addressee, and in this case its addressees were “the Member States”: see Article 12 of the TSE Decision. If the Decision were treated as having direct effect (and its effect was that contended for by the defendants), the result in this case would be the unprecedented one of giving an individual an enforceable right to damages against the Member State. This was simply uncountenanced in any of the relevant European jurisprudence.

Mr Jourdan’s response was that there was no relevant distinction for the purposes of European law between the TSE Decision and a Directive: the latter are addressed to member states as was the TSE Decision. He submitted that it was inconsistent with the binding effect of a Decision addressed to a Member State for an individual to be precluded from invoking it in litigation with the Member State. In support he cited the decision of the ECJ in Grad v. Finanzamt Traunstein (Case 9/70) [1970] E.C.R. 825. That case concerned a turnover tax on transport imposed in Germany. A Council Decision addressed to all the member states provided for VAT to apply as the common system of turnover tax on the carriage of goods. It provided that VAT was to replace any specific turnover taxes. That Decision was binding on Germany pursuant to the provisions of Article 189 of the Treaty. Mr Grad was asked to pay the German tax but he said that the demand was illegitimate because Germany should have abolished its tax. He relied on the Council Decision. Mr Grad argued that he was entitled to rely on it as against the German government authorities. The ECJ held in Mr Grad’s favour on this issue. In its judgment it said:

“… The provision according to which decisions are binding in their entirety on those to whom they are addressed enables the question to be put whether the obligation created by the decision can only be invoked by the Community institutions against the addressee or whether such a right may possibly be exercised by all those who have an interest in the fulfilment of this obligation. It would be incompatible with the binding effect attributed to decisions by Article 189 to exclude in principle the possibility that persons affected may invoke the obligation imposed by a decision. Particularly in cases where, for example, the community authorities by means of a decision have imposed an obligation on a member state or all the member states to act in a certain way, the effectiveness ("l'effet utile") of such a measure would be weakened if the nationals of that state could not invoke it in the courts and the national courts could not take it into consideration as part of community law. Although the effects of a decision may not be identical with those of a provision contained in a regulation, this difference does not exclude the possibility that the end result, namely the right of the individual to invoke the measure before the courts, may be the same as that of a directly applicable provision of a regulation .”

It held that although the Council decision was only binding directly on the German authorities, Mr Grad could rely on it for the purpose of his dispute with those authorities, because the Decision:

“… expressly prohibits the member states from applying the common system of turnover tax concurrently with specific taxes levied instead of turnover taxes. This obligation is unconditional and sufficiently clear and precise to be capable of producing direct effects in the legal relationships between the member states and those subject to their jurisdiction”.

He pointed out that this was the same principle applied in the case of Directives, citing by way of Burton v British Railways Board (Case 19/81) [1982] Q B 1080 where the ECJ said:

“The rulings which have been given by the European Court of Justice on the direct effect of directives have established that individuals may rely upon the provisions of a directive in order to avoid the consequences of a national measure which adversely affects the individual. A directive may thus be relied upon against a member state in so far as the provision in question is capable of having such direct effect: Grad v. Finanzamt Traunstein (Case 9/70) [1970] E.C.R. 825: Van Duyn v. Home Office (Case 41/74) [1975] Ch. 358 and Verbond van Nederlandse Ondernemingen v. Inspecteur der Invoerrechten en Accijnzen (Case 51/76) [1977] E.C.R. 113.

The case law of the court leans towards enabling individuals to rely upon the provisions of directives in proceedings between them and the state. The reasoning underlying that case law is that it would be incompatible with the binding effect attributed to the directive by article 189 to exclude as a matter of principle the possibility that the obligations which it imposes on member states may be invoked by those affected. If an individual were prevented from relying upon a directive which obliges the member state to pursue a particular course of conduct, the legal effectiveness of such an instrument would be weakened and the uniform application of Community law would be prejudiced.”

Mr Harris roundly opposed the application of this principle to Decisions, pointing out that, with the sole exception of Grad, no authority existed for the extension of the principle to Decisions, and that Grad could be explained on the basis of the Decision in that case having been promulgated against the background of directly relevant and applicable Directives and as a “harmonisation” measure.

Given the underlying rationale of the principle applied in Grad and Burton, I cannot myself see why it should not in theory be applicable in an appropriate case to a Decision as much as to a Directive. However, the conditions for its application need to be approached with some care. In Grad the relevant Decision forbade the Member State to levy particular types of tax on individuals. It could therefore be said to have intended to confer on individuals a right of a relatively precise kind. Denying the individual the right to invoke it against the Member State when that State sought to introduce a tax of the prohibited kind would have been to entrench on its binding nature as an instrument of Community legislation. The TSE Decision is of a quite different character. It is not concerned at all with individual rights but with regulating generally the use of material presenting TSE risks. Denying the individual the right to rely on it for the purpose of transmuting what would otherwise have been lawful action by the State into a civil action for trespass sounding in damages would not be incompatible with its binding effect. On the contrary to allow it to be used for such a purpose would, as it appears to me, be not only well outside its intended scope but would have the effect of creating a right of action for breach of Community legislation in circumstances where such a right would not on normal principles be recognised. In the latter connection the ECJ jurisprudence (Brasserie du Pecheur SA v Germany [1996] ECR 1-1029) requires, inter alia, that the relevant Community law is intended to confer rights on the individual and that the Member State has, in its application of Community legislation, “manifestly and gravely disregarded the limits on its discretion.”

The argument that the Groundwater Directive has no relevance because it has been implemented by the Groundwater Regulations. I return to this in paragraphs 208 and 210 below.

For derogation to apply under Annex 1 para 4, is some, and if so what, decision required by the competent authority?

On behalf of Defra it was submitted that there was no requirement for such a decision: paragraph 4 of Annexe 1 permitted a derogation where any of the circumstances posited by Article 3(2) existed as a matter of fact. Defra sought support for that proposition from the decision of the Court of Appeal in R (Feakins) v. Secretary of State for the Environment Food and Rural Affairs [2003] EWCA 156, [2004] 1 WLR 1761 and the decision of Goldring J in that case at first instance ([2002] EWHC 2574).

That litigation (“the Robin Feakins litigation”) concerned unburied ash resulting from a FMD pyre at the farm owned by KF’s brother Robin. The Secretary of State had agreed to remove the unburied ash, proposing to take it to a landfill site. Robin Feakins’ contention was that the TSE Regulation 999/2001 (which replaced the TSE Decision in identical language) required the unburied residue to be disposed of by incineration. The Secretary of State claimed the right to derogate, relying, inter alia, on the Lack of Capacity circumstance. The applicant argued that derogation was not permissible in the absence of domestic legislation conferring a power to derogate. That argument was rejected both at first instance and in the Court of Appeal.

The question which the court there had to decide was very different from that raised before me. Indeed the argument for the applicant in that case proceeded on the footing that the words “may derogate…to allow” in the Regulation were significantly stronger (in the sense of requiring formality) than the words “may where necessary decide” in the AWD. To that extent the argument accepted as a premise that paragraph 10 of Annex 11 to the Regulation (the equivalent of paragraph 4 of Annex 1 to the TSE Decision) did not incorporate by reference the words “may where necessary decide” in the AWD. Dyson LJ disposed of the point in paragraphs 48 and 49 of his judgment in the following terms:

48 This argument may, at first sight, appear to have some force to those schooled in the traditional common law approach to the interpretation of documents, but I cannot accept it. It is clear that the draftsman of point 10 must have had article 3(2) in mind; but different drafting techniques can be employed to achieve the same objective. The technique adopted in Annex XI is to create general rules (points 8 and 9) and then (point 10) permit a derogation from those rules in specified circumstances. In article 3 of the Directive, a different technique is employed. Article 3(1) sets out the general rule, and it has two limbs: (a) the high-risk material must be processed in a high-risk processing plant in accordance with article 4(1) (rule 1); or (b) disposed of by burning or burial in accordance with paragraph 2 (rule 2). Article 3(2) gives details of rule 2. It follows that, as a matter of form, article 3(2) does not provide for derogation at all. Having chosen to draft points 8 and 9 of Annex XI as he did, it is not at all surprising that the draftsman of point 10 did not slavishly adopt the precise words of article 3(2).

49 Nor do I accept that the word "derogation" connotes any particular degree of formality, still less that it is implicit in the use of this word that what was necessarily contemplated was national legislation. No authority of the Court of Justice of the European Communities was cited to us which supports either of these propositions.”

That passage entirely disposes of the argument that derogation under the provisions of paragraph 4 of Annex 1 requires a “decision” because of the reference to a decision in the opening words of Article 3(2) of the AWD. It therefore supports Defra’s case that derogation is permissible if any of the factual circumstances listed in the AWD is present. What the case does not decide is that derogation is lawful simply because one of those factual circumstances exists and regardless of whether a conscious attempt has been made by the State to ascertain that existence and determine on an appropriate course of action as a result. In my judgment, however, there is no reason to read the language of paragraph 4 of Annex 1 as importing a requirement on the State to take such a conscious decision. If the State does not in fact dispose of SRM in one of the ways stipulated by points 2 and 3 of the TSE Decision it will thereby derogate from those requirements. The question then is whether the derogation is lawful. The answer to that question depends in my judgment simply upon whether the two limbs of paragraph 4 have been satisfied, namely (1) whether any of the relevant factual circumstances in Article 3(2) of the AWD existed and (2) whether the method employed for incineration or burial “precludes all risk of transmission”.

“..a method which precludes all risk of transmission of a TSE..” Both parties agreed (as was accepted in the Robin Feakins litigation) that these words could not be read literally if only because, on the basis of the science available, it cannot be postulated of any known method of disposal of SRM that all risk has been eliminated. Defra proposed, and Mr Jourdan in his closing submissions accepted, that the correct construction points to “a reduction in risk comparable to the reduction in risk to be found in disposal methods employed in non-exceptional circumstances, one of which is rendering at a high risk processing plant followed by disposal by landfill”.

I adopt that construction in answering the question whether the method adopted in this case precluded all risk of transmission. I am not sure, however, that it is the correct one. First, I consider that it is at least arguable that, in a context where the derogation contemplates the possibility of the burial of whole bodies – a means of disposal likely in its nature to give rise to a higher risk of the transmission of TSEs than any of the “normal” methods, all that is meant is that the method adopted under the derogation of implementing that means of disposal should reduce all risk of transmission so far as possible in the light of the means of disposal being implemented. Secondly, the construction agreed on by the parties potentially leaves the TSE Decision demanding the impossible: if there is in fact no capacity in relation to the authorised methods (or the topography of the farm makes removal impossible), and no method available which approaches one of the authorised methods in its reduction of risk, common sense suggests that what the Decision ought to be requiring is that the State should then use the best available alternative method.

The first issue which needs to be addressed in answering this question is the relevant date. The defendants’ case was that the relevant date was 1^st March 2001, i.e. the date when all the relevant animals at Hill Farm had been slaughtered and a decision had to be taken as to the disposal of the carcases. Defra submitted that the relevant date was, at the earliest, 29^th March when a decision had to be taken as to what to do with the pyre residue.

In my judgment it is necessary to consider both in the context of any enquiry as to whether the steps taken by Defra complied with the TSE Decision. The decision to burn the carcases on site necessarily involved a derogation from the TSE Decision whatever the ultimate plan might have been with regard to the pyre residue if only because the SRM (or whole carcases deemed to be SRM) was not going to be “marked”. Unless, therefore, one of the derogation circumstances existed at 1^st March there was bound to be a breach of the TSE Decision.

This case does not, however, require or entitle me to conduct a roving enquiry into whether Defra may at some stage have been in breach of the TSE Decision. If it did I should have to examine a number of issues, some of which were indeed canvassed before me, as to the nature of the UK’s response to the TSE Decision and its implementation which I consider to be irrelevant to the question which I do have to determine. That question, easily lost sight of, is whether the ground in which the pyre ash was buried was “suitable in that behalf”. If the TSE Decision is relevant at all to that question, the relevant date at which to assess its relevance must therefore be the date at which the decision to bury the pyre ash was taken, that is not before 29^th March 2001.

In the Robin Feakins litigation the courts had to consider the meaning of lack of capacity in relation to the incineration of pyre residue. Dyson LJ at paragraph 65 said this:

“I respectfully agree with what the judge said at para 161 of his judgment. Article 3(2) speaks of a “lack of capacity at the high-risk material processing plant”. That must be a reference to incinerating capacity, not storage capacity. In my opinion, if a plant is not able to incinerate material for 2 years, it currently lacks incinerating capacity, and it is irrelevant that the plant can store the material until it is able to incinerate in two years time. If, however, the plant will be able to incinerate the material within a reasonable time, and can store it in the meantime, then it is not a misuse of language to say that the plant currently has incinerating capacity. It is a question of fact and degree in respect of which the court will only interfere with the decision of the competent authority if its conclusion is plainly wrong. It seems to me that the judge was right to conclude (as he must have done) that the defendant correctly decided that the prospective storage periods quoted at para 65 above showed that none of the incinerators had incinerating capacity at the time of their quotations.”

Those prospective storage periods for 13,500 tonnes of pyre residues had varied from plant to plant from between 12-18 months for the quickest to 2-5 years for the slowest.

Evidence in relation to this question was given on behalf of Defra by Dr Michael Tas and Mr Frederick Landeg, both Defra employees. From shortly after 22^nd March 2001 when he became a member of the Joint Co-ordination Centre (an organisation combining a number of government agencies set up in response to the 2001 FMD outbreak), Dr Tas became responsible for coordination of disposal matters in the “Disposal Cell” of the JCC and was thus able to speak with authority on the steps which were actually taken in this respect during the course of the epidemic and its aftermath. Mr Landeg is (and was at the material time) the Veterinary Head of Defra’s Exotic Diseases Team. He was able to give evidence as to the evolution of Defra’s disposal policy during the early stages of the epidemic.

Evidence on behalf of the defendants was given by Ms Gill Weeks, the Regulatory Affairs Director of Cleanaway Ltd, the operator of a specialist incinerator plant at Ellesmere.

According to figures produced by Mr Landeg a total of 789,275 animals had been slaughtered as a result of the epidemic by 29^th March 2001. Dr Tas’s evidence was that experience from the epidemic indicated that some 6.28 tonnes of pyre residue was, on average, likely to be produced for every tonne of carcase burnt. Making certain assumptions as to the average weight of the cattle sheep pigs goats and deer carcases comprising the total of 789,275 (which did not appear to me unreasonable) it can be concluded that, if all the slaughtered animals had been burnt there would have been an actual or potential 662,600 tonnes of pyre residue by 29^th March 2001.

On the evidence it was perfectly clear that there was no sufficient incinerator capacity to deal with this quantity of material. The Cleanaway capacity, for example, ran at a maximum of 80,000 tonnes per annum, not all of which could have been used (even if available) for the disposal of the relatively inert FYM pyre residue. Ms Weeks, conceding that she could not give an expert view on the point, thought that the Cleanaway plant might have been able to cope with as much as 500 tonnes per week of pyre residue. If that is right it would have taken the Cleanaway plant 25 years to incinerate the assumed tonnage. There was no evidence that other plants existed in either sufficient numbers or with sufficient capacity to make much difference to these figures. Even allowing for the somewhat indicative nature of the figures (not all the slaughtered animals would in fact have been burnt on pyres) the scale of the figures is such as to justify the conclusion that there was a relevant lack of capacity.

Dr Tas also drew attention to several factors which imposed constraints on adopting the method of disposal contended for by the defendants. These he summarised at paragraph 34 of his witness statement as being:

“(a)

the need for analysis of the ash on representative sites to establish composition and hazard; (b) the production of a COSHH data sheet (i.e. an assessment of the risk to human beings from the projected disposal method under Regulation 6 of the Control Of Substances Hazardous to Health Regulations 1999); (c) the development and description of safe methods of lifting from the field; (d) the development and description of cleansing and disinfection protocols for equipment transport etc and biosecurity protocols for staff; (e) instructions on safe routing to intermediate plants or final destination; (f) the development of methods for the safe re-packaging of bulk loads into 250kg drums and 1tonne bulk bags; (g) the development of methods for the safe re-packaging of foreign objects in pyres (steel girders, other tramp metal, sleepers, tree trunks, telegraph poles, troughs etc); (h) the development of cleansing and disinfection protocols between bulk load input to packaging plants and despatch of clean disinfected re-packaged loads to incinerator plants; (i) the acquisition of waste management licences for the premises in which the waste storage and re-packaging would take place before final removal to incineration, a process which requires public consultation and can take 4-6 months; (j) test burning of the ash in the incineration plant to assess the effect on emissions; (k) application for permission to vary the Plants input (and emission output) under IPC rules from the Environment Agency. Substantial variation of input or output would require public consultation, a process, which can take 4-6 months.”

Although Ms Weeks was confident that Cleanaway would have been able to obtain the necessary alteration to its authorisation under the Environmental Protection Act 1990, that was not in place at 29^th March. Moreover, it was clear that there was no COSSH statement in place.

By taking the relevant date as being 1^st March Mr Jourdan on behalf of the defendants was able to calculate that as at that date the total tonnage of carcases requiring disposal was a mere 6,823 tonnes and to suggest that at that date capacity existed in the form of rendering plants and whole carcase incinerators. So far as the former were concerned these were being used for the disposal of FMD carcases as from 9^th March 2003. So far as the latter were concerned there was a paucity of evidence, but (it was submitted) good reason to think that there was availability as a result of the suspension on 23^rd February 2001 of the OTMS scheme (that being a scheme introduced in 1996 as part of its anti-BSE measures whereby the government bought in and destroyed cattle over thirty months old). Mr Jourdan’s submission was that it was for Defra to prove the absence of this capacity, and that it had failed to do so.

I have already indicated why I consider this question to be irrelevant in deciding whether the ground at Hill Farm in which the pyre residue was buried was suitable ground. If I am wrong about that I am nevertheless satisfied that there was a relevant lack of capacity as 1^st March. The imperative, from a FMD control point of view, was the speedy elimination of all risk of the further spread of FMD from the slaughtered beasts. Rendering was not an option until 9^th March at the earliest (by which time the number of animals slaughtered had risen from the 13646 assumed by Mr Jourdan’s calculations to 94288), and there were no relevant protocols in place which would have enabled use of the whole carcase incinerators theoretically freed up by the suspension of the OTMS.

The question is whether “transport to the nearest high-risk material processing plant of animals infected or suspected of being infected with an epizootic disease [was] rejected because of the danger of propagation of health risks.”

There is no doubt that the thinking behind the VIPER instructions as they stood at the date of the 2001 outbreak (see paragraph 64 above) was that transport for any purpose off the farm either of the carcase or of pyre residue posed a risk of spreading the disease. Indeed, as Mr Landeg’s evidence made clear, movement restrictions had always been an integral part of the Government’s strategy of controlling and eliminating FMD.

The defendants’ case in relation to this is that, as a matter of fact, there was not at any time any “rejection” of the transport option. Mr Jourdan pointed out that a January 1999 MAFF study paper (“the Drummond Report”) had recommended that there should be a review of methods of disposal alternative to the traditional methods of burning or burial but that, despite concerns expressed in July 2000 by Mr Scudamore, the head of the State Veterinary Service, no such review had taken place by the time of the 2001 outbreak. A joint MAFF/EA statement on carcase disposal issued on 25^th February referred only to burning or burial on site (and secure rendering of certain wastes at abattoirs) as recognised methods of disposal. It appears that the possibility of rendering whole carcases was first actively considered on 5^th March 2001, and, having been considered was capable of being implemented (to a limited capacity) from 9^th March. Accordingly, it was submitted, it could not be said that the option of transporting to the nearest high risk processing plant had ever been rejected: that transport option had simply never been considered.

When cross-examined on these points Mr Landeg admitted that work on the recommendations in the Drummond report had not progressed as fast as would have been desirable (one explanation being the impact on departmental resources of the outbreak of classical swine fever in 2000). He maintained that in holding to the “bury or burn on site” policy enshrined in the VIPER instructions the Department was conscious of, and relying on, the fact that the TSE Decision derogation existed (see T24.06.04 pp 62-63, 121, 133, 140 and 143).

It seems to me that any failure there may have been on the part of the department to consider the option of transport because of its belief as to the availability of the derogation in the case of an FMD outbreak constituted an implicit rejection of the option on “propagation of health risk” grounds. Unless and until appropriate protocols had been developed for such transport it was not, as a matter of fact, an option. On the evidence, protocols for the transport of infected carcases had not been developed until on or shortly before 9^th March 2001, or for the transport of pyre residue until towards the end of June 2001 (see Dr Tas’s witness statement at paragraph 27 and T25.06.04 pp72-75).

Accordingly in my judgment the “Propagation of Health Risks” circumstance was present.

The question here is whether “the animals [were] infected with or suspected of being infected with a serious disease or contain residues which could constitute a risk to human or animal health and which could survive inadequate heat treatment”.

Defra does not claim that its actions in any sense relied on a contemporaneous invocation of this circumstance, but nevertheless claims that as a matter of objective fact the circumstance existed. If I understood the argument correctly, it was that the slaughtered animals contained residues (i.e. SRM) which could constitute a risk to human or animal health (because of the possible existence of BSE prions) and that such prions could survive “inadequate heat treatment”. Defra contended that the latter expression referred to rendering. Defra also relied on the fact that FMD was a serious disease, but did not seek to suggest that the FMD virus was capable of surviving “inadequate heat treatment”.

The defendants riposted that any construction of this circumstance which led to the conclusion that the actual or potential presence of BSE prions in the slaughtered animals automatically justified a derogation simply could not be right since it would mean that in every case where the TSE Decision would otherwise apply derogation would be permissible (subject only to satisfaction of the “all risk” condition).

There seems to me to be considerable force in the defendants’ submission and I accept it. Viewed solely in the context of the AWD the wording is plainly apt to cover BSE, but I cannot see how that construction can survive in the context of its incorporation into the TSE Decision without leading to the irrational consequence that the derogation renders paragraphs 2 and 3 of Annex 1 largely otiose.

Accordingly in my judgment this circumstance did not exist.

In relation to this issue the defendants relied on the evidence of Professor Philip Duffus, Professor of Veterinary Medicine at Bristol University. Defra relied on the evidence of Mr Philip Comer of DNV Consulting, a non profit-making foundation specialising in risk assessment.

In very broad terms it can be said that, while they agreed that the burning and burial which had taken place at Hill Farm posed no significant risk to humans, they differed as to their assessment of the risk to animals. Mr Comer’s assessment was that the risk to animals was “a negligible risk”, by which he meant “a qualitative description of risk signifying that such a risk has been eliminated for all practical purposes and would not normally be a cause for concern or require any additional remedial action.” Professor Duffus used the word “negligible” in a somewhat different sense (see T28.06.04 p.6), but the basic thrust of his evidence was that the scientific uncertainties, particularly in relation to the behaviour of prions in the environment, were such that it was not possible to put a meaningful figure on the risk. His opinion was that, given those uncertainties, the field at Hill Farm had not been suitable for the burial of pyre residue insofar as that pyre residue contained ash or body parts deriving from cattle born before 1^st August 1996 (which in the course of the trial were referred to as “5+ cattle”).

The significance of 1^st August 1996 is that it was the date from which, as a result of the measures introduced by the Bovine Spongiform Encephalopathy Order 1996 (SI 1996/2007), a complete ban on the inclusion of mammalian derived meat and bone meal (MBM) in all animal feeds took effect. It was common ground between the two experts that the chances of a cow born after this date having BSE was a hundred times smaller (0.004%) than that of a cow born before that date (0.4%). There were fifteen 5+ cows on Hill Farm. Professor Duffus and Mr Comer agreed, adopting essentially the same methodology, that there was a 98% probability that none of these cows was infected by BSE. Put another way, there was a one in fifty chance that one of the cows was so infected.

The infectivity of brain/spinal cord material from a BSE infected cow is measured in ID₅₀/gm of tissue, which describes the dose which will infect and subsequently cause the death of 50% of a recipient population. Mr Comer and Professor Duffus were in agreement as to the likely range of such doses in an infected animal. Both experts also agreed that the infectivity of the hypothetical animal would have been reduced by the effect of the pyre. Mr Comer’s evidence was that destruction of animal carcases in an animal carcase incinerator is thought to reduce infectivity a million fold (based on analysis of the protein content in the ash) but that a pyre, even if carefully conducted, would probably produce a reduction similar to that of ordinary (as opposed to pressure cooking) rendering, i.e. a reduction of fifty fold. However, given the possibility of imperfect combustion, he used what he claimed was the cautious assumption of a 10 fold reduction, and referred to studies of the ash from 12 pyres which indicated a range of protein destruction from 99.9% to 80% with an average of 98%.. He therefore regarded an assumption of 90% reduction in infectivity to be a precautionary one. Professor Duffus, however, considered that the 90% figure could only reasonably be adopted if the pyre was effective to reduce all the carcases to ash, but that if it was not (as the defendants claimed) “I do not think that it would be safe to assume any substantial reduction in infectivity due to the action of the pyre.” Mr Comer’s response to that (at paragraph 14 of his supplementary report) was to point out that, on any view the vast majority of the body parts would have been subjected to significant temperatures, and for any infectivity to remain it would be necessary that it should be the infected body part of the cow that probably was not there that should happen to have been left unburnt. He continued to maintain therefore that his 90% figure was appropriately cautious and allowed for the possibility that the defendants’ contentions as to the ineffectiveness of the pyre were correct.

Professor Duffus’ principal reason for concluding that it had not been suitable to bury the pyre residue from 5+ cattle at the farm was, as I understood it, the absence of satisfactory scientific evidence as to the survival or transmissibility of the infective prion in the soil environment. He summarised that position in paragraphs 28 to 44 of his written report of which the following appear to me to be the material passages:

“Scientific evidence of risk of BSE infection via environmental contamination

28.

There is a lack of definitive evidence as to the behaviour and fate of TSE’s in the environment… Although the risks created by BSE and the stringent controls referred to above were well known by 2001, they do not appear to have been identified early on in the standing instructions on how to deal with FMD. These instructions were set out in Chapter 3 of the Veterinary Instructions, Procedures and Emergency Routines (VIPER) produced by the State Veterinary Service (SVS) and which informed SVS staff on how to handle the outbreak. During the outbreak, new instructions were issued at frequent intervals but it appears that the BSE risks and the effect of the stringent controls were not picked up until April or May 2001. For example, none of this is mentioned within Emergency Instruction (EI) 2001/3, 2001/7, 2001/16, 2001/17 and 2001/59. Copies of these EIS are at Appendix 14. Similarly, there is no reference to these risks and controls in a letter from the JCC dated 31 March 2001 or in the joint note from MAFF/DETR on 3 April, copies of which are at Appendix 15 and 16. The risks and controls are reflected in the Environment Agency guidance of 14 April 2001, the letter from the JCC of 15 April and also the SEAC guidance of 24 May 2001 (Appendices 17, 18 and 19). These points are further reflected in the Department of Health guidance of 24 April 2001, its note on disposal of carcases on 31 May 2001 and its main report entitled a Rapid Qualitative Assessment of possible risks to Public Health from current Foot and Mouth Disposal Options in June 2001 (Appendices 20, 21 and 22.)

29.

The lack of knowledge about the behaviour of the TSE agent in the soil, ground or surface water was identified in the SSC [that being the Scientific Steering Committee of the European Commission which had been established in 1997 to provide scientific advice to the European Commission] report of 24-25 June 1999 on the Risks of Non-Conventional Transmissible Agents, Conventional Infectious Agents and Other Hazards Such As Toxic Substances Entering The Human Food and Animal Feed Chains Via Raw Material from Fallen Stock and Dead Animals or Via Condemned Material, a copy of which is at Appendix 23. The report stresses at paragraphs 6.3(b) that even with controlled landfill, “the long term and indirect risks (e.g., long term survival of BSE like agents in the environment, the possibility of them escaping from landfill site in leachates) have so far not been fully evaluated.” At paragraph 6.3(b), the SSC said this:

“With respect to BSE, the risks of using uncontrolled landfill to dispose of “high risk” materials are in theory very much comparable to the risks that go along with burial (e.g. long-term survival of the agent, leachate, dispersion in the environment etc.).

In its conclusions on this section, at paragraph 6.3(c) the SSC said that “because of the possible and not yet fully evaluated long term and indirect risks, it is advisable to prohibit the use of landfilling/burial of untreated actually or potentially TSE infected ruminant material.” It was advisable to use either high temperature incineration or a process involving rendering followed by burning of the MBM (pages 45-46).

30.

At paragraph 6.3, page 46, the report went on to say that for exceptional reasons, such as a large epidemic, “landfill of the condemned cadavers or materials may be imposed.” The importance of the risk assessment was stressed and it was said that in addition, “the material should if possible and indicated (e.g., infectious agents) first go through an appropriate risk reduction process.”

31.

In its general conclusions at paragraph 7, pages 58-62 inclusive, the SSC stresses the importance of the risk assessment and that even if for exceptional reasons such as a large epidemic, landfill was used, the materials should go through an appropriate infectivity reduction process and that “initial rendering of infected raw material is indicated to reduce the risks if storage of the material is necessary before final incineration.”

32.

This lack of evidence was further underlined by a workshop held by Defra in April 2002 (Defra, 2002 Appendix 24). Within this workshop it was stated that the “unknowns” with regard to the persistence, movement and infectivity of TSE’s in the environment were:

(a)

which soil micro-organisms cause carcase degradation

(b)

adsorption/entrapment in soil

(c)

fate of TSE’s after ingestion by soil animals

(d)

heat denaturation, the effect of drying is known to make the prions more resistant to denaturation.

33.The workshop asked Defra to consider funding research into such areas because many risk assessments on TSE’s have relied on the assumption that the TSE agents are hydrophobic and stick to particulate matter in the soil: these assumptions require scientific validation.

34.In the absence of such validation, it is very difficult to be sure about the risks of environmental contamination by BSE prions. It can be said that the hydrophobic nature of the BSE prion is a vital property when estimating the likely movement and eventual fate of the prion after burial. The term hydrophobic means “water hating” and results in the BSE prion attaching with great tenacity to other molecules to the exclusion of water (Gale et al, 1998, Appendix 25). Together with its biochemical and biophysical properties, the hydrophobicity of the BSE prion makes it sticky and insoluble (Prusiner et al, 1991, Appendix 26). After burial of whole cattle carcases the BSE prions will initially attach to molecules that are proteinaceous and carbohydrate in nature, and then following decay of both sets of molecules, the bound BSE prion will be released and immediately bind to other material (Gale et al, 1998 Appendix 25). Such properties of the BSE prion, and especially its hydrophobicity, have been used to develop a risk assessment model for BSE prions in the aquatic environment (Gale et al, 1998 Appendix 25).

35.Although uptake of the BSE prions by plant roots is very unlikely (as roots do not take up high molecular weight compounds such as prions), adult grazing cattle can consume as much as 1kg of soil per day as particles on stems/roots as well as directly (Fraunhofer Institute, 2001 Appendix 27). There is also the possibility of the soil being disturbed by human or animal contact. Clearly, the more deeply buried the material is, the less chance there is of contamination by this route.

…

37.

There are a lack of publications that bear on the issue. However, there is some work involving the survival in garden soil of hamster derived scrapie TSE prions over a three year period (Brown and Gajdusek, 1991, Appendix 28). The level of infectivity fell from 4.8 log units to between 2.2 and 3.0 log units after the three years. Interestingly, an additional 1.3 log units had leached into the soil immediately below the infected material with no infectivity 4-8 cm below that, despite an average annual rainfall of 100 cm in the test area. This result emphasises the “stickability” of the hamster TSE prion in soil.”

He then referred to studies which had been done of cattle born after the reinforced ban (BARBs) which had developed BSE, and observed:

“39

These data do not, by themselves, suggest that horizontal or environmental transmission is a major route of BSE transmission in cattle. Professor Wilesmith supports an endogenous contaminated food source as the most plausible oral route of infection for this group of cattle.

40.

However, as is evident from the European legislation on the disposal of SRM, there are concerns about dangers of infection by BSE to cattle and man from SRM if it is not incinerated or rendered before being disposed of. The SSC stated at its meeting in 24/25 June 1999 (SSC, Scientific Opinion 1999, Appendix 30, para 9, page 3), well before the 2001 FMD outbreak, that while “economically feasible technologies for safely disposing of TSE risk materials are considered to be direct incineration of carcases and incineration or burning under appropriate controlled conditions of rendered materials”, the SSC recognised at para 10, page 4 “that in emergency situations it may be necessary, as a short term measure, to seek alternative routes of disposal”. It urged that in such situations “the selection is based on a proper risk assessment and that unsafe practices are avoided”.

He then at paragraph 42 referred to the fact that the SSC had more recently (in January 2003) reiterated that opinion “in the absence of any new data”, and noted concerns that had been raised in connection with the possibility of mites acting as vectors or reservoirs of sheep scrapie and to the possibility of uncovering of risk material which was not “deeply buried” by animals. He concluded:

“44.

Overall, I would summarise the position by saying that the potential for transmission of infective TSE prions to susceptible cattle, sheep and humans via environmental contamination is particularly unclear. Such limited evidence as exists does not suggest a cause for serious concern, but further investigations are needed.”

Mr Comer’s response was to point out, inter alia, that to the extent infectivity remained in the buried ash, Professor Duffus himself supported the view that the prions were likely to remain attached to soil, observing (at paragraphs 9 and 10 of his supplemental report)

“Thus for cattle to be exposed the ash pit would need to be dug up, the precise part that included any BSE infected material exposed, left on the surface and then that precise part ingested by a cow

..I would also add that I am not aware of any evidence of BSE occurring in cattle as a result of environmental contamination. This is so, notwithstanding the fact that, for example, pastures would have been treated with bovine faeces, in the form of manure, which faeces may have contained the BSE agent (as a result of animals ingesting the BSE agent in meat and bone meal, and excreting the residual BSE agent)..”

Mr Comer concluded his supplemental report with the following observations (at paragraph 15)

“..There are many factors, as reported by Professor Duffus, that indicate that the risk of exposure to either humans or cattle would be negligible, independent of the effect of the hydrogeology (which could only result in additional dilution of infectivity or its removal through absorption in the ground). These factors include (as shown in the attached diagram): low risk that an infected animal is present; infectivity likely to be reduced by at least 90% in the pyre; ash is buried so effectively eliminating exposure; infectivity remains bound to soil so unlikely to migrate away from pit; infectivity will decay over time.”

In cross-examination Professor Duffus was taken through each of the points on that attached diagram and did not, save in relation to his point about the effectiveness of the pyre, significantly quarrel with any of them. He agreed that there was “basically no risk to humans” if the ash were to remain in the pit (Day 11 p 10) and that for cattle to be exposed to it the infective prion, which would be likely to have attached itself to a particulate material, would have to migrate through a metre of topsoil and then be eaten by a cow (Day 11 pp 39-40).

In his closing submissions Mr Jourdan on behalf of the defendants began by comparing the reduction of risks produced by the methods authorised by the TSE Decision with the reduction in risk produced by burning and burial. He submitted that Mr Comer’s ten fold reduction in infectivity by the pyre had to be compared and contrasted with the factor of a million obtained by incineration in a fixed plant incinerator, the factor of 50 obtained by ordinary rendering, and the factor of 1000 obtained by pressure cooking rendering. He pointed out that under the TSE Decision pressure cooking rendering had to be followed by burial in a controlled landfill site, and that Mr Comer had accepted that a controlled landfill site was safer than burial in an unmarked pit at the farm. He submitted that any reliance by Defra on the approach of the court in the Robin Feakins litigation was misplaced since the court’s attention in that case had not been drawn to the vastly different reductions in infectivity produced by the different methods, and the court had in any case been concerned with a proposal to bury ash in a controlled landfill site.

In my judgment these submissions are fallacious. A distinction needs to be drawn between reduction in infectivity on the one hand and reduction in the risk of transmission of TSEs on the other hand. The authorised methods under the Decision reduce the risk of the latter by adopting the strategy of reduction in infectivity. It does not follow that risk of transmission can only be reduced by reduction in infectivity. This was implicitly accepted by Professor Duffus when he accepted that burial of the pyre ash effectively eliminated risk of transmission to humans.

Mr Jourdan next submitted that the improbability of there having been a BSE infected cow at Hill Farm was irrelevant in considering whether the method adopted was one which precluded all risk. I do not accept that submission. We are concerned here with the particular case of Hill Farm and the question whether the derogation was available to Defra in connection with the method of disposal which was there applied.

Mr Jourdan then made a number of points of criticism of specific parts of Mr Comer’s evidence. He submitted that the establishment of a “negligible risk” in Mr Comer’s sense did not reflect the approach of the TSE Decision itself, which adopted a highly cautious approach to risk; that Mr Comer was wrong to have paid any regard to the reduction in infectivity in the soil over time, both because his focus should have been on the situation in 2001 and because the experimental underpinning of the hypothesis of decay over three years was (although I observe that it was accepted by Professor Duffus in cross-examination) extremely slender; and that Mr Comer’s views on the risk of transmission through the environment were simply wrong when viewed against the background of numerous scientific reports (to which he was taken in cross-examination) which showed that environmental contamination had consistently been recognised as a risk factor by the TSE scientific community.

On these points, I do not myself consider that Mr Comer’s use of the concept of “negligible risk” is incompatible with the meaning of “preclude all risk” in paragraph 4 of Annex 1 of the Decision. Indeed, in a context where, ex hypothesi, the best options, represented by the authorised methods, are not for one reason or another available and a derogation is, for that reason, permitted, a construction of “precludes all risk” as meaning “reduces risk to a point where it has been eliminated for all practical purposes”, seems to me entirely appropriate. I agree, however, that, on the basis of the very limited experimental evidence available, Mr Comer’s prediction (and assumption) of a 98% reduction over three years cannot be said to be cautious. I do not agree, however, that such a reduction in infectivity over time is in principle irrelevant to the question whether all risk of transmission had been eliminated in 2001. If for example it could be predicted that all infectivity would be eliminated over a three year period, and that the manner of burial precluded all risk of exposure during that period, that would be relevant.

As for Mr Comer’s view that environmental contamination is not a risk factor in the transmission of BSE, I accept that this view is not one reflected in the scientific advice which has been given to the European Commission and does not represent a consensus scientific view. Mr Comer plainly believed that, in the fullness of time it would become apparent that some of the responses to the epidemic had been an over-reaction, but was constrained to concede that the time had not yet come when that could be said. Nevertheless he appears to be correct in saying that there was no empirical evidence for environmental contamination being a risk factor. Absence of evidence should not, of course be confused with evidence of absence; and the history of the BSE epidemic (which is not yet over) emphasises the need for extreme caution in making assumptions.

Mr Jourdan submitted that the 90% figure assumed by Mr Comer (for reduction of infectivity by the pyre) could not be said to be a cautious assumption because the Environment Agency studies (which showed an average 98% reduction in protein) on which it was based were not a reliable guide. In this respect he presented a critique of the Environment Agency studies which had not been advanced by Professor Duffus but which, insofar as it was put to Mr Comer in cross-examination, did not cause him to change his view.

Mr Jourdan analysed the evidence which had been given as to the effectiveness of the Hill Farm pyre, submitting that the court should conclude that it was not very effective. I review this evidence in paragraph 192 and following below. I have, however, concluded that resolution of this issue of fact is not determinative of the question which I have to decide for two reasons. First, the question seems to me to be whether the method “authorised and supervised by the competent authority” precluded the risk. So far as the method consisted of the pyre, the procedure which ought to have been employed was to ensure that any unburnt material left at the end of the burn was separated from the ash and then re-burnt. This was the evidence of Mr Brisbourne, the Defra Animal Health Officer who supervised the construction of the Hill Farm pyre. If this should have happened but did not happen in the case of unburnt materials from that pyre it must have been the result of defective supervision of the procedure by Mr Bell: it was not a defect of the method in principle. Secondly, for the reasons given by Mr Comer at paragraph 14 of his supplementary report which I accept, his 90% figure allows for the possibility of a relatively ineffective burn.

Mr Jourdan further criticised Mr Comer’s approach for having ignored the risk of transmission of the BSE agent through smoke from the pyre, submitting that particles might have fallen on pasture land in sufficient quantity to pose a risk of ingestion of infectious doses by ruminants. Mr Comer’s report had, however, only been directed to the risk of transmission from the buried ash, and this possible side effect of the burn process was not fully explored with him in cross-examination, was not the subject of any expert evidence led by the defendants, and formed no part of their pleaded case. In my judgment, given that the focus is whether the ground was suitable for the burial of the ash, Mr Comer’s report cannot be criticised in this respect.

A further criticism was made that Mr Comer had wrongly claimed that his risk assessment was cautious because none of the cattle were displaying clinical signs of BSE. Mr Comer accepted that the amount of infectivity might be very high prior to the emergence of any clinical symptoms. Given the agreement between the experts as to the degree of probability of there having been a cow infected with BSE, I cannot see that anything turns on this point.

Mr Comer was also criticised for having assumed a 5% infectivity possibly leaching out from the unlined pit, a figure with which he had been supplied by the Environment Agency. Mr Jourdan put it to him that there was no justification for the figure, and submitted in closing that it was pure guesswork. Mr Comer thought that the estimate was likely to be pessimistic given the nature of prion protein. As to this it seems to me that Mr Comer’s approach had support from the observations of Professor Duffus in paragraph 34 of his report, and in particular from the Gale et al 1998 paper at Appendix 25 to his report.

Finally Mr Comer was criticised for having ignored the risk that infective material might be brought to the surface by some future farmer ignorant of its existence, or by burrowing animals such as badgers, moles, or rabbits or by insects. This was not a point specifically put to him in cross-examination, although Professor Duffus’ report had referred (at paragraph 42 of his report) to the research available in relation to mites and scrapie, and to the possibility of risk material which was not deeply buried being uncovered. No evidence was led, or referred to, which supported a suggestion that burrowing animals or insects might uncover risk material buried beneath one metre of topsoil in such a way as to bring it to the surface either at all, or still less in such quantities as to pose a risk to grazing ruminants.

For the reasons which I have sought to give in recounting and commenting upon Mr Jourdan’s submissions, I was not persuaded that Mr Comer’s evidence was in any relevant sense unreliable and ought to be rejected. On the contrary I was persuaded by it that the burning of the carcases and burial of the pyre residue at Hill Farm under one metre of topsoil was a method which could be expected to, and in practice did, eliminate all foreseeable risk of the transmission of TSE.

That conclusion does not mean that I dissent from Professor Duffus’ general approach which was founded on the proposition that a method of disposal which did in fact make a distinction between the 5+ cattle and the other slaughtered animals would have been a sensible additional precaution. Such a strategy was in fact adopted by Defra from about the end of March 2001 in relation to other farms. However, in the context of applying both the AWD and the TSE Decision, I accept Defra’s submission that there is some significance in the fact that no such distinction is drawn in either piece of legislation.

For these reasons I do not consider that there was any breach by Defra of the TSE Decision, nor that anything in the TSE Decision rendered the ground of the Ash Pit “unsuitable in that behalf” for the purposes of Section 34(4) AHA 1981.

The pyre was constructed under the supervision of Mr Brisbourne to a standard specification measuring some 40 metres long by 4-5 metres wide, and was lit by KF on 1st March. Although there was some conflicting evidence as to how well it “took” during the first 24 hours, I find that it burnt thereafter until late March, being regularly stoked by KF, Matthew Feakins and Dale Davies (a Garron employee). Mr Bell recorded in his log on 23rd March

“Driver has stirred fire and it is now burning well. There is a lot of unburned coal and sleepers in it but no carcases left.”

In his first witness statement he said

“I do not recall seeing any animal body parts among the ash. My instructions were to ensure that the carcases were reduced fully to ash and I therefore ensured before the ash was buried there were no animal parts remaining. I would not have allowed burial of the ash if I thought there were still animal remains in it…”

That evidence was contradicted by those whose function it had been to stoke the fire. KF in particular claimed that

“[E]ach time I saw the fire it looked as if it was barely burning or out and I saw it most days as one of my jobs was stoking the fire [paragraph 133 of his first witness statement]…my clear recollection is that it burned very poorly (ibid paragraph 135)..In the course of [stoking] I could see that carcases had not burnt. It was possible to see legs sticking up in the air. I could also see unburnt sleepers and tyres taken from the silage clamp [ibid para 138] When stoking the fire, it used to send up a huge cloud of smoke and ash (ibid para 139)…When the pyre was turned over by a contractor using a Hymac [on 23rd March], I can remember seeing unburned sleepers and unburned coal and straw [para 149]....[when the Ash Pit was being filled in on 29th March] I saw sleepers, straw silage and animal parts going into the hole – for example half a sheep which still had part of its fleece and cattle body parts [para 157].

Matthew Feakins’ written evidence was to similar effect:

“ “[By 6th March] I could still see carcases on the pyre… the ash was so bad that I could not see out of the cab [of the Matbro being used to stoke the fire] [para 75]…I stoked the fire, an operation which took some four to six hours each day. It would take half an hour to an hour to stoke the fire and then it would be done again about an hour later [para 86].. [when watching the contents of the pyre being pushed into the Ash Pit] I could see animal parts, including whole cow heads that had really only just be singed, legs, joints, sheep carcases with their fleeces still intact, pieces of bone, unburned coal, sleepers, straw and lots of silage, some of which still had the wrapping intact….””

That evidence was also supported by Dale Davies, whose witness statement said:

“[when loading the silage bales on to the pyre in early to mid March] I could see that the pyre had not burnt well and could still see animals on the pyre. I remember seeing the bull and that was pretty much intact [paragraph 11]....I estimate it took me about an hour each time to stoke the pyre….Occasionally the tyres [of the Matbro] caught fire [para 14]”

In addition the defendants adduced evidence from neighbouring farmers who had had the opportunity of watching the Hill Farm and other pyres from a distance (often a very considerable distance): Mr Huw Beavan of Skirrid Farm (15 miles away), Mr Crouch of Yew Tree House (½ mile away), Mr Michael Williams, of Trewaugh Farm (1 ½ miles away), Mr Neil Beavan of Trothlands Farm (1 mile away, and Mr Watkins of Trecorras (2 miles away). The general tenor of their evidence was that from their observations the pyre at Hill Farm had burned for longer than other pyres in the area and, while it had produced a lot of smoke, had not produced much in the way of visible flame.

In cross-examination Mr Bell conceded that his inspection of the burial of the ash had been such as to make it possible that others had seen what he did not, i.e. that there were some unburnt animal parts. Despite the tenor of his written evidence, I was not satisfied that he had taken any very systematic steps to ensure that the carcases had all been effectively incinerated.

I found some of the evidence tendered by the defendants to suffer from a degree of inaccuracy and exaggeration. This is particularly so of KF’s statements to the effect that each time he looked at the pyre it was barely burning or out. However, there is some consistency between him and Mr Bell as to the state of affairs as late as 23^rd March, when both agree that unburned coal and sleepers were visible when the contents were stirred by the Hymac. That certainly suggests that as at that date there could still have been unburned carcases. The accounts that the pyre produced more smoke than flame is consistent with the fact that the pyre was used (at Mr Bell’s direction) to dispose of some 135 bales of silage. On the other hand, the fact that the silage caused the pyre to emit large quantities of smoke, and that some fuel coal and sleepers on the windward side of the pyre remained unburned at a late stage, is not necessarily inconsistent with there having been a good incineration of the central contents. Mr Eyers (another ADAS employee) recorded somewhat cryptically on 26^th March (three days before the burial) that

““fire smouldering quietly will take a long time to go at this rate”

On the whole of the evidence I was not satisfied that the pyre was completely effective in reducing all of the carcases to ash.

This section of my judgment picks up the water pollution issues referred to at paragraph 113 above. The relevant legislative provisions are to be found in the Water Resources Act 1991, the Groundwater Directive and the Groundwater Regulations.

The Groundwater Directive. Article 1(1) explains that the purpose is to prevent the pollution of groundwater by substances belonging to the families and groups of substances in lists I or II in the Annex. The key definitions are in Article 1(2), sub-paragraph (d) of which defines “pollution” as

“the discharge by man, directly or indirectly, of substances or energy into groundwater, the results of which are such as to endanger human health or water supplies, harm living resources and the aquatic ecosystem or interfere with other legitimate uses of water.”

Article 3 states:

“Member States shall take the necessary steps to:

(a)

prevent the introduction into groundwater of substances in list I ; and

(b)

limit the introduction into groundwater of substances in list II so as to avoid pollution of this water by these substances”.

This obligation is then elaborated in articles 4 and 5, so far as relevant, as follows:

“4.1.

To comply with the obligation referred to in Article 3(a), Member States: -

- shall prohibit all direct discharge of substances in list I,

- shall subject to prior investigation any disposal or tipping for the purpose of disposal of these substances which might lead to indirect discharge. In the light of that investigation, member States shall prohibit such activity or shall grant authorization provided that all the technical precautions necessary to prevent such discharge are observed,

- shall take all appropriate measures they deem necessary to prevent any indirect discharge of substances in list I due to activities on or in the ground other than those mentioned in the second indent….”

“5.1.

To comply with the obligation referred to in Article 3(b), Member States shall make subject to prior investigation:-

- all direct discharge of substances in list II, so as to limit such discharges,

- the disposal or tipping for the purpose of disposal of these substances which might lead to indirect discharge.

In the light of that investigation, Member States may grant an authorization, provided that all the technical precautions for preventing groundwater pollution by these substances are observed.

2.

Furthermore, Member States shall take the appropriate measures they deem necessary to limit all indirect discharge of substances in list II, due to activities on or in the ground other than those mentioned in the first paragraph.”

Article 7 is also relevant:

“The prior investigations referred to in Articles 4 and 5 shall include examination of the hydrogeological conditions of the area concerned, the possible purifying powers of the soil and subsoil and the risk of pollution and alteration of the quality of the groundwater from the discharge and shall establish whether the discharge of substances into groundwater is a satisfactory solution from the point of view of the environment.”

Article 4 of the Directive has been implemented by Regulation 4 of the Groundwater Regulations, Article 5 by Regulation 5, Article 7 by Regulation 7.

Prior to the introduction of the Groundwater Regulations, section 85 of the Water Resources Act 1991 had already created a number of pollution offences for which a party is criminally liable. Section 85(1) provides that:

“A person contravenes this section if he causes or knowingly permits any poisonous, noxious or polluting matter or any solid waste matter to enter any controlled waters”

Controlled waters are defined in section 104 as including inland freshwaters (including a relevant lake or pond or so much of a river or watercourse as is above the freshwater limit) (see section 104(1)(c)) and “ground waters, that is to say, any waters contained in underground strata” (see section 104(1)(d)).

Section 88 makes it a defence to an offence under section 85:

“if the entry occurs or the discharge is made under and in accordance with, or as a result of any act or omission and in accordance with –

(a)

a consent given under this Chapter or under Part II of the Control of Pollution Act 1974;

(b)

….”

The reference to “this Chapter” means Chapter II of Part III of the Water Resources Act 1991.

The Groundwater Regulations 1998 expanded the effect of section 85 to make specific provision for the application of criminal penalties under section 85 of the Water Resources Act 1991 (or under section 30F of the Control of Pollution Act 1974 for cases in Scotland) for causing or knowingly permitting disposals which fall within the scope of the Regulations except for those carried out under or in accordance with an authorisation, and for the application of penalties for contravention of an authorisation: see Regulation 14.

Regulation 14(2) of the Groundwater Regulations makes discharge under and in accordance with an authorisation under regulation 18 or 19 a defence to an offence under section 85 of the Water Resources Act 1991. It provides: -

“Section 88(1) of the Water Resources Act 1991 and section 30I(1) of the Control of Pollution Act 1974 (defences to water pollution offences in respect of authorised discharges) shall apply in relation to an authorisation under regulation 18 or 19 as if the reference –

in section 88(1) (a) to a consent under Chapter II of Part III of the Water Resources Act 1991;

(b)

in section 30I(1) to a consent under Part II of the Control of Pollution Act 1974;

included a reference to such an authorisation.””

The following legal issues arise

The following factual issues arise:

The defendants’ closing submissions put an additional Community law argument in the following way:

“180.

Ds also rely on the direct effect principle explained in the Three Rivers case [2003] 2 AC 1 at pp.61-66, 99-103 and 197-200. That principle is that a Directive may have “vertical direct effect” if it lays down unconditional and sufficiently precise provisions binding a Member State (p.64F-65B). If that is the case, the Member State may not plead its own breach of the Directive or Decision in litigation against an individual (p.64A-B, 64G-65C). This is described as “estoppel-based liability” (p.65D-F).

181.

In Three Rivers, one of the issues was whether an individual can rely on a Directive after the Member State had transposed it into legislation. Hirst and Robert Walker LJJ in the Court of Appeal considered this question at p.68H-72A and concluded that the cases:

‘… suggest that there may be a category of directives in relation to which a member state's obligation of proper implementation is not restricted to a once-for-all legislative process, but also requires a continuing administrative process” (p.71G-H).’

182.

Auld LJ considered the issue at 133D-136C. He, unlike the majority, held that the First Council Banking Co-Ordination Directive 1977 did confer rights on individuals. He rejected the Bank’s argument that the Becker principle only applies where a Directive has not been implemented at all, or has been mis-implemented. The Bank argued that the implementation of the Directive by the Banking Acts 1979 and 1987 deprived individuals of such rights. Auld LJ rejected that argument for two reasons:

(a)

If the Banking Acts and the common law failed to give effect to the rights created under the Directive, then they mis-implemented the Directive and that brought into play the Becker principle: p.133E-134C.

(b)

The rationale of the Becker principle was to ensure that obligations under Directives were complied with. This would not be achieved if it was a pre-condition for Becker liability that non- or mis-implementation should be regarded as a precondition for Becker liability: p.134C-136C.

183.

In the House of Lords, Lord Hope cited the views of both the majority and Auld LJ with approval at p.202B-203C.

184.

It follows that if the burial of the pyre remains in the Ash Pit breached the Groundwater Directive, the fact that the UK implemented that Directive by the Groundwater Regulations does not, by itself, prevent the direct effect principle from applying.”

The short answer to that argument, in my judgment, is that we are not here concerned with Becker type liability at all. There is no suggestion that the Groundwater Regulations themselves in any way failed to implement the Groundwater Directive. The proposition is that the Environment Agency, in the course of exercising its powers to issue an authorisation, failed properly to carry out the prior investigation or stipulate the technical requirements required alike by the Regulations (Regulation 7) and the Directive (Article 7). If this action were an action against the Environment Agency founded on that alleged breach, I can see how Auld LJ’s observations might be relevant. I cannot see their relevance to the question which I have to consider.

Accordingly, insofar as (contrary to Defra’s submissions) compliance with the groundwater regime is relevant at all to the question, the most that the phrase “ground suitable in that behalf” requires in my judgment is that the ground concerned should be capable of being the subject of an authorisation under the Groundwater Regulations.

Taking that view it is unnecessary for me to consider whether and to what extent the breaches of the Groundwater Directive relied on have been made out as a matter of fact. For completeness they were as indicated, first, that there had been no “prior investigation” as required by the Directive (and the Regulations) and, secondly, that there had been a failure to ensure that “all technical precautions” were in place to prevent the direct or indirect discharge of List 1 substances and groundwater pollution by List 2 substances. On the first point, Defra had pleaded that the visit to the farm on 27^th February 2001 by Mr Neale, a senior hydrogeologist with the Environment Agency, had been the relevant prior investigation, but Mr Neale, when he came to give evidence, did not understand that he was there specifically in connection with the grant of an authorisation, and, while he assisted Mrs Wilson in advising on the best location for the pyre from a hydrogeological point of view, was not directly concerned in such process as led to the authorisation. He did complete a Foot and Mouth Site Assessment sheet which, it can be inferred, would have been relied on by whoever did issue the assessment. It is, therefore, unclear on the evidence what, if any, additional information the Environment Agency had. There is no evidence, or suggestion on the part of Defra, that other on site hydrogeological investigations had taken place. On the second point, the defendants relied upon the fact that in a draft report made later in the year (26^th June 2001) the Environment Agency had specified certain parameters (e.g. that there should be “at least two metres of unsaturated zone below the base of the excavation, to be confirmed by trial pitting adjacent to the site where necessary”) which were not specified (and probably not complied with) in the pit at Hill Farm.

The EA authorisation. This was issued by the Environment Agency under its powers under the Groundwater Regulations to Mrs Williams on 27^th February 2001. It authorised the disposal of “burnt remains of animal carcases by burial” subject to the conditions set out in a Schedule. Those conditions were (so far as material) as follows:

“GENERAL

1.

The disposal shall consist only of burnt remains of animal carcases.

2.

The disposal shall be undertaken at the location specified in condition 3 below so that:

(a)

There shall be no direct discharge of List 1 substances (set out in Annex 1 to this Authorisation) to groundwater or surface waters;

(b)

Groundwater (as defined by the Groundwater Regulations 1998) is not polluted;

(c)

The disposal shall not cause any adverse effects on sources of water for potable supply;

(d)

Disposal of List 1 and List 2 substances (set out in Annex 1 to this Authorisation) shall only be made in accordance with the following conditions of this Authorisation.

(e)

Provided that the disposal hereby authorised is made in accordance with all of the conditions of this Authorisation, the disposal shall not be taken to be in breach of conditions (a), (b) or (c) above because it contains substances or has properties identified in and controlled by conditions (a), (b) or (c).

(f)

The Authorisation holder shall take all practicable measures to minimise adverse environmental impact of the disposal.

3.

The disposal shall be made by burial on an area of land centered at:

(a)

National Grid Reference SO 4907 2069

(b)

As shown marked ‘Disposal Area A’ on the attached Plan GWSE3006”

The location of the Ash Pit only partially coincided with the area shown on the attached plan. Following a review of the matter in 2002 (detailed in the witness statement of Richard Appleton) the Environment Agency on 10^th March 2003 issued a variation of the authorisation so that it covered the location of the Ash Pit.

The defendants contend that the disposal contravened the terms of the authorisation in four respects.

First, they submit that the material disposed of included the burnt remains of silage and that the authorisation did not permit that. I am unclear whether the submission depends on a finding that the silage was not reduced to ash, or whether it depends on the general proposition that silage should not have been added to the pyre. Whichever it is, I am unable to see what relevance it has to the question whether the ground was suitable for the burial of the carcases. It is obvious that the disposal will have included burnt remains of substances other than carcases, e.g. fuel ash from the sleepers and other fuel used in the combustion.

Secondly, it was submitted that there was a direct discharge of Part 1 and Part 2 substances into the groundwater contrary to General Condition (a). This submission was based on the following propositions: first, that FMD pyre ash typically contains Part 1 and Part 2 substances and the Hill Farm pyre ash can therefore be assumed to have contained Part 1 and Part 2 substances; secondly, that there was a perched aquifer beneath the Pyre field at the relevant place; and, thirdly, that the Ash Pit was dug to such a depth as to cause direct contact by the Part 1 and Part 2 substances to that perched aquifer.

On behalf of Defra, objection was taken as to the evidential basis for any of these propositions: no evidence had been led as to whether the Hill Farm pyre residue contained the substances found in studies of other pyres, nor was there any firm basis (such as might have been provided by a hydrogeological survey) for the proposition either that there was a perched aquifer under the Pyre field or, if there was, as to its depth. Moreover, there was a conflict of evidence as to the depth to which the Ash Pit had been dug (Mr Bell deposing to 3 metres, a figure also given by KF at T16.06.04 p 134 and Mr Matthew Feakins describing it as varying in depth depending on the underlying rock formation but as being, at its deepest part, a “very very deep hole..it may have been 15 foot”).

The evidence is certainly not in a satisfactory state. However the inference that the Hill Farm pyre ash will have contained Part 1 and Part 2 substances can, in my judgment, be properly drawn from the material relied on by the defendants, namely a draft Report prepared for the Environment Agency dated 26^th June 2001 and a report by Water Management Consultants for the Environment Agency dated March 2002. The hydrogeology of the site presents greater difficulties in the absence of trial pits having been dug, but Mr Hodson (the defendants’ expert ) was prepared to opine that it was highly likely that the perched aquifer under the farm buildings extended to the relevant location in the pyre field. Mr McKelvey, Defra’s expert, was reluctant to express any view, but when pressed by me to “take a bet on it” responded that it was likely. As to the depth of the Ash Pit, there are difficulties in placing any definitive reliance on the statements either of Mr Bell or of Mr Matthew Feakins. The “Record of Disposal” annexed to the authorisation (but completed on the basis of we know not what information) records the pit as having had a depth of 4 metres. Whether the perched aquifer was as high as 4 metres below ground at the ash pit site is a matter of pure speculation. Mr Hodson was prepared to opine that “at times during the winter” it would be that high and in a wet winter periodically significantly higher. KF, in a late witness statement, said that he saw water accumulating in the Ash Pit as it was being dug. Mr Bell said in evidence that he saw none.

Were it necessary to decide these issues I would hold that the defendants have proved to a sufficient standard that the ash did contain the relevant substances, and that there was a perched aquifer at the relevant location. I would not hold that they had proved that the perched aquifer was at a sufficient height to result in a direct discharge of the substances into the groundwater.

I do not in fact consider that the correct answer to these questions is determinative of whether or not there was a breach of the authorisation since condition (e) expressly provides, in language which is admittedly not altogether happy, that the presence of List 1 and List 2 substances will not by itself cause a breach of the condition “[p]rovided that the disposal hereby authorised is made in accordance with all of the conditions of this Authorisation”. Given the Environment Agency’s own understanding that the Ash Pit was 4 metres deep, the only sensible way in which to construe this is as authorising the burial which in fact took place notwithstanding the presence of the Part 1 and Part 2 substances.

Thirdly, it was contended that there had been pollution of groundwater contrary to condition (b). “Pollution” is defined in Regulation 1 of the Groundwater Regulations in the same terms as in Article 2(d) of the Groundwater Directive which is set out at paragraph 200 above. To prove pollution it is not enough for the defendants to show that there has been discharge of Part 1 and Part 2 substances. They have to show, on a balance of probabilities, that there has been a discharge which has actually had one of the results posited by that definition. For reasons which I elaborate when considering the expert evidence, they have not in my judgment done so.

Finally, the point was taken that Defra could not rely on the authorisation because of the mistake in the attached plan and the grid references, a mistake which (it was submitted) could not be retrospectively cured by the corrective variation issued on 10^th March 2003. On the approach which I have taken (that at most the ground should be suitable for authorisation under the Groundwater Regulations) there is nothing in this point.

For the reasons given I do not consider that either of the arguments relied on by the defendants as showing that the Ash Pit was not dug in “ground suitable in that behalf” succeeds.

The non-Garron animals

The question here is a short one arising out of the requirement that the ground in which the burial takes place should be

“ground in the possession or occupation of the owner of the animal”

The submission on behalf of the defendants was simply that neither Mr Hendy (the owner of the 46 calves being contract reared by Miss Hawkins in a shed at the farm), nor Mr Pugh (the owner of 32 cattle which were being kept in the Lowther Shed) nor Mr Watkins (the owner of 544 sheep which were grazing the roots field) either owned or occupied that part of the Pyre Field in which the animals’ burnt remains were buried. It was conceded that Mr Watkins was in occupation of the roots field, so that burial of his animals could have taken place there, and the logic of that concession applies also (sed quaere in the case of Mr Hendy) to the owners in relation to the places where their animals were respectively allowed to be.

Defra’s primary case was (i) on a true interpretation of the word “occupation”, as it is used in s 34(4), the animals (and, through them, their owners) had been in occupation of Hill Farm and (ii) that “ground” properly interpreted refers to anywhere on the IP that is suitable for burial

In support of that submission reference was first made to Dawson v. The Midland Railway [1872] LR 8 Exch. 8. In that case the defendant railway company was under a statutory duty to maintain fences between the railway land and adjoining land:

“protecting such lands from trespass, or the cattle of the owners or occupiers thereof from straying thereout…”

The plaintiff had hired a stable for his horse from an occupant of adjoining land, and was allowed to graze the horse in a field adjoining the railway during the day. The horse escaped from its stable during the night into the field and thence onto the railway line via a defective fence. Refusing a rule, Kelly CB held that the horse had been lawfully in the field and “the horse [being] upon the close with the licence of the occupier” the defendants were liable.

All that case is authority for is that “occupier” meant anyone whose animal was in the field with the consent of the owner. Why it was taken that the horse was in the field with such consent when the licence in question appeared only to cover daytime grazing is not clear. I do not find the case of any assistance on the question which I have to determine. The defendants do not dispute that the various owners were in occupation of parts of Hill Farm; simply that they were not in occupation of the relevant part.

It was next submitted that it was necessary to give the words a sensible, purposive construction. The argument was that since the evident purpose of section 34(4) is to permit burial of diseased carcases without the danger of further propagation of health risks entailed by moving the carcases off-site, one should strive to construe it so as to enable that purpose to be achieved in relation to the non-Garron animals. I was referred to the case of Kholwad v. Municipal Council of Johannesburg [1922] 1 AC 500 as an example of the court applying such a construction. Mr Harris on behalf of Defra developed this argument in powerful written closing submissions in the following passage

“ The AHA is there to permit effective control and eradication of very serious animal diseases. The whole of a farm premises is declared an Infected Premises (“IP”) when FMD strikes, not just the field in which the animals stood, or the area in which slaughter takes place. The whole of the IP then has to be slaughtered out. The whole of the IP has to be cleansed and disinfected. The whole IP is put under movement restrictions. The whole slaughter and disposal has to be carried out as urgently as possible. Transport of carcases off the IP will create a danger of propagation of health risks. It might not even be possible to discern which animals have been in which part of the farm, particularly if they have all been gathered together for slaughter (which is very likely, and which took place on Hill Farm). Animals often move round areas of farm premises, sometimes in a controlled manner (for example, for milking, or moving to new pasture, or for mating), sometimes uncontrolled (e.g. as strays). The list of reasons for rejecting the Defendants’ interpretation is almost endless.

…..

38.

So, “occupation” should be interpreted to include occupation via/through the medium of animals, and “ground” should mean anywhere suitable for burial on the IP. Such an interpretation is sensible and purposive, just like the approach of the High Court in Dixon. It is particularly appropriate when interpreting the AHA in light of the FMD Directives: see also herein the section under the heading “Suitability”.”

It was further submitted that to draw a line round particular parts of the farm (for example the roots field in the case of Mr Watkins’ sheep) was, in the light of the purposes of the Act, irrational and arbitrary. As to that I agree, but it is not irrational or arbitrary when asking the question (which the subsection seems to pose) as to what ground Mr Watkins was occupying.

I agree that there are powerful policy reasons for seeking to read section 34(4) in the way urged upon me by Mr Harris. However, I remain unpersuaded by his arguments that it is possible to get the desired meaning out of the words used. Mr Jourdan submitted that, by praying in aid the concept of an IP, Mr Harris was seeking to construe the Act by reference to subsequent subordinate legislation made under it, an impermissible process. In fact the submission seems to me to be inaccurate, since the concept of an IP does not emerge for the first time in the 1983 Order but is to be found in section 17 of the Act itself: see section 17(2). That fact, however, strengthens rather than weakens the submission made on behalf of the defendants: if Parliament had intended to identify “the ground” in section 34(4) with the IP, there was no reason why it should not have used the concept of an IP expressly.

For the reasons already given, I do not think that reliance can be placed on paragraph 2 of the 1993 Order nor that the power can somehow be willed into being by a process of necessary implication. I have come to the conclusion that burial of the burnt remains of the non-Garron animals in the Ash Pit was not authorised either by section 34(4) or any other power.

It follows from my findings that the defendants’ case against Defra fails in all respects save two, namely (1) that Defra had no power to bury seized items in the C&D Pit and (2) that Defra had no power to bury the burnt remains of the non-Garron animals in the Ash Pit. Miss Hawkins (or KF if the order under section 423 restores his title) is therefore entitled to sue in trespass in respect of these matters. It also follows from Defra’s concession in relation to the unburied FYM (see paragraph 78), and my finding that the legislation gives no power to Defra permanently to store seized materials on an IP, that the leaving of the FYM at Hill Farm has potentially been a trespass. I say “potentially” because Defra was under no immediate obligation, having “seized” it in February 2001, to remove it, and I am unclear whether it has ever been given an opportunity to remove it. These matters were not the subject of argument before me.

Defra sought to argue (if I understood the argument correctly) that, even if its actions had amounted to trespasses because neither expressly nor impliedly authorised by statute, it was nonetheless not liable to pay damages for trespass. This argument was based on the proposition that the detailed provisions for compensation contained in the legislation impliedly excluded a further liability for damages in trespass. Reference was made to Geddis v. Proprietors of the Bann Reservoir 3 App Cas 440, Marriage v. East Norfolk Rivers [1950] 1 KB 284 and to Marcic v. Thames Water Utilities [2003] 3 WLR 1603, [2003] UKHL 66 in support of this proposition. However, once it has been found that the particular action complained of is neither expressly nor impliedly authorised by the statute in question, I see no room for the invocation of the principles illustrated by these authorities.

I should add that, so far as the non-Garron animals were concerned, it was argued on behalf of the defendants in supplemental written closing submissions that the mixture, before burial, of their ash with that of the Garron animals meant that Defra had put it out of its power only to bury the latter, so that burial of all the ash was trespassory. I do not accept that submission. Even were I to accept it, it would not in my judgment lead to any difference in my approach to the calculation of user damages in respect of the Ash Pit for the reasons given paragraph 276 below. I would add that, on any view, this is a case where I do not think it appropriate to grant injunctive relief requiring the removal of the contents of the Ash Pit. Given the fact that the relevant defendant can be fairly compensated in money for the continuing trespass and the disproportionate expense which such removal would occasion to Defra, the grant of such relief can in my judgment properly be viewed as oppressive within the principle laid down in Jaggard v. Sawyer [1995] 1 WLR 269, [1995] 1 AER 189, CA.

The defendants put their claim for damages for trespass under two heads. First, they claim damages for diminution in the value of the land, contending that there has been such diminution as a result, not of any actual contamination of the land, but of the risk of such contamination in the future. Secondly, they claim “user” damages in respect of the continued user of the land in respect of the Defra owned materials which are the subject matter of a continuing trespass. It is clear that, in an appropriate case, it is possible to claim on both bases: see, for example, Whitwham v Westminster Brymbo Coal and Coke Co [1896] 2 Ch 538, CA. In addition they seek orders for the removal of the trespassing material.

Given my findings on liability I am strictly only concerned with the C&D Pit, the non-Garron animal remains in the Ash Pit, and the unburied FYM. The claim for damages based on diminution of value relates only to the C&D Pit and the unburied FYM since, as Mr Jourdan conceded in his closing speech, it could not be suggested that the trespassory burial of the non-Garron animals caused any diminution in the value of the land additional to that (if any) caused by the non-trespassory creation and use of the Ash Pit. Defra has agreed to remove the excavated contents of the C&D Pit and the unburied FYM and to make good the relevant parts of the land at its own expense. I propose to order that it is liable to do so. On that basis the claim for diminution of value seems to me to be limited to the diminution in value as a result of the risk of future contamination on the footing that those steps have been taken. The extent to which it is strictly necessary for me to decide on the many hydrogeological and valuation issues which were canvassed before me is therefore very limited. Much of what follows in the discussion of those issues is therefore relevant only if I am wrong in the decisions which I have reached on liability.

The expert evidence on hydrogeology was given by Mr Paul Hodson MSc, MBIAC of Fieldfare Associates on behalf of the defendants and by Mr Patrick McKelvey BSc, MSc of Water Management Consultants on behalf of Defra.

While there was some measure of agreement between the experts as to the significant hydrogeological features of Hill Farm there remained some significant differences of opinion. These were largely the result of the fact that no hydrogeological investigations had been undertaken, with the result that their respective conclusions were in some respects necessarily speculative.

Hill Farm is located on a hill which slopes relatively steeply down to the north east and west. The farmhouse itself is at 167 metres above sea level (masl), the Ash Pit 400 metres and the C&D pit some 360 metres to the north west is at 145 masl. The water supply at the farm is from a borehole (“the Active Borehole”) situate just to the south of the farm buildings which is drilled to a depth of 75 metres below ground level (mbgl) which is lined with a casing (the annulus). The annulus has holes to permit water to enter between 66 and 75 mbgl.

Below the surface soil the geological composition is a thick layer, probably 180 mbgl of Brownstone. The aquifer accessed by the Active Borehole is described by Mr McKelvey as “a low yielding, fracture flow aquifer with low permeability and storage”. Such an aquifer (“the subterranean aquifer”) will tend to draw in water in a horizontal rather than a vertical plane. The water bearing strata lie below a confining layer of impervious material and are therefore under pressure. Such an aquifer is described as a “confined” aquifer.

There is an old dug well (“the old well”) in the farmhouse itself, not currently used for water supply. It is some 6.1 metres deep. This indicates the existence of a shallow aquifer above the brownstone formation (“the perched aquifer”). The groundwater flow in the perched aquifer is likely to follow the topography and discharge to the streams and springs in the valleys to the west and north (Llantywaun Brook some 800 metres from the farm buildings) and east (Gorsty Spring which is some 450m from the farm). As already noted (see paragraph 220 above whether that perched aquifer extended to the Pyre Field was a matter of speculation).

If the subterranean aquifer is a completely confined aquifer there will be no possibility of water from the perched aquifer reaching the subterranean aquifer. If, however, the latter is not completely confined, because of the existence of vertical fissures in the brownstone formation, that possibility may exist. Mr Hodson described such an incompletely confined aquifer as a “leaky” aquifer.

There are two other inactive boreholes at other locations near the farm buildings, the “old borehole” (described on the plan at 7/1894 as “Old Well in Garden) and “the abandoned borehole” (described on that plan as Old Borehole”) situated approximately 50 metres to the west of the Active Borehole. Nothing is known about the depth of the old borehole save that (because it was serviced by a wind pump and is locally reputed to have been a “very deep well”) it can be supposed to have accessed a subterranean aquifer rather than the perched aquifer which sourced the old well. The abandoned borehole was drilled in Spring 1994 to a depth of approximately 50 metres and is partially lined with 4.5 metres of cement grout. It proved to be low yielding and was therefore abandoned in favour of the current Active Borehole in January 1995.

When water is pumped from a borehole the initial water yield comes from storage within the borehole and in the aquifer immediately adjacent to the intake screen of the borehole. As the level of the water in the well decreases a “cone of depression” results, creating a hydraulic gradient drawing water from the aquifer. The longer the pumping continues, the more the cone of depression and radius of influence of the well deepens and expands. The expansion will continue until the cone intercepts enough aquifer flow to equal the pumping rate and/or there is sufficient leakage from overlying formations to equal the pumping rate.

Unusually sustained pumping from the Active Borehole took place during the C&D operations in the spring of 2001. At the end of August 2001 the Feakins family reported that they were experiencing an unusual chemical smell and metallic taste to their water supply. Samples were tested by Hereford Environmental Health (23^rd August 2001) and by Chave and Jackson of Hereford in November 2001. The first test showed an unusually high level of sodium. Both tests indicated the presence of bacteria.

That has been the only recorded episode of contamination of the Active Borehole either before or since the FMD outbreak. Mr Hodson’s opinion was that there was a causal connection between that episode and the C&D operations, that opinion being based on the fact that both events shared the same characteristics of being unprecedented and unrepeated and that the second had followed the first (see T29.6.04 p 40). Two substantial reasons for doubting the causal connection, however, are, first, that Mr Hodson assumed the sodium to have come from the disinfectants used in the C&D operation whereas, had that been the case, one would have expected to see correspondingly raised levels of potassium chloride and sulphate, but these were not found; and, secondly, that the presence of the bacteria was an indication that active disinfectants had not contaminated the Active Borehole.

The defendants’ allegation was that the source of the contamination in August 2001 was probably the Lagoon. Mr Hodson’s original report (January /June 2002) hypothesised that the most likely pathway was by way of the old well, having made the mistake at that stage of supposing that the old well drew on the subterranean aquifer. That mistake having been corrected, Mr Hodson’s preferred candidate for a pathway was the incompletely lined abandoned borehole. Alternatively he suggested a possible connection between the perched and the subterranean aquifers by vertical fissures in the brownstone. The fact that there were such fissures was, he suggested, indicated by the fact that ephemeral “Artesian” springs had been noted in some of the fields during wet winter months. He accepted, however, in his later evidence that the springs which he had described as Artesian (i.e. the product of water being forced up under pressure from the subterranean aquifer through vertical fissures) might as easily be explained as the product of flow through a perched aquifer after heavy rain. Two other potential pathways suggested by him in his first report were slow seepage of shallow groundwater into the aquifer (which if it existed would present a low risk having regard to the opportunity for the attenuation and degradation of potential contaminants) and annular flow in the Active Borehole (which should not occur at all if the cement grout had been properly installed).

Mr McKelvey considered that contamination of the Active Borehole supply from vertical flows down either the old or the abandoned boreholes was unlikely: the Active Borehole had been drilled to a depth of 75 metres, suggesting that the high yielding fracture in the brownstone had been located below 60m. Even with the possibility of direct vertical flow down the abandoned borehole he thought that the geology made it unlikely that there was a connection to the Active Borehole, and unlikely in any case that there would be a sufficient driving head from the Active Borehole to draw in contaminants from the surface.

I do not think that it is possible on the evidence to conclude on the balance of probabilities that the contamination which occurred in August 2001 was the result of the C&D disinfectants reaching the Active Borehole as a result of the extended pumping. Such a conclusion involves pure post hoc propter hoc reasoning. It is just as likely that, as suggested by Mr McKelvey, that the increased level of sodium was explicable by the use of water softeners, brackish water or effluent, or might have been the result of laboratory error. I would add that the August 2001 water sample, if accurate, would appear to tell, if anything, against there being a relevant connection between an FMD contaminated perched aquifer and the subterranean aquifer drawn on by the Active Borehole, since, if there had been such a connection which was activated by the extended pumping which took place, a wider range of contaminants would have been found in the sample.

That conclusion does not involve my rejecting the proposition that there is some risk of a possible connection between any perched aquifer and the subterranean aquifer feeding the Active Borehole. Nor does it say anything about the consequences, assuming no such connection, of such contamination as there may have been of perched aquifers. These issues are best examined by reference to the location and components of the various FMD sites at the farm.

The Ash Pit. The defendants’ case is that there is a risk that the Ash Pit contains prions and List 1 and 2 substances, all of which may leach out into the perched groundwater, whence they may (a) contaminate springs in the adjacent field and (b) migrate to the subterranean aquifer either through vertical fissures or via either the Old or the Abandoned boreholes.

So far as prions are concerned I have already concluded, accepting Mr Comer’s evidence, that the risk of transmission is negligible. So far as List 1 and 2 substances are concerned, the defendants have adduced no direct evidence of their presence either in the ash leachate or in any springs connected with such perched aquifer as may exist in contact with the ash pit. Mr McKelvey thought that if there were any such leaching it would have been revealed by the tests carried out on the water samples from two seeps for the purpose of the joint report made by himself and Professor Willetts (see paragraph 261 below). The defendants objected in their closing submissions that there was no evidence that groundwater flows from the vicinity of the Ash Pit would end up in the same springs as those from the C&D Pit. Mr McKelvey’s evidence on this was, however, unequivocal: he had no doubt (see T 30.6.04 pp. 18-20) that the two tested springs would have picked up any flow of groundwater from the Ash Pit, adding that the Environment Agency report of 1^st April 2004 (which had also tested the springs) had shown no evidence of the suggested contaminants from the Ash Pit. There is no reason why I should reject that evidence. Nor, I would add, did the defendants in any case, adduce any evidence that such contaminants as there may have been in the ash pit leachate would be likely to exist in sufficient quantities in such springs to pose any danger to human or animal health.

As for the possibility of the putatively contaminated leachate reaching the subterranean aquifer via vertical fissures in the intervening brownstone or via the annulus of the Old or Abandoned Boreholes, Mr Hodson (while describing the risk in his reports as a “medium” risk) appeared to accept in cross-examination that it was unlikely. All the evidence I have heard persuades me that it is very unlikely indeed. The Ash Pit is over 200 metres away and downhill from the old boreholes and some 400 metres, again downhill, from the Active Borehole. The natural flows of groundwater would be downhill towards Llantywaun Brook. Mr Hodson’s evidence was that such potential as there was for this effect depended on a period of abnormally extended pumping. He accepted that the potential for this effect was less in the case of the Ash Pit and the C&D Pit than in the case of the Lagoon (see T 29.06.04 p.20). The possibility seems to me to be belied by the fact that, despite the existence of such a period of extended pumping during the C&D operations, not a trace of relevant contamination has at any time been detected in the Active Borehole supply.

The Lagoon. It was not suggested that the presence of the lagoon presented any future risk of contamination. It has been periodically emptied and its contents spread on to the fields. Mr Hodson said that the chance of contamination in the lagoon was low to non-existent (see report dated 4^th June 2004, appendix 1 para 15).

The C&D Pit. A preliminary issue of fact here is as to what was disposed of in the C&D Pit. KF’s evidence was that amongst the items disposed of in the C&D Pit were the contents of the building known as the workshop (No 5 on the plan) and agricultural fertilisers and other chemicals stored in “the shed opposite the house” (No 4 on the plan). He said that he had been present in the workshop when Mr Bell had given an instruction to the contractors that it needed to be cleared so that disinfection of the workshop could take place, and had himself had assisted the contractors in the resulting process by loading those contents into a trailer for disposal into the C&D Pit. From memory he thought that the contents (some of which can be seen in a photograph supplied by Defra) included”..10-15 batteries on the bench being charged for use on the electric fences; under the bench on the bottom shelf were between 40-50 tins of household and farm paints, including emulsion, glosses and red oxides. On the left hand side of the bench were bottles of anti-freeze and grease cartridges. Between the bench and the door, I stored 5 gallon cans of new engine oil, hydraulic oils and numerous cans of waste engine oil, one or two 5 gallon cans of creosote, one 5 gallon can of battery acid and several jerry cans of petrol and diesel”.

So far as shed no 4 was concerned, KF played no direct role in the disposal of its contents. Those contents included items which appeared on the list of materials signed by Mr Bell on 24^th March 2001 as having been seized by him (and for which Defra therefore accepted a liability to compensate KF). That list did not, however, include any of the agricultural chemicals which KF now believes were taken to the C&D Pit. By inspecting invoices for such chemicals, KF has with the assistance of Medicrop compiled a list of the chemicals which he believes may have been in shed no 4. This list is exhibited at KAF 9 to his witness statement. His belief that Mr Bell gave an instruction in relation to the contents of shed no 4 similar to that alleged to have been given in relation to the contents of the workshop is unsupported by any direct evidence: he said in evidence that it was an inference which he drew.

Mr Bell denied both in his witness statement and in cross-examination having given any such instruction as was either deposed to directly, or inferred, by KF. According to Mr Bell, the only materials disposed of in the pit were metal fittings (gates, hurdles, etc.), plastics and a small amount of animal feed including mineral blocks

The C&D Pit has been excavated (in April 2004) in accordance with an agreed protocol under the supervision of Mr McKelvey (acting as Defra’s expert) and Professor Willetts (acting as an expert on behalf of the defendants). Objects found as a result of that excavation are listed in their joint report. They comprised a broken 1" plastic water pipe exposed in SE and NE corners of the pit, large pockets of fermenting grain, feed troughs, metal work, wires, plastic netting, concrete, gate post, empty and partially full tins of paint/liquid compound (eight were counted and listed), a traffic cone, car and lorry lead/acid batteries (four were counted), one fire extinguisher, one metal box identified by KF as a welding unit, plastic buckets, one grease gun plus several used cartridges.

That finding suggests that, in addition to the items admitted by Mr Bell to have been disposed of in the C& D Pit, there were also some items in the categories said by KF to have been removed from the workshop. The experts disagreed as to whether other items than those found in the course of the excavation may have been in the C&D Pit. The methodology of the excavation is described in the report. The excavation was done by a digger using a bucket which was about one and half metres wide and half a metre deep which scooped out material in lifts on close on a tonne at a time which were then deposited on plastic sheeting. No attempt was made to break up or sift the contents of each bucket load. The found items were simply those that happened to be identified in the process. Professor Willetts was of the opinion (and I agree) that there was ample scope for there to have been other items in the pit whose existence was not revealed by the process, although I would myself rate the chances of turning up an item as large as a 5 gallon container as quite high.

What was found therefore provides support for KF’s evidence that some at least of what he identifies as having been in the workshop was disposed of in the C&D Pit. The joint report does not, however, provide any positive support for the thesis that chemicals from the “Medicrop” list (believed by KF to have been in shed no 4) were so disposed of. Mr Hodson, however, thought that there was support for it in the results of an Environment Agency test of 1^st April 2004 which found elevated levels of manganese (a constituent of some agricultural chemicals) in the C&D Pit and in a field spring 250 metres WNW of the C&D Pit (and also at Gorsty Spring). He thought that the manganese might be the cause of algae which had appeared in certain of the field springs and which were reported to him by KF. In cross-examination he agreed that it was unlikely that there was a pathway between the C&D Pit and Gorsty Spring (T 29.06.04 p 65). A test commissioned by himself and done on 24^th April 2004 also found two other organophosphorous compounds associated with agricultural chemicals (pirimiphos-methyl and imazalil) in seepage at the base of the C&D Pit which were also consistent with the hypothesis that chemicals had been disposed of in the C&D Pit. Puzzlingly, the joint report had tested 24 soil samples from the C&D Pit for, inter alia, the first of these compounds but had found none.

It was submitted on behalf of Defra that I should reject the inference which Mr Hodson sought to draw from these tests since they had been carried out unilaterally by the defendants, without consulting Defra (notwithstanding the previously agreed joint methodology) and after the pit had stood excavated for over a month; moreover, the manganese reading had to be seen in the context of there having been inexplicable increases in manganese on Hill Farm in the past (an inexplicable increase in manganese in the Lagoon was observed between tests carried out on 14 May 2002 and 23 July 2002). In addition, it was pointed out (and I accept) that the elevated levels of dyphelinamine and seven synthetic pyrethoids in Gorsty Spring (which were not found in the C&D Pit) was further support for the improbability (which Mr Hodson accepted) of there being any link between the C&D Pit and Gorsty Spring. It was further submitted that Mr Hodson was not justified in drawing the conclusions which he did from the photographs of the algae (his tentative conclusion that the algae might indicate manganese iron depended on interpreting the photographs as showing the algae to be “reddish-black”, which in my judgment they do not).

My overall conclusion is that the scientific evidence does not positively support the theory that the chemicals from the Medicrop list were disposed of in the C&D Pit, although it is consistent with the possibility that some were. The absence of some chemical traces that might have been expected is explicable if there had been no leakage from the containers, and the absence of containers themselves has not been proved. If the question which I have to decide is the effect of the trespass on the value at 30^th November 2001, a firm conclusion one way or another on the point is unnecessary. The question, as it seems to me, is what would have been the effect then of the existence of the buried contents of the C&D Pit given uncertainties as to its precise contents. Neither the defendants nor Defra is able to prove exactly what those contents were. There was a high risk that it contained at least some of the possible contaminants from the workshop and some risk that it may have included small containers of agricultural chemicals.

The joint report concluded that the field springs had elevated zinc and ammonia likely to be sourced from the C&D pit. This clearly indicates that its authors considered that there is a hydrogeological link between the C&D pit and the field springs. Mr McKelvey confirmed this in cross-examination, stating that samples from one of the springs “showed distinct characteristics of seepage from the pit” (T 29.6.2004 p.145). They also agreed that now that the C&D Pit had been excavated and its contents were to be removed there was no need for any further remediation measures. In his closing submissions Mr Jourdan submitted that there was a continuing risk that any contaminating materials which may remain in the C&D Pit may continue to leach out. On the evidence this could only be the manganese and/or the pirimiphos-methyl detected by his test done on 24^th April (the imzalil does not readily leach out), but Mr Hodson does not say that the leaching of these materials is likely to pose any future hazard. I accept the evidence of the joint report in this respect.

The position would in my judgment have been otherwise had the C&D Pit not been excavated. When Mr McKelvey was cross-examined as to this (T30.6.04 p.24), the following exchange took place:

“Q Would you agree that the work of removing the contents of the C&D pit was warranted? A. No, I would not, actually. According to the results that we find in the soil, any degree of contamination was below the limit required for remediation. Q. It might not have stayed below that limit, might it, if you just left everything down there to rust away, all the containers, all the things that might have been down there? A. It is impossible to say. It may have gone one way, it may have gone the other.”

The last answer indicates that there was an appreciable, albeit unquantifiable, risk of contamination of the groundwater from the unexcavated C&D Pit.

For the reasons already given in connection with the Ash Pit (see paragraph 256) above) I do not consider that there was any appreciable risk of any contamination in the C&D Pit reaching the Active Borehole.

The Raised Area. The claim here is that the material buried in the Raised Area will have included bedding from the shed in which the slaughter took place into which there is likely to have been some seepage of brain tissue which, in the event of there having been a cow with BSE amongst those slaughtered, may have led to contamination with prions. Allowing for the improbability of there having been such a cow, Mr Comer’s opinion was that the risk of there being any infectivity in the material in the Raised Area was negligible when allowance was made for the decay of infectivity over time. Both he and Professor Duffus were in agreement as to the hydrophobic nature of prions, rendering it extremely unlikely that they would migrate with groundwater flows. There was no evidence as to there being any leaching from the Raised Area, although Mr Hodson speculated on the possibility that some such effect might explain the otherwise inexplicable changes in the constituents of the Lagoon which took place in 2002.

Expert evidence of valuation was given on behalf of the defendants by Mr Ian Hepburn FRICS FAAV of Strutt & Parker and on behalf of Defra by Mr Timothy Swallow BSc(Hons) MRICS who is employed by District Valuer Services. Their evidence was principally focussed on the value of Hill Farm on 30^th November 2001 on various different hypotheses. That date was taken as the appropriate one as being the date when, but for risk of contamination putatively caused by Defra’s trespass/es, the sale to the Nevchatals would have completed (and by analogy with the approach taken by the Court of Appeal in Blue Circle Industries plc v Ministry of Defence [1999] Ch 289). What was not done, however, was to examine in any way what the position would have been had the alleged trespasses never occurred. Such an alternative scenario would, it seems to me, have had to include the possibility that no effective C&D operation had taken place (if the defendants are correct in saying that Defra had no power to conduct it) and Hill Farm then remained an IP. This was not, however, a point taken by Defra.

Mr Hepburn and Mr Swallow were able to agree as to their valuation of Hill Farm as at 30^th November 2001 on four out of the five assumptions which they were invited to make. They were agreed on the following:

The basis upon which they disagreed was Basis 3 which was that:

“The [FYM], lagoon and the contents of the C&D pit are removed and the areas made good at the expense of Defra. Furthermore it is to be assumed that there has been some contamination of the land, for example in the C&D Pit, but the area has been reinstated at Defra’s expense including the contaminated areas and the risk of contamination now or in the future is negligible”

Mr Hepburn’s valuation on this basis was £850,000. Mr Swallow’s was £1.1m. A simple difference of interpretation explained their different results. Mr Swallow assumed that “negligible” bore its dictionary meaning. Mr Hepburn had interpreted “negligible” as meaning, not that there was a risk which could be wholly discounted, but as conveying to a purchaser that, in the light of the events that had happened, while “[the] farm had effectively been cleared of contamination….no one could give the ultimate assurance that..it was free from contamination. One would have to take that into account in advising a purchaser or indeed a lender.” (T 1.7.04 pp 22-3).

It seems to me that Mr Hepburn’s approach to Basis 3 was inconsistent with his approach to Basis 1 and Basis 2. Neither Basis 1 (which assumes everything to be removed and made good) nor Basis 2 (which assumes no removal or making good except in relation to the lagoon) proceeds on the assumption that no one can give “the ultimate assurance” that no contamination will occur in the future: simply that “no material contamination…is likely to occur in the future” (emphasis supplied). I think therefore that the approach he has adopted is to assume that the risk is of the order indicated by Mr McKelvey in relation to the unexcavated C&D Pit, namely that future contamination was unlikely but “It may have gone one way, it may have gone the other” (see paragraph 267 above).

I do not think that I need resolve this issue since, on the basis of my findings above, Basis 1 appears to me to be the correct basis to adopt: the only operation of Defra which was both a trespass and potentially contaminating was the C&D Pit. Once that is removed the expert evidence established that the potential for future contamination from that source will have been removed. Accordingly the defendants have not established an entitlement to damages for diminution in value.

I turn therefore to the question of “user” damages. The defendants sought a measure equal to the fair price that would have been negotiated prior to the commencement of the trespass. The authorities relevant to this question have recently been reviewed in Barnes v Severn Trent Water Ltd [2004] EWCA CIV 570, [2004] All ER (D) 179 (May) but do not require discussion. Mr Jourdan argued that the fair price for permanent storage on Hill Farm would have been negotiated by reference to the amount of money Defra would have saved itself by not having to pay landfill costs elsewhere. Thus, taking the landfill costs as £53.00 per tonne and assuming the Ash Pit to have contained 4375 tonnes of material, he submitted that the fair price for permanent use of the Ash Pit was £231,875. He submitted that the fair price for the temporary use of the land for the unburied FYM and the C&D Pit should be calculated on the basis of an interest charge of 4% on the cost of removing the relevant materials to landfill (which was submitted to be £211.00 per tonne). That produced a figure (as at 31^st July 2004) of £36,974 in relation to the FYM (taking that as 1560 tonnes) and £2,133 in relation to the C&D Pit (taking that as 90 tonnes). On reviewing these calculations I record that, while in his closing written submissions, the FYM heap was taken on the basis of KF’s estimate as 1000 tonnes, this had increased (as a result of an estimate by a contractor which Defra believes to be an over-estimate) to 1560 tonnes in supplemental written submissions.

While accepting the general principle that there is an entitlement to damages based on the loss of an opportunity to negotiate a charge, I am unable to accept Mr Jourdan’s submissions. Essentially this is because the picture he asks me to have of the hypothetical negotiation is a wholly unreal one (even supposing that he is correct, as his submissions assume, that the negotiation would have been with KF as freeholder rather than with the company as tenant). So far as the C&D Pit is concerned the negotiation would not have been about the excavated contents of the C&D Pit: it would have been about what should be done with the seized items which were eventually buried there. So far as the evidence goes, the tonnage of these would have been trivial, and the difficulty and cost for Defra in removing them far less than Mr Jourdan’s calculations suggest. Similarly, in relation to the Ash Pit and the non-Garron animals, the negotiation would not have been about what to do with the ash produced by their incineration on the farm, but about what to do with the carcases given that there was no power to burn and bury them there. The “saving” to Defra in being able to burn and bury them along with the Garron animals was, on any view, no more than the cost of the removal of 46 calf, 32 cattle and 544 sheep carcases, and their disposal on some other pyre or pyres (which might have been on the respective lands of KF’s friends and neighbours Mr Hendy Mr Pugh and Mr Watkins). On Mr Jourdan’s figures (which assume 2 cows or 20 sheep weigh a tonne and make no allowance for calves weighing less than cows) the tonnage involved in that would have been in the region of 66. The tonnage would in fact have been less because I take judicial notice of the fact that calves weigh considerably less than cows. Moreover, in any negotiation KF was in an extremely weak negotiating position: he was not even in a position to insist that all the non-Garron carcases be disposed of elsewhere than on Hill Farm, since even on his own argument the roots field was a potential site for burial of the 544 Watkins’ sheep; further, Defra was ostensibly in a position to insist, if it chose, that he be responsible for the costs of the C&D operation (I say “ostensibly” mindful of the fact that KF might have had a public law argument that such playing of hard ball on Defra’s part would have been judicially reviewable). In addition, the negotiation would have taken place against a background where it was in the interests of both Defra and KF that Defra should take all necessary steps to suppress and eradicate the national FMD epidemic which was destroying so many livelihoods including KF’s own. KF would have been willing to co-operate (as he did co-operate) with Defra to that end. Indeed, a contemporary letter of his emphasised that fact. If he disliked being pointed out as the farmer who had spread the disease to France (see paragraph 74 above), he would not have welcomed being advertised as the farmer whose obstructiveness had caused Defra to have to transport infected carcases across the countryside because (absent a ransom payment) he wanted to limit the pyre on his land to his animals and to wash his hands of responsibility for dealing with the infected beasts which were on his land with his permission but which he did not happen to own.

In such a negotiation in relation to the permanent use of the Ash Pit for the non-Garron animals there would, in my judgment, have been considerable force in the argument which it is suggested that Defra would have made, namely that the charge payable (whether for permanent or temporary use) should be calculated by reference to the agricultural value of the land (say at £2,500.00 per acre), discounting that further for the fact that the land was going to remain available for agricultural use That would, however, have produced so paltry a sum as might have been rejected by KF without risking public opprobrium, and a higher sum might in practice therefore have had to be offered. I think it probable that the parties would have come to terms somewhere in the middle range between the cost to Defra of taking the non-Garron and non-Watkins carcases for disposal elsewhere (say 30 tonnes at say £211 per tonne = £6,330) and Defra’s opening offer (say £1,000). I would therefore award £3,500 in respect of the permanent use of the Ash Pit for all the non-Garron carcase ash.

The amount claimed for temporary “storage” of the contents of the C&D Pit is the relatively modest sum of £2,133, but it is based, as I find, on the false premise that Defra ever would have had to confront the prospect of removing 90 tonnes at £211.00 per tonne. It is difficult to see any rational basis for fixing the charge. The answer in my judgment is to award a nominal sum of £250.00 per annum in respect of the continuing trespass.

The imagined negotiation over the FYM would in some respects have had a different quality. It is important not to forget what we are talking of here: the farm muck heap. Defra, having now conceded that it “seized” the muck heap, has necessarily had also to recognise an obligation to pay its fair value. Had that in fact been recognised at the time at which it is now conceded that the seizure took place, the owner of the FYM (whoever that was, but presumably the company as tenant) would have been in the position of knowing that it was going to be paid compensation for it and that Defra was in due course going to have to remove it at its own expense. The argument that “if you leave it here, for the time being, you are saving yourself the cost of taking it away now, so in the meantime pay me interest on that cost” would have had some logic to it. On the other hand, unless and until some such argument actually was put, it would be a rather surprising basis on which to expect to charge for the continued presence on your land of a muck heap. The reality of the situation is that the continued presence of the muck heap on the land was not the result of any defiant or deliberate trespass by Defra, but the result of the fact that the parties were in bona fide dispute as to whether it had been “seized” and, therefore, whether Defra was liable to pay compensation for it. In my judgment, the damage suffered is damage suffered as a result of the delay by Defra in recognising the latter obligation, and is properly compensated for by awarding a suitably generous rate of interest on the amount of that compensation.

This claim is based on the proposition that there was a large amount of equipment belonging to Miss Hawkins, mostly of an equestrian nature, which was stored in the tack room at Hill Farm and which was damaged by the disinfection process employed by Defra. The claim is disputed by Defra on a number of grounds: in particular it is denied that the equipment concerned was in the tack room; and it is not admitted, if it was, that the process employed damaged it.

The disinfection of the tack room took place on 28^th March 2001. It was carried out by Mr Dean of H.J. Kirk & Sons who were working as sub-contractors of JMD. The method employed was that known as formaldehyde “fogging”. That involves the use of a machine containing a solution of formaldehyde and water which is then ignited so as to release a formaldehyde vapour. How the decision came to be taken to employ this method is obscure. Mr Bell’s diary note for 28^th March 2001 records:

“Kirks have brought the formaldehyde. Fumigation takes place in stone barns workshop little office at lambing shed and tack room. Gina has questioned effect of Formaldehyde on saddlery etc. Tack room was fumigated rather than washed as Sylvia [Wilson] said that water would cause mildew etc and be detrimental to leather”

If the decision was Mrs Wilson’s it seems likely that she was simply seeking to follow the guidance in the relevant section of VIPER which (at Chapter 7.2) warns that “Leather articles must be fumigated, as other disinfection methods may cause damage”. Appendix N2 gives guidance as to the various methods by which sterilisation by use of formaldehyde vapour may be achieved, including the use of fogging machines and an alternative method involving the adding of a 40% formalin solution (i.e. as I understand it a solution of formaldehyde and water) to a bed of potassium permanganate (“the potash method”). A report by a Defra vet, Mr Shapter, dated 27^th March had recorded that the tack would need to be disinfected by “formalin fumigation”.

On 30^th March Mr Bell recorded

“Kevin and Gina complains about the use of formaldehyde to fumigate sheds. Say that it will rot the stitching in saddlery and will render hay and straw useless”

These concerns were reflected in a letter written by KF to a Mr Allsop the Technical Manager of a company called Tennants to whom KF had spoken on the telephone on 29^th March to ascertain his views on the use of the Tennants’ product on hay, saddlery and electrical equipment.

The episode is also referred to in a document produced by the defendants which purported to be a diary of relevant events which they maintained had been typed up near contemporaneously from written notes. I was not satisfied by their evidence as to the provenance of this document. It bore more than one trace of much later composition. In connection with this particular event, it purported to record that the contractors had confirmed that they had used “neat formalin” because they did not have potassium. I am quite satisfied that no such conversation could have taken place: the fogging process employed was not the potash method (of which, indeed, Mr Dean had never heard).

The first record of a complaint that the saddlery had actually suffered damage which I have noted dates from early June. At that stage it was being reported internally within Defra that a claim of £15,000 was being asserted in respect of saddlery damaged by formaldehyde. Mr Spilsbury, a Defra C&D officer, reported on 18^th June 2001 in the following terms

“Mr Feakins owns a great deal of horse leather that he claims has been affected by the chemicals used in the C&D process. The leather has gone rather mouldy and the stitching looks as if it has suffered. Whether or not his has been caused directly by the use of Formalin disinfectant, or if it is merely a lack of saddle soap is uncertain and additional research will be needed to establish this.

Formalin is applied as a dry application in most cases, and it is unlikely that it would have caused this level of degradation of the leather. Mr Feakins has made enquiries about the product used and was told that it is not advised for use on saddlery because of it’s derisive effect on the stitching. According to the contractors, this would be the case when formalin is used as a wet application, however, when applied (as in this case) as a dry formulation in a burnt fog, the effect would be negligible”

In his written evidence Mr Spilsbury said that he was shown certain items by Miss Hawkins which were said by her to be “chapped, warped and split and with split stitching” and continued

“I could not say what caused it although it was not looking in a good state. I have seen other saddlery in a similar state on other premises that had not been infected by FMD (and therefore not subject to the same material)”

He told her that if she thought the cleaning had done the damage she should get a valuation and submit a claim.

Miss Hawkins thereafter compiled an inventory for the purposes of a claim against Defra. It is a long list (four and half pages of closely typed items) grouped under the following headings: Bits, Bridles, Accessories, Reins, Horse Protective Equipment, People Clothing, Electrical Equipment, Horse Feed, Rugs & Accessories, Riding Hats, Body Protectors, Accessories, Show Equipment, Saddles & Attachments, Saddle Cloths, Girths, Training Equipment. The most expensive individual item on the list is a Panasonic video camera (stated to be worth £849) and the cheapest a rubber curry comb (of which there were said to have been five) at £1.50. The total values ascribed (which seem to have been arrived at by obtaining prices from various suppliers for new articles) amounted to £24,855.19.

This was subsequently submitted to Defra under cover of a letter dated 4^th August, the material part of which read as follows:

“Since the occurrence all of my saddles, bridles, etc have gone mouldy dried out and now show signs of severe cracking and deterioration. The brass bits and leather strap buckles have either tarnished or gone rusty. My electrical equipment, radios, cameras, clippers, etc are no longer in good working order. I have since contacted several saddlers also the president of the guild of master saddlers at Albion saddlers to seek their opinions and advice, letters enclosed. All are horrified to know that this equipment has been treated in this way and all advise that it should be scrapped and be replaced as new as it could prove dangerous to use.

I raised this matter as a complaint to Mr S. Spilsbury when MAFF, Deffra, returned to finish the C&D work at the farm I also spoke to Mr J. Eckersley VO who said he found it hard to believe that Formalin had been used on my tack in this way, he said the correct procedure should have been to wipe them down with a cloth using Virkon or even using Virkon for the fumigation certainly not Formaldehyde.

I have had everything itemised and priced as new as per the advice of the saddlers and are herewith claiming that Deffra pay to replace all of the damaged goods. Enclosed is the inventory with the values showing what I am claiming.

I have been told not to use any of the bridles and saddles etc as the stitching will have commenced rapid deterioration and could prove extremely dangerous with possible fatal injuries. I therefore require this matter to be dealt with quickly as I have no equipment to use and it is affecting my business and making it extremely difficult to earn a living. ”

The reference in the last sentence to Miss Hawkins’ “business” was a fiction.

The defendants’ evidence is that, before Defra had responded to this claim, all the items listed on the inventory (save for a few items retained for the purposes of the claim) had been disposed of by burying the same in a pit dug by KF especially for the purpose in an area of coppice in a field uphill from the farm buildings. This disposal had taken place at some time in the autumn of 2001 following the sale to the Nevchatals and (it was said) in preparation for the defendants’ intended departure from the farm to live in a small cottage.

In January 2002 Miss Hawkins gave some samples of leather to a Mr Belton of Albion Saddlemakers, who by letter dated 30^th January addressed “to whom it may concern” advised

“I have examined the leather samples sent to me by Mrs Gina Hawkins. I understand this leather was treated with the chemical Formalin during the middle part of 2001. I have taken advice on the chemical effects that Formalin is likely to have on tanned leather. I can confirm the samples I have examined have deteriorated in substance to the point of being totally unsafe for any usage. The effects of this chemical treatment on the leather is irreversible.

It is my opinion all leather products treated with this chemical must be destroyed in order to ensure no accident can occur as a result of camouflaging the weakening effects of this chemical and reintroducing the item into a working environment”

Subsequently, the parties agreed to use Mr Belton as a jointly instructed expert for the purposes of these proceedings. He was instructed to advise on two alternative scenarios namely (1) that the fumigation had been done by the fogging machine process and (2) that it had been done by the potash method, and on various different hypotheses as to the state of the leather before treatment (see 11/3822). Unfortunately, in giving his opinion, Mr Belton (who is not a leather chemist) did not specifically address either scenario in his written report which read (in material part):

“The reaction of leather exposed to a Formaldehyde solution is in effect to “cook” the fibres. It is reasonable therefore, to assume that leather already correctly treated, when subjected to further exposure of a chemical such as Formalin, would tend to be progressively “overcooked.”

The best explanation of this chemical process would be to use the following analogy;

By toasting a slice of bread lightly would cause a firming of the fibres while the fibres would remain pliable. By controlling the heat level and the time exposed it is possible to achieve an exact degree of stiffness and pliability as required.

If however, at any time the toasted slice was subjected to further heat it would progressively become firmer to the point of being both rigid and brittle. Once reaching this state the original characteristic properties of the bread can never be recovered nor the process reversed.

When leather is subjected to a Formalin type chemical, by persons who are not familiar with the potential hazardous influence I believe there must always be a likelihood that their judgement may create an irreversible problem and the leather could become dangerous, through a weakening of its structure. Whatever the original state of the leather i.e. good, average, well maintained, etc., the reaction to Formalin is likely to be detrimental.

Leather is a natural material and as such is subject to a natural deterioration. The breakdown potential is minimised through correct preparation and on going maintenance to reintroduce the oils and greases neutralised through time and working conditions.

…

I believe the safety factor of leather may be compromised when subjected to the chemical treatment as described in this case. It should also be noted as the saddlery equipment may be held together by stitched components and the thread used of natural origin, this too may be subject to dangerous deterioration. It would therefore be extremely unwise to use this equipment and risk serious injury through failure of any integral component.”

That evidence does not make it clear that Mr Belton, in his general remarks, was addressing himself to the effect of a formaldehyde vapour produced by a fogging machine as opposed to the direct application of formalin. His only reference to the actual process applied is in the final paragraph quoted, and there he only uses the word “may”. Neither party thought it appropriate to call Mr Belton to give oral evidence.

Defra’s thesis that there was nothing of significance in the tack room when it was fumigated was supported by the evidence of Mr Dean. He was undoubtedly an honest non-partisan witness. I think, however, that he must be mistaken in his recollection. Miss Hawkins was keeping some 27 horses at the farm for the purposes of various equestrian activities of which she was a keen devotee. I have no doubt that she owned a great deal of saddlery and other equipment for that purpose. There is every reason to suppose that it was kept in the tack room. Mr Shapter’s and Mr Bell’s contemporary records referring to the fumigation of the tack by formaldehyde fogging, and Mr Bell’s record of the defendants’ concerns, are consistent with the account given by the defendants. Mr Spilsbury was undoubtedly shown a “significant amount” of tack in the tack room in June. It is implausible to suggest (as the Defra thesis asks me to suppose) that tack which had not been there in March had been deliberately moved to the tack room by June. If that had happened Mr Bell and Mrs Wilson (who would each have known the state in March) could have been relied on to give the lie to the claim.

I think also that Miss Hawkins’ inventory is likely to have been a reasonably accurate inventory of the contents of the tack room in June. While it may be debated whether she could reasonably expect Defra to visit in order to ascertain the validity of her list, she could not count on its not doing so

What is far less clear is whether any of the items on the list had been damaged by the fogging, if so which ones and to what extent, and, if the effect was to render the item valueless, what was the value of that item.

So far as leather items are concerned, the evidence does not clearly establish whether the damage noted by Mr Spilsbury was the result of the fogging as opposed to the neglect of the tack. Miss Hawkins’ evidence (which on this point I accept) was that she was accustomed to maintain her tack in a professional way, but that this had not been done in the weeks following the fumigation. On the other hand, if it is the case that fogging would not have the effect on the saddlery which Miss Hawkins claims that it did have, it should have been a relatively easy matter for Defra to have led persuasive evidence to that effect. It did not do so, choosing instead to rely on the ambiguities in Mr Belton’s evidence. The inference I draw is that leather articles, and articles containing natural fibre stitching, are likely to have been damaged to some degree. Insofar as the items required full integrity in order to be usable (which would apply for example to saddles and bridles but not, I would think, to whips, boots and so forth) I think that I can properly take the view that they were rendered valueless. None of this equipment was, however, brand new. Miss Hawkins has only produced evidence of replacement value in 2001.

There is, however, a vast range of material in the inventory which either is not leather and/or which does not contain stitching which would have been compromised by the fogging and/or which, if it does contain such stitching, has not been shown to have been incapable of repair, and/or which, although composed in whole or in part of leather has not been shown to be unusable or incapable of repair. Almost everything under the following headings in the list fall into one or other these categories: Bits, Horse Protective Equipment, People Clothing, Electrical Equipment, Rugs & Accessories, Riding Hats, Body Protectors, Accessories, Saddle Cloths. There was no evidence before me (other than the defendants’ asserted belief) that the fogging would have caused or did cause irremediable damage to metal, rubber, or electrical equipment.

Given the absence of such evidence, the claim in respect of these items can only be justified on the basis that the whole of the contents of the tack room were seized by Defra, so that statutory compensation was payable. That claim cannot in my judgement succeed. The only relevant act was the sealing off of the tackroom for 24 (or possibly 48) hours after the fumigation (Miss Hawkins’ evidence that she was excluded for five days is inconsistent with the contemporary records). This was a necessary consequence of the process.

The damage which I am able to regard as proved is limited, therefore, to the articles listed under Bridles Accessories and Reins on page 2 (approx £3100), all the items save two items under Show Equipment on page 3 (£882), all the items under Saddles and Girths on page 3 with the exception of the rubber treads and the stirrups (£5534), and the items on pages 3 and 4 under Training Equipment with the exception of the canvas caversons and the spurs (£1250). That makes a total possible claim of some £10766 assuming that she is entitled to claim replacement values and assuming that the replacement values alleged are genuine.

The causes of action alleged in support of the claim are trespass (on the footing that Defra had no power to disinfect) and negligence (on the footing that the use of formaldehyde fogging involved the foreseeable risk of damage to the property. The trespass claim does not succeed for the reasons already given, but the negligence claim does. Some allowance has to be made for the fact that the property which I have (narrowly) held to have been rendered valueless was itself not brand new. Doing the best I can in the absence of evidence I would allow the saddlery claim to the extent of £9,000.

Assuming that Miss Hawkins’ title to the farm remains undisturbed as a result of the claim, the relief to which she is entitled is