England and Wales High Court (Administrative Court) Decisions

 
SUMMARY OF JUDGEMENT

SUMMARY

1. This case concerns a substantial industrial installation for the manufacture of glassware at a former power station at Elton, on the borders of the districts of the City of Chester and Ellesmere Port and Neston. In particular, these works have been designed to be the largest container glass factory in Europe. It is a development by Quinn Glass Limited, a major manufacturer of glass, but in production terms a relative newcomer to the UK.
2. Its construction and operation require various authorisations, but two in particular, namely the grant of planning permission under TCPA 1990 and a permit under the IPPC regime for pollution control
3. This challenge relates to the grant of an IPPC permit by Chester City Council (" Chester CC") on 2nd March 2005. It was issued following a decision on the application by the Chief Executive Mr Paul Durham, and was said to be issued under delegated authority.
4. It is argued by Rockware Glass Limited (" Rockware") which company is a rival glass manufacturer, and which had objected to the grant of a permit, that

(a) Mr Durham had no authority to decide to issue the permit

(b) The Council had failed properly to interpret and apply the relevant EU Directive (Directive 96/61/EC relating to Integrated Pollution Prevention and Control ) and the Pollution Prevention and Control (England and Wales) Regulations 2000 SI No 1973, (" PPC Regs") which were made pursuant to the Pollution Prevention and Control Act 1999

(c) The Council had misinterpreted the statutory guidance note SG2 issued by the Secretary of State for the Environment pursuant to the PPC Regs.

(d) The Council had taken irrelevant considerations into account and had failed to take material considerations into account

(e) It was irrational to have reached a decision on the application for a permit when he did not take steps to determine whether the concurrent planning application had been called in for determination by the First Secretary of State

5. The Defendant City Council seeks to dispute those grounds. In addition it also contends that Rockware has insufficient interest to bring these proceedings. It also seeks to persuade me that if I find any of the substantive grounds of challenge made out, I should not exercise my discretion in favour of quashing the permit.
6. Quinn also dispute the grounds, and argue that Rockware has no sufficient interest to bring these proceedings. It also contends that Rockware failed to bring them promptly, and argues that if I find any of the substantive grounds of challenge made out, I should not exercise my discretion in favour of quashing the permit.
7. It was agreed by all parties before me that the matter should proceed as a final hearing.
8. At the hearing, I held that Rockware had sought permission for judicial review promptly, but that I would give my reasons in this judgement.
9. The judgement which I am handing down is a lengthy one. The circumstances of this case require it for the following reasons

(a) As I describe in the judgement, the central issue in this litigation is one where no authority currently exists, and I have been asked by the regulator to give guidance for future applications;

(b) The case involves the interpretation and application of an important part of the European and UK legislation designed to protect the environment from industrial pollution;

(c) The process concerned has involved major investment, and shutting it down would involve substantial further costs, which Quinn state would run into millions of pounds. It is also said that there would be ongoing losses of interest on capital expenditure;

(d) Quinn have taken on a workforce of 220 people, and contend that it would have to lay them off if the permit were quashed. The costs of doing so would be some £ 1.1 million;

(e) It follows that there are powerful reasons why the judgement in this matter should be considered and thorough.

10. In this context, I must point out, as will become clear below, that the circumstances in which the expenditure was incurred by Quinn, and its employment of large numbers of people, are unusual, and represented the taking of a calculated risk on its part.

The central issues

11. There are seven principal areas of dispute

(a) the degree to which the technique, production capacity and process configuration proposed by the applicant is determinative of the process, criteria and considerations by which the application is to be judged by the regulator;

(b) whether the process of consideration and reasoning of the regulator in this case was flawed;

(c) whether authority rested in the Chief Executive of the regulator to make the decision;

(d) whether he should have made a decision or waited until he knew that the concurrent planning application had been called in.

(e) whether Rockware has a sufficient interest

(f) whether the application was made promptly

(g) whether, if I find that any of the substantive grounds for challenge are made out, I should exercise my discretion to grant relief

12. Issues (b)- (g) are important but raise no new points of law. In the case of (a), there is no decided authority brought to the court's attention or of which it is aware which deals with the point. For Chester City Council_{CHESTER CC}, Mr Horlock QC urged the court to give clear guidance to regulators where none currently exists.

The Application In Question and its consideration by Chester City Council.

13. It is helpful at this stage to set out something of the history of this case, drawn from the chronology submitted by the claimant and from the exhibits lodged with the court.
14.  

First Quinn Glass planning application made for site at Ince - for plant with three oxyfuel furnaces of 400 tonnes per day each	May 2000
Amended Quinn Glass planning application made - for plant with two oxyfuel furnaces of 600 tonnes per day each	August 2000
Meeting between Quinn and Chester where Quinn state desire to start building at start of 2004 and commence production in February 2005.	23 October 2003
Application made by Quinn Glass for revised planning permission - for plant with two furnaces (no longer oxyfuel) and production lines increased from 8 to 13 lines	12 December 2003
Principal construction activities start on site	January 2004
Plant granted revised planning permission	3 March 2004
Rockware Glass issue challenge to revised planning permission on the grounds that no Environmental Assessment carried out/submitted	19 May 2004
Quinn's solicitor confirms that the plant is already programmed to open in 2005	28 June 2004
Revised planning permission quashed by consent (by Harrison J)	22 July 2004
Further application made by Quinn Glass for revised planning permission, with new Environmental Statement	On or around 23 July 2004
Initial application for IPPC Permit made by Quinn Glass to Chester City Council	10 August 2004
DLA Piper, Solicitors, write on behalf of Rockware Glass to seek call in by the First Secretary of State of the 2004 revised Quinn Glass planning application	10 August 2004
Quinn Glass lodged amended application for IPPC Permit.	15 October 2004
Meeting between Quinn and Chester (attended by Mr David Hosker and others) where change in furnace type discussed	4 November 2004
Mr Hosker wrote to Quinn Glass indicating that their application did not comply with SG2	24 November 2004
Meeting between Quinn Glass and Mr Hosker and submission of revised NOx emission abatement proposals by Quinn Glass	26 November 2004
Mr Hosker prepared a report to Chester City Council members on Quinn Glass' IPPC application.	November 2004
Quinn confirms to Chester CC that it has "significant and confirmed trade orders" for produce from the site	December 2004
Mr Hosker prepared a further report to Chester City Council members on Quinn Glass' IPPC application.	February 2005
Report written for consideration by Chester CC by Brian Hughes, its Development Co-ordination Manager, i.e. the Planning Officer at the Defendant responsible for the Quinn planning application.	February 2005
Mr Hosker meets Chief Executive of Chester CC (Mr Paul Durham), and permit is issued by Chief Executive	2nd March 2005
Government Office for North West ( "GONW") notifies Chester CC that planning application called in for determination by First Secretary of State	2nd March 2005
Date of Planning Board meeting of Chester CC at which planning application was to have been considered	3rd March 2005
Rockware's solicitors warn Quinn's solicitors that they were instructed to get the permit withdrawn or have it quashed	9th March 2005
Quinn's solicitors write that " ….the development….has been proceeding uninterrupted since October 2003. At the time of your challenge to the approval of amendments to the …..planning permission…….our clients have made it abundantly clear that they intended to continue with their development. ………our clients have made long term contractual commitments to suppliers of materials, plant and equipment, and to glass purchasers, and have employed 118 full time glass manufacturing staff, most of whom are close to completing full-time training………the start of production is imminent."	11th March 2005
Quinn fire up furnaces	11th April 2005

15. It will be seen from the above that Quinn has elected to proceed with this development without any planning permission being in existence which authorises the development. Chester CC has thus far not considered whether to take enforcement action against Quinn. In my judgement, the letter from its solicitors of 11^th March 2005 shows that it had committed itself to this project to the extent of entering into contracts, and had trained staff, long before the permit was granted on 2^nd March 2005. Thus, the largest container glass factory in Europe has been quite deliberately advanced far beyond the design and planning stage without two of the necessary fundamental statutory permits being in place. It has also been constructed and started up before the local planning authority has considered any of the environmental information (in the meaning of that term in the Town and Country Planning (Environmental Impact Assessment) Regulations 1999 SI NO 293, and therefore including comments received from statutory undertakers, interested parties and the public upon the ES filed by the developer) or considered whether the environmental effects have been adequately addressed. It is entirely inconsistent with the objectives of either the European or national pollution, prevention and control codes, which seek to ensure that a process is gone through before a plant's design is finalised plants that a major potentially polluting installation should be commissioned and constructed (as this one undoubtedly was) without the permit being in place. It is also contrary to the spirit of the environmental assessment code, whereby proper environmental assessment is undertaken and the public's views considered, before a major project with potential effects on the environment is undertaken.
16. I accept of course that no criminal offence has been committed. The IPPC permit remains in being unless and until it has been quashed, and no criminal offence is committed under the Town and Country Planning Code unless and until the Local Planning Authority has issued an Enforcement Notice which has come into force. I accept that for a glass manufacturing plant, an IPPC permit can be issued without a planning permission being in existence. I also accept that the fact that Quinn has behaved in this manner and taken a very considerable gamble, does not of itself give rise to a ground of challenge, nor can it colour the way in which I must interpret the relevant code, nor affect the way in which I must draw inferences about what Mr Hosker and Mr Durham did, nor the way in which I must apply public law precepts to those findings. It may however be relevant when I come to consider Quinn's arguments on delay, and on whether I should exercise my discretion to grant or refuse relief.

Chester City Council's consideration of the application for a permit

17. In my judgement I deal at length with the provisions of the relevant statutory code. I also deal at length with the process of consideration by Chester City Council. The permit was issued by its Chief Executive Paul Durham, who adopted and relied on the advice he received from the Environmental Manager David Hosker.
18. The issues in the case relate to the steps which are to be taken in the industrial process to limit the emission of oxides of nitrogen into the atmosphere. Oxides of nitrogen have an important role in generating ozone and are regarded as a global pollutant and a greenhouse gas. Emissions in one area can have effects many hundreds of kilometres away or even further afield.
19. Chester CC placed limits on the emission of oxides of nitrogen which allow emissions during the first four years of operation which are higher than those set out in the statutory guidance given by the Secretary of State for the Environment and Rural Affairs to regulators when they consider permits for new installations, as this one was. The limits imposed by Chester set levels which reduce year on year from twice the level advised until they are reduced to that level after four years.
20. In my judgement, Chester's approach to this issue was defective. I have concluded that Chester City Council

(a) wrongly failed to consider whether alternative configurations, size or design to that proposed would have produced lower emissions of specified pollutants, and in particular oxides of nitrogen (NO_x), either in the context of a BAT analysis, or in determining whether the permit should be refused or granted; (" BAT" = Best Available Technique, a test under European and UK legislation)

(b) in particular, failed to consider whether the use of an oxyfuel process with a different number and size of furnaces would produce lower emission levels of oxides of nitrogen (NO_x), and/or would constitute BAT;

(c) misinterpreted and misapplied statutory note SG 2 when considering the date at which the SG 2 recommended emission limit of 500 mg/Nm³ was to be applied to a new installation for the manufacture of container glass;

(d) Took into account an immaterial consideration, namely the emission limits set at other existing UK plants, when considering whether the levels permitted at the application site were BAT for the purposes of the European and UK statutory codes and statutory guidance;

(e) misinterpreted and misapplied the BREF document on achievable emission limits and achieved levels;

(f) acted in breach of the statutory European and UK codes for pollution control by imposing emission limits for oxides of nitrogen (NO_x) which were higher than those which were achievable

(g) alternatively, failed to have regard to a material consideration, namely the evidence before it that lower emission limits were achievable for oxides of nitrogen (NO_x) if alternative primary techniques were used, and/or if secondary techniques were applied;

(h) when considering the relationship between emissions of CO₂ and NO_x failed to take into account a material consideration, namely whether oxides of nitrogen (NO_x) are global pollutants or are to be treated as greenhouse gases;

(i) failed to give adequate or intelligible reasoning for its conclusions on the above topics

(j) failed to give adequate or intelligible reasoning for its conclusions that the storage of oxygen on site in an oxyfuel process was a matter that justified rejecting that process

(k) failed to give adequate or intelligible reasoning for its conclusions concerning the effects on air quality.

21. I have also considered whether Mr Durham, the Chief Executive, had any authority to decide to issue the permit. The power to issue a permit is vested in Chester City Council, but it may determine to delegate it to an officer. It is well established that if it does so, the officer may only act within the scope of the power delegated to him/her. The delegation made by the Council was

"power to deal with matters where a decision is nominally to be made by the Council is governed substantially by matters of fact or technical factors so that there is no real discretion."

22. That discretion to make a decision refers to the decision to be made by the regulator, and not (as Chester CC said to the court he took it to mean) the situation in this case, which is that Mr Durham thought Mr Hosker had reached the only possible decision on his interpretation of the relevant law, guidance and factual information. A Council, or its delegate when exercising its powers, cannot give up the responsibility to reach discretionary judgements by saying that it was bound to accept the advice of its technical officer.
23. But even if I were wrong about that, I am quite satisfied that Mr Durham knew very well that this was a decision where there were judgements to be made by him as the decision maker. I have decided that his own evidence showed that he was exercising a real discretion.
24. I therefore hold that Mr Durham acted outside the scope of his authority in issuing the permit.

Relationship to call in

25. Quinn had built its plant without a planning permission being in existence which allowed it do so. It has applied for permission, which Chester City Council were due to consider on 3^rd May 2005. As it turned out, its application was called in for determination by the First Secretary of State during the afternoon of 2^nd May 2005 shortly before Mr Durham considered whether to issue the permit, but he was unaware of what had happened.
26. In my judgement, the Chief Executive was entitled to treat the planning application as still for his Council to consider unless and until he was informed that it had been called in.
27. I reject this ground of challenge.

Whether Rockware have sufficient interest to seek or obtain judicial review

28. Rockware must show that it has sufficient interest to make this application. In my judgement, I consider the meaning of that test and its application to this case.
29. Essentially, Rockware's complaint is that industrialists in the glass manufacturing industry have a legitimate cause to complain if standards arrived at after consultation are then not applied in a consistent manner by regulators , or if emission levels are not based on a proper application of those standards and principles.
30. In an industrial sector with substantial investment decisions to be made about capital works, it is in my judgement a proper interest to seek to ensure that one's few competitors are subject to the same consistency of approach.
31. The unacceptable and lax Chester CC approach to the issue of this permit, if unchallenged, could allow other glass manufacturers to bring forward inadequate proposals. I consider that the other industrialists in this sector have the right to seek a consistency of approach. If what one was dealing with here were less important breaches of the code and the process had involved some attempt at rigorous analysis of BAT, then the sufficiency of interest may have been less easy to discern, but the deficiencies in Chester's approach are so serious, and have such serious implications for the regulation of the whole sector, that I am satisfied that a sufficient interest exists to grant relief, should I be satisfied that it is otherwise proper to do so.

Delay

32. The proceedings were issued on 25^th May 2005. Chester CC did not argue that the application for permission had been made anything other than promptly. However Quinn argued that it had not been issued promptly in accordance with the Civil Procedure Rules. I reject that argument for the reasons given in my judgement. I summarise the main aspects of it as follows.
33. In my judgement the vast bulk of the delay between 2^nd March and 25^th May 2005 was attributable to the inexcusable delays of the Defendant's solicitors Messrs Eversheds .
34. But it is also right to say that the problems which this challenge has caused and will cause Quinn are to a large part of its own making. I have no doubt that, as its witness Mr O'Reilly says in his evidence, closing down the furnaces will involve it in very substantial costs, potential loss of employment for its employees, loss of business and loss of profit. But the fact is that it was planning to go ahead with this project , to the extent of letting contracts, taking on large numbers of staff, and entering into commitments, long before the 2^nd March 2005, when it had neither a planning permission nor an IPPC permit. No doubt it felt encouraged by the fact that Chester CC, as the local planning authority had made it plain that it wanted to see the development go ahead, and reassured by the discussions it had had with Mr Hosker. But none of that is a substitute for an actual planning permission or permit issued in accordance with the appropriate statutory code. Indeed it had built the plant without a planning permission being in existence, construction having started and continued after it was quashed, and before the permit existed. It then continued to proceed to fire up the furnaces despite knowing that Rockware had warned that it was under challenge, and knowing that the planning application had been called in. It has taken a calculated risk with its eyes open. I do not consider that the adverse effects which it will sustain are such as to strike out a claim which I have determined is well made and was made promptly. I feel nothing but sympathy with those employees who have assumed that their new employer was in a position to operate its plant.

Discretion generally

35. Quinn (but not Chester CC) invited me to say that judicial review should be refused because there were appropriate alternative remedies available, namely seeking to persuade the Secretary of State to intervene.

I reject this approach. In this case Rockware has no right of appeal or right to statutory review. It seeks to establish an important point of principle on the interpretation of the statutory codes and the application of the statutory guidance. Chester CC has through its counsel asked this court to give guidance. I consider that the circumstances here are ones where judicial review is, by contrast, the route by which those legal principles may be most quickly and efficiently established.

36. There is an additional, and in my judgement compelling reason why judicial review is appropriate in this case. The planning inquiry into the called in planning application starts at the end of November 2005. It is essential in my judgement that the Inspector (and First Secretary of State) conduct that inquiry with the legal status of the permit of 2^nd March 2005 having been addressed. It is thus convenient in the public interest that this issue is determined now by judicial review instead of by a call in which may or may not occur.
37. In my judgement the failures by Mr Hosker, and therefore by Mr Durham, are so substantial, the reasoning so poor, and the misunderstanding of the pollution control code and of statutory guidance so great, that there is a very real possibility that the Council, once it addresses the matter properly, would reach a different decision.
38. There were no other grounds argued before me why I should not exercise my discretion to grant relief. In my judgement the errors of law , the failures in the process of consideration and the flaws in the reasoning are so substantial, and the interests of Rockware sufficiently affected that I should exercise my discretion to grant the relief claimed and quash the permit.

Conclusion

39. I therefore

(a) grant permission for Rockware to seek judicial review of the IPPC permit Number IPPC/A2/01/04 issued by Chester City Council on 2^nd March 2005 to Quinn Glass Limited to operate an installation at Quinn Business Park, Ash Road, Elton, Cheshire, CH2 4LF

(b) quash the said permit.

40. I will hear submissions on the form of the Order to be made.
41. I pay tribute to the excellence of the submissions made to me by Mr Gordon QC, Mr Horlock QC, and Mr Taylor. Their respective clients' cases were robustly but realistically argued, and my judicial task much assisted.
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