Partridge Farms Ltd v Secretary of State for Environment, Food and Rural Affairs
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lawrence Collins,Lord Justice Keene,Lord Justice Ward |
| Judgment Date | 01 April 2009 |
| Neutral Citation | [2009] EWCA Civ 284 |
| Docket Number | Case No: C1/2008/1911 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 April 2009 |
[2009] EWCA Civ 284
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
Lord Justice Stanley Burnton
CO/5636/2006
ON APPEAL FROM QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Before: Lord Justice Ward
Lord Justice Keene
Lord Justice Lawrence Collins
Case No: C1/2008/1911
Mr Christopher Vajda QC and Mr Jason Coppel (instructed by DEFRA Legal Group) for the Appellant
Mr Hugh Mercer QC and Mr Jeremy Brier (instructed by Clarke Willmott) for the Respondent
Hearing dates: March 16 and 17, 2009
Lord Justice Lawrence Collins:
I Introduction
This is an appeal by the Secretary of State for Environment, Food and Rural Affairs from an order of Stanley Burnton LJ sitting in the Administrative Court dated July 14, 2008. The judge made a declaration that the Cattle Compensation (England) Order 2006 (SI 2006/168) (“the Order”) breached the principle of equality in European Community law, because in setting compensation for cattle slaughtered on account of cattle tuberculosis (bovine TB) it did not make proper provision for pedigree cattle of especially high value.
TB is one of the most serious animal health problems in the United Kingdom today. In areas where the prevalence of the disease is highest, there has been enormous disruption to the farming industry. The question of compensation for cattle slaughtered because of TB is of great importance to farmers.
Section 32 of the Animal Health Act 1981 confers power on the Secretary of State to cause to be slaughtered any animal which is affected or suspected of being affected with a disease to which that section is applied, or which has been exposed to the infection of any such disease.
By Section 32(3):
“The Minister shall pay for animals slaughtered under this section compensation of such amount as may be determined in accordance with scales prescribed by order of the Minister made with the Treasury's approval.”
The Order was made under section 32(3) of the 1981 Act. It makes provision for the payment of compensation in respect of animals slaughtered as a result of the exercise by the Secretary of State of the power under section 32 in relation to brucellosis, TB and enzootic bovine leukosis (EBL): Article 3(1).
In principle it makes provision for compensation payable by reference to average market prices of cattle in 47 categories. Compensation is not set on the basis of an animal's real value as a diseased animal which required to be slaughtered (salvage value).
Subject to two exceptions, compensation is payable “at the level of the average market price for the bovine category into which that animal falls at the relevant date”: Article 3(3). The relevant date in respect of animals slaughtered for TB is the date when a positive or inconclusive skin test is read; or the date on which a clinical sample is taken; or if slaughtered because of contact with an affected or suspected animal, the same date as for that other animal: Article 3(5).
The principal means of ascertaining the amount of compensation payable under the Order is known as table valuation. Part 2 of the Order contains a table setting out the 47 categories of cattle. For pedigree cattle, the compensation payable is the average market price during the period of 6 months preceding the relevant date.
Schedule 1 provides for compensation to be paid in accordance with a table valuation based on 47 categories which are set out in Schedule 1, Part 2. The schedule is divided by the age of the animal and by male/female; beef/dairy; and non-pedigree/pedigree. The Schedule does not distinguish between particular pedigrees.
Part I, paragraph 1 provides for the average market price for non-pedigree cattle to be calculated from data relating to sales prices of animals of that category in the preceding month. Paragraph 2 provides that the average market price for pedigree cattle will be the amount obtained by dividing the sum of the sale prices by the total number of animals of that category for which sale price data (relating to the sale price of animals in that category for the preceding six months) has been collected.
The two exceptions to the table valuations are these. First, the compensation payable in respect of a buffalo or bison is to be set at the level of its market value under the Individual Ascertainment of Value (England) Order 2005 (SI 2005/3434): Article 3(2). This is of no practical significance since there are no sales data relating to buffalo or bison which could be used to determine a table valuation. Second, where the Secretary of State considers that sales price data for any particular bovine category in any given month are inadequate, or the data are unavailable, the Secretary of State may opt to pay compensation at the level of market value of the animal, as ascertained under the 2005 Order. Under that Order valuation is undertaken (at least in theory) by a valuer appointed jointly by the Secretary of State and the owner.
Prior to the Order, compensation arrangements for TB were governed by the Brucellosis and Tuberculosis (England and Wales) Compensation Order 1978 ( SI 1978/1483, as amended). In practice owners of cattle had a choice between (a) valuation by a government veterinary officer; and (b) valuation by a professional valuer of the owner's choice (provided that the valuer was on a government-approved list). In some areas the State Veterinary Service adopted a practice of using two valuers to value one animal in order to control excessive valuations. From 2004 valuers were nominated by the State Veterinary Service from a list of approved valuers on a rota basis. In the case of an animal slaughtered for TB the compensation was to be “its market value”: Article 3(2A), as inserted by SI 1998/2073.
Compensation schemes in respect of diseased animals have generally constituted state aids for the purposes of Article 87 of the EC Treaty. The table valuation system under the Order was notified to the European Commission, which on December 6, 2006 informed the Secretary of State that it had decided to raise no objections to the scheme under the Order (and for the scheme in relation to BSE), because the scheme was in line with Community guidelines for state aid in the agricultural sector.
II Partridge Farms Ltd and high value cattle
The claimant, Partridge Farms Ltd, claims that the compensation scheme under the Order, based upon table valuations determined by reference to average market price for certain pre-determined categories of cattle, is contrary to the general principle of equality in Community law. It maintains that the table valuations necessarily mean that farmers whose cattle are substantially better than average will receive substantially less than the individual value of their cattle and the greater the disparity between the value of their cattle and that of the average cattle in a category, the greater the disparity (in terms of percentage of value received) between their compensation and the compensation received by the owner of an average or below average animal.
The principal owner of the claimant is David Partridge, who followed his family into farming. The claimant's farm is near Tiverton in Devon. It has nearly 900 head of cattle, of which about 300 are Holstein dairy cows, 300 are followers (young stock) and 300 are beef cattle.
The claimant's case throughout has been that its herd is of significantly higher quality than the average, and that this is reflected in the market value of its cows. The top producing Holstein produces about 80 litres of milk a day, much more than twice the national average.
The evidence for the claimant was that there are pedigree herds in England which have a significantly higher value than average cows of that pedigree. High value dairy herds in England are centred in the regions which had higher levels of grass growth, namely the western half of the country, including Devon, Somerset, Dorset, Gloucestershire, Cheshire and Lancashire. This was also where the rainfall was higher and where there was a relatively high and local human population to consume the milk produced, coupled with the necessary processing plants. The factors which contribute to their higher value include breeding, genetics, age, lactation, capacity, classification and general appearance. Herds which had been kept closed, that is without animals being purchased into the herd with the exception of bulls, would usually also have a higher herd health status and therefore a higher value, as the risk of disease being introduced was diminished.
The claimant's farm is in one of the areas of the country which has a chronic TB problem. Mr Partridge's evidence in June 2006 was that the claimant had been formed about 3 1/2; years before, and that the farm had had an on-going problem with TB for about 4 years, i.e. throughout the time since the claimant was formed.
About 110 animals had been removed from the herd for slaughter between 2002 and 2006. In February 2006 a TB test was carried out. It identified 9 reactors (i.e. cattle which give a positive reaction to a skin test for TB – although this does not necessarily mean that the animal is infected), a bull and 8 Holstein cows, and they were removed for slaughter in March 2006.
The bull was individually valued at £25,000. Before their removal, the cows and heifers were separately...
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