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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Trailer & Marina (Leven) Ltd v Secretary of State for Environment, Food & Rural Affairs & Anor [2004] EWHC 153 (Admin) (06 February 2004) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2004/153.html Cite as: [2004] EWHC 153 (Admin), [2004] Env LR 40

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IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th February 2004

Mr Justice Ouseley:

Introduction

1. By this application for judicial review, the claimant seeks a declaration that sections 28-32 of the Wildlife and Countryside Act 1981, as amended by section 75(1) and Schedule 9 to the Countryside and Rights of Way Act 2000, are incompatible with its rights under ECHR and Article 1, Protocol 1 in particular.
2. The claimant owns the Leven canal in Yorkshire, having acquired it in 1971. The directors' families had been employed in connection with its general maintenance for many years before that. The canal runs in a straight line for 5 kilometres from the village of Leven to the River Hull; it is embanked because the water level is higher than that of the surrounding farmland. Approximately ?rds along its length from Leven the canal is blocked by an embankment so that no boat can pass from one side to the other, though the canal water passes through in a pipe. At its end by the River Hull, the canal is again blocked so that passage to and from the River Hull is not now possible. The claimant purchased the canal in that condition. At the Leven end, the claimant has established a small caravan site beside the canal to replace the dilapidated caravans there when it acquired the site.
3. When the claimant acquired the site, it had already been notified as an "area of special scientific interest" under the National Parks and Access to the Countryside Act 1949 because of its flora and fauna. This meant that the Nature Conservancy Council had to notify the local planning authority, which would regard that notice and the underlying nature interest as a material consideration in dealing with any applications for planning permission. In 1987, the NCC notified the whole site of the canal including the caravan site as an SSSI under section 28 of the Wildlife and Countryside Act 1981. Putting matters very simply, this meant that specified operations were prohibited but those operations could be carried out either with the consent of the NCC, or under a management agreement with the NCC, or after the lapse of 4 months. The incentive on the landowner to agree to forego the opportunity of carrying out those prohibited operations was the availability of compensation from the NCC. Compensation was available based on the loss of income or capital value which arose from being unable to carry out activities including those which the landowner was not yet carrying out, but which he intended to undertake or could undertake if he waited for the temporary prohibition to lapse.
4. In 1997, after an Order was made under section 29 of the 1981 Act, which had the effect of extending the period which had to elapse before the prohibited operation could be carried out, the claimant and NCC entered into a management agreement pursuant to which £19,000 annual compensation was paid to the claimant. This reflected the losses which the claimant would suffer in consequence of its agreement not to carry out certain commercial activities, fishing and boating, which it wished to commence or intensify on the canal. A further £19,000 was paid to its fishing tenants. This agreement lapsed at the end of 2000.
5. On 30^th January 2001, the Wildlife and Countryside Act was amended as the new provisions of the Countryside and Rights of Way Act came into force. Although English Nature, as the NCC has now become, is prepared to enter into another management agreement, the basis upon which it will pay compensation has changed. It is unable, as a result of the new statutory scheme and Ministerial guidance under it, to pay compensation in respect of losses of profit or capital value based on activities which are not being undertaken but which the landowner would wish to undertake but is prohibited from undertaking. The prohibitions do not now lapse through the effluxion of time. The claimant says that it is now prevented from using the canal in the way in which it intended for boating and fishing, and that it is without compensation for that loss. It says that the restrictions have reduced the value of the land almost to nil. A statutory scheme which requires or permits that to happen without compensation breaches Article 1, Protocol 1.

The Facts

6. The canal which dates from 1802 was used for the transport of goods and people, for boating and angling. In 1935, the Leven Canal Acts Revocation Order relieved the owner of the obligation to keep the canal open for traffic and although the lock which was used to connect the canal and River Hull was not removed and a sluice gate remains, a flood embankment was constructed across the access to the River Hull. The canal gradually deteriorated though a few boats still used it, and it appears to have been in declining use when the claimant bought it. The notification under section 23 National Parks and Access to Countryside Act 1949 was then in existence. However it prohibited nothing and would only have been a material consideration, however weighty, if planning permission were required for something which the claimant wished to do.
7. The claimant's evidence through Mr Draper, was that it bought the canal intending to exploit it commercially in the following ways. First, it intended to establish the modern caravan site which it has done; second, it intended to extend the angling so that it could create a trout stew pond for fly fishing and an area for coarse fishing when the lease to a local angling association expired. The lease expired in the mid 80s, the stew pond was created and the claimant had started to rear trout. Third, it intended to restore the lock at the River Hull and to open the connection again; it was expected that this would enable river craft to moor in the canal permanently and semi-permanently, there being a dearth of such facilities on the river; traffic would generate the sale of boat supplies and mooring fees and Leven itself was seen as both an attractive destination and a point of access for boats. Mr Draper took the view that planning permission would not be an obstacle. The lock was not restored because by the time in the mid 80s when the claimant was ready to embark on that stage of the enterprise, NCC notified site as SSSI under the Wildlife and Countryside Act 1981. The claimant had however done some dredging, reed and weed cutting, bank repair and trimming the bank vegetation to enable anglers to use the canal.
8. There was no objection by the claimant to the notification, although notification brought with it a list of specified and hence prohibited operations which were thought likely to damage the special interest of the canal, which lay in the quality of its wetland habitats and plants. The specified operations included the removal, killing or bringing in of any animals including fish, the modification of the water course, the management of aquatic or bank vegetation for drainage, and the use of light or recreational activities likely to disturb features of interest. Mr Draper describes these restrictions as being so extensive as to prevent the claimant using the canal for any viable commercial purpose.
9. The claimant continued its minor operations with the consent of the NCC. But no management agreement was reached because negotiations broke down over the claimant's desire to reopen the canal and to intensify the boating and fishing activities, with all that that would require by way of dredging, angling facilities, fish stocking and vegetation removal. The principal difference related more to the intensity of the operations which the claimant wanted to undertake rather than their principle, with the claimant contending that the level at which the NCC would be prepared to see the operations was far below that which was necessary for their commercial viability. In order to prolong the period in which the specified operations could not be carried out and to prolong the period available for negotiations, in effect to 12 months, the Secretary of State made a Nature Conservation Order under section 29 of the Wildlife and Countryside Act on 7^th August 1995. The claimant objected and a public inquiry was held. The Inspector recommended that it should not be revoked. His recommendation was accepted by the Secretary of State. Both parties relied on what he said at various points in his Report. His Report contains a convenient summary of the nature conservation interest upon which the defendants rely in their argument as to the proportionality of the legislation at issue and its application to this case. I set it out:

"9.10 The Order land covers the great majority of the Leven Canal SSSI (1.2). National policy in PPG9 does not identify every SSSI as being of national interest. The Leven Canal SSSI was not selected as a key site of national importance in the NCR (4.17)."

"9.11 Canals are generally of importance to nature conservation. Nearly half of the 3% of British standing waters with the greatest diversity of aquatic plant species are canals (4.11)."

"9.12 The Leven Canal supports 83 aquatic, riparian and wetland species, including 44 species of aquatic plant (4.13). These are high numbers of species. There is a wide range of plants, and a noteworthy zonation from open water communities, through emergent communities close to the canal sides, to bankside communities (4.12). The water is clean and calcareous, and yet there are areas of peaty substrate which have different characteristics influencing the vegetation (4.13, 4.39). Deep drainage nearby (6.30) may well have stopped the flow of water from calcareous springs into the canal. Nevertheless there is a supply of calcareous water from the River Hull. There is very little boating on the canal (4.12) and therefore particular interest arises from the presence of species which require clean water. Pollution tolerant species are found in other standing waters (4.14)."

"9.13 From the above evidence, it seems to me that English Nature's statement that this canal is one of the six best in England (4.13) is likely to be accurate. There is another canal SSSI about 30 kilometres from the Leven Canal, based on the Pocklington Canal (4.13) but this is a type 10 standing water, like most other canals. The Leven Canal is a type 9 standing water, with different water chemistry from the Pocklington Canal. It is a very good example of its type (4.12/3)."

"9.14 My conclusion is that, because of the general nature conservation importance of canals, the specific characteristics of this canal, including its differences from other canals, and its position amongst the best English canals, the Leven Canal is both of special interest and of national importance. Further evidence of its interest and national importance comes from its role as a refuge for wetland flora. On a national scale, the area of wetland has decreased massively (4.15). My opinion is that the failure of the NCR to recognise the national importance of this SSSI is likely to have been a reflection of the methodologies and classification systems used when the NCR was carried out in the 1970s (4.17). It does not mean that the SSSI lacks importance at national level."

"9.15 It is the flora of the canal which appears to me to make the Order land of special interest and national importance. The flora is dependent on the hydrology of the canal, although the hydrology is imperfectly understood at the present. Nationally scarce plants are found on the Order lands, but no nationally rare ones, and English Nature does not provide detailed evidence on the threats to the survival in Great Britain of the nationally scarce species. Hence in my view section 29(1)(b) applies rather than section 29(1)(a)."

10. The Inspector then discussed the operations being undertaken by the claimant. He thought that their dredging activity had been harmful:

"9.18 Populations of bottom rooting plants, and bottom dwelling animals, are likely to have suffered. Removal of material and cutting plants growing in the water have obviously harmful implications for an SSSI which is important because of its aquatic vegetation. I conclude that weed cutting and dredging are likely to destroy or damage the special interest of the SSSI, unless carried on with care and sensitivity."

11. He concluded that bank repair work needed to be undertaken carefully if damage were to be avoided, and that the current method of replenishing the water from River Hull would be damaging in the long run.

He said of angling and boating:

"9.21 Angling is an important leisure activity on the canal (6.27). Of the order of 100 pegs have been in existence recently. Cutting the vegetation to keep the pegs clear could involve the loss of plants belonging to species which contribute to the special interest of the SSSI. Fishery management needs to be carried on sensitively because of the importance of the aquatic ecosystem of the canal. Stocking of certain fish, i.e. carp and bream, can change the nature of fish populations. More importantly, it can lead to deoxygenation through a chain of events which starts with increased turbidity arising from bottom feeding, the loss of aquatic plants, and the growth of algae (e.45). Removal of predators can also change the composition of fish populations, and ground baiting can increase the nutrients available in the water, with potential effects such as an increase in algae (4.50). Fish have been introduced to the canal, and predators have been removed (6.32, 6.30). Ground baiting is commonly used in angling matches, and these matches occur on the canal (4.50, 4.69)."

"9.22 There is little boating on the canal at present, merely the use of the weed cutting boat, and of some small boats by caravan owners (6.41, 8.4). It is the objective of T & M to reopen the canal to navigation (6.14). This would involve reopening the lock to the River Hull. A flood bank separates canal and river, and the lock is in partial disrepair (2.1). Physical works would therefore be necessary, and these would disturb the flora and fauna at the western end of the canal. Other work would be necessary, for example, to remove the barrier which carries the Great Western Drain across the course of the canal (2.7)."

12. He concluded that many potentially damaging operations had been carried out:

"9.26 The intention of English Nature is not to prevent all activity. English Nature has variously said that maintenance, walking, angling, and limited boating, could all be compatible with nature conservation (4.22). The Order would give an opportunity for further negotiation, so that operations compatible with the special interest of the SSSI could take place in a controlled way and this would reduce the likelihood of damage."

13. He referred to the negotiations and to his view that the NCC request for a business plan was not unreasonable in view of the scale of operations and the expenditure of public money sought, and referred to the debate over whether one had been provided. He then said:

"9.31 T & M are proud of the special interest of the canal (6.25) and they have considerable experience in its management. However, they also have business objectives, which are not necessarily compatible with the retention of the full range of nature conservation interest which the canal possesses. My opinion is that the company's approach to management is over-robust. The company has not appreciated, in the past, the obligations falling upon the owners of an SSSI, and the requirements of the Act. The approach adopted by T & M in the recent past will not enable management of the SSSI to benefit from scientific analysis and advice."

"9.32 However, the special interest of this SSSI is a matter of public interest on a national scale. This brings with it obligations, as set out in the Act, which are capable in principle of overriding the private interest of owners and users where there is conflict. The objections on grounds of morality and ethics are not therefore well-founded."

"9.33 It may be that T & M would suffer a decline in the capital value of the business, although this depends on the operations which any management plan, or consent from English Nature, might allow. Even if there is uncompensated decline in the value of the business, my view is that the special interest and national importance of the SSSI outweighs it."

14. Mr Maurici for the defendants pointed to the balancing exercise which the Inspector undertook.

"9.37 If the order is not revoked, there is a likelihood that some recreational activities, which would assist the local economy and a small business, would be found to be incompatible with the special interest of the canal. These would not be consented by English Nature, would not form part of any management plan which might be agreed and would not take place. In my judgement, the national interest of conserving the important nature conservation features of the Order land certainly outweighs the loss of economic and recreational activity which would result. English Nature has stated that compensation would be payable to T & M if an agreement is made (4.24), and it seems to me that loss of profits could be made up."

15. He concluded that the Nature Conservation Order was necessary in order for negotiations to continue, saying:

"9.40 The Order land is of special interest and of national importance for nature conservation, principally by reason of its flora, which is dependent on the nature of its water regime. Operations likely to damage or destroy the flora and the water quality are undertaken on the Order land. Negotiations between English Nature and the main objectors have broken down. The Order should not be revoked."

16. Subsequently, further negotiations took place and a management agreement was concluded in March 1997 for a term of 5 years starting in January 1996. The agreement contains a combination of restrictions and positive obligations largely to be found in the management plan annexed to it. A dredging programme was agreed and other operational matters but the two key restrictions were that no more than 40 fishing pegs were to be set out on the 10 kilometres of bank, in specified areas, with the swim in front of them to be cleared in an appropriate fashion, and boating was restricted to the small boats of the occupants of the trailer park which were only to be used in the section of canal which adjoins that park. There were minor revisions agreed in 1999 but not to those key restrictions. In return for these restrictions, the claimant received £19,000 a year. The claimant's fishing tenant also received £19,000 a year. The agreement expired on 31^st December 2000.
17. Negotiations for a replacement agreement came to naught because of the differing views of the parties as to the effect of the coming into force of the amendments to the Wildlife and Countryside Act 1981 brought about by Schedule 9 to the Countryside and Rights of Way Act 2001 in January of that year. The claimant claimed that the restrictions which English Nature said now applied to the payment of compensation were unlawful, incompatible with its human rights.
18. The claimant contends that the impact of this legislative change, and of the related change in Ministerial Guidance as to compensation, has been to reduce the value of its interest in the canal site nearly to nil. It cannot put the canal to any, or at least any commercial use; its shareholders can merely observe the evolution of nature. In support of those contentions, which Mr Maurici for the defendants contested as matters of fact, the claimant relied upon the evidence of Mr Draper, one of its directors.
19. Mr Draper said that the canal was completely amortised and there was no form of commercial activity which could be carried on. It had lost the opportunity to recover rent or to obtain grants for the restoration of the canal because that would involve works which were now prohibited. Nothing now could be done with it and its value had been reduced to very close to nil. The claimant also had to incur the costs of public liability insurance without the prospect of commercial return. It was unreasonable for the burden of the protection of nature conservation in the public interest to be borne without compensation for the private owner. Angling was prevented on a commercial basis by the restrictions on operations relating to the release and capture of fish and by the restrictions on reed and vegetation clearance. The costs of stocking, dredging, vegetation clearance and peg provisions would not be commercially viable with only 40 pegs on 10 kilometres of bank. Boating was restricted to 600 boat movements per annum. Access was only via Leven and it was usable for only 2½ kilometres. He explained why the licensed fishing and boating which English Nature were prepared to allow would be insufficient to cover the costs of running such operations. He referred to the cost of buying a second hand dredger and of paying for a bailiff clearing weed. He produced a short letter from his bank which said that the restrictions arising out of the designation of the SSSI had rendered the land unmarketable and incapable of use as security for a loan. Mr Rabie said that the letter was a glimpse of the obvious in response to its usefulness being queried by Mr Maurici. Mr Draper also took issue with allegations that he had failed to maintain the canal.

The Legislation

20. The Wildlife and Countryside Act 1981 as amended by schedule 9 to The Countryside and Rights of Way Act provides as follows in section 28(1) and (4):

"(1) Where the Nature Conservancy Council are of the opinion that any area of land is of special interest by reason of any of its flora, fauna, or geological or physiographical features, it shall be the duty of the Council to notify that fact –

(a) to the local planning authority in whose area the land is situated;

(b) to every owner and occupier of any of that land; and

(c) to the Secretary of State."

"(4) A notification under subsection (1)(b) shall also specify-

(a) the flora, fauna, or geological or physiographical features by reason of which the land is of special interest, and

(b) any operations appearing to the Council to be likely to damage that flora or fauna or those features, and shall contain a statement of the Council's views about the management of the land (including any views the Council may have about the conservation and enhancement of that flora or fauna or those features)."

21. There is also a provision for the withdrawal of a notification or its ceasing to have effect.
22. Notification of land as a SSSI has a number of legal consequences. First, the owner or occupier of any land included in an SSSI may not carry out any operation specified in the notification itself, as being likely to damage the matters by reason of which the area is of special interest, unless English Nature have been given notice of a proposal to carry it out (specifying its nature and the land on which it is proposed to be carried out) and the operation is carried out either in accordance with the terms of a relevant agreement with English Nature (e.g. under section 15 of the Countryside Act 1968), a management scheme or a management notice (under section 28J or 28K), or with English Nature's written consent; (section 28E). English Nature's decisions in relation to such consents may be the subject of appeal to the Secretary of State; section (28F). A person who contravenes these requirements without a reasonable excuse is guilty of a criminal offence. Such a reasonable excuse may exist if the operation carried out is an emergency operation, or if it was authorised by a planning permission granted under Part III of the Town and Country Planning Act 1990 which requires a specific application for planning permission, or if it was permitted by certain public bodies in other circumstances; section (28P). Mr Rabie for the claimant emphasised the scale of penalties, including an unlimited fine on indictment, which he said could also apply on committal from the Magistrates Court if its limit of £20,000 were thought too low.
23. Mr Maurici emphasised the continuing role of management agreements under section 15 of the Countryside Act 1968. English Nature may enter into an agreement with the owners, lessees and occupiers of any land within such an area for the purpose of conserving or restoring the matters by reason of which the area is of special interest, imposing restrictions on the exercise of the rights of these persons and for the carrying out of work or the doing of such other things on the land as may be expedient. Furthermore, section 15(3)(c) provides that any such agreement "may contain such other provisions as to the making of payments by [English Nature] as may be specified in the agreement". This is considered further below.
24. Under the amended Act, English Nature may formulate a "management scheme" for conserving or restoring the matters by reason of which the area is of special interest, following the procedure set out in section 28J of the 1981 Act. English Nature must serve a notice of a proposed management scheme on every owner and occupier of a SSSI but only after they have been consulted about the proposed management scheme, section 28J(3). The notice must specify the time and manner in which representations or objections with respect to the proposed management scheme should be made and English Nature is required to consider such representations or objections; section 28J(7). English Nature must then within 9 months either withdraw or confirm (with or without modifications) the management scheme, which has effect from the time the notice is served on all the relevant owners and occupiers; section 28J(8). English Nature can at any time cancel or amend a management scheme but must again notify or consult owners and occupiers; section 28J(11) and (12). Section 28J(13) provides that a section 15 1968 Act agreement may provide for any matter which a management scheme could provide for.
25. If it appears to English Nature that any owner or occupier of land is not giving effect to a provision of a management scheme, or that they are unable to conclude an agreement with him on reasonable terms as to its management in accordance with the scheme and that, as a result matters of interest are being inadequately conserved or restored, it may serve a "management notice" on him under section 28K of the 1981 Act. Such a notice may require him to carry out such work on the land or do such other things with respect to it as are reasonably required to ensure that the land is managed in accordance with the management scheme. Failure to comply with any requirement of a management notice without a reasonable excuse is a criminal offence and entitles English Nature to enter the land and to do what is required. There is a right of appeal against a management notice to the Secretary of State; section 28L.
26. Also, English Nature may acquire all or any part of an SSSI compulsorily if satisfied that it is unable to conclude an agreement as to the management of the land on reasonable terms or if any such agreement is breached in such a way that the land is not being managed satisfactorily; section 28N(3) and (2). Any dispute about whether an agreement has been breached is to be determined by an arbitrator appointed by the Lord Chancellor; section 28N(3). By virtue of section 28N(5) of the 1981 Act and section 103 of the 1949 Act, where English Nature acquires land by compulsory order, compensation will be paid according to the compensation code in the Land Compensation Acts 1961 and 1973, and the Compulsory Purchase Act 1965. The operation of that code in these circumstances was a matter of some debate.
27. Other public bodies are also required to take reasonable steps in the exercise of their own functions, insofar as their exercise is likely to affect matters by reason of which the area is of special interest, to further the conservation and enhancement of those matters provided that such steps are consistent with the proper exercise of their own functions. Such public bodies are also required to follow a specific procedure designed to protect such matters, which requires them to take into account English Nature's advice if they propose to carry out, or to give any consent for, any operations that are likely to damage such matters: sections (28G, H and I) of the 1981 Act.
28. I have taken this analysis from Mr Maurici's Skeleton Argument; it is borne out by Lightman J in Fisher v English Nature [2003] EWHC 1599 Admin
29. There are two other provisions which are of crucial importance to the argument in this case. First, section 50 of the 1981 Act applies where, inter alia, English Nature offer to enter into an agreement under section 15 of the 1968 Act providing for the making of payments to any person. Section 50(2) provides that "the said payments shall be of such amounts as may be determined by the offeror in accordance with guidance given by Ministers." Section 50(3) provides for arbitration where there is a dispute as to the amounts to be paid under such agreements. This provision is unamended by the 2000 Act and is the provision pursuant to which the payments of £19,000 p.a. were made to the claimant.
30. Second, section 28M of the 1981 Act provides:

"(2) The Council may, if they think fit, make one or more payments to any owner or occupier of land in relation to which a management scheme under section 28J is in force.

(3) The amount of a payment under this section is to be determined by the Council in accordance with guidance given and published by the Ministers.

(4) Section 50(3) applies to the determination of the amount of payments under this section as it applies to the determination of the amount of payments under that section."

The Guidance

31. Ministers first gave guidance as envisaged by section 50(2) of the 1981 Act in a joint circular 4/83 – issued by the then Department of the Environment and the Ministry of Agriculture, Fisheries and Food on 31 January 1983. This was entitled "Financial Guidelines for Management Agreements".
32. In accordance with sections 28M(3) and 50 of the 1981 Act, as amended by the 2000 Act the then Department of the Environment, Transport and the Regions issued revised guidance on management agreements in February 2001: the Guidelines on Management Agreement Payments and other Related Matters ("the GMAP").
33. The 1983 Guidance provided that annual payments should reflect "net profits foregone", the chief feature of relevance of which was that it covered the profits foregone from activities which might have been profitable but which were not necessarily yet being carried out and which could not be carried out because of the notification of the SSSI. It permitted a degree of speculation about what an owner would do. It was seen as a system whereby owners, by threatening to carry out a specified operation which would damage the SSSI, could obtain public funds not to do so. English Nature and DEFRA recognised that although many landowners had an interest in the maintenance of the special interest of their sites, others could obtain full compensation for net profits foregone by agreeing with English Nature not to do operations which they were not yet doing but which would damage the site if carried out as proposed.
34. For a variety of reasons, by the late 90s this was considered by the Government no longer to be appropriate. A consultation paper of 1998 "SSSIs – Better protection and management", was produced by DETR. Mr Maurici put some weight on this paper and the responses, in his submissions on the degree of deference due to the Government and Parliament's assessment of what was a proportionate interference with the property rights of the site owners. It was thought no longer to be appropriate that a landowner should receive compensation for threatening to do an act which would be harmful to nature conservation interests; the then current regime had achieved much of value but it had not been successful in bringing about positive steps from landowners to improve, restore or maintain the features of special interest; the EU regulations on agricultural subsidy were affecting the way in which farmers could be compensated for non production or for restrictions on production which were less generous than the 4/83 guidelines permitted. There was considerable support in many quarters for the changes, in particular for the changes proposed to the compensation regime.
35. The new legislation does not contain the changed compensation provisions in so many words. It is still left to be provided by Ministerial Guidance of February 2001, the GMAP. There was consultation over it. It reiterates at para 1.2: "Ministers are not prepared for public money to be paid out simply to prevent new operations which could destroy or damage these national assets." There was to be a "menu of standard payments" for each principal habitat; the actual costs of carrying out management works would be paid. There would be an element for income foregone, a payment for additional costs of managing an SSSI, e.g. if livestock grazing had to be introduced or other costs items. There would be an incentive payment of 20% of the income foregone and additional costs to encourage positive management. If compulsory purchase should prove necessary, the Guidance said that the statutory compensation code would apply.
36. The GMAP elaborated on income foregone in paras 3.5 and 3.6 as follows:

"3.5 This element of the payment is calculated on the basis of net income foregone by owners/occupiers in changing the current land management practice on the SSSI to that required to manage the SSSI for the benefit of nature conservation. Calculation of income foregone will take into account current land management practices of similar land uses in the area around the SSSI and revenue and cost estimates based on typical farm businesses. Agricultural subsidies and forestry grants received for the current land management practice on the SSSI will be taken into account."

3.6 In assessing the income foregone it is a requirement that the owner/occupier is complying with the standards of Good Farming Practice set out in Annex IV of the England Rural Development Programme². This is regardless of the use to which the land is being put, because elements of Good Farming Practice will be appropriate to holdings not under agricultural management. The costs incurred by the owner/occupier in meeting these requirements will not be taken into account in assessing the management agreement payment."

37. The impact is quite clear. Although if an owner is unable to continue what he is already doing, he will qualify in most circumstances for compensation for lost income, he will no longer do so if he has not yet undertaken the activities which are now prohibited in the absence of consent or regulation by agreement.

The ECHR

38. Article 1 of Protocol 1 to the ECHR is as follows:-

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

38. It is recognised that Article 1, Protocol 1 contains three categories of interference with property rights: interference in the peaceful enjoyment of property, deprivation of property and control of the use of property. These "distinct rules" as they were described in Sporrong and Lonnroth v Sweden [1982] EHRR 35, are nonetheless connected. As the ECtHR put it in Jacobsson v Sweden [1989] 12 EHRR 56:

"53. According to the Court's case law, this provision comprises three distinct rules. The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of peaceful enjoyment of property; the second rule, contained in the second sentence of the same paragraph, covers deprivation of possessions and makes it subject to certain conditions; and the third rule, stated in the second paragraph, recognises that Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are not distinct in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule."

39. That has been the Court's consistent jurisprudence. The Court however has drawn distinctions between those three categories in terms of what makes an interference disproportionate. The absence of compensation for the interference matters more where there is a deprivation of property. Mr Maurici submitted that its absence was of no significance in a control of use case. Mr Rabie submitted that that depended on circumstances.
40. Here, there was no dispute, at any rate by Mr Rabie's reply, that this case involved interference through the control of the use of land rather than a de facto expropriation, as at one time seemed to be the suggestion.
41. That is obviously the position. There has been no deprivation of property because title rests with the claimant and has not been interfered with. There has been no de facto expropriation; the claimant remains able to take income from the caravan park and there are other low level activities, including fishing, which can be carried out.
42. It is clearly a control of use case as the ECtHR jurisprudence demonstrates. In Oerlemans v Netherlands [1989] 62 DR 200, albeit an admissibility decision, land in Holland was designated as "a protected natural site", the effect of which was that agricultural activities could continue but that if the owner wished to alter or intensify the use of the land or to make certain changes in agricultural practices, authorisation was necessary. The owner argued that he had been deprived of the right to cultivate part of his land. The commission held that this involved a control of use; he was restricted in his manner of farming but not prevented from continuing his farming.
43. Lightman J in Fisher, supra, also treated the overall provisions of the Countryside and Rights of Way Act with which I am concerned as relating to the control of use.
44. There was obviously no dispute that the relevant legislation interfered with the claimant's property through the new controls over its use. Mr Rabie accepted that the provisions in question were provided for by the law. He also accepted that the protection and enhancement of nature conservation interests was a legitimate general and public interest which entitled Parliament to legislate for the restrictions involved here. There was some debate about the significance of the degree of nature conservation interest attaching to an SSSI compared to national nature reserve.
45. The issue was whether that interference was proportionate in the absence of an express statutory provision providing for compensation to be paid on the former basis. Mr Rabie did not contend that the restrictions would have been disproportionate if the former compensation basis had continued. So in the end, the issue came down to the proportionality of the interference in the absence of compensation for a particular but frequently substantial head of loss, in the light of the margin of judgment to be afforded to Parliament and the executive as to the nature of the public interest, and the striking of the balance between that and the rights of the owner.

The Claimant's Submissions

46. It is to be noted that the challenge is made against the statutory provisions in the 1981 Act as amended, and not to the Guidance itself, even though it is the Guidance which contains specific provisions precluding compensation for loss of profits foregone in respect of proposed rather than actual activities. Indeed it was the defendants' contention that the new statutory provisions did not require the Guidance to be as it was; section 50(2) itself was sufficiently flexible to have enabled the former Guidance to have been continued. Mr Rabie contended that, even if that were so, his challenge to the compatibility of the new statutory provisions with Article 1, Protocol 1 remained good because the statutory provisions permitted the Secretary of State to issue Guidance in that way; by itself that reduced the value of land. Even if the Guidance had remained unchanged, there would still therefore be incompatibility, even though there would be no loss. Mr Rabie was at times inclined to go further and say that the new provisions of the Act, embodying a clear change of approach towards preventing operations damaging to nature conservation, would have made the former Guidance very difficult to operate, if not impossible.
47. Mr Rabie contrasted the previous regime for SSSIs with that now in force. He pointed out that previously the restrictions were limited in time; after the expiry of that time, the restricted operations could in fact be carried out. There was an obvious incentive on English Nature to conclude management agreements, including proper provisions for compensation for profits foregone, so that the landowner would thereafter be unable to make the best use of his land which otherwise he could, (subject to planning permission). Now, the restrictions did not expire, and although consents and agreements might be forthcoming, there was to be no compensation for the profits lost through the restrictions on prospective commercial activities, no matter how important financially to the owner.
48. He submitted that if a consent were sought from English Nature to carry out a prohibited operation or to do so under a management agreement or scheme, English Nature would only consider the environmental impact of the operation and would have to disregard the financial implications for the landowner. The restrictions on the operations were likewise imposed only on the basis of nature conservation criteria. Such an approach could lead to land having no market value or production capability, as he said was the position here. English Nature was under no obligation to consent to anything, and was not at risk of having to pay compensation if it refused to allow the owner the opportunity of using his land in the way he wanted, whilst the land lost all value. Boating and fishing was so restricted that it could not even be undertaken as a commercial proposition and those activities were all now that could give the canal any value. Indeed, the legislation permitted English Nature to go further and possibly to require the landowner, who was obtaining nothing from his land, to carry out positive steps and if he refused, he was at risk of the works being done anyway or of the site being acquired compulsorily.
49. Even if the land were acquired compulsorily, the compensation assessed under the compensation code for the market value of the land would have to disregard the scheme, which would not eliminate the effect of the designation or of the restrictions on the carrying out of the operations specified in the notification. Hence the land would have no market value in compulsory acquisition.
50. No longer did the landowner voluntarily give up rights in return for compensation for what had been given up; the owner was no longer in a position to demand compensation for all that he had lost; the management system, whether agreement, scheme or notice was intended to compel him to do things and to compensate him only, or nearly only for the costs of doing so.
51. Mr Rabie summarised the effect of the legislation as (1) permanently restricting the landowner in the operations which he can lawfully do on his land in such a way that many and possibly all profitable activities are prohibited; (2) putting him at risk of a

management notice or compulsory purchase if he is unwilling to carry out works which English Nature require, for which he will only receive the cost of compliance; (3) providing nothing for the consequential considerable reduction in land value, even if it is reduced as here to a nil value.

52. He submitted that the legislative provisions were disproportionate in the absence of compensation, and that the whole burden of the effect of notification of land as an SSSI fell upon the owners of such land rather than on the general public, even though it was the general interest which was being promoted rather than the personal position of the landowners. The burden could only be shared proportionately if the landowner received compensation for the loss of value of his land which the new regime entailed. There was no grave risk or immediate urgency to justify such an uncompensated loss. Unlike the Town and Country Planning Act, which applied its restrictions to all land in the UK, this legislation applied only to those 4113 English and 950 Welsh sites which had been notified as SSSIs. This covered only 7 per cent of the land area of England and Wales.
53. He argued that nature reserves were of national interest, whereas SSSIs were not necessarily in that category; they could be SSSIs even where it was not "expedient in the national interest that they be regarded as nature reserves." He contrasted section 35 of the 1981 Act with section 28 relating to SSSIs.
54. Mr Rabie submitted that the disproportion between the general interest in the protection of nature conservation interest and the impact of that protection on the individual landowner fell outside the scope of the discretionary area of judgment enjoyed by Parliament. The legislation did not concern social and economic policy, or an equivalent policy to those dealing with the compensation provisions for nationalising an industry or for leasehold enfranchisement. The disproportion between the legitimate aim of protecting nature conservation interests and the means used, in the absence of compensation, was beyond the area of judgment to be accorded to Parliament. There was no need for Parliament to require compensation to be foregone in order to advance the interests of nature conservation. Parliament was no better able to judge these issues than the Courts. It was not possible, he submitted, to construe the legislation so as to make it compatible with the ECHR.

The Significance of Nature Conservation in the Public Interest

55. Although it was accepted by the claimants that the protection and enhancement of nature was in the general interest, Mr Rabie's arguments tended to play down its significance and the importance of the systems available to advance nature conservation interests, according to Mr Maurici. Mr Rabie had said that they were not important in the way in which social policy was, e.g. the leasehold reform which was at issue in James v UK [1986] 8 EHRR 123 or the economic policies which underlay the nationalisation of shipbuilding companies in Lithgow v UK [1986] 8 EHRR 329. The purpose of those submissions was to decrease the significance of the general interest to be weighed in the scales when proportionality was considered, and to suggest that the Court should be less willing to accord a wide measure of discretion to Parliament and the executive in this respect.
56. Whilst I accept that in James, the ECtHR uses language, at para 47, in describing the intent behind leasehold enfranchisement of "eliminating social injustice" and of the provision of housing "as a prime social need in the eyes of modern societies," it is plain that it is not setting out some hierarchy of general interests in which as a matter of principle, the protection and enhancement of nature would come low. The same is true of the language in Lithgow concerning economic reform. There is of course room for a value judgement about the importance of nature conservation and the system for its protection, and how important that is in comparison with other interests which can broadly be described as economic or social. But that serves to illustrate rather than to diminish the relevance of the area for discretion available to the legislature and executive.
57. Mr Maurici drew attention to the range of material demonstrating the importance of the interests of nature conservation. Stronger protection for SSSIs was an essential part of the Government's overall sustainable development and biodiversity strategy which it saw as enhancing the quality of life and as part of its international and EU obligations. SSSIs had economic importance as well, as set out in the evidence of Mr Thomas, para. 13. There had been widespread consultation over and support expressed for the strengthening of the regime for the enhancement of SSSIs, which could be seen as the latest step in a gradual process of improving the status and protection given to nature conservation interests, domestically and internationally. The essence of the designation of an SSSI was that it was "special" and in the Government's eyes, all now are of national importance; they "represent the best examples of the full range of natural and semi-natural eco-systems and provide the core habitats necessary for the conservation of biodiversity." I take that from para. A14 of the DEFRA consultation paper on the then proposed new legislation. In para. B2 a number of related aims are set out for SSSIs to fulfil, which serve to emphasise their importance.
58. I also accept Mr Maurici's response to the submission that SSSIs were of lesser importance on the national scale than national nature reserves. Of course the latter must be of national and not just local importance, which is the point of the legislation relied on by Mr Rabie. But that does not mean that SSSIs are not of national importance. The evidence of Mr Thomas and the policy statements in the consultation paper support that.
59. Descending to the particular, Dr Clements of English Nature explained in his Witness Statement what the special interest in this SSSI was. Slow-flowing, shallow, nutrient poor waters led to a rich aquatic life. The Leven canal was of particular interest because of the low usage which it had enjoyed, enabling an "impressive array of aquatic, riparian and wetland plants to become established." It had five nationally rare

plants. The Report of the Inspector into the Nature Conservation Order made many of the same points, as I have set out. It was of public importance on a national scale.

60. Accordingly I accept that nature conservation interests and SSSIs are an important aspect of what can be seen as social policy. I agree with Mr Maurici that environmental policy is properly to be regarded as falling within that broad head in the way in which the ECtHR uses that phrase. But it scarcely matters by what name it goes. Government and Parliament are entitled to regard the protection and enhancement of nature conservation and of SSSIs in particular as an important policy with international ramifications. This site too is regarded by experts as of national importance.

The discretionary area of judgement

61. Mr Maurici also took issue with the assertion by Mr Rabie that the margin or area of discretionary judgment available to the defendants was quite limited and limited because the Court was in as good or nearly as good a position as the defendants to reach a judgement as to what interference was in the general interest. I confess to being surprised at Mr Rabie's submission. The evaluation of the importance of SSSIs and the need for a strengthening of the system for their protection and enhancement, and the question of whether payments should continue to be made to an owner for refraining from carrying out harmful operations to a site of national interest, is a matter upon which various arms of the State other than the judiciary are far better placed to reach a judgement. There are scientific and economic judgements to be made as to how important their protection is, how that chimes with international obligations, what sort of funding is or should be available and what the effect of a continuation of the former regime would be and so on. The Government has an expert adviser in English Nature. The consultation process shows that, as is obvious, the wider public have an interest and view which are properly taken into account. There is also the broader political or moral judgement about whether the time had come, as a further step in protecting and enhancing SSSIs, to stop paying owners not to undertake or threaten to undertake potentially damaging operations. No doubt two views and more can legitimately exist about that but it is not an issue upon which the Courts have any particular insights not vouchsafed to others or experience and expertise which places such an issue clearly within their province. Others are much better placed to judge the significance of the assessment in the consultation paper that 25 percent of all SSSIs were in an "unfavourable condition" and only 55 percent in a "favourable condition". Others too are better placed to judge what remedial measures are called for, if any.
62. I accept instead the way in which Mr Maurici put his case on the area of discretion. This is an area in which a wide margin of discretion should be accorded to the decisions of the legislature and the executive. Although the margin of appreciation accorded to national decisions by the ECtHR is not the same conceptually as the area of discretion afforded by the Courts to the decisions of Parliament and of the Government, the width of the margin of appreciation accorded in such cases by the ECtHR is an indication of the appropriate width of the area of discretionary judgement accorded to the decisions of Parliament and of the executive. It is plain from decisions on the controls of the use and development of land, and in environmental policy generally, that a wide margin of appreciation is accorded by the ECHR to national decisions. Sporring and Lonnroth v Sweden [1982] EHRR 35, which in part involved a control of use and Chapman v UK [2001] 23 EHRR 18, which concerned the enforcement of planning controls so as to prevent a gypsy from living on her land within the Green Belt, both refer to the "wide" and "broad" margins of appreciation which such national decisions enjoy.
63. Similarly, looking at the discretionary area of judgement accorded by domestic courts to the acts of the legislature and of the executive in relation to environmental policy and legislation, the decision of Lightman J in Fisher is relevant and persuasive. That case concerned whether the designation of an SSSI was a breach of Article I Protocol 1 ECtHR. I adopt what he said in para 46:

"I should add that if the legal merits of any complaint did need to be examined in any more detail, under Article 1 a fair balance must be struck between the general interest and the interest of any property owner. But in considering questions of proportionality under Article 1 the European Court of Human Rights had made it plain that states enjoy a wide 'margin of appreciation' in this area relating to the control of the use of land in the public interest for environmental reasons, and that the controls prescribed or interferences involved must be without any reasonable foundation if the court is to regard them as disproportionate: Fredin v Sweden [1991] 13 EHRR 784. It is well established that a reasonable relationship of proportionality under Article 1 does not import a test of strict necessity (as Mr Holgate has argued). The fact that there may be other even better methods of achieving the same ends does not necessarily mean that any particular measure is disproportionate under Article 1: see James v the UK [1986] 8 EHRR 123; Tre Traktorer Aktiebolag v Sweden [1991] 13 EHRR 309. That 'margin of appreciation' is properly reflected domestically in the respect that is due: (a) to the choices that the legislature is entitled to make in this area (for which it is democratically accountable): and (b) to any judgement made by English Nature as a specialist regulator, expert in the matters of nature conservation: cf Holder v the Law Society [2003] EWCA Civ 39, 1 WLR 1059. As Forbes J stated in Aggregate, the legislation and Decision fall well within the areas of respect to be accorded to the legislature and English Nature."

64. I also agree with his conclusions on a further point raised by Mr Rabie, to the effect that where there were other ways in which the desired end might be achieved but with a lesser impact upon the claimants, that did not of itself show that the route chosen is disproportionate; see also Mellacher v Austria [1989] 12 EHRR 391
65. Mr Maurici rightly placed reliance on the fact that the actions which were said to be disproportionate were not essentially those of the executive, but the legislation itself passed by Parliament. Mr Rabie contended that the vice of the Act was that it permitted the GMAP compensation guidance to be issued. Even treating the allegedly incompatible act as the GMAP itself, produced by the executive rather than Parliament, there is a significant element of expertise involved in the assessment of whether the regime needed to be changed to achieve the legitimate policy objective, a proper role for the views of the public as to an appropriate compensation regime, and a policy judgement to be made as to whether the operations which would harm the public interest in nature conservation should generate compensation from the public purse. In International Transport Roth Gmbh v SSHD [2002] EWCA Civ 158 [2003] QB 728, Simon Brown LJ said at para 26:

"26. Those being the most critical features of this case, it seems to me that ultimately one single question arises for determination by the court: is the scheme not merely harsh but plainly unfair so that, however effectively that unfairness may assist in achieving the social goal, it simply cannot be permitted? In addressing this question I for my part would recognise a wide discretion in the Secretary of State in his task of devising a suitable scheme, and a high degree of deference due by the court to Parliament when it comes to determining its legality. Our law is now replete with dicta at the very highest level commending the courts to show such deference. I take as a single example what Lord Bingham of Cornhill said in Brown v Stott [2003] 1 AC 681, 703:

Judicial recognition and assertion of the human rights defined in the Convention is not a substitute for the processes of democratic government but a complement to them. While a national court does not accord the margin of appreciation recognised by the European Court as a supra-national court, it will give weight to the decisions of a representative legislature and a democratic government within the discretionary area of judgment accorded to those bodies…"

66. Laws LJ, although dissenting in part in the result, said this in relation to the approach to the area of discretion at paras 83-87:

"83 Against this background, the first principle which I think emerges from the authorities is that greater deference is to be paid to an Act of Parliament than to a decision of the executive or subordinate measures: see in particular the two citations of Lord Woolf set out above, from the Lambert case [2002] 2 AC 545 and the Poplar case [2002] QB 48. Where the decision-maker is not Parliament, but a minister or other public or governmental authority exercising power conferred by Parliament a degree of deference will be due on democratic grounds—the decision –maker is Parliament's delegate—within the principles accorded by the cases. But where the decision-maker is Parliament itself, speaking through main legislation, the tension of which I have spoken is at its most acute. In our intermediate constitution the legislature is not subordinate to a sovereign text, as are the legislatures in "constitutional" systems. Parliament remains the sovereign legislator. It, and not a written constitution, bears the ultimate mantle of democracy in the state."

"84 The second principle is that there is more scope for deference "where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified" (per Lord Hope in Ex p Kebilene, cited above at paragraph 80). In the present case we are principally concerned with article 6, which does not on its face require any balance to be struck: it contains no analogue of paragraph 2 in articles 9 to 11, dealing with policy rights. It is thus a context which militates against deference…."

"85 The third principle is that greater deference will be due to the democratic powers where the subject-matter in hand is peculiarly within their constitutional responsibility, and less when it lies more particularly within the constitutional responsibility of the courts…The first duty of government is the defence of the realm. The first duty of the courts is the maintenance of the rule of law. That is exemplified in many ways, not least by the extremely restrictive construction always placed on no-certiorari clauses."

"87 The fourth and last principle is very closely allied to the third, and indeed may be regarded as little more than an emanation of it; but I think it makes for clarity if it is separately articulated. It is that greater or lesser deference will be due according to whether the subject matter lies more readily within the actual or potential expertise of the democratic powers of the courts. Thus, quite aside from defence, government decisions in the area of macro-economic policy will be relatively remote from judicial control: see for example R v Secretary of State for the Environment Ex p Hammersmith and Fulham London Borough Council [1991] 1 AC 521."

I adopt and apply that guidance later.

Compensation and proportionality

67. Mr Rabie's case turns upon the ECtHR jurisprudence as to whether and if so in what circumstances compensation has to be paid in order for an interference with property rights by a control over the use to be proportionate. I now turn to that bearing in mind the very considerable area for discretion which the defendants enjoy here.
68. Mr Maurici's submission was that nothing in Article 1, Protocol 1 or in the related ECtHR jurisprudence showed that compensation at all, let alone a particular head of compensation, was essential or inherent for the control of use to be a proportionate interference with property rights.
69. In Sporring and Lonnroth, supra, the Court considered that the combination of the duration of the expropriation permits coupled with the prohibition on construction did not amount to an actual or de facto expropriation (para.63); the prohibition on construction was clearly a control of use but the expropriation permits were not (paras. 64 and 65); they fell within the wide margin of appreciation allowed to states in their planning policies. But they amounted to an undue interference with peaceful enjoyment of possessions in combination with the prohibition on construction, in the absence of either compensation or a means of reducing the duration of their impact. This does not support any blanket approach being taken to the relevance of compensation. A control of use in combination with other measures could be disproportionate in the absence of compensation or other relief.
70. Mr Maurici relied on a range of cases which, however, made good his general proposition. Jacobsson v Sweden [1989] 12 EHRR 56 involved a building prohibition in force for thirteen years without compensation. The owner had no absolute right to build a second home as he knew when he bought the property, and he had been able to live there undisturbed. The interference was not disproportionate. Although there are factual differences, planning prohibitions were not thought generally to require compensation. In Fredin v Sweden [1991] 13 EHRR 784, a gravel pit licence was revoked without compensation pursuant to legislation brought in after the owner had acquired the pit but before it had begun to exploit it. The actual revocation took place after the pit had been exploited for a number of years, but the owner had known that its future was uncertain because of the possibility of revocation. It contended that it should have had more time in which to close down and that it had made investments which should have been allowed to be more fully exploited. The time given was held to be reasonable. The case illustrates that legislative changes in the public interest in the use or control of land can disadvantage an owner without there being a requirement for compensation for all heads of loss which might be caused. When, in Sweden, an alcohol licence was withdrawn with immediate effect because of financial irregularities, with the result that the restaurant business collapsed, the interference with property rights was held proportionate even though no compensation was payable for the loss caused and the effect of the legislation was regarded as severe; Tre Traktorer Aktiebolag v Sweden [1989] 13 EHRR 309.
71. Mr Maurici placed particular reliance on Baner v Sweden (1989) 60 DR 125, an admissibility decision. The applicant's land included lakes which were fished by the landowner's household and employees; the public were not allowed to fish. In 1985 new legislation permitted licence-free fishing by everyone. Many more people came to the beaches and fished the lakes; there was an increase in illegal fishing. No compensation was payable in these circumstances, there being no loss of previous income from the grant of licences. The Commission first considered that this legislation did not involve any expropriation, but was a control of use. Next, it recognised that where there was deprivation of property there was normally an inherent right to compensation. It continued at p 142:

"However, in the Commission's view such a right to compensation sets the framework in which the property may be used and does not, as a rule, contain any right to compensation. This general distinction between expropriation and regulation of use is known in many, if not all, Convention countries."

This does not exclude that the law may provide for compensation in cases where a regulation of use may have severe economic consequences to the detriment of the property owner. The Commission is not required to establish in the abstract under which circumstances Article 1 may require that compensation be paid in such cases. When assessing the proportionality of the regulation in question it will be of relevance whether compensation is available and to what extent a concrete economic loss was caused by the legislation.

The Commission further recalls that the interference with the applicant's property right was limited to one form of fishing in his waters, namely fishing with hand-held tackle. The applicant had not before the reform derived any income from such fishing. He cannot, therefore, claim any direct loss of income from the reform. As to the allegation that the value of his property was reduced, the Commission notes that the legislation affected many fishing properties all over Sweden and it is not easy to see how a specific and concrete reduction in value could result from this general legislation. Even assuming that some theoretical loss in value could be established, the Commission cannot find that such a loss caused by general legislation must necessarily be compensated on the basis of Article 1 of Protocol No. 1."

72. In rejecting the claim under Article 1 of Protocol 1 as manifestly unfounded, the Commission obviously thought that it was applying the clear and consistent jurisprudence of the Court.
73. Mr Rabie emphasised the latter passages, saying that it dealt with a theoretical loss, general legislation and that that did not "necessarily" require compensation. It followed, he said, that sometimes it might.
74. Mr Rabie referred to S v France [1990] 65 DR 250 in which the Commission, dealing with admissibility, pointed out that noise nuisance could be so severe as to amount to a partial expropriation where it rendered a property unsaleable or unusable, severely affecting its value. He drew parallels with what he said was the position here. But the comments in that case were predicated on the effect of the nuisance being so severe as to amount to a partial expropriation, which Mr Rabie accepted was not the case here. Compensation would normally be required in such a case for the interference to be proportionate.
75. Mr Rabie's strongest case was Chassagnou v France [1999 29] EHRR615; a law was passed which permitted local authorities to oblige landowners to transfer hunting rights over private land to approved hunting associations. The landowners could not prevent hunting on their property. Landowners so affected were made members automatically of the hunting association so that they could now hunt over other land also subject to the same new access provision. There was also some compensation for those who thereby had lost a source of actual income. Unlike Baner, the case did not concern the loss of private hunting rights, nor did it resemble those other cases of compulsory free access to that which had previously been profitably licensed. The complaint was that the owners wished to prevent hunting over their land and use it to conserve the hunted. The right to hunt over other land was not for them compensation at all. The Court recognised the legitimate interests involved in the protection and advancement of hunting in France. It pointed out that there was no provision for compensation for those who had an objection to hunting. It concluded that there was an interference with the right to use property and accordingly had to decide whether, in the absence of compensation for those opposed to hunting over their land, the control of use was disproportionate. It concluded in Para 85:

"85 In conclusion, notwithstanding the legitimate aims of the Loi Verdeille when it was adopted, the Court considers that the result of the compulsory-transfer system which it lays down has been to place the applicants in a situation which upsets the fair balance to be struck between protection of the right of property and the requirements of the general interest. Compelling small landowners to transfer hunting rights over their land so that others can make use of them in a way which is totally incompatible with their beliefs imposes a disproportionate burden which is not justified under the second paragraph of Article 1 of Protocol No. 1. There has therefore been a violation of that provision."

76. It also found that there was unjustified discrimination in that large landowners did have the right to object to their land being used in that way and so only those who had larger holdings were entitled to use their land in accordance with their conscience.
77. Mr Maurici accepted that this was a case involving a control over use, for that had been accepted before the Commission. He described as bizarre the Commission's attempt to distinguish Baner on the grounds that this involved an interference with landownership rights so as to impose upon an owner an activity which he found unethical and required him to accept the presence of armed men with dogs. He said that the discussion about compensation in the Court was not so much to show that compensation should have been paid and thus render the interference proportionate, but had been to refute the French Government's contention that the availability of compensation in various forms made the interference proportionate.
78. This is not an easy case to fit into any kind of line of cases. Like so many others it depends upon the combination of circumstances. I accept Mr Maurici's point that the dominant sense of the judgment of the Court, whatever may have been the Commission's thinking, is that the imposition of hunting with guns and dogs on those landowners opposed to it, was disproportionate in the absence of any means of voicing an objection, particularly in the light of the compensation available to those who had no such objection. The impact of the legislation thus bore disproportionately on those who were opposed to it and could not benefit from it. I do not think that one can ignore either in the property interference conclusions that greater freedoms were allowed to larger landowners; the Court refers to small landowners. The case is, I agree, not one in which the root of the disproportion is to be found in the absence of compensation to the owners but it was a contributory factor in the light of the compensation available for those who in some way would benefit from the new hunting rights. The essence of the case was not the absence of compensation.
79. I regard Baner as showing what the general but not necessarily universal position is in relation to a control of use. Compensation for it is not inherent in the Convention, control of use legislation does not "as a rule" contain provision for compensation. Given the fact-sensitive nature of the ECtHR jurisprudence however it would be foolhardy to treat a general statement as one which permitted of no exceptions, until the degree or nature of the control had become such as to amount to expropriation. Nor does the Court express itself in such a way. It is better to say, drawing on the article by David Anderson QC "Compensation for Interference with Property" [1999] EHRLR 544 that there is no presumption in favour of compensation in a control of use case, and that its availability is one of the factors relevant to whether a fair balance has been struck between the public interest and an individual's rights. The payment of compensation will generally support a finding of non-violation but many instances existed where a fair balance had been struck notwithstanding the absence of such provision.
80. In my view, the comfort which Mr Rabie can derive from Chassagnou case is that the way in which a balance has to be struck between the rights of the owner and the public interest in a control of use case cannot make the issue of compensation as a matter of principle, irrelevant. But it is clear that it will be of significance on rare occasions rather than as a matter of routine. It is manifestly different from expropriation in that respect.
81. Mr Maurici properly characterises the essence of Mr Rabie's point as going to the availability of a particular head of compensation, because the statutory scheme does provide for compensation in some circumstances, in addition to the income foregone and the incentive payment. Compensation is also payable upon compulsory purchase based on the compensation code in the Land Compensation Acts, and where consents are withdrawn or varied in such a way as to cause losses to arise. He contends that the ECtHR jurisprudence even in an expropriation case shows that it accords a very wide margin of appreciation to States in relation to the heads or manner of assessment of compensation once some compensation scheme is in place. The margin should be yet wider in relation to control of use when considering proportionality. The area of discretion accorded to the decisions of Parliament or the executive should reflect that.
82. In my judgment, that contention of Mr Maurici's is well founded. In James, supra, the ECtHR held in para 54:

"The Court further accepts the Commission's conclusion as to the standard of compensation: the taking of property without payment of an amount reasonably related to its value would normally constitute a disproportionate interference which could not be considered justifiable under Article 1. Article 1 does not, however, guarantee a right to full compensation in all circumstances. Legitimate objectives of `public interest', such as pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value. Furthermore, the Court's power of review is limited to ascertaining whether the choice of compensation terms falls outside the State's wide margin of appreciation in this domain."

83. Although compensation terms in an expropriation case are material to whether the relevant balance had been struck fairly, if full market value was not required there because of countervailing legitimate objectives of a public interest nature, even more so does that argument apply in relation to interference by way of control of use.
84. In Lithgow, the ECtHR made the point at paragraph 121 that the assessment of compensation in a nationalisation case was particularly complex and called for different considerations from those which applied to the compulsory acquisition of land where legislation applicable across the board was required. That is the position here with the compensation payable for compulsory purchase reflecting the normal compensation code. Mr Rabie responds fairly enough that the basis of compensation would involve the land being valued as an SSSI, subject to the relevant statutory regime; this would not permit a valuation on the basis of the previous compensation regime. Thus it would not afford an answer to his grievance. It is not necessary to resolve what might be an argument as to what might constitute the "scheme" which had to be disregarded for the purposes of assessing compensation on compulsory purchase. The real point is not whether it provides an answer to the owner's current concern. It is rather that the legislation provides for compensation in certain circumstances which is not illusory even here, though it may fall a long way short of what the owner considers fair. Additionally, looking at the general position across the board, the absence of compensation for loss caused by the prohibition of prospective operations parallels the position which landowners routinely face when their property becomes subject to a less favourable planning designation; compensation is not payable when land loses its development prospects when included in the Green Belt or when a building can no longer be demolished because it becomes listed. Compensation is not provided for the designation of an SSSI, nor as I understood Mr Rabie's argument did he suggest that it should be. This SSSI has not been affected by discriminatory treatment nor has its owner.

Additional factors relevant to proportionality

85. Mr Maurici relied on three further points in his submissions that the interference was proportionate. First, he said that the legislation did not preclude the economic considerations and the personal financial circumstances of the owner being taken into account when English Nature decided whether or not to grant consent, and if so on what terms, for an operation to be carried out. Mr Rabie submitted that the only factors relevant to such a decision were the protection of the nature interest and so there was no room for any alleviation of the effects of the new regime through praying in aid personal or corporate difficulties.
86. I accept Mr Maurici's submission, although it would be very unrealistic to suppose that it would provide much comfort generally. His submissions changed during the course of the hearing and I deal with those upon which he had taken specific instruction. Section 37 of the Countryside Act 1968, which applies to the way in which English Nature carries out its functions under the 1981 Act, as amended, requires it to have regard to the "needs of agriculture and forestry and to the economic and social interests of rural areas." There is also an appeal mechanism available to someone refused consent to carry out a prohibited operation, in which the same obligation logically would apply.
87. The most persuasive provision is in section 28P of the amended Act. It makes it an offence to carry out prohibited operations without consent or agreement. It provides for a defence of "reasonable excuse" and in subsection (4)(a) provides that in general it is a reasonable excuse if the operation was authorised by a planning permission granted on a specific application. It follows that those factors which are relevant to the grant of planning permission should also be relevant to the grant of consent, otherwise there would be a curious incentive to use the planning process rather than the specific statutory procedures. In any event, it is a procedure available to a landowner through which to bring in factors other than nature conservation interests. There is also a provision in the EC Habitats Directive whereby a potentially damaging operation can be permitted in a protected site for overriding reasons in the public interest which can include economic considerations. Indeed, economic factors were taken into account by the Inspector at the NCO Inquiry.
88. However, whilst I readily accept that the planning system will take account of economic factors such as employment or the encouragement of tourism and that that may indirectly assist a company or individual's financial position, it is rather less common, but not unheard of, for a personal or corporate financial consequence or interest to be a relevant factor. Mr Maurici accepted nonetheless that it could be relevant to the grant by English Nature of consent just as it could be to the grant of planning permission. It would be wrong to suppose that this is likely to be of any real help because a simple argument that a company and its directors will suffer financially if an operation is not permitted is very unlikely to be relevant or weighty by itself. However, the relevance of economic and individual factors to the decision-making process is also relevant to the question of the proportionality of the legislative restriction.
89. Second, the question of proportionality is not to be judged in a factual vacuum as the decisions of the ECtHR show. The assertions that the value of the claimant's land has been reduced to almost nothing are not proven, though I would accept that it has suffered a loss of the compensation which it used to enjoy. I cannot regard the residual value as self-evidently nil, albeit it has been reduced by at least the capitalised value of the lost compensation. The trailer park provides some income as does the limited boating allowed. I do not wish to become embroiled unnecessarily in the disputes between the claimant and English Nature as to whether a Business Plan has been provided and if so whether it is sufficient. It does appear however that the claimant has not explored to the fullest extent, what might be obtainable under the consent procedure or by agreement, particularly in the light of what Mr Maurici said about the relevance of other factors. It does appear to have focused in its discussions with English Nature on its claim that the changes to the compensation guidance breached its human rights. It may well be that the contentions prove correct that whatever flexibility emerged would not suffice for any operation to be viable commercially; there was seeming sense in some of what was said. But differing approaches, such as hiring rather then buying a dredger, were suggested by the defendants and this could have a considerable impact on any financial assessment.
90. Mr Maurici is justified in raising the question as to whether the new legislation is the only or the major impediment to the claimant's plans especially in respect of boating. Planning permission may well be required for the operational or engineering development involved in making a connection to the River Hull and in removing the transverse embankment so as to permit navigation to Leven from the Hull. Yet, if so, it might be refused for nature conservation reasons anyway and could have been refused under the former provisions. The new legislation would not have worsened the position. The claimant has owned the canal for long enough in which to seek permission to do those works or to do them if no permission was required. The reasons which it gives for not having done so may be right, but there is at least a question mark over the real cause of the loss attributed to the new compensation guidance.
91. Third, the principle of paying compensation only for income foregone is derived from EC Council Regulation No 1257/1999, the Rural Development Regulation, which deals with the basis for agricultural support payments across the Community. Mr Thomas' evidence describes its operation in some detail. Put very shortly, payments which provide rural support must be calculated on the basis of income foregone, additional costs and an incentive payment. It is to be assumed that farmers are complying with good farming practice. Each management agreement scheme under the amended Act has to be reported as a scheme of State aid. The Government concluded that its previous scheme required to be changed to ensure compliance with the Rural Development Regulation. Most SSSIs are on farmland. The Government decided that it would apply the same scheme to those SSSIs, such as the Leven Canal, which would not have come within the scope of the Regulation. This was essentially for consistency of treatment as between different owners of SSSIs. This factor was also relied on as showing the extent to which the guidance and the legislation fell within the area of discretion afforded to the executive and Parliament.

Conclusion

92. I consider that the legislative change and the compensation consequences are compatible with the ECHR. The question comes down to whether the degree of interference through this form of control over the use of property is proportionate in the absence of compensation for the loss of the ability to undertake prospective harmful operations and the loss of the compensation currently received.
93. The change comes as the latest in a slowly evolving legislative structure which places increasing emphasis on the protection and now enhancement of nature conservation interests. The restriction on compensation reflects a changing view over time as to the relationship between an owner's rights and a public interest, the importance of which has grown significantly. It does not put the owner of an SSSI in any worse a position overall than the owner of other properties which become protected in the public interest such as a listed building or a scheduled ancient monument. Compensation is not usually payable at all for what may be the financially very damaging consequences of changing planning designations. The scheme is not at odds with what is the general position in relation to the control of the use of land. The legislation applies to SSSIs generally, just as that which relates to other protected properties applies generally to those, but by its nature cannot apply to those properties which fall outside that area of interest. It does not leave the owner to bear all the burden of the consequences of designation, because there is a compensation system.
94. The legislation provides for consent to be sought for operations and for an appeal system where it is refused. It enables the grant of specific planning permission to provide a defence to the carrying out of otherwise unauthorised operations. It is not confined to the consideration of nature conservation matters. It enables compensation to be paid for the income which is lost from activities being undertaken, together with an incentive payment. The system of so assessing compensation is required for most SSSIs as a result of EC Regulation and it is not unreasonable for the same regime to be applied to all SSSIs.
95. In judging the balance struck between the interests of the landowner and providing the protection to nature conservation interests as desired, I consider that a very considerable area of discretion should be allowed to the legislation and to the guidance. The legislation is challenged because it permits the offending guidance to be issued, and is couched in terms which makes such guidance a likely, if not inevitable, outcome of the exercise of the executive's discretionary powers. It thus represents Parliament's consideration of a policy matter which involves a question of public expenditure and a question of whether a restriction of a particular activity ought to be compensateable. The issue of whether public money should be available to compensate a landowner for not carrying out an operation which is harmful to the public interest is clearly a matter for its judgement. If that is seen as an executive decision, it is nonetheless a balancing of interests which it is for the executive, answerable to Parliament, to decide. The extent and result of public consultation over the changes strongly reinforces the view that this is very much a policy area. The backdrop of EC Regulation is also very significant in the weighing process, for in respect of agricultural SSSIs, it represents a Community wide balance involving other interests as well, and even for non-agricultural interests, scarcely supports the notion that the approach is disproportionate.
96. The way in which nature conservation interest is best advanced is a matter for a degree of expert advice, and for experience of the ways in which the previous system had proved deficient, even open to perhaps unjustified exploitation by those who were in fact unlikely to carry out the operations for which they were compensated. This is clearly not an area in which the court can claim any especially relevant experience or expertise. It is not a matter which falls within the general remit of the courts to weigh and decide. The court is simply not in as good a position as the other decision-makers to balance the relevant factors in the public interest. I accept that the interests of nature conservation also fall within the scope of social or economic areas where the mode of their advancement or protection is for the legislature or executive and a wide area of discretion should be accorded to their decisions.
97. There is nothing in the general tenor of ECtHR decisions on the payment of compensation for the control of use which helps the claimant. Their tenor is that such compensation is not usually necessary. Chassagnou is a very exceptional case. There can be occasions where the absence of compensation amounts to a de facto expropriation, but that does not arise here. The fact that there is no rule that compensation is irrelevant to a control of use case does not go very far. In this case the result of there being no compensation for the particular head of loss here is consistent with the position in other areas of control of use in the UK and indeed in some respects remains more generous.
98. The ECtHR is also clear that the way in which compensation is calculated is a factor in the assessment of proportionality. Part of its concern is with the avoidance of arbitrary distinctions, which do not arise here. The compensation available is not illusory, nor does it fail to address some of the effects on landowners. It recognises that full market compensation is not required for compatibility. But sufficiency of compensation overall has to be looked at in the light of the scheme as a whole and the other restrictions placed on the landowner, and his ability to appeal or to contest their application.
99. Taking the legislative scheme as a whole, it strikes a fair balance between the relevant interests within the wide area of discretion available here to Parliament and to the executive.
100. It is of course possible to argue that more generous compensation should be available. But the response: why should a land owner be paid for not harming nature conservation interests, is powerful. The resolution of that is for other decision-makers. It is not important that there are other ways in which the matter could have been resolved which would involve a lesser degree of interference with the rights of the landowner. The effect of insisting on that would be to enshrine a system which is perceived to be less effective than desired and to produce what are seen to be unmerited payments from the public purse. The choice of means to resolve that issue is very much for other decision-makers.
101. If the issue is set in the context of this particular claimant, the result does not show that the general position yields to its particular circumstances. It is a reasonable judgement to apply the Rural Development Regulation regime to all SSSIs. The assertion of a total loss of value is not made out; it is plainly wrong. The claimant's assessment of the degree of impact on it remains unproven: it has not fully pursued the flexibility, although it may not be much, which English Nature has to consent to or control operations. Its financial assessments may be less than fully considered, and a more cautious approach to costs might be helpful. It remains unclear how far in any event it would have been able to obtain planning permission which it might have needed to carry out the relevant operations anyway. This SSSI is of national importance. Although dealing with a different compensation regime, the Inspector concluded that the nature conservation interest took priority over the commercial interest of the claimant.
102. I conclude that the interference with the landowner's rights in general and with the claimant's in particular is not disproportionate. There is no incompatibility between the amended Act, or indeed the guidance and the ECHR. Accordingly this application is dismissed.