Petitioners: Williamson; Shepherd & Wedderburn, W.S.

Respondents: Davidson, Q.C.; Digby Brown

5 August 2005

[1] This was an application for first order and interim interdict which I heard on 4 and 5 August 2005. The respondents did not reclaim against my decision to grant interim interdict but some considerable time after my decision the parties requested me to write a note explaining that decision in order to assist them in future discussions. I agreed to do so.

[2] The application arose out of a dispute between Shetland Islands Council ("SIC") and Lerwick Port Authority ("LPA") over SIC's proposal to construct a bridge to the island of Bressay over the North entrance to Lerwick harbour. This is one of two entrances to Lerwick harbour, the other entrance being from the South. The circumstance which precipitated the application for judicial review and the application for interim interdict was the decision by LPA to instruct dredging works in the channel of the North entrance to Lerwick harbour. SIC alleged that that the dredging works would interfere with their proposals for the location of the central piers of the bridge which by this stage had been designed.

[3] SIC appointed a project team, including Halcrow Crouch, consulting engineers, ("Halcrow"), to design the bridge and to discuss with LPA the alignment of a dredged channel within the proposed bridge supports. The proposed bridge was designed taking account of LPA's representations to SIC's professional advisers of their requirements for navigation in the North entrance to Lerwick harbour. The height of the bridge was designed as 40 metres above Mean High Water Springs to allow large vessels to pass underneath and the spans of the bridge were designed to allow a dredged navigation channel of 120 metres in width under the bridge. LPA, which had commissioned Arch Henderson & Partners to advise them on the effect of the proposed bridge on the operation and future development of the port, had taken the view that they required a minimum navigational channel of 100 metres in width (10 metres wider than the existing channel) and a dredged channel of 120 metres in width and 9 metres in depth. To accommodate this the foundation supports of the central piers of the proposed bridge required to be at least 160 metres apart.

[4] SIC averred that in the course of 2003 they and LPA agreed that the depth of the dredged channel would be 9 metres, that its width would be 120 metres aligned between the two piers that would support the central span of the proposed bridge and that the bridge would have an air draft of 40 metres to cater for larger vessels. They averred that they used that agreement as the basis for fixing the positions of the relevant piers in their applications for the necessary statutory consents for the construction of the bridge. Under planning legislation SIC, which were both the planning authority and the proposed developer, required to prepare a notice of intention to develop for consideration by the Scottish Ministers. They published the notice in December 2003 and produced, advertised and made available for inspection an environmental impact assessment in relation to the bridge. Under roads legislation SIC required to promote a roads scheme, which they did on June 2004. Finally, to acquire the necessary land for the construction of the bridge SIC made a compulsory purchase order in March 2005.

[5] SIC averred that LPA objected to the notice of intention to develop and the environmental statement but did not indicate in their objections that they intended to revise their proposals for the navigable channel. Similarly LPA objected to the roads scheme but did not indicate any intention to revise those proposals. The Scottish Ministers did not call in the notice of intention to develop but in August 2004 LPA raised proceedings for judicial review to challenge that decision and in June 2005 parties agreed that that decision was flawed and that the Court should quash the decision. The Court of Session annulled the decision. When I heard this motion, the Scottish Ministers had yet to decide whether to call in the notice of intention to develop. LPA's objection to the roads scheme if not withdrawn will result in a public local inquiry under the roads legislation.

[6] SIC averred that in about December 2004 LPA applied to the Scottish Ministers for a harbour revision order seeking authority to use dredged material for land reclamation as part of a project to deepen and widen the North access to Lerwick harbour. The environmental statement, which accompanied the application, revealed that LPA proposed significantly more extensive dredging than the proposals which they had agreed with SIC. SIC objected to the application for the harbour revision order and the Scottish Ministers had not determined whether to hold a public local inquiry as required by the relevant harbours legislation.

[7] SIC averred that on or around 25 June 2005 LPA intimated to them that they were amending their dredging proposals and sent them drawings numbers 204516-91 and 204516-92 illustrating their revised proposals. The effect of the revised proposals would be to locate the west pier of the central span of the proposed bridge within the revised navigational channel, causing an obstruction and danger to navigation. SIC averred that this prejudiced the outcome of any public local inquiry that might be held into the roads scheme.

[8] In their petition for judicial review SIC sought (1) reduction of LPA's amended dredging proposals, (2) interdict and interim interdict prohibiting LPA from implementing the amended dredging proposals, (3) an order on LPA to serve notice of their dredging proposals on the Scottish Ministers, (4) declarator that the dredging proposals constituted a project which fell within Annexes I and II of Council Directive 85/337/EEC and (6) declarator that the Scottish Ministers should require LPA to carry out an environmental impact assessment of the dredging proposals.

[9] The grounds of challenge were, first, that the decision of LPA to revise their dredging proposals and change the alignment of the navigable channel was Wednesbury unreasonable. In essence the averred unreasonableness consisted in the awareness that on the altered alignment the west pier of the proposed bridge would be within the navigable channel and that that would entail danger both vessels and bridge users. Miss Williamson however in her submissions founded on the knowledge of LPA that their decision would make the proposed bridge impossible to construct as designed. Secondly, SIC averred that LPA acted unreasonably in the Wednesbury sense in refusing to provide SIC with a copy of the report from Eagle Lyon Pope which LPA had represented showed ship simulations that justified their decision to realign the navigable channel. In this context I was referred to James Aitken & Sons (Meat Producers) Ltd v City of Edinburgh District Council 1990 SLT 241. Thirdly, SIC averred that LPA were personally barred from altering their dredging proposals because of the agreement which they reached with SIC on their original dredging proposals and thereby the alignment of the navigable channel. SIC averred that they had taken forward the necessary planning and roads applications and compulsory purchase order in reliance on that agreement and that the LPA's new proposals prejudiced those applications. I was referred to Cairncross v Lorimer (1860) 3 Macq 827 and Gatty v MacLaine 1921 SC (HL) 1. Relying on the same facts and essentially the same reasons, SIC argued, fourthly, that they had a legitimate expectation that LPA would not alter their dredging proposals which had been agreed.

[10] Fifthly, SIC averred that LPA required and had failed to notify and obtain approval from the Scottish Ministers under section 9(5) of the Lerwick Harbour Order Confirmation Act 1974 ("the 1974 Act") in relation to the deposit of reclaimed materials below the high water mark. Sixthly, it was asserted that because their dredging proposals constituted development and the authorisation of a harbour revision order to use the dredged material to reclaim land constituted development consent, LPA were under an obligation to carry out an environmental assessment under Council Directive 85/337/EEC which was directly effective. I was referred to Marshall v Southampton & South West Hampshire Area Health Authority (Case 152/84) [1986] 1 CMLR 688. SIC averred that LPA's environmental statement was inadequate as it was confined to the land reclamation works; Council Directive 85/337/EEC required an assessment of the proposed dredging works. Seventhly and finally, SIC averred that in any event because LPA had not notified the dredging proposals to the Scottish Ministers under section 9(5) of the 1974 Act, the Council Directive 85/337/EEC was directly effective and LPA had failed to carry out the required environmental impact assessment. Miss Williamson submitted that the revised dredging proposals were a project either under paragraph 8(a) of Annex I of that Directive or in any event under one or more of paragraphs 2c, 10c, 10k or 13 of Annex II of that Directive.

[11] Miss Williamson submitted that SIC had made out a prima facie case against LPA for interim interdict. SIC understood that LPA had placed a contract for dredging and that operations would begin on Tuesday 9 August. The dredging works would prejudice the construction of the bridge and the consents sought in relation to it. The balance of convenience favoured the preservation of the status quo pending resolution of the application for judicial review.

[12] Mr Davidson QC for LPA invited me to refuse interim interdict or in any event to accept an undertaking which LPA had offered and SIC refused. He explained that SIC had been aware since about December 2004 of the broad outline of LPA's revised thinking on the dredged channel in the Northern approach to Lerwick harbour. Thus, he submitted, the factual position which SIC presented in their petition was not the whole picture.

[13] He invited me in my consideration of the application for interim interdict to have regard to the relative strength of the parties' cases: Toynar Ltd v Whitbread & Co plc 1988 SLT 433, 434. He submitted that there were matters which had not been disclosed in the petition which could not be treated as SIC's final position and that SIC's case was not likely ultimately to succeed. In any event, he submitted that the balance of convenience did not favour the grant of interim interdict.

[14] On the merits of the various grounds of challenge Mr Davidson addressed me systematically on each of the relevant paragraphs of the petition. First, he submitted that there was nothing irrational about LPA's decision to revise the dimensions of the channel as the decision was motivated by concerns for navigational safety and as neither the existence nor the final positioning of the bridge was a certainty. Secondly, LPA were under no obligation to show SIC the Eagle Lyon Pope report but had shown them the proposed dredging plans which were informed by that report. SIC had known that LPA's dredging plans were not immutable. Thus the refusal to disclose the report could not of itself be irrational. Thirdly, there was no factual basis for the case of personal bar. All that had been agreed by the parties was the location of the existing channel; there was no agreement as to the future alignment of the channel. For personal bar there required to be a clear and unambiguous representation and this was lacking. The chief executive officer of SIC who had attended the meeting with LPA on 13 December 2004 had not suggested that LPA were barred by any agreement from altering their dredging plans. The documents on which SIC founded were communings between professional advisers and not the authorities themselves. There was no representation by LPA that a drawing showed the proposed dredging channel and that its alignment and dimensions were fixed thereafter. Fourthly, there was no basis for a case of legitimate expectation as there was no express promise or established practice disclosed in the facts on which SIC relied: CCSU v Minister for the Civil Service [1985] AC 374, Lord Fraser at 401B, Clyde and Edwards "Judicial Review" para 19.09f.

[15] Fifthly, Mr Davidson explained that there was no failure to notify the Scottish Ministers under section 9(5) of the 1974 Act. LPA required two licences, one for dredging and one for land reclamation. The applications included drawings setting out the proposed dredging works. The Scottish Ministers had granted both licences to the LPA. Sixthly and seventhly, SIC had not pleaded the environmental impact of the dredging which, he submitted, did not fall within any of the relevant paragraphs of Annex I or Annex II of Council Directive 85/337/EEC.

[16] In relation to the balance of convenience, Mr Davidson submitted that the only prejudice SIC could assert was prejudice to the proposed bridge in its current form and that form was not immutable. LPA had placed a contract to dredge for a period of eight weeks at a price of £6.5 million and demurrage would run at £2,250 per hour. The vessel was due to arrive on 9 August and dredging would commence shortly thereafter. Cancellation costs would be in the region of 250,000 Euros. The harbour was a significant employer as about 2,000 jobs depended on it. The status quo in the Northern approach was not desirable and there was a real issue of the safety of navigation. Without the improvements to that approach, Lerwick harbour might not be able to attract larger vessels which would go elsewhere. He renewed the offer of the undertaking.

[17] In considering the application for interim interdict I was aware that the petition had been prepared at short notice and that LPA had not had an opportunity to prepare detailed Answers to it as they became aware of the application only by the operation of a caveat on 3 August. I also took account of the fact that the undertaking was tendered by LPA on the morning of 5 August in discussions between the parties in an attempt to resolve their dispute. Miss Williamson represented to me that SIC were not able to determine whether the undertaking was appropriate in the absence of the Eagle Lyon Pope report and that the drawing submitted with the undertaking was in any event too inspecific to allow SIC to reach a view on it. In the circumstances I was not able to reach a view on the desirability of the undertaking and therefore I accepted SIC's representation that the undertaking was not a sufficient alternative to the interim interdict which they sought.

[18] I was not satisfied that the decisions to alter the alignment of the dredged channel and place a contract to dredge the altered channel were unreasonable on the basis of LPA's awareness that the altered channel would not be compatible with the design of the proposed bridge. In the absence of any agreement between the two public authorities as to the location of the proposed dredged channel or an understanding which would support a submission of personal bar or legitimate expectation, I did not consider that it was Wednesbury unreasonable for LPA to change their proposals for the location of the dredged channel. Absent such agreement or understanding, it would simply be the case that one public body's proposed works were not compatible with those of another public body and I was not persuaded that administrative law requires one body to defer to the other in this context. Similarly, while one might expect responsible public bodies to cooperate by disclosing to each other information such as the Eagle Lyon Pope report to enable them to conduct their discussions in an economic and efficient manner, I was not able to categorise LPA's refusal to release the report, which it had obtained for its purposes, as unreasonable.

[19] Nonetheless there appeared to me to be a prima facie case either that LPA were personally barred from altering their proposals or that their behaviour had given rise to a legitimate expectation that they would not do so. To explain this I must set out the events upon which SIC relied to support these grounds of challenge. Initially in April 1999 Halcrow produced a feasibility study for a link to Bressay and recommended as a preferred option a fixed bridge. In response, Arch Henderson produced a report for LPA in January 2003 recommending that the minimum navigational channel required for the future development of the port should be of the dimensions mentioned at the end of paragraph 3 above and including drawings showing the location of the then proposed channel. The report stated that the anticipated distance between bridge pier foundation supports corresponded to the minimum 160 metres but that this dimension could be finalised and agreed only once future site investigation information confirmed the side slope characteristics of the dredged channel. In April 2003 Arch Henderson sent estimated dredging costs to LPA for the dredging works on a channel illustrated on drawing 202512-03. Following discussions in late 2003 which SIC aver gave rise to the agreement, a further meeting was held on 9 January 2004 between Arch Henderson on behalf of LPA and a representative of SIC at which agreement was reached or confirmed as to the alignment of the existing dredged channel. On the same day Arch Henderson sent SIC an e-mail with a plan showing both the existing channel and the boundaries of the new dredged channel which LPA wished to create. Arch Henderson in that e-mail asked SIC to incorporate the drawing into all existing and future bridge drawings. Thereafter on 13 April 2004 Arch Henderson sent SIC the contract drawings and tender documents that they had prepared for the proposed dredging and land reclamation works and attached to the letter a plan which showed the proposed dredged channel which was in all material respects the same as that shown on the plan that accompanied the e-mail of 9 January 2004. On 17 May 2004 LPA sent an e-mail to Mr Nicholson of SIC's project team in response to queries from the latter. The e-mail contained a representation that the new channel alignment had not been changed.

[20] The cases of personal bar and legitimate expectation were as follows. Miss Williamson submitted that the agreement reached in late 2003, and evidenced by the later e-mail and correspondence, was binding on LPA. She founded in particular on the e-mail of 9 January 2004 and Arch Henderson's letter of 13 April 2004. If there were no binding agreement, she submitted that there was a representation that LPA would not depart from the alignment of the channel which they had indicated. That representation bound LPA as they knew that SIC would rely on it to their detriment and SIC did so in working up and progressing the notice of intention to develop (in December 2003), the roads scheme (in June 2004) and their compulsory purchase order (in March 2005). It was not until 26 June 2005 that LPA intimated to SIC that they were to amend the alignment of the dredged channel. She submitted that at the meeting on 13 December 2004 LPA did not specify the changes to the dredged channel which they were considering, that the chief executive of SIC was not aware of the effect of such changes on the bridge design and that the SIC's project team did not attend the meeting. That meeting did not support the inference that there had not been and there was not detrimental reliance by SIC.

[21] In my opinion, it appeared from the documents produced in court that Arch Henderson and LPA, since January 2003 at the latest, knew that SIC were seeking to accommodate LPA's proposals for the future dredged channel in their design of the bridge and that SIC were seeking to reach agreement, or at least an understanding, with LPA as to those proposals which would inform their design of the bridge. Whether one categorised a representation by a public authority as personal bar, where it is followed by detrimental reliance by the representee, or as a species of breach of a legitimate expectation (see R v Jockey Club, ex parte RAM Racecourses [1993] 2 All ER 225, Stuart Smith LJ at 236), I considered that the documentation produced to me supported the view that there was such a representation and reliance. In particular I considered (i) that there was a clear and unambiguous representation as to LPA's proposals for the dredged channel, (ii) that this representation was made in a context in which LPA and their advisers would have known that SIC and its advisers would reasonably rely on it, (iii) that SIC did so rely on the representation, and (iv) that there was detriment to SIC in the sense that, were LPA to depart from the representation by altering their plans materially and dredging a different channel, SIC would suffer substantial financial loss through wasted expenditure in taking forward proposals which would then have to be altered radically. See William Grant & Sons Ltd v Glen Catrine Bonded Warehouse Ltd 2001 SC 901, 921, where Lord President Rodger cites a luminous passage from the judgment of Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674-675.

[22] Turning to Mr Davidson's submission that there was no factual basis for the cases of personal bar and breach of legitimate expectation, three points may be made. First, while the correspondence in the main comprised exchanges between professional advisers and not their clients, I was not persuaded that this was material in the context in which the exchanges (and in particular the e-mail of 9 January 2004) took place. It appeared that LPA could have been in no doubt why SIC were seeking to ascertain their proposals for the dredged channel or as to the reliance that SIC would place on a representation in that regard. Secondly, while the documentation did not contain an express statement that LPA would not alter materially the alignment of the proposed dredged channel in future, I considered that the context in which the exchanges took place between the parties suggested that this was implicit in what SIC sought and what LPA represented. Thirdly, while the documentation suggested that the chief executive of SIC who met with representatives of LPA on 13 December 2004 did not assert that LPA were barred from altering their plans, it was not clear how well informed he was of the discussions between the two public authorities' officials and advisers when he attended that meeting. In the absence of more detailed information about the lead up to and circumstances of the meeting I was not persuaded that that what occurred at that meeting undermined SIC's case of detrimental reliance. In relation to Mr Davidson's submission that there could be a legitimate expectation only if there were an express promise or established practice, I did not consider that Lord Fraser's reference in CCSU (above) to an express promise excluded a representation which in English law might ground an estoppel or in Scots law a personal bar (R v Board of Inland Revenue ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545, Bingham LJ at 1569-1570).

[23] In granting the motion for interim interdict I upheld Miss Williamson's submissions that the understanding reached in about December 2003 and January 2004 grounded a prima facie case of personal bar or breach of legitimate expectations.

[24] In relation to the balance of convenience I considered that the preservation of the status quo was the predominant consideration having regard to the likelihood that the dredging works if carried out would undermine much of the work that SIC had carried out since late 2003. I recognised that interim interdict might force LPA to cancel or curtail their dredging contract at considerable cost to the public but was not persuaded that that consideration should outweigh prejudice to SIC where LPA appeared knowingly to have sought to alter the status quo. I also had regard to the fact that, before placing the dredging contract, LPA had been unwilling to discuss with SIC's advisers the technical basis on which they had altered their proposals when they must have known that the proposed alteration would prejudice the development of the bridge on which SIC and their advisers had been working for several years. While that may not have been Wednesbury unreasonable, it did not appear to be a laudable way for a public body charged with the use of public money to deal with another public body. I was not persuaded that concerns about the long term future of the harbour if the Northern channel were not improved were a weighty factor in the balance of convenience at this interim stage.

[25] When granting interim interdict I stated that I had made my decision on the limited material available, that I recognised there would have been much material that had not been disclosed to the court which might cast light on parties' understanding of each other's position during 2004, and that I would have been prepared to sit again on the following week to reconsider matters in the light of a fuller discussion of the background.

[26] I can deal briefly with the other grounds of challenge listed in paragraph 10 above as they were not material to my decision. There was a factual dispute as to whether LPA had obtained the approvals from the Scottish Ministers in relation to the deposit of reclaimed materials that the 1974 Act required. Similarly there was a dispute whether the dredging works fell within any of the paragraphs of the Annexes to Council Directive 85/337/EEC to which I referred in paragraph 10 above. I did not consider that I had sufficient information to form a clear view on the merits of these disputes. Having decided to pronounce interim interdict on the basis of the cases of personal bar and breach of legitimate expectation, I concluded that there was no need for me to attempt to do so.