Department for Environment Food & Rural Affairs v Feakins & Anor

For the purposes of the Insolvency Act 1986, a person may enter into a transaction by participating in a composite arrangement, even where individual transfers are made by a mortgagee or company. Connected steps may be treated as one arrangement where their linkage achieves the statutory mischief.

Statutory powers affecting property rights may be implied only where necessary implication is established by clear statutory purpose and structure. Permanent burial of seized material requires sufficiently clear authority. Temporary measures incidental to disease-control operations may, however, be authorised by necessary implication.

Defra sought relief under section 423 of the Insolvency Act 1986 concerning the transfer of Hill Farm to Georgina Hawkins at a valuation reflecting an agricultural tenancy, followed by surrender of that tenancy and an intended resale with vacant possession. The defendants disputed that Kevin Feakins had entered into any relevant transaction because the sale was made by NatWest as mortgagee and the tenancy was surrendered by a company.

The defendants counterclaimed in trespass and negligence arising from foot-and-mouth disease control operations, including slaughter, burning and burial of carcases, cleansing and disinfection, construction of a lagoon and burial pits, and fumigation of saddlery. The central issues were the scope of Defra’s statutory powers and the relief available.

1. Claim under section 423. The tenancy remained legally effective and had not been impliedly surrendered. Nevertheless, Feakins participated in an arrangement with Hawkins under which she acquired the farm subject to the tenancy, with a prior commitment to procure its surrender so that the vacant-possession value could be realised. Reading “enter into a transaction” as “participate in an arrangement” was permissible under sections 423 and 436 of the Insolvency Act 1986. The connected sale and surrender could be treated as one composite arrangement. The claim succeeded.
2. Statutory implication. The necessary-implication test is rigorous. Section 34(2) of the Animal Health Act 1981 authorised temporary use of infected premises for steps preparatory to disposal, including burning. Section 34(4) authorised burial on suitable ground. The legislation did not, however, clearly authorise permanent burial of seized non-carcass material under the Diseases of Animals (Seizure) Order 1993.
3. Disease-control operations. Cleansing and disinfection were authorised under the Foot and Mouth Disease Order 1983, including through the power in article 40 where the occupier could be treated as having failed to perform the required duty. Construction of the temporary lagoon was a necessary incident of a properly conducted operation and was not trespass. Feakins consented to the Raised Area, so no trespass was established there.
4. Ash Pit. The ground was suitable for section 34(4). The TSE Decision and groundwater regime informed that assessment, but the TSE Decision did not create a private damages action. The evidence established that the method used could be expected to eliminate all foreseeable risk of TSE transmission. Burial of the non-Garron animals was nevertheless unauthorised because the relevant ground was not in the possession or occupation of their owners.
5. Relief. Defra was to remove and reinstate the unburied FYM, the C&D Pit contents and the Lagoon. User damages were awarded for the non-Garron remains and C&D Pit. No diminution-in-value damages were established. Hawkins recovered £9,000 for saddlery damage caused by negligent formaldehyde fumigation.

First-instance judgment. No earlier appellate decision is stated in the judgment.