Secretary of State for Environment, Food and Rural Affairs v LJ Fairburn & Son Ltd & Ors, R (on the application of)

The Court of Appeal allowed the Secretary of State's appeal and set aside the High Court's declaration that the Secretary of State's pre-October 2022 compensation policy was unlawful. The court held that paragraph 5(2) of Schedule 3 to the Animal Health Act 1981 must be read plainly: compensation is payable only for poultry (other than diseased poultry) which are actually slaughtered under that paragraph and, where payable, is the value of the bird immediately before it was slaughtered.

The court rejected the approach adopted below of treating the question as when a right to compensation "accrues" (at condemnation or at slaughter) and emphasised that the correct question is in what circumstances, and in what amount, the Secretary of State is obliged to pay. The statutory context (including other provisions of the Animal Health Act 1981 and relevant orders) shows Parliament expressly distinguished between animals "caused to be slaughtered" and animals actually slaughtered, and provided for different methods and timings of valuation where it intended to do so.

The court also dismissed the respondents' Human Rights Act 1998 / Article 1 of Protocol 1 ECHR attack. It agreed with the High Court that the statutory controls culminating in condemnation and slaughter are properly classified as a control of use rather than a deprivation of property and that the compensation regime, construed and applied, did not violate the property protection in A1P1.

Background and parties: The respondents were poultry keepers affected by severe outbreaks of avian influenza. They challenged the Secretary of State's policies for paying compensation for slaughtered poultry, contending that paragraph 5(2) of Schedule 3 to the Animal Health Act 1981 required compensation for birds condemned to be slaughtered (at condemnation) rather than only for birds actually slaughtered. They also contended that the Secretary of State's approach breached Article 1 of Protocol 1 to the European Convention on Human Rights (A1P1) as incorporated by the Human Rights Act 1998.

Procedural posture: The High Court (Hill J) allowed the respondents' application for judicial review on two grounds and declared the Secretary of State's earlier policy unlawful; the Secretary of State obtained permission to appeal. The appeal is from Hill J ([2024] EWHC 65 (Admin)).

Relief sought: The respondents sought a declaration that compensation for birds "slaughtered under" paragraph 5(2) accrues at the point of condemnation and that the Secretary of State's policy failing to pay for birds condemned but which died before slaughter was unlawful; they also sought relief under A1P1.

Issues framed by the court:

• Statutory construction: in what circumstances and in what amount is the Secretary of State obliged to pay compensation under paragraph 5(2) of Schedule 3 to the Animal Health Act 1981?; and
• Human rights: whether the statutory scheme and the Secretary of State's policy were compatible with A1P1.

Court's reasoning on statutory construction: The Court of Appeal held the High Court had asked the wrong question by focusing on when a right to compensation accrues. Paragraph 5(2) is not ambiguous: it requires payment only for poultry "slaughtered under this paragraph" and prescribes the amount as the value immediately before the bird was slaughtered. The court examined the statutory context and concluded Parliament elsewhere drew clear distinctions between animals "caused to be slaughtered" and animals actually slaughtered and knew how to provide compensation measured at an earlier point where intended. Accordingly, the respondents' construction inserting an entitlement arising at condemnation was not reasonably available; there was no ambiguity invoking any Horner-type canon to give the respondent the benefit of doubt.

Court's reasoning on A1P1: The court agreed with the High Court that condemnation and the related statutory controls should be classified as a control of use rather than an unlawful deprivation. It gave significant persuasive weight to relevant Strasbourg authorities addressing preventive slaughter in outbreaks of animal disease and applied the margin of appreciation / manifestly without reasonable foundation standard. The court concluded the compensation regime did not violate A1P1 and dismissed the respondents' cross-appeal.

Outcome: The Secretary of State's appeal was allowed and the respondents' cross-appeal was dismissed. The Court of Appeal endorsed the Secretary of State's construction of paragraph 5(2) and upheld that there was no breach of A1P1.

Appeal allowed. The Court of Appeal held that paragraph 5(2) of Schedule 3 to the Animal Health Act 1981 is clear: compensation is payable only for poultry (other than diseased poultry) actually slaughtered under paragraph 5 and the amount is the bird's value immediately before slaughter. The High Court's approach of treating the question as when a right to compensation accrues was revised: the correct inquiry is the circumstances and amount of the statutory obligation to pay. The court also held there was no breach of Article 1 of Protocol 1 ECHR because the statutory controls and condemnation amount to a control of use and the compensation scheme was not manifestly without reasonable foundation; the respondents' cross-appeal on A1P1 was dismissed.

Appeal from the Administrative Court, King’s Bench Division (Hill J), [2024] EWHC 65 (Admin). The Secretary of State obtained permission to appeal to the Court of Appeal, which heard the appeal and handed down judgment on 20 December 2024 ([2024] EWCA Civ 1585).