Case No:  C1/2004/0379/QBACF

Neutral Citation Number:  [2004] EWCA Civ 1580
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION (Administrative Court)
(Ouseley J)
CO/1700/03
Royal Courts of Justice
Strand, London, WC2A 2LL

Thursday, 16th December 2004
Before :

LORD PHILLIPS OF WORTH MATRAVERS MR
LORD JUSTICE SEDLEY
and
LORD JUSTICE NEUBERGER
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Between :

	THE QUEEN
(on the application of Trailer & Marina (Leven) Limited	Appellant	
	- and -		
	Secretary of State for 
the Environment, Food & Rural Affairs
and
English Nature	1st Respondent

2nd Respondent	

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(Transcript of the Handed Down Judgment of
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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G Rabie Esq
(instructed by Rollits) for the Appellant
J Howell Esq QC & J Maurici Esq
(instructed by The Treasury Solicitor) for the First Respondent
(instructed by Browne Jacobson for the Second Respondent
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Judgment
Lord Justice Neuberger:
1.	This is the judgment of the court, to which all members have contributed.
Introductory
2.	This appeal is brought by Trailer and Marina (Leven) Limited (“the company”) against the dismissal, by Ouseley J on 6th February 2004, of its claim for a declaration that sections 28-28Q of the Wildlife and Countryside Act 1981 (“the 1981 Act”), as amended by the Countryside and Rights of Way Act 2000 (“the 2000 Act”), are incompatible with its rights under Article 1 of the First Protocol  (“Article 1P1”) of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”).
3.	Article 1P1 is in these terms:
“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.”
4.	As he developed his case, Mr Gerald Rabie, who appears for the company, somewhat reformulated the company’s case from how it was put below.  It is now that the effect of the legislation in question was or could be to infringe the Convention rights of some people, and that this is sufficient for the company’s purposes, because it should lead the court to grant a declaration of incompatibility.  As we understand it, armed with such a declaration, the company would then seek to establish on another occasion that it falls within the class of people whose Convention rights have been infringed by such incompatibility.
5.	That approach appears to raise the point whether, and if so on what basis, the court should grant a declaration of incompatibility in relation to a statutory provision which might, perhaps only in rare circumstances, give rise to an infringement of Convention rights.  Mr Rabie’s argument in its final formulation is that the amendments effected to the 1981 Act by the 2000 Act could, in some circumstances, infringe the Convention rights of those who, at the date the amendments came into force, were owners of land subject to the provisions of the 1981 Act.  The primary case on behalf of the respondents, the Secretary of State and English Nature (advanced by Mr John Howell QC, who appears with Mr James Maurici) is that, properly interpreted, the 1981 Act as amended by the 2000 Act could never result in such an infringement.  However, they contend, in the alternative, that any infringement could only occur in such unusual and extreme circumstances, that it would be inappropriate for the court to grant a declaration of incompatibility.
6.	According to the company’s evidence, a summary of the relevant facts is as follows.  Not all these facts are agreed by the respondents.  However, it is unnecessary (and may not be sensibly possible) for this court to seek to resolve any issue in this connection.
The facts
7.	The Leven Canal (“the canal”) was constructed by Charlotte, Lady Bethell at the beginning of the 19th Century.  It runs for a total of five kilometres in a westerly direction from the head of the canal in Leven to the River Hull.  By 1935 it appears that the commercial use of the canal had effectively ceased, and only a small number of craft were using it.  In 1962 much of the canal was notified as an “Area of Special Scientific Interest” under the National Parks and Access to the Countryside Act 1949 (“the 1949 Act”).
8.	In 1971, the company purchased the freehold in the canal (including its banks).  It would appear that the directors of the company intended, and indeed still wish, to restore the connection between Leven and the River Hull by repairing the lock (which is currently disused), to open the river to craft, so that commercial fishing could resume, and to make the canal available to recreational anglers.  To that end, the company’s evidence is that it dredged the canal, controlled the reeds and waterweed, began the task of restoring leaking and subsided canal banks, trimmed the banks with mowing machines, and started fish farming.
9.	In 1987, the Nature Conservancy Council, now (since January 2001) English Nature (as we shall refer to them), the second respondent, notified the whole of the canal as a Site of Special Scientific Interest (“SSSI”), under s28 of the 1981 Act.  This notification (“the Notification”) specified a wide range of operations which, as it appeared to English Nature, would be likely to damage the flora and fauna on the site.  With the consent of English Nature, the company nonetheless continued various operations on the canal.  However, during 1995, the company wished to carry out certain works, to which English Nature objected, but the company gave notice under s28(5) of the 1981 Act of its intention to carry out that work.  Accordingly, on 7th August 1995, pursuant to s29 of the 1981 Act, the Secretary of State for the Environment made the Leven Canal (Humberside) Nature Conservation Order 1995 (“the 1995 order”).  Because the company objected to the making of the 1995 order, an inspector was appointed, and he held a local inquiry, following which he reported to the Secretary of State, on 15th December 1995, upholding the 1995 order save in one minor respect.
10.	On 27th March 1997, the company and English Nature entered into a Management Agreement under s15 of the Countryside Act 1968 (“the 1968 Act”).  The effect of the agreement was that the company accepted fairly comprehensive restrictions in relation to its activities on the canal, in return for an annual payment of £19,000.  The Management Agreement expired on 31st December 2000.
11.	On 30th January 2001, Part III of the 2000 Act came into force.  It effected substantial amendments to the 1981 Act, particularly in relation to SSSIs.  As a result, English Nature indicated to the company that the Notification was “absolute”, and that it would not give consent to any “works or leisure activities” on the canal.  English Nature further stated that the amendments to the law effected by the 2000 Act would have, amongst its consequences, the result that any new Management Agreement would not provide for a payment to compensate the company for the effect of the Notification, and in particular the inability to carry on activities on the canal, whether by way of compensation for a reduction in the value of the canal, or for the loss of profit from those activities.  By the time the 2000 Act came into force, it appears that about 7% of the area of England has been notified as SSSIs, of which there were 20 canals.  It does not appear that a substantial increase in the number of SSSIs was then - or is now - anticipated.
Outline of the legislation
12.	Although s23 of the 1949 Act provided for notification that certain land was of “special scientific interest”, no restrictions were thereby placed on the operations which could be carried out on such land.  However, s15 of the 1968 Act introduced a scheme of voluntary restrictions on operations which could be carried out on an SSSI, and authorised English Nature to enter into management agreements with owners of such sites.  Under such an agreement, the owner, in consideration of a payment, could voluntarily undertake to limit the activities on an SSSI.
13.	Subsequently, ss28-31 of the 1981 Act, as originally enacted, introduced a scheme whereby the owner of what would now be called an SSSI could, for a limited period of time, and pending agreement for a management agreement, be prohibited from carrying out operations, specified by English Nature as likely to have an environmentally detrimental effect on the site.  While the effect of those sections was to prevent the owner of an SSSI, under pain of criminal penalties, from carrying out activities prohibited by English Nature, the owner could lawfully perform such operations by giving notice to English Nature of his intention to do so.  There then followed a period within which negotiations for a management agreement under s15 of the 1968 Act could proceed.  If no management agreement was negotiated within the relevant period, the only way in which the owner of the SSSI could be prevented from carrying out the activity or activities to which English Nature objected was by English Nature exercising a right to acquire the site compulsorily.
14.	The 2000 Act represented a marked departure in policy, effectively replacing voluntary control by mandatory control.  The amendments to the 1981 Act were largely effected by altering s28, and adding a number of new sections after s28, of the 1981 Act.
15.	The company’s contention is that the application of the amendments to the 1981 Act, as effected by the 2000 Act, to SSSIs, was, at least in some cases, incompatible with the Article 1P1 rights of owners of such SSSIs at the time the 2000 Act came into force.  This contention is based on the proposition that the consequence of the amendments effected by the 2000 Act to the 1981 Act curtailed, often very severely, the use which owners of SSSIs could make of their land, and consequently reduced, often substantially, indeed, sometimes to the point of extinction, the profit earning capacity, and hence the market value, of their land, without according any compensation for such reduction.
16.	It appears to us self-evident that the consequence of the amendments to the 1981 Act effected by the 2000 Act would be to curtail, sometimes, severely, the uses to which an SSSI could be put for the foreseeable future, and that this would have a detrimental, and in some cases a severely detrimental, effect on the profits which could be made from activities on the land concerned, and consequently on the market value of the land.  On the basis of the evidence provided, we are prepared to accept (without deciding) that it may well be that the uses to which the land in the present case, namely the canal, can be put have been substantially curtailed for the foreseeable future, and that this has had a substantial effect on the profit earning capacity, and hence the market value, of the canal.  The question which, on the company’s case, is said to arise is whether, in such circumstances, the amendments effected by the 2000 Act to the 1981 Act are effectively capable of giving rise to an infringement of the Convention rights of a person who was, at the time that the amendments effected by the 2000 Act came into force, the owner of an SSSI.
The issues
17.	The two principal arguments raised on behalf of the respondents against the contention that the amendments effected by the 2000 Act to the 1981 Act will lead to such an infringement, are conceptually independent of each other, but they are, albeit to a limited extent, practically connected.
18.	The first argument is that the relevant provisions of the 1981 Act and the 2000 Act are concerned with the control of use of land, rather than the expropriation of land, for a publicly beneficial purpose, and that the ultimate nature of the company’s complaint is that the 1981 Act as amended does not provide for any compensation for the control of use, and consequent loss of profit earning capacity and diminution in value, of an SSSI.  It is said that the company’s case must fail because Article 1P1, as interpreted and applied by the ECtHR, does not require any compensation to be accorded in such circumstances.
19.	The second argument raised by the respondents is that, even if the principle embodied in the second sentence of that quotation has exceptions, in that there can be circumstances in which restriction on use will infringe Article 1P1 unless accompanied by compensation or some other appropriate relief, the 1981 Act as amended can and should be implemented in such a way as to avoid any possible infringement of Article 1P1.  In that connection, Mr Howell relies on s3(1) of the Human Rights Act (“the 1998 Act”) which provides:
“So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.”
20.	In order to deal properly with the arguments, we must first refer to some of the statutory provisions in a little more detail.
The statutory regime prior to the 2000 Act
21.	The 1949 Act (which was largely unaffected by the 2000 Act) introduced for the first time the concept of a “nature reserve”.  This was defined in s15 in very similar terms to the subsequent definition of an SSSI in the 1981 Act.  Section 16(1) of the 1949 Act empowered English Nature, then the Nature Conservancy Council, to “enter into an agreement with every owner, lessee and occupier of any land” which it was regarded as “expedient in the national interest … should be managed as a nature reserve”.  Subsections (2) and (3) provided that such an agreement could impose appropriate restrictions on the use of the land, and could provide for management of the land.  In particular, subsection (3) provided that such an agreement:
“(b)	may provide … for the cost thereof being defrayed either by the … owner … or by [English Nature], or partly in one way and partly in another;
(c)	may contain such other provisions as to the making of payment by [English Nature] and in particular for the payment by them of compensation for the effect of the restrictions mentioned in the last foregoing subsection, as may be specified in the agreement.”
22.	Section 17(1) of the 1949 Act gave English Nature the power to acquire “any land that it is expedient in the national interest that it should be managed as a nature reserve”, but subsection (2) precluded such powers being exercised where the land could otherwise “be satisfactorily managed as a nature reserve”.
23.	The 1968 Act was also largely unaffected by the 2000 Act.  Section 15 of the 1968 Act introduced the concept of “Areas of Special Scientific Interest”, which are very similar to SSSIs as defined in the 1981 Act.  Section 15(2) empowered English Nature, where it is “expedient to do so” to enter into an agreement “which imposes restrictions on the exercise of rights over” an area of special scientific interest.  Section 15(2) and (3) of the 1968 Act were concerned with agreements between English Nature and the owner of an area of special scientific interest, and their provisions were very similar to those of s16(2) and (3) of the 1949 Act.
24.	I turn to the 1981 Act, as originally enacted.  Section 28 extended the law somewhat in relation to notification of areas of special scientific interest.  Such a notification had to identify the features by reason of which the land was of special interest, and it also had to identify the operations which English Nature considered would be likely to damage those features.
25.	By s28(5), once such notification had taken effect, the owner or occupier of the land concerned was prohibited from carrying out on the land any use or operation prohibited by the notification unless and until one of the conditions specified in s28(6) was satisfied.  Those conditions were:
“(a)	that the operation is carried out with [English Nature’s] written consent;
(b)	that the operation is carried out in accordance with the terms of an agreement under section 16 of the 1949 Act or section 15 of the 1968 Act;  and
(c)	that four months [increased from three months in 1985] have expired from the giving of the notice under subsection (5).”
The Secretary of State had power under s29 of the 1981 Act to extend the four month period in s28(6)(c) for up to a further 12 months for the purpose of consultation.
26.	The effect of s28(6A) was that the owner or occupier of the land could agree with English Nature within the period identified in s28(6)(c) that the specified use or operations would not be carried out for a certain period.  
27.	Section 29 gave certain powers to the Secretary of State.  In particular, subsection (1) enabled him to make an order under subsection (3) “for the purpose of securing the survival … of any kind of animal or plant or of complying with an international obligation” or “for the purpose of conserving any … flora, fauna or geological or physiographical features”, after consultation with English Nature.  The effect of subsection (3) was that any such order relating to the land in question would prevent any operation on that land which was specified in the order and appeared “likely to destroy or damage the [relevant] features by reason of which” the land fell within subsection (1).
28.	Once an order was made under s29(3), subsections (4) and (5), which were substantially similar to s28(5) and (6), applied, save that, by s29(7), in addition to its ability to offer the owner or occupier of the land a management agreement, English Nature had the alternative or additional right to acquire the land in question compulsorily.
29.	The effect of s30(1) and (2) of the 1981 Act was to accord to the owner of an area of special scientific interest the right to compensation where an order under s29(3) had been made, and the owner had given notice to English Nature of a proposal to carry out an operation, under s29(4).  Section 30(2) provided that the compensation in such a case was the amount by which “the value of [the owner’s] interest is less than it would have been if the order had not been made”.
30.	Thus, subject to the relatively extreme and potentially cumbersome and expensive compulsory purchase powers accorded by s17 of the 1949 Act, the legislation, as it stood in 2000 had a relatively limited effect.  Unless English Nature was in a position to offer a management agreement whose terms were acceptable to the owner, the effect of the 1981 legislation was merely to delay any development which would harm the features of the land which justified its notification as an SSSI.  Lord Mustill discussed the effect of the statutory provisions in Southern Water Authority -v- Nature Conservancy Council [1992] 1 WLR 775. He said, at 778B, that “it needs only a moment to see that this regime is toothless, for it demands no more from the owner or occupier of an SSSI than a little patience”, unless the Secretary of State could be persuaded to make an order under s29, which Lord Mustill described as “a task rarely accomplished”.
The 2000 Act
31.	As we have already mentioned, the 2000 Act made very substantial amendments to the 1981 Act.  Section 28 was significantly amended, a swathe of new sections, namely ss28A-28R, were introduced, and ss29 and 30 were repealed.  An “area of special scientific interest” became renamed as a “site of special scientific interest”.  The transitional provisions contained in Schedule 11 to the 2000 Act had the effect that any notification of an area of special scientific interest given under the original s28 of the 1981 Act had effect, subject to a few small necessary exceptions, as if it had been served under the new s28:  see paragraphs 2-6.
32.	By s28(1), if “English Nature 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”, they must “notify” that fact to the local planning authority, the owner and occupier of the land, and the Secretary of State.  Section 28(4) requires any such notification to specify (a) the relevant features of the land and (b) “any operations appearing to [English Nature] to be likely to damage … those features”.  It also requires the Notification to “contain a statement of [English Nature’s] views about the management of the land”.
33.	Section 28E(1) prohibits any operation to be carried out on such land which infringes the terms of the notification unless notice has been given to English Nature and “one of the conditions specified in subsection (3) is fulfilled”.  Those conditions are:
“(a)	that the operation is carried out with [English Nature’s] written consent;
(b)	that the operation is carried out in accordance with the terms of an agreement under section 16 of the 1949 Act or section 15 of the 1968 Act;
(c)	that the operation is carried out in accordance with a management scheme under section 28J or a management notice under section 28K.”
34.	Section 28E(4) provides that any such consent given by English Nature can be “subject to conditions” and “for a limited period”.  Section 28F provides for an appeal to the Secretary of State by the owner or occupier of an SSSI, who has been refused a consent by English Nature under s28E, or has been granted consent subject to conditions to which objection is taken.  In this connection, the Secretary of State is given wide powers, including the power to delegate the decision making process.
35.	Section 28G(1) and (2) require various authorities identified in subsection (3) (including planning authorities) when exercising their functions, to “take reasonable steps, consistent with the proper exercise of [their] functions” to “further the conservation and enhancement” of the features which render land an SSSI.
36.	Section 28J(1) empowers English Nature to “formulate a management scheme for all or part” of an SSSI, and subsection (2) enables a management scheme to be formulated for conservation, restoration or both.  Such a scheme is not effective until notice has been given to the owner and occupier of the site concerned.  In a case where such a management scheme has come into effect, and English Nature consider that it is not being implemented, s28K(1) permits English Nature to serve a “management notice” on the owner or occupier.  However, by virtue of subsection (2), English Nature can only serve such a notice if satisfied that they are unable to conclude, on reasonable terms, an agreement with the owner or occupier as to the management of the land in accordance with the management scheme”.  If the management notice is not complied with, then by virtue of subsection (7), English Nature can go on to the land, carry out the work required by the notice, and recover the cost from the owner or occupier.  The owner or occupier can appeal to the Secretary of State against the service or terms of a management notice pursuant to s28L.
37.	Under s28M(2), English Nature “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 s28J is in force”.  Subsection (3) provides that the amount of such payment “is to be determined by [English Nature] in accordance with guidance given and published by the Ministers”.  Section 28M(4), by incorporating s50(3), entitles a dissatisfied owner or occupier who is made an offer of compensation to refer the question of the compensation to arbitration.
38.	By s28N, English Nature has the right to acquire compulsorily an SSSI in respect of which they are either unable to reach an agreement with its owner or occupier as to its management, or where they are satisfied that it is not being properly managed.
39.	Section 28P(1) provides:
“A person who, without reasonable excuse, contravenes section 28E(1) is guilty of an offence and is liable on summary conviction to a fine not exceeding £20,000 or on conviction on indictment to a fine.”
By s28P(4) a “reasonable excuse” for the purpose of subsection (1) includes:
“(a)	… the operation in question was authorised by a planning permission granted on application under Part III of the Town and Country Planning  Act 1990 …;  or
(b)	the operation in question was an emergency operation particulars of which (including details of the emergency) were notified to [English Nature].”
40.	The only other section of the 1981 Act to which reference should be made is s50 (which was in the statute as originally enacted).  So far as relevant, it provides as follows:
“(1)	This section applies where -
(a)	[English Nature] offer to enter into an agreement under section 16 of the 1949 Act or section 15 of the 1968 Act providing for the making by them of payment to any person;  …
(2)	…  The said payments shall be of such amounts as may be determined by the offeror in accordance with guidance given by the Ministers.”
By subsection (3) the recipient of such an offer, who will normally be the owner or occupier of the land concerned, can refer the terms of the offer to an arbitrator to be appointed, in default of agreement, by the Secretary of State.
Article 1P1 and the right to compensation
41.	Mr Howell’s primary argument is that, while legislation which has no provision for compensation will normally infringe Article 1P1 if it has the consequence of depriving a person of property, there will be no such infringement if the legislation results in the control of the use of the property, even if that control of use results in substantial financial loss.
42.	There is no doubt that the first part of that proposition, namely that deprivation of property without compensation will normally infringe Article 1P1, is correct.  Thus, in James -v- United Kingdom (1986) 8 EHRR 123 at paragraph 54, the ECtHR said this:
“[T]he taking of property in the public interest without payment of compensation is treated as justifiable only in exceptional circumstances not relevant for present purposes.  As far as Article 1 is concerned, the protection of the right to property it affords would be largely illusory and ineffective in the absence of any equivalent principle.”
43.	The court immediately went to say:
“Clearly, compensation terms are material to the assessment whether the contested legislation respects a fair balance between the various interests at stake and, notably, whether it does not impose a disproportionate burden on the applicants [sc  the persons deprived of their property].”
44.	Furthermore, as the ECtHR held in that case, and indeed has held in other cases:
“Article 1 does not, however, guarantee a right to full compensation in all cases, since 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.”
See Lithgow -v- United Kingdom (1986) 8 EHRR 329, paragraph 121.
45.	Those observations were concerned with deprivation of ownership of property, whereas the present case is concerned with control of use of property.  In such cases, as Lord Hoffmann made clear in R (Alconbury Developments Limited & Others) -v- Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295, Article 1P1 does not, at least normally, give rise to a right to compensation.  He said:
“72.	Thus, under the first paragraph, property may be taken by the state, on payment of compensation, if the public interest so requires.  And, under the second paragraph, the use of property may be restricted without compensation on similar grounds.  Importantly, the question of what the public interest requires for the purpose of Article 1 of the First Protocol can, and in my opinion should, be determined according to the democratic principle - by elected local or central bodies or by ministers accountable to them.  …
73.	There is however another relevant principle which must exist in a democratic society.  That is the rule of law.  When ministers or officials make decisions affecting the rights of individuals, they must do so in accordance with the law.  The legality of what they do must be subject to review by an independent and impartial tribunal.  This is reflected in the requirement in Article 1 of the First Protocol that a taking of property must be ‘subject to the conditions provided for by law’.”
46.	If Article 1P1 required the provision of compensation in legislation which restricted the use of property, the results would be very far-reaching indeed.  The financial consequences of introducing laws concerned with town and country planning, listed and historic buildings, health and safety at work, and hygiene, to take some obvious examples, would be such as severely to cripple the legislature’s freedom to introduce such socially beneficial legislation.
47.	However, the jurisprudence of the ECtHR demonstrates that what is not an actual expropriation may amount to what one might call a de facto expropriation for the purposes of Article 1P1.  Thus, in what appeared to be a control of use case the ECtHR said:
“In the absence of a formal expropriation, that is to say a transfer of ownership, the court considers that it must look behind the appearances and investigate the realities of the situation complained of.  Since the Convention is intended to guarantee rights that are ‘practical and effective’, it has to be ascertained whether that situation amounted to a de facto expropriation, as was argued by the applicants.”
Sporrong & Lönnroth -v- Sweden (1982) 5 EHRR 35 at paragraph 63.  The only case in which the ECtHR may have found such circumstances to exist is Papamichalopoulos -v- Greece (1993) 16 EHRR 40.
48.	In that case, the ECtHR held that expropriation notices, which were eventually withdrawn, constituted neither deprivation of property (the second sentence of the first paragraph of Article 1P1) nor control of use (the second paragraph of Article 1P1).  However, the court went on to say:
“The fact that the permits fell within the ambit of neither of the second sentence of the first paragraph nor of the second paragraph does not mean that the interference with the [right guaranteed by Article 1P1] violated the rule contained in the first sentence of the first paragraph.” - paragraph 69.
49.	The ECtHR then continued:
“For the purposes of the latter provision, the court must determine whether a fair balance was struck between the demands of the general interests of the community and the requirements of the protection of the individual’s fundamental rights.  The search for the balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1.”
On the unusual facts of that case, it was held that there had been an infringement of Article 1P1.  Any public benefit which could have been said to accrue from the existence of the expropriation notices was far outweighed by their detrimental effect on the applicant’s ability to use his property in light of the unjustifiable and very long period for which the notices were in force.
50.	Where there is no actual or  de facto expropriation, the proper approach of the court to a complaint that there has been an infringement of Article 1P1 was spelled out in Jacobsson -v- Sweden (1989) 12 EHRR 56.  The ECtHR, after explaining why Sporrong was distinguishable, said this at paragraph 55:
“Under the second paragraph of Article 1 of Protocol No 1, the Contracting States are entitled, among other things, to control the use of property in accordance with the general interest by enforcing such laws as they deem necessary for the purpose.  However, as this provision is to be construed in the light of the general principle enunciated in the first sentence of the first paragraph, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised ….  In striking the fair balance thereby required between the general interests of the community and the requirements of the protection of the individual’s fundamental rights, the authorities enjoy a wide margin of appreciation.”
51.	In this connection, it is worth mentioning what, in the context of the Convention, is the exceptional nature of the second paragraph of Article 1P1.  It expressly excludes from the ambit of the right granted by the first paragraph any interference which is “deem[ed] necessary” by the state “in accordance with the general interest” (or to secure payment of taxes).  This subjective approach to necessity is in marked contrast to the objective requirement of necessity in the second paragraph of Articles 8, 9, 10 and 11.
52.	The reasoning of the ECtHR in the two cases referred to above appears to us to establish that, when considering whether legislation, which controls the use of property in the public interest, infringes Article 1P1, a fair balance has to be struck between the general public interest and individual rights, which is tantamount to a requirement of proportionality (as the ECtHR recognised in Jacobsson).  In appraising this, the court must accord to the legislature the measure of judgment discussed by Lord Hoffmann in Alconbury at paragraphs 72-73, and by Lord Nicholls of Birkenhead at paragraphs 68-70 in Wilson -v- First County Trust (No 2) [2004] 1 AC 816.
53.	In paragraph 70 in Wilson, Lord Nicholls said:
“… [C]ourts should have in mind that theirs is a reviewing role.  Parliament is charged with the primary responsibility for deciding whether the means chosen to deal with a social problem are both necessary and appropriate.  Assessment of the advantages and disadvantages of the various legislative alternatives is primarily a matter for Parliament.”
As Mr Rabie says, it is debatable whether the legislation with which this case is concerned can be characterised as aimed at “a social problem”.  In our view, however, the legislation in the present case was plainly enacted for “the general interests of the community” (to quote from Jacobsson at paragraph 55) and the observations of Lord Nicholls are equally applicable to it.
54.	The area of judgment afforded to the legislature is well illustrated by the reasoning of the ECtHR in Mellacher -v- Austria (1989) 12 EHRR 391, where it was argued that the Austrian rent restriction legislation infringed private landlords’ Article 1P1 rights.  At paragraph 53, the court said this:
“The possible existence of alternative solutions [to the perceived concern of the detrimental effect of high residential rents] does not in itself render the contested legislation unjustified.  Provided that the legislature remains within the bounds of its margin of appreciation, it is not for the court to say whether the legislation represented the best solution for dealing with the problem or whether the legislative discretion should have been exercised in another way.”
55.	In paragraph 54 the court made reference to the fact that, in two cases, the reduction in rental income (without compensation) suffered by the applicant landlord was approximately 80%, and, in the next paragraph, it referred to the fact that the legislation nonetheless permitted a landlord to recover, by way of increased rent, the cost of services, maintenance and improvement.  The court then concluded:
“In the light of these considerations, and having regard to the legitimate aims pursued by the legislation, the court finds that it cannot be said that the measures complained of by the applicants which were taken to achieve these aims was so inappropriate or disproportionate as to take them outside the state’s margin of appreciation.”
56.	The possible relevance of the availability of compensation to the question whether a fair balance has been struck by the legislation in a control of use case has, so far as we are aware, only been considered in terms, and then shortly and somewhat obliquely, by the Commission.  Thus in Baner -v- Sweden (1989) 60 DR 125 the Commission said:
“The legislation regulating the use of property 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 may 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.” (emphasis added)
57.	We have been referred to no case where the ECtHR has found that the absence of a provision in the relevant legislation for compensation has resulted in a control of use (as opposed to an expropriation) infringing Article 1P1.  However, in S -v- France (1990) 65 DR 250, the Commission appears to have concluded that, where substantial compensation was payable in a control of use case (involving substantial interference with the applicant’s enjoyment of her property) there was no infringement of Article 1P1.  None of this comes close to a doctrine that there can be no control of use without compensation.
58.	The right analysis seems to us to be that provided the state could properly take the view that the benefit to the community outweighs the detriment to the individual, a fair balance will be struck, without any requirement to compensate the individual.  Should this not be the case, compensation in some appropriate form may serve to redress the balance, so that no breach of Article 1P1 occurs.
The application of Article 1P1 in the present case
59.	It is only the transitional provisions of the 2000 Act which Mr Rabie suggests infringe rights under Article 1P1.  We should explain why this is.  When exercising its powers of notification under s28 as amended by that Act, English Nature will have to make sure that it does not infringe Convention rights, which it should be in a position to do.  Thus there can be no question of the powers of notification granted to English Nature under the 1981 Act as amended by the 2000 Act being in conflict with Convention rights.  Mr Rabie’s argument only runs with respect to notification already given under the 1981 Act.  These were largely “toothless” when that Act was passed, but have been given teeth by the transitional provisions of the 2000 Act.  It is Mr Rabie’s case that the giving of teeth in 2000 to some of the notifications effected under the 1981 Act, may result in infringement of the Article 1P1 rights of the owners of land subject to such notification.
60.	The general aim of the 2000 Act, and in particular of the transitional provisions, namely to protect and preserve flora, fauna, or geological or physiographical features which are of special interest, is plainly a defensible, indeed a laudable, objective.  As we have said, it is one which can fairly be said to be in the public interest, or, to use the words of the ECtHR in paragraph 55 in Jacobsson, in the general interests of the community.  Until the amendments made by the 2000 Act, the effect of the legislation designed to give such protection and preservation was, or at the very least could fairly be perceived to have been, unsatisfactory.  Unless the relatively extreme and potentially cumbersome and expensive route of compulsory acquisition of the land was invoked, the only effect of the legislation on an unwilling owner was to delay his ability to damage or destroy the features of interest.
61.	As to the genesis of the amendments effected by the 2000 Act, the position is as follows.  The legislation was preceded in September 1998 by a consultation paper, “Sites of Special Scientific Interest - Better Protection and Management”, which contained the Government’s preliminary suggestions which, at least in broad terms, are ultimately reflected in the amendments effected by the 2000 Act.  In particular, the view was expressed that compensating land owners for agreeing not to carry out damaging operations was inappropriate, because resources should be devoted to the encouragement of conservation.  Having received responses, the Government published its proposals in August 1999 for legislation in a further paper “Sites of Special Scientific Interest - Better Protection and Management.  The Government’s framework for action”.  In somewhat less tentative and detailed terms, this repeated the Government’s preliminary suggestions, and, in particular, repeated that it was not prepared to pay out public money simply to dissuade operations which could destroy or damage SSSIs, on the basis that such money should be devoted to ensuring that conservation objectives were achieved.  A consultation paper in relation to the financial guidelines was issued in May 2000, and the 2000 Act was then enacted.
62.	As to the functioning of the 1981 Act, as amended, we find it hard to see how any objection can be taken.  The definition of an SSSI cannot sensibly be attacked, and it seems unexceptional that a site initially becomes an SSSI once English Nature is satisfied that it is appropriate.  There is procedure for de-notification where English Nature “are of the opinion that … a site of special scientific interest is no longer of special interest” (see s28D).  The provisions relating to management schemes and management notices in s28J and 28K provide an appropriate mechanism to ensure preservation.  Furthermore, it is plain that neither the uses nor operations precluded by notification, nor the requirements of management notices are absolute.  Insofar as notification serves to prevent a particular use or operation, English Nature’s consent to such a use or operation can be sought under s28E, and if its consent is refused or granted on unacceptable terms, there is the provision for appeal in s28F.  In addition, there is the possibility of planning permission being granted for the proposed use or operation:  see s28P(4)(a).
63.	Further, as pointed out by Ouseley J, it is not even as if the 2000 Act introduced for the first time controls over land containing botanical, zoological or geological features of interest.  The legislative history since 1949, much of which, but by no means all of which, is summarised above, demonstrates that any prospective or actual purchaser of land with such features of interest, at least after 1949, would have been aware of legislative controls over the use of such land.  Indeed, at least since 1956, he ought to have been aware of the fact that such legislative controls were likely to increase rather than decrease.
64.	There is also the provision for compensation in relation to the cost of work which has to be carried out pursuant to a management agreement or management scheme:  see ss50(2) and 28M(2).  Accordingly, in relation to the cost of any positive acts required of the owner or occupier consequent on the land being an SSSI, there is provision for compensation.  We were not taken to the Ministerial guidance referred to in ss28M(3) and 50(2), although we were told a little about it.  However, it seems to us that the terms of the guidance are not of much relevance for present purposes, given that the issue is whether the legislature’s statutory provisions, rather than any executive guidance made pursuant thereto, infringes Convention rights.
65.	We accept, of course, that the consequence of the amendments effected by the 2000 Act must have been to diminish, sometimes substantially, the scope of the uses to which an SSSI could be put, and accordingly to reduce, sometimes substantially, the income which could be obtained from activities on an SSSI, and consequently its market value.  It can fairly be said that, in those circumstances, the public benefit enjoyed as a result of the amendments effected by the 2000 Act will, in the absence of any compensation provisions, have been at the expense of the owners and occupiers of SSSIs.  However, given the purpose and genesis of the legislation, and the jurisprudence of the ECtHR, that cannot of itself justify an argument that there has been an infringement of the Article 1P1 rights of the owner of an SSSI whose value has been substantially diminished as a result of the amendments effected by the 2000 Act.
66.	While accepting the self-evident correctness of the proposition that each piece of legislation must be judged by reference to its own particular features, we think it is equally self-evident that the reasoning of the majority of the ECtHR in Mellacher highlights the difficulty faced by the company in seeking a declaration of incompatibility in relation to the effect of the transitional provisions of the 2000 Act.  In Mellacher, the immediate benefit of the legislation was limited to a relatively small number of people, namely residential tenants in the private sector, whereas the preservation of the desirable features of SSSIs is for the general public benefit.  The financial loss suffered by at least some of the applicants in Mellacher was very substantial, namely a reduction in their income by 80%.  Further, in Mellacher there were strong grounds for attacking the suggestion that there was any need for the legislation concerned (see the discussion in paragraph 46 of the ECtHR’s judgment).
67.	Mr Rabie nonetheless contends that there may be cases in which the effect of the transitional provisions of the 2000 Act on a notification under s28 of the 1981 Act has been to curtail the uses of the land to such an extent, and to depreciate the profit earning capacity, and hence the market value, of the land, to such an extent that either or both of the following conditions is satisfied, namely:
i)	the effect of the restriction and reduction is such that what appears on its face to be a restriction in use in fact amounts to a de facto expropriation within the terms of Article 1P1, and/or;
ii)	the effect of the restriction and reduction is such as to represent a disproportionate burden on the owner of the land concerned, even taking into account what one might characterise as the otherwise general lawfulness of the legislation.
68.	Mr Rabie has not sought to persuade us that the restrictions placed by the Notification on the company’s use of the canal falls into either category.  In the present case, there is no question of the company being excluded from using the canal;  indeed, there is nothing to prevent it from exploiting the canal, albeit to a significantly more limited extent than would be possible if it was not subject to the Notification under s28 of the 1981 Act as amended.
Reliance on hypothetical facts is not possible where executive action is being challenged.  This is because of the requirement in s7(1) of the Human Rights Act that the claimant must be a victim of the unlawful act.  However, the power under s4 to declare primary legislation incompatible with one or more Convention rights is not so limited.
To demonstrate such an incompatibility in principle, as Mr Rabie seeks to do, it would be necessary to show that there are no primary or delegated powers which, if properly exercised, would prevent the use of the statute from invading the Convention right or rights.  Given that the asserted incompatibility is with Article 1P1, a number of such provisions become relevant.  There are the powers of English Nature under s28E and those of the Secretary of State under s28F, each of which is capable of accommodating Convention rights.  There are the compensation provisions under s28M and s50, which are capable of implementation to the same end.  If hypothetically the ministerial guidelines were to be taken as excluding compensation in a case where Article 1P1 required it, that would be an unlawful act under s6 of the Human Rights Act, not a product of statutory incompatibility.  There may also, in certain cases, be recourse to planning permission so as to engage s28P(4)(a), or to the service of a purchase notice under the Town and Country Planning Act 1990, Part VI, Ch 1.  If none of these provisions assisted because they resulted in adverse decisions for the landowner, it would be necessary for him to attack the decision as unlawful by reason of their violation of a Convention right, rather than to attack the statute which provided for them as incompatible with that right.
71.	The 1981 Act as amended in 2000 is not, therefore, in our judgment, vulnerable to the accusation of inherent incompatibility with Article 1P1.  Its provisions for the control of use of property do not amount to disguised appropriation;  and if in an extreme case such controls were to have that effect, there are several means by which the statute itself enables the effect to be mitigated or compensated for.  Nor do they come anywhere near the hypothetical category of a measure which is so manifestly disproportionate that it offends against the first sentence of Article 1P1.
Conclusion
72.	In these circumstances, we are of the view that Ouseley J was right in rejecting the contention that ss28-28Q of the 1981 Act, as amended by the 2000 Act, are incompatible with Article 1P1.  We would accordingly dismiss this appeal.