Ipsofactoj.com: International Cases [2004] Part 6 Case 6 [CAEW]


COURT OF APPEAL, ENGLAND & WALES

Coram

Feakins

- vs -

Secretary of State for Environment, Food

and Rural Affairs

LORD THORPE

LORD JUSTICE JONATHAN PARKER

LORD JUSTICE DYSON

4 NOVEMBER 2003


Judgment

Lord Justice Dyson

INTRODUCTION

  1. This appeal concerns the manner in which an estimated 13,500 tonnes of potentially contaminated material left by the defendant on or under the claimantís farm land may be disposed of by the defendant. That material ("the residue") includes ash from pyres on which at least 4750 animal carcasses which had been seized and slaughtered by the defendant were burned (or attempted to be burned) during the foot and mouth disease ("FMD") epidemic in March and April 2001. It also comprises unburnt carcass parts. The claimant contends that the only lawful manner of disposal of the residue is by incineration at an incineration plant. He relies on 

    1. the (EU) TSE Regulation (999/2001/EC) ("the Regulation"); and

    2. the (EU) Animal Waste Directive (90/667/EEC) ("the Directive").

  2. The defendant contends that she is entitled to dispose of the residue to landfill, without any form of prior processing. She relies on the "derogation" option provided by point 10 of Annex XI to the Regulation. Before I identify and deal with the issues that arise on this appeal, I need to say something about the background and how this litigation arose.

    BACKGROUND

  3. The claimant owns a farm named Sparum Farm, which is near Kidderminster in Worcestershire. Until the end of February 2001, it was run as a livestock farm. In late February/early March 2001, FMD was diagnosed in animals at the farm. The claimant had some 820 cattle and 700 sheep at that time. All these animals were seized and slaughtered by the defendant, and the decision was taken to burn their carcasses on pyres on the claimantís land. The pyres were built and the burnings commenced in mid-March 2001. The claimant also agreed to the burning on his land of at least 158 further cattle and 3080 sheep which had been seized and slaughtered by the defendant on other farms.

  4. On 24 October 2001, the claimant launched judicial review proceedings following the defendantís refusal to begin clearing up the land following the burnings. He made a number of allegations. Relevantly for the purposes of the present appeal, these included allegations relating to both the buried and the unburied residue. The application for permission to apply for judicial review came before Stanley Burnton J on 27 February 2002. The defendant undertook to remove the residue which had not been buried, thereby obviating the need for the claimant to seek permission in relation to it. Permission was granted in respect of the failure to remove the buried residue, which at that stage the defendant was not willing to remove. The defendantís undertaking was in these terms:

    On or before 4pm on 27 March 2002 to remove from the premises known as and situate at Sparum Farm, Kidderminster, Worcestershire so far as is practicable all ash and burned or partially burned animal carcasses or parts thereof now lying upon the surface of the ground thereat and forming part of or resulting from pyres built for the purpose of destroying the carcasses of animals slaughtered by the defendant her servants or agents pursuant to the powers granted by section 31 of the Animal Health Act 1981.

  5. When the defendant informed the claimant of her intention to remove the unburied residue to landfill, the claimant objected to the legality of that course. She, therefore, issued separate proceedings seeking a declaration that the course that she proposed to adopt was lawful. But these proceedings were never served. In fact, they were discontinued, and the defendant invited the claimant to make an application in the judicial review proceedings if he still wished to contest the legality of the proposal to remove the material directly to landfill. Thus it was that on 20 June 2002, the claimant issued an application in the judicial review proceedings for an order that the residue referred to in the undertaking given by the defendant to the court was required by law to be disposed of by incineration.

    THE ISSUES

  6.  A procedural issue arises (on the defendantís cross-appeal) as to whether the claimant had sufficient standing to challenge the lawfulness of the defendantís proposed course of action. The substantive issues raised by the claimant on the appeal are:

    1. whether the "derogation" option contained in point 10 to Annex XI of the Regulation can be invoked informally by the defendant (as occurred in this case), or whether domestic legislation is first required; and

    2. whether certain pre-conditions for the application of the "derogation" option were satisfied on the facts of the case.

    DOES THE CLAIMANT HAVE STANDING?

    The facts

  7.  This issue has undergone a number of twists and turns. Before the judge, it was submitted on his behalf that the claimant was seeking a declaration because he was concerned that the presence of the residue which had not been buried might expose him to civil or criminal liability under the Animal By-Products Order 1999 (SI 646 of 1999) ("ABPO") and/or the TSE (England and Wales) Regulations 2002 (SI 843 of 2002) ("the TSE Regs"). The judge expressed doubts as to these alleged concerns. In the alternative, it was submitted that the claimant was acting in the public interest. It was said that his position was analogous to that of an environmental interest group, such as Greenpeace.

  8. The judge dealt with the issue of standing in a rather summary way. At para 69 of his judgment, he said:

    As I have said, the claimant states that he is seeking this declaration in the public interest (among other reasons). That seems to me improbable. On 25 October 2001, his solicitors indicated that if he was paid sufficient by the defendant, he would be prepared to have the ash re-buried "in the correct manner" on his land. Otherwise he wants it taken away.

  9. Later, he said:

    119.

    The first issue raised by the defendant is that the claimant has no standing to bring this action. No interest of his is affected. He is, whatever he claims, at no risk of prosecution. He is at no risk of civil liability. The claim that he is bringing the action out of public interest is spurious. I should not therefore entertain the action.

    120.

    I can deal with this issue shortly. As will become clear, there is in my view no risk of the claimant being prosecuted. Neither is there any prospect of him bearing any civil liability. In the highly unlikely eventuality of him being sued, he would be able to claim an indemnity from the defendant. Mr. Parker indeed suggested the defendant might well agree to indemnify in such circumstances. I have already stated that I find it improbable he is seeking this declaration in the public interest.

    121.

    All that having been said, I shall consider this case on its merits. If, having heard argument, I consider that what the defendant is proposing is unlawful, it seems to me that in the public interest I should say so.

  10. In order to examine this issue it is necessary to consider the history of the litigation in a little detail. On 24 October 2001, the defendant made an ex gratia offer of £20,333 to the claimant for the burning of carcasses brought in from other farms and the burial of resultant ash. The claimantís solicitors rejected this offer by their letter of the following day. They said that the offer was insufficient given the risk from remains of cattle born before 1 August 1996. Accordingly, they said that unless a more favourable offer were made, the claimant wished the unburied ash, burnt carcass remains and incorrectly buried ash to be removed from his property.

  11. No further offer was made. The claimant pursued his judicial review proceedings, and as I have already said, on 27 February 2002, the defendant gave her undertaking. The claimant continued to express his concerns that the presence of the residue on his farm might expose him to liability. His concerns were based on a possible interpretation of Article 5(1) and (2) of ABPO. It is not necessary to set out these provisions, since it has not been submitted to us that the defendantís concerns were objectively well-founded.

  12. By a letter dated 22 March 2002, the defendant sought to persuade the claimant that it was the defendant, and not the claimant, upon whom obligations were imposed by Article 5 of ABPO. Para 13 of the letter included:

    Whilst DEFRA accepts that your client may have legitimate concerns as to liability he may incur in relation to the disposal of the ash, DEFRA wishes to make plain that your client is not entitled to dictate the method of DEFRAís disposal of the ash ....

  13. The next relevant event occurred on 24 May 2002 when the defendant issued proceedings seeking the declaration to which I have referred. On 10 June, the defendant informed the claimant that she intended to discontinue these proceedings, adding: "should your client wish to challenge the lawfulness of DEFRAís disposal methods, he should make an application to the court to do so." As I have already said, this is what the claimant did by his notice of application on 20 June 2002. He served his outline submissions on 28 August. The defendant served her outline submissions in response on 6 September. The hearing had been fixed to be heard on or about 11 September. In her submissions, the defendant challenged the claimantís standing on the basis that his alleged concerns about an actual or potential liability under ABPO were misconceived. Despite the letter of 25 October 2001, she did not however, contend that the real reason for the claimantís application was to extract an improved offer of compensation.

  14. Very shortly before 11 September the defendant served a great deal of evidence. Much of it was technical. It included the voluminous expert evidence on which she was to rely at the hearing before Goldring J, and on which she was to succeed in relation to the second substantive issue that arises on this appeal. It seems that the claimant did not, however, seek an adjournment, and the hearing started before Scott Baker J on 11 September. But it was aborted for want of time.

  15. On that same day, the claimantís solicitors wrote a letter to the defendant headed "without prejudice save as to costs". They said that the final tranche of the defendantís evidence had not been received until the previous day, and that they had only now been able to take the claimantís instructions on the issues raised by that evidence. Some of these issues had not previously been raised. They went on to say that it was clear that on the defendantís best case, the cost of removing buried and unburied ash to landfill would be £1,919,363. On the defendantís worst case (i.e. if the claimant were successful and the court ordered the ash to be removed to incineration), the cost would be £6,345,000. They continued:

    Bearing in mind these figures and the evidence now received from DEFRA our client is prepared to put forward an offer pursuant to Part 36 of the Civil Procedure Rules as follows:

    1.

    Our client will accept the sum of £950,000 to allow DEFRA to bury the buried and unburied ash (estimated by DEFRA at 13,500 tonnes) upon Sparum Farm. This sum will be payable in twenty-eight days..

  16.  The letter contained a number of notes, one of which said:

    If in the future the Environment Agency or other relevant body considers that it is unsafe to leave material where it is buried or DEFRAís assessment of the risk of leaving the material changes, DEFRA will remove at their own cost the material in accordance with any existing current guidance.

  17.  The offer was rejected by the defendantís letter of 20 September 2002. This letter included the following:

    Furthermore, in ordinary civil proceedings the willingness of a claimant to settle an action for a sum less than the full amount claimed is generally consistent with the legal rights and obligations asserted by the claimant. In this case, however, the offer is predicated on the assumption that disposal may be affected Ė at a price Ė other than by incineration, an assumption wholly at odds with the relief sought by the claimant.

  18.  This correspondence was drawn to the attention of the judge for the first time on 20 December 2002, when he handed down his judgment. Having read the letter of 11 September 2002, he said:

    The submissions were made to me upon the basis that this action was being brought in the publicís interest, for fear of prosecution, and for fear of being sued. Reading the offer that was made, it seems to me that in fact what was lying behind it was none of those things but the financial interest that the claimant felt in this litigation. On reading that document, I have to say I was a little surprised and a little troubled, and I think it only right that you should know that is my feeling about it.

  19. Later during the hearing on that date, the judge said that there was "a fundamental inconsistency between the allegation that it is unlawful, and, by implication, dangerous, and the acceptance that provided youíve paid enough money, I will have it on my own land".

    Discussion

  20. Mr. Kenneth Parker QC submits that, even on the material available to him at the substantive hearing, the judge should have ruled that the claimant did not have sufficient standing to make the application. That submission, argues Mr. Parker, is fortified by the claimantís letter of 11 September 2002. The case advanced by Mr. Parker may be summarised as follows. The claimantís alleged concerns as to his potential liability under the ABPO were misconceived. If, on the other hand, the application had been inspired by a genuine concern in the public interest to prevent the defendant from acting unlawfully and in a manner that threatened the environment, Mr. Parker concedes that it would have been proper to hold that he had a sufficient interest to make the application. In that event, his position would have been analogous to environmental pressure groups such as Greenpeace, who are routinely permitted to make public law challenges in cases of this kind. But, he submits, it is clear that the claimant did not make the application in the public interest. The letter of 25 October 2001, and more particularly the letter of 11 September 2002, show that the claimantís real interest in making the application was to bring pressure to bear on the defendant and thereby persuade her to pay substantial compensation. In these circumstances, the claimant did not have a legitimate interest which was sufficient to entitle him to seek the declaration.

  21. In recent years, there has unquestionably been a considerable liberalisation of what is required to found a sufficiency of interest for the purposes of standing. That is why it is accepted by Mr. Parker (rightly in my view) that, if the claimant had genuinely made the application in the public interest, the judge would have been right to hold that he had sufficient standing to proceed.

  22. I confess that I have not found the approach of the judge to this issue altogether easy to follow. At paras 69 and 120 he said that it was "improbable" that the claimant was seeking the declaration in the public interest. At para 120 he rejected the only private interest advanced by the claimant as the foundation for his claim to standing (the risk of liability). In these circumstances, one might have expected the judge to conclude that the claimant did not have a sufficient interest to give him standing. Nevertheless, he decided to accord the claimant standing because "if, having heard argument, I consider that what the defendant is proposing is unlawful, it seems to me that in the public interest I should say so". The position, therefore, is that the judge said that the claimant was not bringing the proceedings in the public interest, and yet he (impliedly) held that the claimant did have standing because there was a public interest in the issues raised by the proceedings. The judge made no finding as to why the claimant was bringing the proceedings. In particular, he did not find that the claimant was actuated by an improper motive. In short, he did not consider why the claimant had taken the trouble and incurred the very considerable expense of embarking on the application at all.

  23. In my judgment, if a claimant has no sufficient private interest to support a claim to standing, then he should not be accorded standing merely because he raises an issue in which there is, objectively speaking, a public interest. As Sedley J said in R v Somerset County Council & ARC Southern Ltd, ex p Dixon [1997] Env LR 111, when considering the issue of standing, the court had to ensure that the claimant was not prompted by an ill-motive, and was not a mere busybody or a trouble-maker. Thus, if a claimant seeks to challenge a decision in which he has no private law interest, it is difficult to conceive of circumstances in which the court will accord him standing, even where there is a public interest in testing the lawfulness of the decision, if the claimant is acting out of ill-will or for some other improper purpose. It is an abuse of process to permit a claimant to bring a claim in such circumstances. If the real reason why a claimant wishes to challenge a decision in which, objectively, there is a public interest is not that he has a genuine concern about the decision, but some other reason, then that is material to the question whether he should be accorded standing.

  24. It follows that I must reject the submission of Mr. Stephen Smith QC that a claimantís motive is irrelevant. Since the hearing of this appeal, our attention has been drawn to R (Mount Cook Land Ltd) v Westminster City Council [2003] EWCA Civ 1346, and in particular the obiter dicta of Auld LJ at paras 45 and 46. He counselled caution against treating motive as important in this context. He said:

    I do not say that considerations of a claimantís motive in claiming judicial review could never be relevant to a courtís decision whether to refuse relief in its discretion, for example, where the pursuance of the motive in question goes so far beyond the advancement of a collateral purpose as to amount to an abuse of process. The court should, at the very least, be slow to have recourse to that species of conduct as a basis for discretionary refusal of relief.

    I would not disagree with these observations.

  25.  I return to the facts of this case. Since the judge did not make a finding as to why the claimant decided to make the application, it seems to me that we must do our best on the material available to us to determine the answer to that question. I am not satisfied that Mr. Parker has shown that the claimantís reason for making the application was to further the purpose of extracting substantial compensation from the defendant, rather than from a genuine desire to challenge in the public interest the lawfulness of what the defendant was proposing to do. The letter of 25 October 2001 does, at first sight, appear to be inconsistent with a genuine concern as to the safety of burying the residue (in this instance on the claimantís own land) rather than incinerating it. But this was at an early stage of the dispute, and well before the critical undertaking given on 27 February 2002. The important question is why the claimant made the application in June 2002. The application was issued at the suggestion of the defendant. It is somewhat paradoxical that the defendant should have suggested to the claimant that he make the application, and should later contend that he had no standing to make it because he was actuated by an improper motive. And yet that is precisely the stance taken by the defendant.

  26. Having issued his application, the claimant proceeded with expedition towards a hearing on 11 September. He must have incurred considerable costs. It has not been suggested that he did anything during this period that cast doubt as to his motives. The hearing commenced on 11 September, but was aborted for want of time. Very shortly before the hearing, the defendant served on the claimant a substantial quantity of impressive material which must have caused him to have serious doubts as to whether his application would be successful. The judge was later to say that "the defendant provided copious material too late and without proper warning". As Mr. Smith points out, the position facing the claimant on 11 September was that the application had been adjourned, and he was confronted with a great deal of new evidence and several new points. His prospects of success were uncertain. If he were to proceed with the application, he would have to incur considerable further costs.

  27. When viewed against this background, I do not consider that the letter of 11 September proves that the claimantís sole, or even principal, motive in making the application in the first place was to extract compensation. The letter was perhaps opportunistic, but I am not prepared to infer from the fact that it was written when it was written that the claimantís purpose in making the application was improper. I am fortified in this conclusion by the note to which I have already referred, in which the claimant asked for an undertaking that the defendant would remove the material if the Environment Agency or other relevant body considered it to be unsafe to leave the material buried, or the defendantís own assessment as to its safety were to change.

  28. I would, therefore, hold that the claimant did have standing to make the application, and that nothing has happened since the proceedings started to cast doubt on that. I should add that, even if I entertained a doubt as to whether the claimant had standing, I would be reluctant to allow the cross appeal on that basis. As Mr. Smith says, the judge has decided the substantive issues. One of these (the first issue to which I am about to come) is one of some general importance. In these circumstances, it would be most unfortunate if this court, having heard full argument on the substantive issues, should not decide whether the judge resolved those issues correctly.

    THE FIRST ISSUE

    The Legislative Material

  29. This issue raises a question as to the proper interpretation of point 10 of Annex XI to the Regulation. This regulation came into force on 1 July 2001. It provided rules for the prevention, control and eradication of certain transmissible spongiform encephalopathies ("TSEs"). One of the TSEs that has been identified in the UK is bovine spongiform encephalopathy ("BSE"). The recitals to the Regulation include:

    (10)

    Certain ruminant issues should be designated as special risk material on the basis of the pathogenesis of TSEs and the epidemiological status of the country or region of origin or residence of the animal concerned. The specified risk material should be removed and disposed of in a manner which avoids any risk to human or animal health ....

  30. It is common ground that the residue on the claimantís farm is a specified risk material ("SRM"). Article 3 contains definitions, including:

    (e)

    Competent authority: the central authority of a Member State competent to ensure compliance with the requirements of this Regulation or any authority to which that central authority has delegated that competence ....

  31. Article 22 provides that the transitional measures concerning SRM which are to be found in Annex XI shall apply for a period of at least six months from 1 July 2001. These measures have been applicable at all material times so far as the present litigation is concerned.

  32. Annex XI provides:

    A. Concerning the removal of specified risk material

    1.

    Member States shall ensure that the specified risk material designated below is removed and destroyed in accordance with points 6 to 11.

    ....

    8.

     

    Member States shall ensure that specified risk material is removed at:

    (a)

    slaughterhouses;

    (b)

    .... high-risk processing plants .... under the supervision of a designated agent appointed by the competent authority. Those establishments shall be approved for that purpose by the competent authority.

    ....

    Where specified risk material is not removed from dead animals which have not been slaughtered for human consumption, the parts of the body containing specified risk material or the entire body must be treated as specified risk material.

    9.

    Member States shall ensure that all specified risk material is stained with a dye and, as appropriate, marked immediately on removal, and completely destroyed:

    (a)

    by incineration without pre-processing; or

    provided that the dye or marking remains detectable, after pre-processing: .... by incineration

    (ii)

    in accordance at least with the standards set out in Annex 1 to Council Decision 1999/534/EC by burial in an approved landfill site.

    10.

    Member States may derogate from the provisions of points 8 and 9 to allow the incineration or burial of specified risk material or entire bodies, without prior staining, or, as appropriate, without removal of the specified risk material, in the circumstances set out in Article 3(2) of Directive 90/667/EEC and by a method which precludes all risk of transmission of a TSE and is approved and verified by the competent authority, in particular where animals have died or have been killed in the context of disease control measures.

  33. It is the true interpretation of point 10 of Annex XI which lies at the heart of the first issue. Before discussing this issue, however, it is necessary to refer to the Directive. Article 1 provides:

    1.

    This Directive lays down:

    (a)

    the animal and public health requirements for the:

    (i)

    disposal and/or processing of animal waste in order to destroy pathogens which might be present in such materials ....

  34. Article 3 provides:

    1.

    The following 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:

    ....

    2.

    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 could 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

    ....

    An epizootic disease is a disease affecting a large number of animals simultaneously throughout a large area and spreading with great speed. It is common ground that FMD is an epizootic disease.

    The first issue explained

  35. The defendant contends that she is entitled by point 10 of Annex XI to derogate from the provisions of points 8 and 9 and to remove the unburied residue from the claimantís farm directly to landfill without incineration. She relies on one of the circumstances specified in Article 3(2) of the Directive, namely that "a widespread epizootic disease [has led] to a lack of capacity at the high-risk material processing plant". The residue, being an SRM, is a high-risk material for the purposes of the Directive. The defendant says that she can rely on point 10 without more as enabling her to decide in this case to remove the SRM directly to landfill on the grounds that the circumstance to which I have referred obtains, and has obtained at all material times. The issue that separates the parties can be shortly stated. The claimant says that the defendant may not derogate under point 10 in the absence of domestic legislation which gives her the power to do so. Point 10 gives Member States an option to derogate, but this option can only be exercised pursuant to legislation enacted for that purpose. The defendant, on the other hand, submits that point 10 itself is sufficient to give her the power to derogate where she considers it necessary to dispose of SRM by burning or by burial in one or more of the circumstances identified in Article 3(2) of the Directive.

  36. In support of the claimantís case, Mr. Smith makes a number of points on the language of point 10 which, he submits, show clearly that a Member State may only derogate from points 8 and 9 where permitted to do so by domestic legislation. He points to the contrast between the wording of point 10 and Article 3(2) of the Directive. The former says that Member States may "derogate .... to allow the incineration ..". The latter says that the "competent authorities may where necessary decide that high-risk material must be disposed of by burning ...." Thus Article 3(2) can be invoked by a decision, and the decision must be by the competent authority. Point 10 refers to a derogation (as opposed to a decision) by a Member State (as opposed to a competent authority). These differences in language cannot be fortuitous, since the draftsman, having referred to Article 3(2), must have had its terms well in mind when drafting point 10. Mr. Smith submits that there are good grounds for requiring a greater degree of formality in a derogation from provisions of the Regulation than from those of the Directive, since TSEs are more infective and dangerous than the pathogens present in animal waste.

  37. Mr. Smith places emphasis on the words "may derogate .... to allow": the words "to allow" suggest that what is contemplated is some positive action. They should not be interpreted as if they read "may ignore points 8 and 9 ....". He also relies on the fact that the defendant, who is the competent authority, cannot at the same time be the Member State, and yet that is the result of her interpretation of point 10 of Annex XI.

  38. On behalf of the defendant, Mr. Parker submits that point 10 does not require a legislative step to be undertaken by the Member State. He argues as follows. The Regulation is directly applicable in the Member States: see, for example, Commission v Italy [1973] ECR 101. An EC regulation may require national legislation. But such legislation is not required unless the language of the regulation shows that this is necessary: the test is one of necessity, and it is a high test. An example of a case where such a test was satisfied is Azienda Agricola Monte Arcosu [2001] ECR 1-103. In that case, the relevant provision of the regulation stated:

    Member States shall, for the purposes of this regulation, define what is meant by the expression " farmer practising farming as his main occupation".

  39. The regulation also provided that the Member States "shall define what is meant by this same expression in the case of persons other than natural persons". The Member State (Italy) did not introduce domestic legislation to define the expression "farmer practising farming as his main occupation" in the case of persons other than natural persons. It was held by the European Court of Justice that Italy had failed to undertake the national implementing measure required of it by the regulation. That is the context in which paragraph 26 of the judgment of the court should be understood:

    In this respect, although, by virtue of the very nature of regulations and of their function in the system of sources of Community law, the provisions of those regulations generally have immediate effect in the national legal systems without it being necessary for the national authorities to adopt measures of application, some of their provisions may nonetheless necessitate, for their implementation, the adoption of measures of application by the Member States.

  40. Mr. Parker relies on this statement of general principle in support of his submissions. He argues that the language of point 10 of Annex XI does not necessitate the adoption of measures of application by the Member States. Since national legislation could simply replicate the language of Article 3(2) of the Directive, no useful purpose would be served by requiring an intermediate legislative step in order to make point 10 fully effective.

  41. Mr. Parker also makes the point that the Regulation has been superseded by Commission Regulation (EC) 1139/2003 which came into force on 1 October 2003. The effect of Annex XI point 11 of that regulation is that all SRM shall be disposed of in accordance with the provisions laid down in Regulation (EC) 1774/2002, and in particular Article 4(2). Article 4(2) of that regulation provides that the material shall be disposed of by incineration, but subject to articles 23 and 24. Article 24 provides that:

    Derogations regarding the disposal of animal by-products.

    1.

    The competent authority may, where necessary, decide that:

    ....

    (c)

    animal by-products may be disposed of as waste by burial or burning on site .... if the competent authority rejects transport to the nearest incineration or processing plant because of the danger of propagation of health risks or because a widespread outbreak of an epizootic disease leads to a lack of capacity at such plants.

  42. It is clear, therefore, that since 1 October 2003, derogation under the EU legislation does not require the Member States to take legislative steps either in relation to TSEs or animal waste generally. Mr. Parker submits that it would be extraordinary if the position had been otherwise before 1 October 2003. As regards Mr. Smithís linguistic points, Mr. Parker submits that they are no more than that.

    Conclusion

  43. It is common ground that the Regulation applies directly in Member States. It is not in issue that it is open to Member States to deviate from the strict requirements of points 8 and 9 in the circumstances set out in Article 3(2), and by a method which precludes all risk of transmission of a TSE and which is approved and verified by the competent authority. The question is whether point 10 imposes on Member States any (and if so what) requirement as to the mechanism by which such deviation may be effected. I shall start by considering this question leaving out of account the fact (on which Mr. Smith places considerable reliance) that Article 3(2) uses the different words "the competent authority may where necessary decide". In my judgment, there is nothing in the language of point 10 and the circumstances set out in Article 3(2) which prescribes the mechanism by which the Member State must exercise the option to derogate from the provisions of points 8 and 9. Point 10 could have specified the form which a derogation should take, but it has not done so. The wording is broad and general: "Member States may derogate .... to allow the incineration or burial .... in the circumstances set out in Article 3(2)".

  44. It would have been surprising if it had been thought necessary or desirable to impose a requirement as to the form of a derogation. Mr. Smith suggests that there might be advantages in requiring Member States to spell out with some degree of formality (preferably in legislation) the detailed criteria that are to be applied by competent authorities when deciding whether or not to derogate in individual cases. He accepts (rightly in my view) that the principle of certainty does not require the promulgation of criteria that are more detailed than the circumstances set out in Article 3(2). It is difficult to see what useful purpose would be served by requiring the imposition of an additional legislative step. If point 10 required the enactment of national legislation, Mr. Smith accepts (again, rightly in my view) that it would be open to a Member State to satisfy this requirement by simply replicating precisely the wording of Article 3(2), no more and no less.

  45. I have referred to the EU legislation that superseded the Regulation with effect from 1 October 2003. It is beyond doubt that since that date national legislation is not required as a condition of derogation. Mr. Smith is unable to point to any material (other than the difference in the wording of the two regulations) which indicates that there has been a change of policy as to the need for, or desirability of, national legislation. Nor is he able to suggest any rationale for such a change. In my view, this merely serves to underline the point that the imposition of an additional legislative step would serve no useful purpose. The court should be very slow to impute to the European Parliament and the Council of the European Union an intention to impose procedural requirements on Member States which are of no apparent utility.

  46. The conclusion that I have reached thus far is based on what I consider to be the natural and sensible interpretation of the language of point 10. This conclusion is entirely consistent with the statement of principle at para 26 of Azienda Agricola Monte Arcosu. I do not find it necessary to decide whether the conclusion is compelled by that statement of principle.

  47. I turn, therefore, to consider whether the fact that Article 3(2) of the Directive provides that "the competent authority may where necessary decide ...." should lead to a different interpretation of point 10 from that which I have expressed thus far. The argument relying on the differences in wording proceeds along these lines:

    1. the draftsman must have had Article 3(2) of the Directive in mind when drafting point 10, and must, therefore, have chosen different language for some reason;

    2. the word "derogate" connotes a greater degree of formality than the word "decide"; and accordingly

    3. the use of the word "derogate" indicates the requirement of a formal legislative step.

    The argument is fortified by the contrast between Member States and competent authorities.

  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:

    1. the high-risk material must be processed in a high-risk processing plant in accordance with Article 4(1) (rule 1); or

    2. disposed of by burning or burial in accordance with para 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 ECJ authority was cited to us which supports either of these propositions.

  50. It follows that in my view the difference in language to which Mr. Smith has drawn attention does not have the significance for which he contends, and does not displace the provisional conclusion that I had reached earlier as to the meaning of point 10.

    THE SECOND ISSUE

  51. The second issue is whether two pre-conditions for the application of the option to derogate in point 10 of Annex XI were satisfied in this case. These are

    1. that a widespread epizootic disease (in this case FMD) led to a lack of capacity at a high-risk material processing plant (i.e. incinerating plant), and

    2. the method proposed by the defendant for disposal (i.e. directly to landfill) was one which "precludes all risk of transmission of a TSE" within the meaning of point 10.

    The first condition ("the lack of capacity condition") is one of the circumstances set out in Article 3(2) of the Directive, and is incorporated into point 10 by reference. The second condition ("the risk condition") is expressly mentioned in point 10 itself. I shall deal with them in turn.

    The lack of capacity condition

  52. There was debate before the judge as to the relevant date for the purposes of determining whether the lack of capacity condition was satisfied. The defendant contended for the date of the original burning and burying on the claimantís land (March 2001). The claimant submitted that the correct date was the date of the defendantís undertaking, alternatively the date of the hearing before the judge. The judge was content to assume, without deciding, that the relevant date was the date of the hearing before him. I shall take the same course as the judge, although it seems to me that there are powerful arguments in favour of taking the date of the undertaking.

  53. The judge considered a great deal of evidence. We have been shown extracts from some of the witness statements and various papers and reports. Neither party asked for that evidence to be given orally or to be tested by cross examination. In these circumstances, the judge had to make findings of fact as best he could on all of the material before him. I do not propose to refer to all the material which was considered by the judge or which was shown to us. The nub of the judgeís reasoning was as follows:

    114.

    It seems to me necessary to consider the issue of capacity with a degree of common sense. There is a huge quantity of unburied ash on Sparum Farm (let alone buried ash). The problems of capacity in 2001 seem to me absolutely plain. The interim assessment from the Environment Agency .... underlines the scale of the problem of coping with the enormous number of carcasses to be disposed of. Other documents referred to above underline it. The information contained in the SEAC report speaks for itself. The fact burning on site was carried out to the extent it was, even where animals were old, was, in part, a recognition of that. It seems to me unrealistic to argue there was capacity in 2001.

    115.

    The situation has no doubt improved by now. However, that there are significant problems of capacity when dealing with this quantity of ash is established by Mr. Hickmanís evidence. It would be surprising if that were not so. Moreover, if the claimant is right, and all the ash containing residue from carcasses of old cattle referred to by SEAC has to be incinerated, the effect on capacity would be enormous.

  54. As regards the position in 2001, the judge based himself on the SEAC report dated 24 May 2001 and the Environment Agency report dated December 2001. The SEAC report stated inter alia:

    .... Given available incineration capacity, initial indications were that up to 8 Ė 10 years might be required to dispose of the estimated 100,000 tonnes of ash currently unburied .... If all the ash had to be incinerated .... some would have to be stored for several years which would require double handling given that it could not be safely left where it currently lay. The worker safety risks of multiple movement of ash could be much bigger than the relative .... risk of different disposal options and needed to be taken into account in any risk assessments. .... However the risks from landfilling were also very small, and .... smaller than leaving the ash where it .... lay. Where incineration capacity was limited, the risks from greater handling and storage of ash, if it all had to be incinerated, also had to be taken into account in the risk assessments.

  55. The Executive summary of the Environment Agency report included:

    3.

    The main potential pressures on the environment due to the outbreak have been:

    the disposal of about 6 million animal carcasses, two-thirds from disease control and one-third from welfare cull, amounting to some 600,000 tonnes. Provisional data show that about 14% went to mass burial, 16% to commercial landfills, 22% to rendering, and the remaining 48% was either burnt or buried on farms ....

  56. Paragraph 3.1 of the body of the report included:

    During the early stage of the outbreak, restrictions on the movement of animals and carcasses limited the use of existing rendering plants. Suitable landfill sites had also not then been identified. This meant that initially, following 1967 practice, most disposals took place on farms by burial and burning on pyres. Mobile incinerators were trialled but could not achieve the throughput required. Later, suitable landfills were identified and ways found of using rendering plants. No carcasses were sent to incineration plants, although the meat and bonemeal from rendering plants were disposed of in this way.

  57. The report stated that approximately 131,000 tonnes of carcasses had been disposed of to rendering plants by October 2001. It also stated that the residue from rendering cattle over 30 months must be incinerated to destroy any BSE infectivity.

  58. On the face of it, the judge was entitled to conclude on this material that in 2001 there was no capacity to incinerate the residue from the claimantís farm. Existing capacity was used to incinerate the residue from rendering cattle. It would take years before there would be the capacity to incinerate the residue of carcasses that had been burnt on farms. At first sight, this material justified the conclusion that the lack of incineration capacity in 2001 was caused by the FMD.

  59. As against that, Mr. Smith relies on a number of other documentary references. First, there is a memorandum dated 9 June 2001 from Dr Tas, director of disposal operations within DEFRA. When discussing possible routes for ash disposal, he said:

    Incineration capacity is not generally available and we have been asked to put ash behind OTMS casualties and the fallen stock survey (75,000 animals per annum) in the queue. Thus for this option to be exploited we would have to find intermediate storage.

  60. OTMS is a reference to the Over Thirty Months Scheme whereby cattle more than 30 months of age were slaughtered as a response to the BSE problem. Mr. Smith submits that this document shows that the defendant was incinerating OTMS and fallen stock carcasses ahead of those that had been burnt by reason of FMD, and that, had the position been otherwise, there would have been capacity available to incinerate the claimantís cattle. I confess that I do not find this document entirely easy to interpret, and, at first blush, it does not sit easily with the SEAC and Environment Agency reports to which I have referred. But the general point remains that the sheer volume of carcasses burnt during 2001 by reason of FMD meant that the entire residue of such burnings could not have been incinerated for a number of years. That is entirely consistent with the evidence of Mr. Hickman (to which I shall come later) as to the position in 2002, when the situation had undoubtedly improved. Even at this much later time, periods of between 1 and 5 years were being quoted for the incineration of the 13,500 tonnes of residue lying on the claimantís land.

  61. The next material relied on by Mr. Smith is an answer given by Lord Whitty (the Minister) on 24 July 2001 when responding to the question what contingency plans had been prepared to deal with the estimated 250,000 backlog of cattle that would have been disposed of under the OTMS scheme but for the outbreak of FMD. The Minister said that the fight against FMD remained the overriding priority, and therefore had first call on processing capacity whenever it was needed. He added that the Rural Payments Agency had now advised that there was sufficient disposal capacity to restart the OTMS, and it was hoped to be possible to do this in England on 30 July. Mr. Smith submits that this shows that in July 2001 there was incinerating capacity which could, and should, have been used for disposing of SRM, rather than carcasses of cattle within the OTMS. But, the general point that I have made in relation to the memorandum of Dr Tas applies with equal force here.

  62. Finally, there is the evidence of Mr. Dean. Mr. Dean is an environmental consultant whose evidence was before the judge. He said that he thought that the most attractive option would have been to utilise some of the 3 million tonnes a year of existing municipal incineration capacity in the UK to deal with the residue. He also said that he understood that an agreement had been made in the spring of 2001 between the defendant and two companies (Cleanaway and Shanks) for the disposal of all pyre ash that might contain BSE prion. The companies made plans to store and incinerate the ash and purchase orders were sent to them by the defendant, but these were cancelled, the companies being informed that "following a risk assessment, the ash material would be disposed of to land".

  63. The judge dealt with the municipal incinerator suggestion at para 110 of his judgment in these terms:

    110.

    Mr. Dean says that, "The two types of incinerator that I believe could reasonably have handled significant quantities of BSE suspect pyre ash in 2001 are municipal waste incinerators and hazardous waste incinerators [3/28/620]." He says that municipal incinerators meet all the requirements for burning pyres ash and that DEFRA "virtually ignored" this "enormous potential incineration capacity [3/28/620]." He refers however to a number of matters that would have to be done before such incinerators could be used. They comprise "regulatory adjustments" to permit such incinerators to bury pyre ash, trial burns which the Environment Agency would almost certainly want, the probable requirement for public consultation before such use and the possible need for the installation of a separate, sealed conveyor system. He says that, "none [of these things] is a logical reason for ignoring the municipal waste sector [3/28/620]." He produces no evidence from any municipal contractor dealing with these matters. He says nothing as to how public consultation might reasonably be expected to proceed, or its time scale or the time scale for trial burns. He suggests that municipal incinerators would have been the "best type of facility to target [3/28/6121]." He criticises Mr. Hickmanís statement to the effect that municipal incinerators are fully utilised and would have difficulties dealing with pyre ash. He concludes, "that [municipal] incineration capacity [is] .... capable of destroying the prion and other residual proteins in BSE suspect pyre ash [and] could have been available in 2001 .... [3/28/621].

  64. The judge also referred to the alleged reneging (by the defendant), but did not expressly deal with it. Nor did the defendant submit any evidence in response to this allegation, although Mr. Parker has told us that he is instructed that it is denied. I would not place any reliance on this allegation. I do not regard the hearsay evidence by Mr. Dean as a satisfactory basis for concluding that there was capacity in spring 2001.

    • First, it flies in the face of the evidence to which I have already referred.

    • Secondly, there is no evidence from the companies themselves.

    • Thirdly, the purchase orders have not been produced.

    • Finally, there is no evidence as to how long the ash would have been required to be kept in storage.

    I note that in the summer of 2002, when asked to quote for the incineration of the 13,500 tonnes on the claimantís farm, Cleanaway said that they would require 12-18 months for disposal, and Shanks said that they would need 2 years. They would surely have required considerably longer in Spring 2001 when the crisis was at its highest.

  65. I turn to consider the position as at the time of the hearing. The judge relied heavily on the evidence of Mr. Hickman, who is seconded to the defendant and employed by an independent company to provide agricultural and environmental services. In July 2002, he wrote to a number of incineration plants to establish the potential for incinerating the entire 13,500 tonnes. Mr. Hickman states that few incinerators were willing or able to accept the waste at all. The incinerators who were willing to take the material responded as follows (I indicate in brackets the cost and estimated time for full disposal quoted in each case): Cleanaway (£11,103,750; 12-18 months); Grundons (£14,752,125; 3 years); Shanks (£11,896,875; 2 years); Animal Waste Services (£6,345,000; 2-5 years).

  66. I should deal at this stage with the issue of storage. Mr. Smith submits that these responses show there was capacity at the time of the hearing before the judge. It does not matter that the incineration plants could not incinerate the residue immediately: they would only lack capacity if the residue could not be stored pending incineration. The judge dealt with this submission in the following way:

    161.

    I do not accept Mr. Smithís submission. In my view Mr. Parker is right when he submits that capacity (both for the purposes of the paragraph 5(2) of the Animals By-Products Order 1991 and the derogation under the Animal Waste Directive) must be construed reasonably and purposively. If an incinerator plant cannot dispose of the high risk material within a reasonable time or without undue delay (to adopt the phraseology of the Order), but has to take it into storage for a long (and somewhat uncertain) time, and at high expense, it cannot be said to have capacity. It may be worth repeating Mr. Hickmanís evidence in this regard. The time to dispose of the ash would be between one and one and a half years. That would cost more than £11 million. It would involve transporting all the waste to a suitable warehouse, putting it in there, re-packing it into smaller containers and transporting it to Ellesmere Port. The cheapest incinerator would cost more than £6.3 million. The time to dispose of the ash would be between two and five years. It would have to be transported and stored in a facility during that time. Capacity on such time scales was not contemplated by a derogation brought in to deal with the consequences of epizootic disease.

  67. Mr. Smith submits that the judge was wrong. In particular he says that the judge overlooked para 1 of Chapter II to Annex II of the Directive which states: "Animal waste must be processed as soon as possible after arrival. It must be stored properly until processed". I do not think that this provision (which is of general application to all animal waste) sheds any light on the proper interpretation of the meaning of " lack of capacity" in Article 3(2). 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.

  68. For all these reasons, in my view the judge was right to conclude that the lack of capacity condition was satisfied in this case.

    The Risk Condition

  69. The judge summarised his conclusion at paragraph 170 in these terms:

    The defendantís proposal is burial in approved, licensed, landfill sites. Such sites, as I understand it, would safely retain the ash. As I have said, even before burial, the expert evidence which I accept and is in reality all one way, suggests the burning has substantially reduced infectivity. Such burial would reduce the already reduced risk to what Dr Huntly, conservatively, has termed "negligible". On any reasonable, sensible and purposive construction of the Regulation, the course of action proposed would avoid "any risk to human or animal health". "All risk of transmission of a TSE" would for the purposes of the Regulations be precluded.

  70. The expert evidence to which the judge referred was the following. Mr. Barker, an engineer employed by the Environment Agency, analysed buried samples of ash taken from Sparum Farm. He concluded:

    The destruction calculation on the three buried samples showed a destruction rate of about 99.5% and of the unburied samples of about 99.9%. However, it should be pointed out that the samples were of higher fuel ash content than other pyre ash samples (as shown by the silicon, iron etc results) and there were not as many non-determined amino acids as in many samples. Given this, the length of time after the pyre, the approximations in the calculation and the other points mentioned above, it is probably unwise to assume a destruction rate greater than 95%. This percentage destruction is not unusual for pyres and within the original risk assessment carried out by DNV Consulting Limited.

  71. Mr. Hickman expressed the view that there would be "no material risk whatsoever to human or animal health if properly buried". His opinions were based on inferences from the evidence, and assumptions made as to the effectiveness of the burnings. The judge described the argument about Mr. Hickmanís evidence as "sterile" (para 75). He said:

    Mr. Barker has dealt with the effectiveness of these burns. The defendant is not assuming as part of her case a 99% destruction of protein. For present purposes I need say no more.

  72. The judge placed considerable weight on the report by Dr Huntly. Dr Huntly prepared an "Assessment of Risk due to BSE Infectivity Associated with Ash from Disposal of Cattle due to FMD at Sparum Farm". The judge considered this report in some detail at paras 76 to 91. It is sufficient to record Dr Huntlyís conclusions:

    1.

    The most likely outcome is that there were no BSE infected cattle included in the slaughter and disposal of stock at Sparum Farm. However, there is a significant chance (about 1 in 3) that there would have been at least one animal with significant levels of BSE infectivity present.

    2.

    Any BSE infectivity remaining in the ash on the farm was not considered to be a risk to people, as it would be mixed into a large volume of ash and soil and is not in a form that could be readily ingested. However, in some circumstances the materials could potentially pose a risk to cattle grazing on land where the materials were present.

    3.

    A number of options have been proposed to either remove the ash from the site or bury it. If these remedial activities are conducted adequately, it is considered they should be effective in reducing any risk from BSE infectivity to negligible levels.

  73. The claimant made a number of criticisms of the Huntly report. In particular, he alleged that the number of cattle burned and the incidence of BSE in their herds of origin were greater than had been assumed by Dr Huntly. Mr. Philip Comer (who had in fact been Dr Huntlyís co-author of the report) responded to these criticisms in a witness statement dated 5 November 2002. For the detailed reasons that he gave in that statement, Mr. Comer concluded that even if the claimantís allegations were true, this would have no significant impact on the risk assessment and conclusions of the report.

  74. The judge held (para 99) that, in the light of the uncontradicted evidence of Mr. Barker and Mr. Comer, the assessment of the risk from BSE infectivity as "negligible" was "too conservative a view". The judge said that it was not necessary for him to resolve the issues of fact raised by the claimant, since, as Mr. Comer said, they did not materially affect Dr Huntlyís conclusions. Mr. Smith challenges the judgeís conclusion on the risk condition. His point is simple. The expert evidence relied on by the judge did not completely rule out all risk of transmission. If the defendantís experts had believed that all risk of transmission was precluded by disposal to landfill, then they would have said so. Mr. Smith also relies on a passage in the report by SEAC dated 24 May 2001 which stated:

    The Working Group reached the following conclusions with respect to ash:

    There were no risk-free options. Although high-temperature incineration was the ideal option, SEAC had already accepted that burial on-farm and in landfill represented a low risk with respect to TSEs for disposal of pyre ash. Leaving the ash in situ was likely to be associated with a higher risk than disposal through these alternative routes.

  75. Mr. Smith accepts that the risk condition is not absolute: it does not require all risk whatsoever to be completely eliminated by the method of disposal. He acknowledges that point 9 of Annex XI permits the disposal of SRM after pre-processing (i.e. rendering) "by burial in an approved landfill site". Rendering reduces, but does not completely eliminate, the risk of transmission of a TSE.

  76. I repeat what I said at para 67 above as to the circumstances in which it is right for the court to interfere with decisions of the competent authority. It applies with equal force here. In my view, the judge was entitled to make the finding that he made. The expert evidence was, indeed, all one way. The judge was right to describe the conclusion in the Huntly report as "conservative". As Mr. Comer pointed out, that report assumed a destruction rate of 90%. In fact, Mr. Barkerís analysis of samples taken from the site showed a destruction rate of about 99.5%. As Mr. Comer said (para 10 of his statement): "there was, accordingly, a much smaller risk of BSE infectivity than I had assumed in the DNV Report."

  77. It follows that, in my view, the judge was right to conclude that the risk condition was satisfied in this case.

    OVERALL CONCLUSION

  78. For the reasons that I have sought to explain, I would dismiss both the appeal and the cross-appeal.

    Lord Justice Jonathan Parker

  79. I agree.

    Lord Justice Thorpe

  80. I also agree.


Cases

R v Somerset County Council & ARC Southern Ltd, ex p Dixon [1997] Env LR 111; R (Mount Cook Land Ltd) v Westminster City Council [2003] EWCA Civ 1346; Commission v Italy [1973] ECR 101; Azienda Agricola Monte Arcosu [2001] ECR 1-103

Legislations

TSE Regulation (999/2001/EC): Art.3, Art.22, Annex XI (point 10)

Animal Waste Directive (90/667/EEC): Art.1, Art.3

Animal By-Products Order 1999 (SI 646 of 1999): Art.5

TSE (England and Wales) Regulations 2002 (SI 843 of 2002)

Commission Regulation (EC) 1139/2003: Annex XI (point 11)

Regulation (EC) 1774/2002: Art.4(2), Art.23, Art.24

Authors and other references

SEAC Report, 24 May 2001

Environment Agency Report, December 2001

Dr Huntly prepared an "Assessment of Risk due to BSE Infectivity Associated with Ash from Disposal of Cattle due to FMD at Sparum Farm"

Representations

Mr. Stephen Smith QC and Mr. Stephen Tromans (instructed by Messrs Burges Salmon) for the Appellant

Mr Kenneth Parker QC and Mr Paul Harris (instructed by Defra Legal Department) for the Respondent


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