Kelsall & Ors, R (on the application of) v Secretary of State for Environment, Food & Rural Affairs [2003] EWHC 656 (Admin)

Case No CO/1127/2002[2003] EWHC 656 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Thursday, 13th March 2003
Strand
London WC2
B E F O R E:
MR JUSTICE STANLEY BURNTON
Between
THE QUEEN ON THE APPLICATION OF LEONARD KELSALL AND OTHERSClaimant-v-
Between
SECRETARY OF STATE FOR ENVIRONMENT, FOOD & RURAL AFFAIRSDefendant
Computer-Aided Transcript of the Stenograph Notes ofSmith Bernal Wordwave Limited190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR T DE LA MARE (instructed by PANNONE & PARTNERS) appeared for CLAIMANTMR P COPPEL (instructed by DEFRA) appeared for DEFENDANTThursday, 13th March 2003
J U D G M E N T
[1]MR JUSTICE STANLEY BURNTON: My judgment was distributed in draft. I am grateful to counsel for their corrections and some typographical errors, and other changes have been made to reflect the dispute which I am about to consider as to the order to be made by the court. Copies of the judgment, in its final form, are available for members of the public, press, and anyone else who may be interested including the parties.[2]Who wants to go first?[3]MR DE LA MARE: My Lord, have you received the two skeleton arguments?

MR JUSTICE STANLEY BURNTON: Yes, yours was very late.

[5]MR DE LA MARE: I am sorry about that. I was waiting for details, I was in court. I have been in court solidly since I saw your Lordship last. I am sorry about the delay, I did not actually learn, until I got back from court yesterday, that I was due to put in a skeleton. That is the reason for my tardiness.

MR JUSTICE STANLEY BURNTON: I did want to know what the ambit of the dispute was and why.

[7]MR DE LA MARE: I think there are two disputes. One is my learned friend, Mr Coppel's, application that there should be some form of severance and secondly as to costs.

MR JUSTICE STANLEY BURNTON: Yes.

[9]MR DE LA MARE: It may be sensible to let him kick off on severance.[10]MR JUSTICE STANLEY BURNTON: I am not sure on whom the burden is. You say the whole order should be quashed?[11]MR DE LA MARE: I think I can explain in short terms, my Lord, why I think severance is inappropriate. The usual situation when you have an application for severance is where the court, in dealing with a series of restrictions, such as in the --[12]MR JUSTICE STANLEY BURNTON: Has there ever been a case of partial quashing of a legislative provision?[13]MR DE LA MARE: I think it can happen in respect of -- if you think about bye-laws for instance, if there is a collection of prohibitions in a bye-law, and one prohibition in the bye-law goes too far, has been adopted, it breaches natural justice et cetera, that provision can be quashed and the remaining provisions can remain in place.[14]The essential difference between that type of case, which is, you know, the classic situation where you get severance, and the type of situation which we have here, is instead of having a series of restrictions, this order constitutes a series of positive measures taken to compensate individual farms. And as I have set out in my skeleton, the unfortunate, and I think, untrue impression that would be created by taking a severance approach in this type of case, would be that the remaining order was satisfactory to discharge the obligations under section 5 of the Act.[15]MR JUSTICE STANLEY BURNTON: I have to say that my judgment assumed you were asking for the order to be quashed as a whole.[16]MR DE LA MARE: Yes.[17]MR JUSTICE STANLEY BURNTON: And the question of severance was not raised during the course of argument, so it did not occur to me. One reason why my predisposition, I have to confess, to quash the order as a whole, is that the relationship between compensation, so-called compensation, for loss of income, that is to say four times average net profits, and the compensation for the value of breeding stock, is far from clear. It is far from clear on the evidence, it is still far from clear to me.[18]It seems to me, therefore, to follow that I am, on the evidence, unsure whether a change in the compensation for breeding stock would result in a change, if one were looking at the matter afresh, a change in the compensation for loss of income, or whether the whole matter might not be dealt with, as I mentioned in the judgment, by way of a figure for compensation for loss of income, which presumedly would not be the same figure as the present figure, it would not be four times, it might be four and a half times, or five times. I just do not know.[19]MR DE LA MARE: I completely see your Lordship's point.[20]MR JUSTICE STANLEY BURNTON: The other point I wanted to raise is this; that in the judgment that Mr Coppel kindly brought to my attention, one of the objections to severance was said to be the fact that the order as severed would not have been one on which there had been consultation.[21]MR DE LA MARE: Yes.[22]MR JUSTICE STANLEY BURNTON: Lord Justice Laws regarded that as of itself a sufficient objection to severance.[23]MR DE LA MARE: Yes, well, we would repeat that objection. It is obviously an objection here. The case is --

MR JUSTICE STANLEY BURNTON: It is not one which appears in your skeleton.

[25]MR DE LA MARE: It is not. I am grateful to your Lordship for having pointed --

MR JUSTICE STANLEY BURNTON: Neither of them does.

[27]MR DE LA MARE: I think the first does, in the sense that what we have said is that the Secretary of State has said that these form a sort of web of measures, an interlocking web of measures, that was his case to justify --[28]MR JUSTICE STANLEY BURNTON: The evidence was that this section provision was in through fairness, but it follows from that that the four times net annual profits of itself was insufficient.[29]MR DE LA MARE: Yes.[30]MR JUSTICE STANLEY BURNTON: Well, if I quash the entirety of the order the Secretary of State can consider whether four times by itself is sufficient or fair, whether it should be four and a half times, 4.25 times or something totally different.[31]MR DE LA MARE: Or whether to adjust the interim payment.[32]MR JUSTICE STANLEY BURNTON: Nor do I know whether Parliament would have approved the order. I cannot remember whether it needed positive approval or -- it does not matter for the purposes of this argument.[33]MR DE LA MARE: It certainly --[34]MR JUSTICE STANLEY BURNTON: Well, Parliament's reaction would have been had the order been in its truncated form.[35]Lastly, I am unclear, and I mention this so that Mr Coppel can deal with it, what the obligation of the Secretary of State would be if I quashed part. If I quash the whole there is a statutory obligation to bring in a proper scheme.[36]MR DE LA MARE: That is exactly the point I make. It gives the impression that if you quash part that the remainder is a satisfactory order --[37]MR JUSTICE STANLEY BURNTON: Forget the impression, the question is: what would be the duty of the Secretary of State?[38]MR DE LA MARE: Yes.[39]MR JUSTICE STANLEY BURNTON: Those are the matters I would like Mr Coppel to address. Are there any others you want to raise?[40]MR DE LA MARE: No, other than that your gut reaction in paragraph 64, or paragraph 60, as I have already stated, is entirely the correct one. We do not, for the reasons I explained, seek a mandatory order.

MR JUSTICE STANLEY BURNTON: It is wholly unnecessary.

[42]MR DE LA MARE: It is, as I have said in the skeleton argument.

MR JUSTICE STANLEY BURNTON: No one suggested there should be one, did they?

[44]MR DE LA MARE: It was in the original claim but --

MR JUSTICE STANLEY BURNTON: That is as far as it got.

[46]MR DE LA MARE: I do not adopt that.[47]MR JUSTICE STANLEY BURNTON: Yes. Mr Coppel?[48]MR COPPEL: My Lord, can I first deal with whether it is possible at all to sever a statutory instrument. It is undoubtedly the case that it is possible to sever parts of the statutory instrument and all of the authorities expressly know that that is the position.

MR JUSTICE STANLEY BURNTON: You mean they contemplate it, but has it actually been done?

[50]MR COPPEL: Well, the Greenham Common was, of course, a bye-law case. Woolwich, they declined to do so, but contemplated that it could be done. It was not an in principle objection to it being done.

MR JUSTICE STANLEY BURNTON: No.

[52]MR COPPEL: So that it can be done, and of course in the Greenham Common case there was an excursion of all of the authorities from various parts of the world, where in fact that sort of thing does get done, not just in relation to statutory instruments but in relation to statutes themselves.[53]MR JUSTICE STANLEY BURNTON: I can understand. Suppose that there had been not just mink farmers but beaver fur farmers with one statute, and there had been a statutory instrument, part one of which dealt with mink, part two with beaver, and no one was complaining about beaver, it was dealt with on a totally different basis; then I can see you might sever. And if you did sever you would leave intact the obligation to bring in a scheme in relation to mink, and it could not be said that the severance of one affected any part of the other, but that is not this case.[54]MR COPPEL: My Lord, can I deal with it in stages, the example given by your Lordship, of course, contemplates that part of the statutory instrument remains alive, and that deals with, I think, the point raised in argument with my learned friend; well, would Parliament have approved it or not? The fact is that in relation to a severance that assumption is made where it can properly be made.[55]MR JUSTICE STANLEY BURNTON: Well, in the example I gave you, it can properly be made, because the provisions are wholly independent in operation.[56]MR COPPEL: Well, my Lord, that is not what the House of Lords tells us is required in order to effect a severance. Might I take your Lordship, I think, to the leading authority of Hutchinson.

MR JUSTICE STANLEY BURNTON: That is not the one you gave me?

[58]MR COPPEL: No, that is not the one. That is the one in the Appeal Cases, I do not know whether your Lordship has --[59]MR DE LA MARE: I have a copy appended to my skeleton, my Lord.

MR JUSTICE STANLEY BURNTON: I have it.

[61]MR COPPEL: It is the one involving the Greenham Common bye-law which was made out in the Military Lands Acts 1892 and what it did was, it restricted everybody from going upon particular land, even though the act under which it was made had a proviso that nothing could take away or prejudicially affect a right of common. And the question was whether you could tinker with it in order to make it viable and they said, well, no you cannot.[62]But what is of particular importance is that it involves a very full treatment of the law relating to severance, and we see that, my Lord, in the leading speech by Lord Bridge. If I can pick it up at 804, at the letter B where he says:
"When a legislative instrument made by a law-maker with limited powers is challenged, the only function of the court is to determine whether there has been a valid exercise of that limited legislative power in relation to the matter which is the subject of disputed enforcement. If a law-maker has validly exercised his power, the court may give effect to the law validly made. But if the court sees only an invalid law made in excess of the law-maker's power, it has no jurisdiction to modify or adapt the law to bring it within the scope..."
[63]These are the basic principles, no difficulty with that. Then it is the next paragraph, my Lord:
"The application of these principles leads naturally and logically to what has traditionally been regarded as the test of severability."
[64]We see here introduced in fact two tests; the higher test or what is called the traditional blue pencil test, and then what the House of Lords says; well, you may not satisfy the blue pencil test, but you may satisfy a second one. And he says the classic test is:
"... often referred to inelegantly as the 'blue pencil' test. Taking the simplest case of a single legislative instrument containing a number of separate clauses..."

MR JUSTICE STANLEY BURNTON: Do you want me to read this to myself?

[66]MR COPPEL: I am sorry, my Lord, yes.[67]MR JUSTICE STANLEY BURNTON: Do not apologise. How far do you want me to go?[68]MR COPPEL: If we take it just down to the first three lines of the following paragraph, before he refers to Lord Kenyon.[69]MR JUSTICE STANLEY BURNTON: Yes. Clearly you can apply a blue pencil test, what I am not satisfied about is that substantial severance is possible.[70]MR COPPEL: Well, my Lord, that, if I may say so, with respect, is to confuse what in fact were the two tests being contemplated by the House of Lords. Where it is possible textually to sever, which is possible here, it is very clear which provisions need to be removed; then the only question to ask yourself is whether that is going to effect a fundamental change to the scheme of the statutory instrument itself.

MR JUSTICE STANLEY BURNTON: Why fundamental change? If it changes it, it changes it.

[72]MR COPPEL: My Lord, it is always going to change and ex hypothesi --

MR JUSTICE STANLEY BURNTON: Yes.

[74]MR COPPEL: -- but the court contemplates that one can sever in instances and the question --[75]MR JUSTICE STANLEY BURNTON: No, the question is whether the part which remains would have been in those terms, had the part that is excised not been their originally.[76]MR COPPEL: Well, my Lord --[77]MR JUSTICE STANLEY BURNTON: Because if the answer is no, surely, they are not substantially severable.[78]MR COPPEL: My Lord, that involves second guessing what the legislative draftsman would have done, and we are told we ought not to be doing that.[79]MR JUSTICE STANLEY BURNTON: Quite, but if I quash the whole then the Secretary of State can decide to re-enact the provisions for income with whatever he thinks appropriate in relation to breeding stock, if anything. There would be nothing whatsoever to prevent his doing that, whereas if I quash only part it would be a very curious statutory instrument which said, in whatever it is, schedule 1, for four times read five.[80]Suppose you were to decide that the appropriate way to deal with it was to deal with it by way of a multiple of average profits and forget the residual value of breeding stock, which is a possible way of dealing with it, I do not say whether it is right or wrong, but it is possible, how would he do that, if I quash only part?[81]MR COPPEL: My Lord, he could not do it under -- he would not be carrying out, as it were, the exact provisions of the statutory instrument. There are a number of possibilities, my Lord, which would follow from a severance and in fact in a way we are a little surprised that there is such opposition from the claimants to severance, for reasons which I will mention in a moment, but let us assume your Lordship was simply to sever the bits which are truly offensive, the result would be that so far as the balance is concerned all of the payments could be paid and could be paid now, and that is part of the reason we do not understand the vehement opposition.

MR JUSTICE STANLEY BURNTON: That is incidental.

[83]MR COPPEL: It is not quite, my Lord, it deals with whether it is desirable or not, because we simply cannot pay unless we have a statutory mandate for doing so.

MR JUSTICE STANLEY BURNTON: Yes, yes.

[85]MR COPPEL: But, secondly, in relation to the residual elements, it may be, I repeat may be, I say, I do not make any promises, that the parties are able to resolve those differences and, of course, those differences are narrower because of the other payments that have been made. Or alternatively it may be that an amending statutory instrument, just dealing with the tiny little bits which your Lordship has held to be unlawful, have to be dealt with. Those are the two alternatives. Or the third alternative -- and I suspect my learned friend and his client's fear is that we will do absolutely nothing -- that is to say, just leave them with the other elements.

MR JUSTICE STANLEY BURNTON: Yes, yes.

[87]MR COPPEL: Now in relation to that, my Lord, if the Secretary of State were to do that and, of course, the Secretary of State will look very carefully at your Lordship's judgment, that will leave him wide open to a claim that the balance, the bit which is left valid, does not properly comply with the terms of the Act itself, and is itself unfair. In other words, what remains is unfair.

MR JUSTICE STANLEY BURNTON: Do you accept that that would be an arguable claim?

[89]MR COPPEL: My Lord, those instructing me will -- because they have only had it, of course, for a very short time, the draft judgment; I cannot say whether they will or they will not say that in the light of your Lordship's judgment. I simply cannot say, but certainly one can contemplate that that would leave them, in one perspective, exposed to such a claim. So that whichever way one looks at it there is not a pressing need for your Lordship to strike down the whole statutory instrument, and what needs to be done in deciding whether or not --[90]MR JUSTICE STANLEY BURNTON: Is it right, according to Lord Bridge -- the passage in Lord Bridge I have read so far indicates that there is a double test.[91]MR COPPEL: Two tests.

MR JUSTICE STANLEY BURNTON: Textual and substantial.

[93]MR COPPEL: The first is the hardest to satisfy. If you satisfy it well and good, but if you do not you can go down into the substantial. It is not two elements that have to be satisfied, they are alternatives, one is harder, the other is easier.[94]MR JUSTICE STANLEY BURNTON: Do you mean you can sever textually even if that affects, substantially, the other parts of the instrument?[95]MR COPPEL: No, the overall result must not -- your Lordship picked me up before about the term fundamentally different; the overall result must not be fundamentally different. Your Lordship sees it in the passage 8.11 from D down to G, page 811.[96]I think the exact answer to your Lordship's question falls between the letters F and G, because what Lord Bridge there says is that in relation to where you have textual severing, where that is possible, then that requirement of substantial severability will be satisfied when the valid text is unaffected by an independent of the invalid text. So that where you can textually sever, then it almost will ineluctably follow that substantial severance is possible. Where you cannot, then you have to look at the totality of the scheme and what remains.

MR JUSTICE STANLEY BURNTON: Yes.

[98]MR COPPEL: My Lord, it is possible to textually sever here.

MR JUSTICE STANLEY BURNTON: Well, there is no dispute about the textual possibility, I think.

[100]MR COPPEL: So the question then becomes; is there something truly unbalanced by that exercise? And we say there is not. Indeed, we say that there is a lot, as it were, going for a textual severance here. We can proceed now to make the second stage payments because they will be upheld and, of course, we can off-set the advance payments that are being made in relation to the other scheme, we can proceed to do that. If the whole thing is struck down, we are back to square one and the --

MR JUSTICE STANLEY BURNTON: Well, it means you have to go out for consultation again.

[102]MR COPPEL: We have to go out to consultation again and the claimants will not see any money for many months to come, possibly over a year.

MR JUSTICE STANLEY BURNTON: Well, they had no doubt thought of that before they brought proceedings.

[104]MR COPPEL: It is not for me to say, one would hope so.[105]MR JUSTICE STANLEY BURNTON: It is unusual to have a government department advocating the early spending of public money, rather than later.[106]MR COPPEL: So, my Lord, applying the test which is set out by Lord Bridge, it is possible to sever. It does not result in a complete distortion of the statutory scheme, there is a lot going for it.

MR JUSTICE STANLEY BURNTON: What do you say about consultation?

[108]MR COPPEL: My Lord, again it comes back to the point I made earlier. If it is being suggested that the balance of the scheme does not represent a scheme which has been properly consulted, and that the claimants are disadvantaged, then that will provide them with a fresh basis for challenge, were that route to be followed. Of course one hopes, with the benefit of your Lordship's judgment, that the parties are able to resolve the bit that remains between them, but the point is that if the whole thing is struck down then everything remains between the parties and we are back to square one. That is not desirable, certainly from the defendant's point of view, and we do not really see why it should be desirable from the claimants' point of view. There is something to be said for keeping what are perfectly valid statutory instruments, those parts are perfectly valid, and see if the parties can just deal with that little bit -- I understand the financial consequences -- that little bit that remains between them.[109]MR JUSTICE STANLEY BURNTON: If you were to resolve and come to a view as to a provision for payment beyond the four times average profits, which was acceptable to the claimants who are all the persons affected, you would require another statutory instrument?[110]MR COPPEL: Almost certainly. This is not a question we have not looked at, as to whether it could be done by way of an ex gratia payment in order to settle differences between the parties; if the claimants were to say we have here a basis for making a claim against you, because the balance of the provisions give us a right of action against you, then we can resolve that as part of a resolution of litigation, but it may require a statutory instrument. But the statutory instrument would be considerably shorter than a complete scheme redrawn from scratch.[111]MR JUSTICE STANLEY BURNTON: Suppose I conclude that it is not possible, substantially, to sever the provision for payment of a multiple of average profits from the provision for compensation for the residual value of breeding stock, do you accept that the whole of the instrument should go?[112]MR COPPEL: Yes, my Lord, if you cannot sever then the whole of the instrument must --[113]MR JUSTICE STANLEY BURNTON: Well, there are bits that could be left, but there does not seem very much point.[114]MR COPPEL: No, my Lord, there would simply be the mechanical aspects of the scheme.[115]MR JUSTICE STANLEY BURNTON: One of the points I did not resolve in my judgment, because I was assuming that it was an all-or-nothing case, was the question of the taking into account of the views of organisations who were suggesting that no compensation at all should be paid. If I am with you, I have to resolve that, do I not? If not, why not?[116]MR COPPEL: I do not quite understand, my Lord, why you would need to resolve that in order to determine the issue of severance?[117]MR JUSTICE STANLEY BURNTON: A question of severance would not arise. If the order as a whole has been arrived at after taking into account -- not ignoring, but taking into account the views of those who thought that no compensation should be paid -- then surely the whole order goes on procedural grounds. It does not matter what the contents of the order are in those circumstances.[118]MR COPPEL: Well, my Lord, the challenge which was made by the claimants was not to the balance of the provisions and indeed the claimants --

MR JUSTICE STANLEY BURNTON: It was --

[120]MR DE LA MARE: It was to the order as a whole.

MR JUSTICE STANLEY BURNTON: They were seeking an order to quash the instrument.

[122]MR COPPEL: The point made in argument by my learned friend, when the hearing took place, was that they were, I will paraphrase, content with the balance of the order, insofar as its provisions made arrangements for payment. So that they are not -- it is not being said they have been affected by the views taken from, let us say, the RSPCA or whoever else the Secretary of State consulted. They appear to have remained, as it were, healthy, notwithstanding what my learned friend would have called the impermissible consultation of those organisations.[123]MR JUSTICE STANLEY BURNTON: If he took them into account -- we do not know whether the multiple would have been five instead of four if he had not taken them into account, do we?[124]MR COPPEL: Well, my Lord, we do not know, but no quarrel is made by the claimants that the multiples, the four or five, whether or not the views of the RSPCA or whoever else were taken into account. If no quarrel is taken with those elements, then it matters not who the Secretary of State consulted, and one has to make the argument viable by showing that the outcome was one which was impermissible according to the claimants, and they do not say that in relation to the other elements.[125]My Lord, unless there are further --

MR JUSTICE STANLEY BURNTON: No, thank you very much.

[127]MR DE LA MARE: My Lord, there are two types of cases that can be the subject of a severance argument. One is where you are faced with the ten commandments. You can be asked to say --[128]MR JUSTICE STANLEY BURNTON: If you have a series of prohibitions the fact that one prohibition is unauthorised does not affect the other nine.[129]MR DE LA MARE: Exactly.

MR JUSTICE STANLEY BURNTON: That is Hutchinson.

[131]MR DE LA MARE: That is Hutchinson, that is the Sun Tours case, that is all of the cases in which severance operated, because you can easily say, Parliament would wish these remaining independent prohibitions to continue. We are not in a tenth commandment case, we are in, to use Mr Coppel's analogy, a case where Parliament has decided to give a cake with icing, with cherries, with candles, with other ornaments, that he enumerated last time round.

MR JUSTICE STANLEY BURNTON: I do not remember the cherries, I only remember the icing.

[133]MR DE LA MARE: Cherries, icing, whatever garnish you like on your cake, was there, and what Mr Coppel is effectively arguing to you now --

MR JUSTICE STANLEY BURNTON: Is that Parliament would have been happy with cake without icing.

[135]MR DE LA MARE: Exactly, a cake without icing and no filling, and that is a clear violation of everything that is contemplated in the Hutchinson cases. The idea that you can treat these provisions as being separate from each other, when the whole of the Secretary of State's case was premised on the inter-operability of the provisions, without looking at the passage as a whole, and the justification lying in it as a whole, is to say the very least unattractive. It constitutes not so much a changing of horse in mid-race, but a changing of racecourse in mid-race, and we say that --

MR JUSTICE STANLEY BURNTON: It is an alternative case.

[137]MR DE LA MARE: It is not even an alternative case --[138]MR JUSTICE STANLEY BURNTON: Yes it is: if I am wrong about the rationality of the provisions relating to breeding stock, the consequence should be partial quashing and not wholesale quashing. What is wrong with that?[139]MR DE LA MARE: I think you can be somewhat cynical as to the timing to which it is deployed. Perhaps I need not say any more than that.[140]Of course, from my client's perspective, the attractive payment to have, would be to have the machinery for the rest of the payment provisions carrying on in force, and for an amended interim payment provision to be substituted. But if you are to allow the order to continue in force, it is difficult to see where, first of all, any obligation on the part of the Secretary of State to amend the interim payment arises from, because the order, if allowed to continue, is by implication a complete discharge of section 4, it is the compensation scheme referred to in section 5.[141]So that is the first point: why would the Secretary of State be under any obligation? You are effectively being asked to endorse a situation which will say that this could be exhaustive compensation. Secondly, there are the consultation features that your Lordship has identified.[142]These are not minor points. You will appreciate -- and I have noted that my learned friend once again characterises the interim payments as a minor part of the compensation scheme -- that is not true. It is certainly not true for a substantial number of the farmers for whom this compensation forms the lion's share of their compensation. Just because the businesses vary from business to business, and some businesses may have stock much more valuable than others, and they may have had, for reasons specific to them, weaker profits over the preceding five years, to allow a system to proceed where effectively all of that interim payment is excised, and to pretend that there is no internal interlocking of the provisions for compensation, is, in my submission, unreal.[143]Your Lordship raised the issue of the unresolved point, and my learned friend sought to deal with that by saying that we had no quarrel with the rest of the order, but that is, with all respect to Mr Coppel, not a fair way of putting it. We had no challenge based on irrationality, or human rights grounds, or disproportionality grounds --[144]MR JUSTICE STANLEY BURNTON: They are different kinds of challenges. One is effectively procedural and one is substantive relating to the terms.[145]MR DE LA MARE: Exactly. And we had engaged in some speculation as to how that unfair weighting may have impacted on the structure report, but it still remains a challenge to the fairness of the consultation procedure.

MR JUSTICE STANLEY BURNTON: It remains speculation.

[147]MR DE LA MARE: It remains speculation, but informed speculation. Your Lordship will need to deal with that point. If Mr Coppel is suggesting that there should be no further consultation process, and the order remains in place, then that point will need to be decided. The last point I make is that it is somewhat held that it is in terrorem over your Lordship that if you quash the whole of this order my client is going to be kept out of compensation for a year and the wheels of government are going to grind slowly along. The reality of the position is this: every single piece of information that is required from the claimant about their business is before DEFRA, they have it. Whatever scheme that they adopt can be rapidly implemented.[148]MR JUSTICE STANLEY BURNTON: I do not think you have to spend too long telling me that the claimants do not mind waiting for their money, if they --[149]MR DE LA MARE: If they are going to get more.

MR JUSTICE STANLEY BURNTON: Well, they may get more, they may get less, as I said in my judgment.

[151]MR DE LA MARE: If they get fair compensation.[152]MR JUSTICE STANLEY BURNTON: But since they have brought these proceedings, which inevitably will lead to a delay in a final scheme, if they are successful, unless you were to stand up and say, "No, no, do not quash the whole of it," I am going to assume that --[153]MR DE LA MARE: They are content to take the consequences.[154]MR JUSTICE STANLEY BURNTON: -- they are content to wait. I do not see that it is any prejudice to the Secretary of State to keep the money until the next budget.[155]MR DE LA MARE: It is very, very difficult, also, my Lord, to see quite why it is going to take so long to deal with. The consultation process has gone through, it has been fairly full, there need not be a full-blown consultation process again. There can be additional points made, additional concerns made.[156]MR JUSTICE STANLEY BURNTON: It can be full-blown consultation, but the range of mandatory consultees is quite low, it is the claimants. One letter to Pannone.[157]MR DE LA MARE: Yes, why should that take a year. I simply do not understand that.

MR JUSTICE STANLEY BURNTON: Well, that is not in my hands.

[159]MR DE LA MARE: So for those reasons, my Lord, we resist any suggestion that there should be severance here. You are being asked to effectively create a different statutory compensation scheme and not one envisaged by Parliament.

JUDGMENT

[160]MR JUSTICE STANLEY BURNTON: Following my judgment, in which I held that the provisions of the Fur Farming (Compensation Scheme) (England) Order 2002, relating to the assessment and payment of compensation for the residual value of breeding stock were unlawful, an issue has arisen as to whether the consequence of my judgment should be to quash that order as a whole, or to quash only those parts which relate to the assessment and payment of compensation for the residual value of breeding stock of mink.[161]The issue was not raised during the course of the original argument, and arose only as a result of my judgment. Indubitably it is possible, textually, to sever the provisions relating to the compensation for the residual value of breeding stock from the remainder of the order. That is to say, to apply what is sometimes referred to as a blue pencil test.[162]In my judgment, however, that is not the sole consideration to be addressed by the court in deciding whether the quashing order should be partial or comprehensive. In arriving at the conclusion I came to, I took into account the fact that there were provisions for the payment of compensation based on average net profits of the claimants' businesses. That is to say, four times average net profits over a period of 5 years preceding their going out of business.[163]It is evident, and referred to in my judgment, that there is a relationship between the two heads of compensation. The value of breeding mink lies in their ability to generate profits. The evidence filed on behalf of the Secretary of State referred to the connection between the two heads of compensation, although not in a way which made it clear what the thinking or rationale was for there being two separate heads of compensation or for the quantification of the multiple addressed to average net profits. It is clear to me that if a scheme were being addressed from the beginning, it would be possible, and might be appropriate, to vary the multiple of average net profits in the light of whatever provision is ultimately arrived at, if any, as to compensation for the residual value of breeding stock.[164]In other words, far from being clear on the evidence that there is no connection between those two heads of compensation, logic, practicality, common sense, and accounting principles indicate that there is a connection.[165]Furthermore, the Secretary of State argued that the provisions of the Order had to be considered as a whole: ie that there is such a connection.[166]In assessing the lawfulness of the compensation scheme in the course of my judgment, I looked not only at the amounts payable by way of compensation for the residual value of breeding stock, but also at the impact of the figures arrived at pursuant to the order on the total compensation, including the compensation payable for loss of income.[167]It was the total variation in compensation which was one of the matters taken into account in deciding that the variations between the figures payable to some fur farmers, as against others, were outside any tolerance which should be accepted on the grounds of practicality, simpleness of administration, or approximation.[168]It follows, therefore,(a) that I am not satisfied that there is a substantial independence between the two kinds of compensation,(b) that I am not satisfied that if the entirety of the order were quashed, that the figure for payment of a multiple of net profits would remain the same, in a new order. Far from it: I am satisfied that there is interdependence between those two provisions.[169]Furthermore, I am, in those circumstances, not satisfied (a) that a scheme which excluded payment for the residual value of breeding stock, but which retained the other provisions of the present order, is one that has fairly been put out to consultation. Secondly, that Parliament has had an opportunity to consider a scheme without the compensation for breeding stock. Similarly I cannot be satisfied that Parliament would have been content with an order in the form that the order would have if I were to quash only part.[170]This is a case dissimilar from the case of the Director of Public Prosecutions v Hutchinson, 1990, 2 A.C. 783, which concerned the lawfulness of a prohibition which it was successfully argued went beyond the authority conferred by the enabling Act.[171]It may often be the case that where there is a series of prohibitions, any one prohibition may be struck down without affecting the others. That is because there is substantial independence between the prohibitions, any one being independent of the others, so that it cannot be said that Parliament, where Parliament is the appropriate authority, would not have approved an order or other instrument, containing only those provisions which remain after there has been quashing of an individual provision or individual provisions.[172]This is a different case, where there are positive obligations on the Secretary of State imposed by the Order. Those positive obligations are interdependent, or at least would be seen as interdependent. Moreover, the Fur Farming Prohibition Act 2000 imposes a duty on the Secretary of State to make a scheme for the payment of compensation.[173]The result of my judgment is that that duty has not yet been fulfilled. If I were to quash part only of the order, it is far from clear that the Secretary of State would consider himself under any duty to supplement the order as it remained. Certainly the impression that would be given by quashing of part of the order would be that the duty had been carried out by reason of the continued existence of the remainder of the order.[174]The effect of my judgment is that the Secretary of State is under a duty to produce a rational and fair scheme for compensating the claimants. As I have already indicated, that cannot sensibly be looked at partially. Whether compensation for loss of a business is rational and fair must depend on the totality of the payments to be made in circumstances where what is lost is a source of income.[175]It has been objected to the contention that there should be comprehensive quashing, that the parties are in negotiation and an agreement may be reached which might obviate the need for a new statutory instrument. That is a matter, it seems to me, which, if not irrelevant as to the form of order to be made, must be given relatively little weight.[176]The consequence of the quashing of the Order will be that the new proposed scheme will go out to consultation. There is no reason for that to take very long. If the Secretary of State decides to retain, in the new scheme, a provision for payment for loss of income, on the basis of a multiple of net profits, it may be the same as in the existing scheme, but it may not. There may or may not be payment in respect of the residual value of breeding stock. The rationale for the provisions of the Order, under both heads, in the evidence before me, were far from clear or cogent.[177]Lastly, it does seem to me that if I were to quash part of the order on the grounds of the unfairness or irrationality of some of its provisions, I should then have to address and determine the question whether the entirety of the order was unlawful, by reason of the Secretary of State having given some weight to submissions made by organisations who contended that nothing at all should be paid to the fur farmers, a contention which was inconsistent with the provisions of the Act itself. In my judgment I did not resolve the issue of whether some weight had been given to those views, because I anticipated the quashing of the order as a whole.[178]In my judgment, if the Secretary of State did give weight to the views of organisations contending that nothing should be paid, the result would be that the whole of the order would be quashed in circumstances where the court is unable to determine which, if any, provisions of the order were affected by his having given weight to those views.[179]Since I heard no oral evidence, if I do not resolve this issue, and if this case goes further, the Court of Appeal will be in as good a position as I am to resolve this issue. In view of the conclusion I have reached, as to whether the order as a whole should be quashed, I propose to continue not to resolve the issue by leaving it to the Court of Appeal to do so, if necessary, if this matter goes further.[180]For the reasons I have given, I am clear that the consequence of my judgment must be that the order as a whole should be quashed.[181]MR DE LA MARE: My Lord, I think the next item on the agenda is, therefore, the issue of costs.

MR JUSTICE STANLEY BURNTON: Yes, well, I have seen your skeleton on costs.

[183]MR DE LA MARE: Those are my submissions.

MR JUSTICE STANLEY BURNTON: Well, I understand you to be asking for --

[185]MR DE LA MARE: My primary --[186]MR JUSTICE STANLEY BURNTON: -- detail. Are you asking for detailed assessment?[187]MR DE LA MARE: My primary case is this, my Lord; we ask that the solicitors' and counsel's costs be assessed in the sum of £40,000. You can do that by way of summary assessment. I instantly accept, and I hope you accept that I fairly accept, that there is some considerable cause for concern at the level of the surveyors' costs. In the time we have not been able to readily root out why they are as high as they are.[188]MR JUSTICE STANLEY BURNTON: I have not known a case where some costs have gone to detailed assessment and some to summary assessment.[189]MR DE LA MARE: I am only trying to be sensible, my Lord. If you think there is an inconsistency between those two positions, our alternative position is that there should be detailed assessment along the lines proposed in the last paragraph of my skeleton. Namely, that my client should recover 95 per cent -- I put 90, I should have put 95.

MR JUSTICE STANLEY BURNTON: You say 95?

[191]MR DE LA MARE: 95, it is the figure I used earlier on. 95 per cent of our assessed costs.

MR JUSTICE STANLEY BURNTON: Well, I have what you are asking for there, have I not?

[193]MR DE LA MARE: I am grateful, and the interim payment as well.[194]MR COPPEL: Well, my Lord, I think there are two issues, perhaps one of them has fallen by the side; whether there should be summary assessment, or whether it should go to a full assessment.

MR JUSTICE STANLEY BURNTON: What do you say about that?

[196]MR COPPEL: My Lord, it needs to go to a full assessment. The figures are, from anyone's perspective, very large indeed. They need to be looked into; there is 50 hours on the telephone, and that needs to be looked at by a taxing master.[197]My Lord, we then get to the portion of the tax costs which ought to be allowed, because what has happened here is that the claimant originally brought its claim with six grounds of challenge, or however one wants to carry it, five or six grounds of challenge. First of all, the issue of inadequate reasons; that was abandoned by the claimant at the hearing. The issue of no genuine consultation; that too was abandoned.

MR JUSTICE STANLEY BURNTON: No genuine consultation.

[199]MR COPPEL: No genuine consultation.

MR JUSTICE STANLEY BURNTON: I had not appreciated that was ever an allegation.

[201]MR DE LA MARE: That was an allegation in the original claim form, before I became involved. I removed that allegation on amendment of the claims form.

MR JUSTICE STANLEY BURNTON: After it had been answered or --

[203]MR COPPEL: Yes, after it had been answered by the --[204]MR DE LA MARE: I do not think we need to go into the reasons why I withdrew it.[205]MR COPPEL: So, there is no reason why the claimant should get any costs in relation to those, and there is no reason why the defendant should not get its costs of fending those off.

MR JUSTICE STANLEY BURNTON: What do you say I should do in respect of those matters?

[207]MR COPPEL: My Lord, I will go through all of them, but what I am going to suggest is that you simply make a percentage apportionment. That is to say, you say --

MR JUSTICE STANLEY BURNTON: What do you say the percentage should be?

[209]MR COPPEL: I say in relation to all of them there should be a discount of 40 per cent.

MR JUSTICE STANLEY BURNTON: 40?

[211]MR COPPEL: 40. 4-0. My Lord, can I, before my learned friend scoffs too much, and does something in court I would prefer not to see, can I go through all of the various grounds?

MR JUSTICE STANLEY BURNTON: Let me get there; no adequate reasons, no genuine consultation?

[213]MR COPPEL: Both abandoned.

MR JUSTICE STANLEY BURNTON: No genuine consultation.

[215]MR COPPEL: Then he said that there were defects in the consultation process and there were two elements to that. First of all, that there was the issue about statutory construction.

MR JUSTICE STANLEY BURNTON: Yes.

[217]MR COPPEL: He lost that; they should not get their costs for that, we should get our costs for it. Secondly --

MR JUSTICE STANLEY BURNTON: Wait a minute.

[219]MR COPPEL: -- there is the other element that your Lordship did not decide one way or the other.

MR JUSTICE STANLEY BURNTON: Yes.

[221]MR COPPEL: I say in relation to that, the costs should lie where they fall, namely --[222]MR JUSTICE STANLEY BURNTON: You brought it on yourselves. Even if you had succeeded on that, let us assume you were right about that, it was brought about as a result of the statement in the grounds of defence, that you had struck a balance between --[223]MR COPPEL: No, my Lord, it existed before then. What happened is that you may remember that in the amended grounds there was an attempt to move away from that. So, it was always there, and we say in relation to that, each party must bear its own.[224]Then there was the flat rate, 40 per cent valuation point, and we do not quarrel with the proposition that they can get their costs on that, and we must, of course, bear our own. Then there was the legitimate --

MR JUSTICE STANLEY BURNTON: Sorry, what was that item, I was writing?

[226]MR COPPEL: That is the flat £40 per animal, does not matter what breed, does not matter whether it is male or female. They have undoubtedly succeeded on that, and we fully accept that that was an important part of the case.

MR JUSTICE STANLEY BURNTON: Yes.

[228]MR COPPEL: Then there was the issue of legitimate expectation. My Lord, this, in a sense, metamorphosed during the course of the hearing, so it did not become a truly legitimate expectation point, but it was worked into the others so that it did involve a certain amount of unnecessary work on the part of the defendant.[229]My Lord, one does not want to make an impossible task for any taxing master, and we also say, that instead of saying, well, we the defendants have been successful on certain points and therefore we should get a certain percentage of our costs, we consider that the most expeditious and economic way of dealing with it, is to factor that into the amount which is probably attributable to the claimants' costs. So that is why, my Lord, I said 40 per cent which --[230]MR JUSTICE STANLEY BURNTON: Can we just pause there for a moment. As far as just looking at it quickly, and correct me if I am wrong, none of the matters to which you have referred would have been the subject of expert evidence? (Pause)[231]MR COPPEL: No, my Lord, none of them is the subject of expert evidence, although that -- the reason I paused is because that, in a way, misrepresents what some of the evidence was about. The so-called expert evidence, in fact, was allied to what took place during the consultation process and that, of course, is a matter of fact.[232]MR JUSTICE STANLEY BURNTON: Yes, but I am not worried here, really, about the costs of Brown's, am I, about the costs of getting their input into -- about their evidence, because it is the claimants who are claiming costs now, and they did have expert evidence.[233]MR COPPEL: Yes, my Lord, they did have.[234]MR JUSTICE STANLEY BURNTON: I am only worried about the expert evidence arising in the litigation, not that relating to the original consultation exercise. Now, so far as that is concerned, it seems to me, none of these matters would have been addressed by the claimants' experts and I include in that, of course, the experts who advised Mr Megaw and whose advice he repeated, or set out, in his witness statement.[235]MR COPPEL: My Lord, that is principally directed to the flat rate £40 point and I accept --

MR JUSTICE STANLEY BURNTON: And different breeds and so on.

[237]MR COPPEL: Yes, I have wrapped them all up together.[238]MR JUSTICE STANLEY BURNTON: I cannot remember what the figure that is claimed at the moment for experts is, offhand, but it is significant, is it not?[239]MR DE LA MARE: It is a figure of, I think --

MR JUSTICE STANLEY BURNTON: £25,000-odd, is it not?

[241]MR COPPEL: Yes. My Lord, I do not know if your Lordship's is paginated, mine is not, but if you go through the detailed section, the breakdown, and on the third page of the breakdown it deals with fees and expenses incurred, surveyors down the bottom of that page has an extra factual assistance.

MR JUSTICE STANLEY BURNTON: Which document are you looking at, the breakdown?

[243]MR COPPEL: Yes, there is the statement of costs, it is the standard form, and then behind that, in my copy at any rate, is what is termed a breakdown, of three pages.

MR JUSTICE STANLEY BURNTON: Yes.

[245]MR COPPEL: On the final page, right down the bottom:[246]"Surveyors, (factual assistance)."

MR JUSTICE STANLEY BURNTON: It is about £22,000-£23,000, is it not?

[248]MR DE LA MARE: 22,710.

MR JUSTICE STANLEY BURNTON: So it is getting on for 50 per cent of the total claim, is it not?

[250]MR COPPEL: No, my Lord. The total claim is just short of £100,000.[251]MR DE LA MARE: About 80,000.[252]MR JUSTICE STANLEY BURNTON: I thought the limit on legal costs recoverable is 43,000 is it, or 40,000?[253]MR DE LA MARE: 40,000.[254]MR JUSTICE STANLEY BURNTON: £40,000. So the total --[255]MR DE LA MARE: The cap does not cover the surveyor's costs.[256]MR JUSTICE STANLEY BURNTON: I understand that. So, if all the surveyors' fees were recoverable the total would be £62, £63,000-odd. If I take 40 per cent of that, if I knock 40 per cent off that, that is cutting very significantly into the surveyors, is it not?[257]MR COPPEL: Well, I am not sure I follow your arithmetic, my Lord.[258]MR JUSTICE STANLEY BURNTON: Well, the 40 per cent was wrong, but the total claim for costs is, as I understand it, £62,710.[259]MR COPPEL: On a capped basis, yes.[260]MR JUSTICE STANLEY BURNTON: If they have agreed with their clients not to charge more than £40,000, I do not see how they can get more than £40,000 from you.[261]MR COPPEL: Yes, my Lord, that is undoubted --

MR JUSTICE STANLEY BURNTON: That is right, is it not?

[263]MR DE LA MARE: That is accepted, my Lord, although what I would say is that any reduction should be taken into account before you impose the cap, that would be the usual way that it would work. So you cannot take the cap and then further discount it.[264]MR JUSTICE STANLEY BURNTON: Suppose 40 per cent were right, to take 40 per cent off the £40,000 would be penalising you.[265]MR DE LA MARE: Would be penalising us.[266]MR COPPEL: I accept that, my Lord, and it has to be correct. But the position is, my Lord, that that percentage must reflect not just those aspects of the claimants' costs, that it ought not to be able to get, but also something for the defendant which is incurred unnecessarily, expense in fending off elements of the claim, which were either abandoned or unsuccessful.[267]Now, that is more easily done by reflecting, as I say, in the percentage allowed to the claimant, rather than having an assessment of both the claimants' and the defendant's costs and then applying a percentage to both of them. So, as I said, as a rough and ready measure I totted that up at about 40 per cent. One can quarrel about the numbers, but one cannot quarrel about the fact that there were a number of grounds, a significant number of grounds, upon which the claimants had been unsuccessful or which had been abandoned. It is all very well at the end of the day to say, well they did not matter all that much, but when one is confronted with --

MR JUSTICE STANLEY BURNTON: And they would have done if they had succeeded on them.

[269]MR COPPEL: Absolutely, that is just the point.[270]MR JUSTICE STANLEY BURNTON: It is not a question of whether they mattered much, the question is what costs were incurred in relation to that, how much time did they take up, and how much work was involved in them.[271]MR COPPEL: You can see how much time, in a sense, they took up by the proportion of the statement of grounds that they occupied, the proportion of the respondent's answer that they occupied, the proportion of my learned friend's skeleton argument that they occupied, and they were significant.[272]So, as I say, that is how I came to a figure of 40 per cent. But it does, as I say, have to reflect all those elements that were either abandoned or were unsuccessful.

MR JUSTICE STANLEY BURNTON: Thank you very much.

[274]MR DE LA MARE: My Lord, I confess to feeling a slight air of unreality about Mr Coppel's submissions. The reason for that is as follows; first of all, let us look realistically at the cost impact on the defendant, of the points that were abandoned. There was one point that was taken in the original claim form, that there was no genuine consultation. That was abandoned by me when I re-pleaded the case. That is the only point that has been abandoned, and to the extent that it has caused any cost --

MR JUSTICE STANLEY BURNTON: Well, no adequate reasons for abandoning as well.

[276]MR DE LA MARE: I am going to come on to that in a second, my Lord. To the extent that that point was abandoned, the costs for that point stopped with the second amendment. I hope, quite fairly, in my skeleton, I have accepted that we should be liable for the costs of re-pleading to our re-pleaded case.

MR JUSTICE STANLEY BURNTON: Yes.

[278]MR DE LA MARE: The second point, no adequate reasons, that point was not abandoned. What happened with that point was, we raised the point, we had an argument in front of Mr Justice Newman, and he said, "If I grant you permission and the Secretary of State therefore has to go away and explain his case in response to your arbitrarian's point, and in response to your Wednesbury point, doubtless he will have to provide reasons in the course of doing so, and the point will fall away."[279]As indeed it did. It has figured at no stage since the permission hearing, and for my learned friend again to invoke that point as causing him substantial costs and causing his clients costs, leading to a substantial reduction in the costs of the case, is simply a distortion.[280]The third point; legitimate expectations. Effectively, I won that point. Your Lordship chose to see the point as something going to the rationality, but the evidence that was put forward on --

MR JUSTICE STANLEY BURNTON: Rationality in fairness.

[282]MR DE LA MARE: Rationality in fairness. The evidence that went forward to that point played a highly influential part in your Lordship's decision, and to characterise that point as having been mutated or stayed or lost, is simply unreal.[283]The next point, and this is the one and only point we lost, relating to the interpretation of section 5 of the Act, that took your Lordship about ten minutes to deal with.

MR JUSTICE STANLEY BURNTON: I do not think it took that long, did it?

[285]MR DE LA MARE: Probably not even that long. You made your position very clear, very quickly. It was very shortly argued, both on the paper and in oral argument. To characterise all of those matters together, as leading to 40 per cent of the costs in this case is, I am afraid, an exercise in illusion. It is simply entirely unreal. If my learned friend wants to follow an issue based approach, we can do that. The reason why he is so keen to get away from his costs, and the costs that his client has wasted, is because the reality of the position is that on those issues, the costs attributable, when you actually look at the figures, are minuscule.[286]I say, the fair order in those circumstances is the 95 or 90 per cent figure I have proposed. I am content with either, but to say that 40 per cent of the cost of the hearing before your Lordship is attributable to these points, to say that 40 per cent of the cost of all of the evidence in this case is attributable to those points is fanciful.[287]Those are my submissions on that point. I do not know whether you want to hear me on interim payment or anything else?

MR JUSTICE STANLEY BURNTON: We will deal with interim payments in a moment.

[289]Two issues have arisen as to costs; the first is whether the legal costs, that is to say the costs of the lawyers of the claimants, should go to detailed assessment. It is clear to me that, given the amounts involved, and given that in any event the surveyors' fees sought to be charged must go to detailed assessment, the right order is that the claimants' costs as a whole go to detailed assessment.[290]The second question that has arisen is as to whether the claimants should recover something less than all of their costs, having regard to the fact they failed in respect of a number of contentions, all of which were of a procedural nature, as opposed to allegations concerned with the substantive terms of the statutory instrument in question. That is to say, allegations of inadequacy of reasons, lack of genuine consultation, defects in the consultation process, taking into account views other than those of the claimants, and to some extent the complaint that there had been legitimate expectation which had been unlawfully disappointed.[291]It is accepted on behalf of the claimants that there should be some percentage reduction in their legal costs on account of those allegations on which they failed. They put it at 5 per cent. It is undoubtedly right that all of the expert evidence of the claimants addressed issues on which they succeeded, and that those issues were the issues which took up most of the evidence and the preponderance of time during the hearing, and no doubt took up the preponderance of time in preparation.[292]In making an apportionment I take into account that I am not simply depriving the claimants of their costs on issues on which they lost, but also reflecting the fact that the defendant incurred costs in respect of those items. Nonetheless, at least one was withdrawn at a very early stage and the remainder were matters which took up very little in terms of evidence or argument.[293]In my judgment, looking at the matter in the round the appropriate reduction is 15 per cent, that is to say the claimants should recover 85 per cent of their legal costs, subject to a limit of £40,000. That is to say the reduction will be from their costs without reference to the limit, but if 85 per cent of those costs comes to more than £40,000 they will recover only £40,000. They are entitled to all of the reasonable costs of their surveyors and that percentage will not apply to the surveyors' fees.[294]Now let us deal with interim payment.[295]MR DE LA MARE: My Lord, there are two matters. One is interim payment, one is a matter that I have just thought of, in all candour. The interim payment I would suggest a figure of £25,000, which we propose is a reasonable one.[296]MR JUSTICE STANLEY BURNTON: Let us get that out of the way. Mr Coppel, what do you say about that?[297]MR COPPEL: My Lord, I cannot object to the issue of some interim payment being made, although an interim payment of, doing the figures in my head, I think, 60 per cent of what is being capped at, does seem by interim payments standards to be on the high side. We would suggest something rather lower than that, but I leave it with your Lordship as to what that percentage ought to be.[298]MR DE LA MARE: 60 per cent of the lawyers' fees takes no account, of course, of the surveyors' fees. We are asking for that interim payment --[299]MR JUSTICE STANLEY BURNTON: I am satisfied that £25,000 is an appropriate figure. The recoverable costs, including the surveyors' fees, would have to come to below that figure for anything to be repayable, and if it is repayable, it is repayable. That would be payable within 14 days, 28 days?[300]MR COPPEL: Let us be safe, my Lord, let us make it 28 days.

MR JUSTICE STANLEY BURNTON: 28 days?

[302]MR DE LA MARE: That is agreeable to me.[303]The second point I would make, my Lord, is this; I wonder if I could ask the Secretary of State for an undertaking that he will not seek to set off those sums payable against the sums that have been paid out by way of interim order. That would be a most unattractive position to adopt. Strictly speaking those sums that have been paid --

MR JUSTICE STANLEY BURNTON: Are repayable.

[305]MR DE LA MARE: Are unlawfully paid, they are repayable. There may, of course, be all kinds of issues about changing position --

MR JUSTICE STANLEY BURNTON: Well, you can ask Mr Coppel, but you cannot ask me so to order.

[307]MR DE LA MARE: I am not asking you, but I am asking in court because I think that is appropriate, and because the reality is that these farmers will all be entitled to very substantial sums of compensation in the future, and any payments that are made in the future can set off the interim payments.

MR JUSTICE STANLEY BURNTON: We are just talking about the £25,000 at the moment, are we?

[309]MR DE LA MARE: Talking about the £25,000, it would be most unattractive to deny them the proceeds of this litigation and put them out of pocket twice.

MR JUSTICE STANLEY BURNTON: Are you in a position to deal with that, Mr Coppel?

[311]MR COPPEL: The answer, my Lord, is no. I have had no forewarning --[312]MR DE LA MARE: I only just thought of it.[313]MR JUSTICE STANLEY BURNTON: If Mr Coppel has had no time to take proper instructions, there we are. If there is an attempt to set off and there is a dispute as to whether there is an entitlement to set off, the matter can be mentioned to me.[314]MR COPPEL: My Lord, that leaves one final matter and that is the question of permission to appeal.

MR JUSTICE STANLEY BURNTON: Yes.

[316]MR COPPEL: My Lord, I do ask for permission, and I ask for it on two bases. First of all there are, of course, two bases for seeking permission, but in relation to whether broader issues are involved, any striking down of the statutory instrument is a matter of considerable importance to the Secretary of State, and that is always going to involve broader issues. So, for that reason alone, we would ask for permission.[317]Secondly, my Lord --[318]MR JUSTICE STANLEY BURNTON: You mean there should always be permission when a statutory instrument is quashed?[319]MR COPPEL: When a significant statutory instrument is quashed, certainly, my Lord. I think that must be the case, it involves a reflection on the parliamentary process, it involves a --

MR JUSTICE STANLEY BURNTON: I can see it is important.

[321]MR COPPEL: Secondly, my Lord, the other issue concerns your Lordship's rulings in relation to severance.

MR JUSTICE STANLEY BURNTON: Yes.

[323]MR COPPEL: I say that there, my Lord, that too is an important point because, with the greatest respect to your Lordship, your Lordship effectively imposed a requirement of substantial severability on top of textural severability, and in so doing effectively made a finding that the balance of the scheme, looked at by itself, was substantially or could be viewed to be substantially, unfair. And so, in relation to that too, I ask for permission to appeal.[324]MR DE LA MARE: I resist that application. In relation to the first: however nicely one looks at it, it is a case of special pleading, an irrational statutory instrument is an irrational statutory instrument. If it is clearly irrational --

MR JUSTICE STANLEY BURNTON: What he said is, "I was wrong to say it was irrational."

[326]MR DE LA MARE: Yes, that is what he has to say, but instead Mr Coppel argues that because it is a statutory instrument, he said it is irrational rather than a decision and permission should be granted. That is not a principal basis on which to proceed.[327]Your Lordship's reasoning is crystal clear. It is unimpeachable, it is clearly right, and unless it is suggested it is not, the fact that it happens to be a statutory instrument --[328]MR JUSTICE STANLEY BURNTON: I like to think that about most of my judgments, but occasionally the Court of Appeal disagrees.[329]MR DE LA MARE: Unless Mr Coppel is going to seriously suggest otherwise and attempt to defend the undefendable, in a situation where their case has changed about three times in trying to address it already, I say you should resist permission.[330]As for the severance point; again, your Lordship is plainly right. Mr Coppel's arguments, elaborate and carefully argued, closely argued as they have been throughout this case, are also clearly wrong. And to argue that, effectively, your Lordship's decision on his cake, to the effect that three quarters of the cake is the same as the whole cake, is creative, but unfounded. For those reasons Mr Coppel should not persuade the Court of Appeal.

MR JUSTICE STANLEY BURNTON: Do you have anything else to say?

[332]MR COPPEL: No, my Lord, I will not add to the baking allusions.[333]MR JUSTICE STANLEY BURNTON: I have formed a clear view in this case, there is a written judgment on the substance of the matter, apart from the form of the order to be made. Having formed that clear view, it seems to me that it is the Court of Appeal which should give leave, if leave is to be given.[334]MR DE LA MARE: My Lord, can I thank you on behalf of all of us for the very efficient, quick, speedy and clear way you have dealt with this.

MR JUSTICE STANLEY BURNTON: I am not sure Mr Coppel entirely agrees.

[336]MR COPPEL: I think it is said on behalf of all, I must be included within all.[337]MR JUSTICE STANLEY BURNTON: Well, it was a very interesting case, and when I thanked you for your submissions I meant it. Thank you both very much.