OUTER HOUSE, COURT OF SESSION
[2009] CSOH 155
|
|
CA109/09
|
OPINION OF LORD GLENNIE
in the cause
PATERSONS OF GREENOAKHILL LIMITED
Pursuers;
against
SP TRANSMISSION LIMITED
Defenders:
ญญญญญญญญญญญญญญญญญ________________
|
Pursuers: Connell, Q.C.; McGrigors LLP
Defenders: Higgins; Biggart Baillie
20 November 2009
[1] The pursuers are heritable proprietors of land at Hamilton Road, Mount Vernon, Glasgow. By an agreement dated 10 and 16 February 1984, they entered into a Wayleave Agreement with the South of Scotland Electricity Board, in terms of which they consented to the Board placing electric lines and works, which included towers or pylons, ("the electric lines") across their land. The interests of the Board are now vested in the defenders as licence holders under the Electricity Act 1989. Clause 7 provided that the pursuers were entitled to terminate such consent at any time on twelve calendar months' written notice (without prejudice to certain rights which are not material for present purposes). On 25 November 2003, the pursuers served such a notice on the defenders, terminating the Wayleave Agreement with effect from 25 November 2004 and requiring them to remove the electric lines from the land from that date.
[2] Schedule 4 to the 1989 Act provides that, where a landowner terminates an electricity wayleave and gives notice requiring the lines to be removed from the land, the licence holder may apply to the Secretary of State (now, in Scotland, the Scottish Ministers) for a "necessary wayleave" to be granted; and, if he does so within a certain period, he is not obliged to remove the electric lines from the land unless and until his application is refused. On 5 February 2004, the defender lodged an application for a necessary wayleave with the Scottish Ministers. The parties entered into negotiations with a view to reaching agreement about a new wayleave and the compensation payable thereunder. While these negotiations were ongoing, the pursuers applied to the Scottish Ministers to sist the defenders' application. The sist was granted in March 2004. Thereafter, the defenders' application was again sisted in March, September and December 2005, on each occasion on the application of the defenders and with the consent of the pursuers. At some point the defenders decided not to keep the electric lines in situ but instead to dismantle and remove them from the land. In the event, in about March 2007 the defenders removed the electric lines from the pursuers' land and withdrew their application for a necessary wayleave.
[3] The pursuers claim compensation in respect of the period from 25 November 2004 until the electric lines were removed in March 2007. Their claim is based on the fact that, as they put it, during this period the defenders had no right or entitlement to maintain the electric lines on their land except by virtue of the provisions of Schedule 4 of the 1989 Act. Before looking at the ways in which their claim for compensation is put, I should set out the relevant provisions of the 1989 Act.
[4] The 1989 Act was enacted as part of the privatisation of the electricity supply in the United Kingdom. The role of the state electricity supplier was transferred to private bodies licensed under the Act by the Secretary of State. The new licence holders had certain obligations. Under section 9, they were under an obligation to develop and maintain an efficient, co-ordinated and economical system of electricity distribution and to facilitate competition in the supply and generation of electricity. The Act had to deal with a number of incidental matters, including compulsory purchase of land and the grant of wayleaves. Section 10 of the Act, which is headed "Powers etc. of licence holders", provides that Schedules 3 and 4 to the Act shall have effect in relation to, inter alia, an electricity distributor or other licence holder. Schedule 3 is concerned with the power of licence holders to acquire land by compulsory purchase. In that Schedule, "land" includes rights over land. Schedule 4 is headed "Other powers etc. of licence holders". Paras.6, 7 and 8 thereof deal with the question of wayleaves. These provide as follows:
"Acquisition of wayleaves
6. -
(1) This paragraph applies where-
(a) for any purpose connected with the carrying on of the activities which he is authorised by his licence to carry on, it is necessary or expedient for a licence holder to instal and keep installed an electric line on, under or over any land; and
(b) the owner or occupier of the land, having been given a notice requiring him to give the necessary wayleave within a period (not being less than 21 days) specified in the notice-
(i) has failed to give the wayleave before the end of that period; or
(ii) has given the wayleave subject to terms and conditions to which the licence holder objects;
and in this paragraph as it so applies "the necessary wayleave" means consent for the licence holder to instal and keep installed the electric line on, under or over the land and to have access to the land for the purpose of inspecting, maintaining, adjusting, repairing, altering, replacing or removing the electric line.
(2) This paragraph also applies where-
(a) for any purpose connected with the carrying on of the activities which he is authorised by his licence to carry on, it is necessary or expedient for a licence holder to keep an electric line installed on, under or over any land; and
(b) the owner or occupier of the land has given notice to the licence holder under paragraph 8(2) below requiring him to remove the electric line;
and in this paragraph as it so applies "the necessary wayleave" means consent for the licence holder to keep the electric line installed on, under or over the land and to have access to the land for the purpose of inspecting, maintaining, adjusting, repairing, altering, replacing or removing the electric line.
(3) Subject to sub-paragraphs (4) and (5) below, the Secretary of State may, on the application of the licence holder, himself grant the necessary wayleave subject to such terms and conditions as he thinks fit; and a necessary wayleave so granted shall, unless previously terminated in accordance with a term contained in the wayleave, continue in force for such period as may be specified in the wayleave.
(4) The Secretary of State shall not entertain an application under sub-paragraph (3) above in any case where-
(a) the land is covered by a dwelling, or will be so covered on the assumption that any planning permission which is in force is acted on; and
(b) the line is to be installed on or over the land.
(5) Before granting the necessary wayleave, the Secretary of State shall afford-
(a) the occupier of the land; and
(b) where the occupier is not also the owner of the land, the owner,
an opportunity of being heard by a person appointed by the Secretary of State.
(6) A necessary wayleave granted under this paragraph-
(a) shall not be subject to the provisions of any enactment requiring the registration of interests in, charges over or other obligations affecting land; but
(b) shall bind any person who is at any time the owner or occupier of the land.
(7) Where in pursuance of a necessary wayleave granted under this paragraph a licence holder has erected on any land supports for an electric line, he shall be deemed to have an interest in that land for the purposes of section 7 of the [1966 c. 4.] Mines (Working Facilities and Support) Act 1966.
(8) In this paragraph "dwelling" means a building or part of a building occupied, or (if not occupied) last occupied or intended to be occupied, as a private dwelling or, in relation to Scotland, a private house, and includes any garden, yard, outhouses and appurtenances belonging to or usually enjoyed with that building or part.
Provisions supplementary to paragraph 6
7. -
(1) Where a wayleave is granted to a licence holder under paragraph 6 above-
(a) the occupier of the land; and
(b) where the occupier is not also the owner of the land, the owner,
may recover from the licence holder compensation in respect of the grant.
(2) Where in the exercise of any right conferred by such a wayleave any damage is caused to land or to moveables, any person interested in the land or moveables may recover from the licence holder compensation in respect of that damage; and where in consequence of the exercise of such a right a person is disturbed in his enjoyment of any land or moveables he may recover from the licence holder compensation in respect of that disturbance.
(3) Compensation under this paragraph may be recovered as a lump sum or by periodical payments or partly in one way and partly in the other.
(4) Any question of disputed compensation under this paragraph shall be determined by the Tribunal; and sections 2 and 4 of the [1961 c. 33.] Land Compensation Act 1961 or sections 9 and 11 of the [1963 c. 51.] Land Compensation (Scotland) Act 1963 shall apply to any such determination.
Temporary continuation of wayleaves
8. -
(1) This paragraph applies where at any time such a wayleave as is mentioned in paragraph 6 above (whether granted under that paragraph or by agreement between the parties)-
(a) is determined by the expiration of a period specified in the wayleave;
(b) is terminated by the owner or occupier of the land in accordance with a term contained in the wayleave; or
(c) by reason of a change in the ownership or occupation of the land after the granting of the wayleave, ceases to be binding on the owner or occupier of the land.
(2) The owner or occupier of the land may-
(a) in a case falling within paragraph (a) of sub-paragraph (1) above, at any time after or within three months before the end of the period specified in the wayleave;
(b) in a case falling within paragraph (b) of that sub-paragraph, at any time after the wayleave has been terminated by him; or
(c) in a case falling within paragraph (c) of that sub-paragraph, at any time after becoming the owner or occupier of the land by virtue of such a change in the ownership or occupation of the land as is mentioned in that paragraph,
give to the licence holder a notice requiring him to remove the electric line from the land; but the licence holder shall not be obliged to comply with such a notice except in the circumstances and to the extent provided by the following provisions of this paragraph.
(3) Where within the period of three months beginning with the date of the notice under sub-paragraph (2) above the licence holder makes neither-
(a) an application for the grant of the necessary wayleave under paragraph 6 above; nor
(b) an order authorising the compulsory purchase of the land made by virtue of paragraph 1 of Schedule 3 to this Act,
the licence holder shall comply with the notice at the end of that period.
(4) Where-
(a) within the period mentioned in sub-paragraph (3) above the licence holder makes an application for the grant of the necessary wayleave under paragraph 6 above; and
(b) that application is refused by the Secretary of State,
the licence holder shall comply with the notice under sub-paragraph (2) above at the end of the period of one month beginning with the date of the Secretary of State's decision or such longer period as the Secretary of State may specify.
(5) Where-
(a) within the period mentioned in sub-paragraph (3) above the licence holder makes an order by virtue of paragraph 1 of Schedule 3 to this Act authorising the compulsory purchase of the land; and
(b) that order is not confirmed by the Secretary of State,
the licence holder shall comply with the notice under sub-paragraph (2) above at the end of the period of one month beginning with the date of the Secretary of State's decision or such longer period as the Secretary of State may specify."
As I have already noted, the functions of the Secretary of State are to be exercised, in relation to Scotland, by the Scottish Ministers.
[5] The purpose of para.6 of Schedule 4 is self-evident. Where it is necessary for a licence holder to instal an electric line over land, then if the owner or occupier of the land fails to grant a wayleave, or is only willing to grant one on terms to which the licence holder objects, the Scottish Ministers may, on the application of the licence holder, themselves grant the "necessary wayleave" on such terms as they think fit. Para.6 applies not only to a new installation of an electric line over land, but also to the case, such as the present, where a line is already in place and the owner or occupier of the land has served a notice requiring the licence holder to remove it from the land. The paragraph allows a necessary wayleave to be granted by the Scottish Ministers against the wishes of the owner or the occupier of the land.
[6] Para.7 of the Schedule is, as the heading makes clear, supplementary to para.6. It deals with the case "where a wayleave is granted to a licence holder under paragraph 6". That must refer to a "necessary wayleave" granted by the Scottish Ministers under para.6(3). In such a case, the owner and/or the occupier of the land may recover compensation "in respect of the grant". The "grant" is the grant by the Scottish Ministers of the necessary wayleave under para.6(3). The remainder of para.7 is concerned with identifying the nature of the compensation and the procedure to be adopted in the event of a dispute.
[7] Para.8 of Schedule 4 deals with a separate question, namely: what is to happen where a wayleave, which has been in existence for some time and in terms of which electricity lines have been installed and maintained over the land, comes to an end, whether by effluxion of time, by termination pursuant to provisions in the wayleave, or by a change of ownership of the land. The case of termination, with which this case is concerned, is expressly contemplated by para.6(2)(b). The problem is a practical one. The electricity lines are on the land but the consent to them remaining there has come to an end. There is a need, in the public interest, to maintain the electricity supply. The licence holder may consider that it is necessary or expedient that he be allowed to keep the lines on the land in order to fulfil his statutory duties relating to the supply of electricity, and may apply for a "necessary wayleave" under para.6. But consideration of the application may take time. What is to happen in the meantime, before a decision is reached by the Scottish Ministers. Para.8(2) deals with a situation in this way: if the licence holder makes an application for a necessary wayleave within the required time, then, until such time as the application has been determined, he does not have to comply with the notice given by the owner or occupier of the land to remove the electric line. If the application is determined in his favour, and a necessary wayleave is granted, he may continue to maintain the electric line on the land under the new wayleave, and the provisions as to compensation set out in para.7 will apply. If, however, his application is unsuccessful, then he has to remove the line from the land within one month after the decision, or such longer period as the Scottish Ministers may specify.
[8] The provisions of para.8 of the Schedule are designed simply to regulate the position for this holding period, during which the licence holder keeps his lines on the land pending a decision by the Scottish Ministers on his application for a necessary wayleave under para.6. There is no reason to believe that anyone envisaged that the decision making process should be lengthy. The application is to be made within three months from the receipt by the licence holder of a notice from the owner or occupier of the land requiring him to remove the electric line from the land; which notice can be given at any time after, and in some cases before, the expiration of the previous wayleave. In the present case, by agreement of the parties, the process took over two years. They were in negotiation, and were no doubt content that during that negotiation the application for a necessary wayleave should not be determined. The length of the period of occupation after termination of the wayleave perhaps gives a superficial attraction to the notion that there must be some right to compensation. But the arguments proceeded before me without reference to any implication drawn from the terms on which the parties agreed to the process being delayed, and they must similarly be judged only on the basis of the provisions of the Schedule to the Act.
[9] Para.8 is silent as to whether any payment, by way of compensation or otherwise, should be made by the (former) licence holder to the owner or occupier of the land during this period after determination of the wayleave while the application is being considered. The pursuers say that it is implicit in the Act that there should be some payment. Mr Connell, QC, who appeared on their behalf, submitted that the Act should be construed in a manner consistent with the maxim "no expropriation without compensation", a principle which dated back to Erskine (Institute, II, 1, 2) or earlier, and which found expression in the decision of the House of Lords in Burmah Oil Co (Burma Trading) Limited v Lord Advocate 1964 SC (HL) 117. He drew my attention to Chapter 1 of Compulsory Purchase and Compensation: The Law in Scotland, 3rd Ed. by Professor Robinson and Elaine Farquharson-Black. Although I raised the question in argument, he made it clear that he did not seek to rely upon Article 1 of the First Protocol to the European Convention on Human Rights. This theme underlay his suggestion of a purposive approach to the construction of the Act.
[10] I accept the need for a purposive construction where possible; and I accept that the purpose can be identified on a micro as well as a macro level. But I would question whether the approach lends any support to the pursuers' arguments in the present case. To adopt a purposive construction is simply to adopt a construction which best gives effect to the basic objectives of the legislation: see e.g. per Lord Steyn in Attorney General's Reference (No.5 of 2002) [2005] 1 AC 167 at para.31: "One can confidently assume that Parliament intends its legislation to be interpreted not in the way of a black letter lawyer, but in a meaningful and purposive way giving effect to the basic objectives of the legislation". The basic objective of the 1989 Act was to effect the privatisation of the electricity supply and, by the introduction of competition, to ensure the efficient and economical supply of electricity. Its long title identifies various aspects of this. Schedules 3 and 4 are to do with powers ancillary to the general purpose. The powers in paras.6 and 7 of Schedule 4 are to ensure that lines can be placed on land where necessary, even against the wishes of the owners or occupiers of the land, with provision for compensation in the event of a wayleave being granted; and those in para.8 are to prevent interruption to the supply and distribution of electricity at the end of a wayleave. They are subsidiary to the general objective of the legislation and do not imply anything about the intention of parliament to award compensation to land owners in particular circumstances. I can find nothing in such purposes to assist the pursuers in their argument that parliament must have intended there to be compensation paid to a land owner for the period after the termination of the wayleave until removal from the land in accordance with the Act.
[11] As to application to the
present case of the principle (assuming it to be one) that there should be no expropriation without compensation, I
simply make two observations. First, this case is not about expropriation in
the sense of taking the pursuers' land from them. We are here only concerned
with the right accorded to the licence holder to continue to maintain its lines
on the pursuers' land during a relatively brief period after the expiry of the
previous wayleave agreement until the decision by the Scottish Ministers on its
application for a necessary wayleave. Second, the Act does provide for
compensation to be paid by the electricity provider both when land is
compulsorily purchased (Schedule 3) and when a necessary wayleave is granted by
the Scottish Ministers. (Schedule 4, para.6(3) and para.7) The question of
whether there should be payment during an interim or holding period under para.8
of the Schedule does not seem to me to raise the sort of fundamental issues of
constitutional law suggested by the pursuers. In my opinion the task of the
court is simply to construe the provisions of paras.6, 7 and 8 of the Schedule,
in the context of the Act as a whole, to see whether there can be discerned a
parliamentary intention that some form of payment of compensation should be
made by the licence holder for this holding period.
[12] The pursuers' first argument, in support of the first
conclusion in the summons, is that the defenders' retention of electricity lines
on the land after the termination of the previous
Wayleave Agreement itself constituted a necessary wayleave in terms of
Schedule 4, in respect of which the pursuers were entitled to compensation
under the compensation provisions set out in para.7 of the Schedule. This
argument has only to be stated to be rejected. Para.7 grants an entitlement to
compensation only where a wayleave is granted to a licence holder by the Scottish
Ministers under para.6(3). Such compensation is payable only in respect of
that grant of a wayleave. It is clear beyond argument that there has been no
such grant in the present case. The statutory entitlement to remain on the
land notwithstanding a notice by the owner or occupier to remove therefrom is
an entitlement given by the terms of para.8(2) pending the determination by the
Scottish Ministers of the licence holder's application for a necessary wayleave
under para.6. As a matter of construction, it would not make any sense to
regard this statutory permission to remain on the land pending the
determination of the wayleave application as itself constituting, either
expressly or by implication, the grant of a necessary wayleave under para.6(3).
It is merely a permission to stay on the land pending the determination of the
application, no more, no less. It is therefore not possible to argue that
compensation is payable under para.7 during that period. Support for this
conclusion is to be found in the decision of the Lands Tribunal in Bolton v.
Southern Electric plc. [1999] EBLR 177. Although dealing with a question
of jurisdiction, the decision is on point and, in my judgement, entirely
correct.
[13] Mr Connell's second argument, in support of a new second conclusion which he sought to introduce by amendment, was put in the alternative, on the hypothesis that, contrary to his main argument, the defenders' retention of electricity lines on the land after the expiry of the wayleave in November 2004 did not constitute an implied wayleave so as to attract compensation under para.7 of the Schedule. The pursuers averred that, in those circumstances, "the pursuer is entitled to compensation under common law which arises from loss and additional expense caused to the pursuer as a result of the compulsory occupation of the premises by the defender in terms of paragraph 8(4) of Schedule 4." It is clear what is meant by "compulsory occupation": it simply refers to the right of the licence holder to remain on the land, against the expressed wishes of the land owner, after termination of the wayleave and until the determination of his application. It is, however, difficult to identify from the pleadings any basis for the argument. No delict is committed by the defender continuing to maintain the lines on the land during the period in question. Nor is there any breach of contract. Mr Connell referred me to the decision of the Inner House in Davie v. Edinburgh Magistrates 1951 SC 720. That case is authority for the proposition that a defender, carrying out certain works under statutory permission which carries its own provision for compensation, might nonetheless also be liable under common law for damages for negligence or nuisance because of the manner in which the works were carried out. That does not assist in the present case, where no delictual conduct, whether in nuisance or negligence, is alleged. The only complaint is that the defender remains, lawfully, in occupation of the land for this short transitional period. Mr Connell did not present any analysis of why, in such circumstances, there should be a common law right to compensation. He did not, for example, argue that the case could be brought within the principles of unjust enrichment, and there are in fact no averments to instruct such a case. Stripped bare, the pursuers' case seems simply to amount to this: that Parliament must have intended the owner or occupier of the land to receive compensation during the period between the termination of the Wayleave Agreement and the grant or refusal of an application for a necessary wayleave. I can see no basis for that submission. I refuse leave to amend to introduce this argument.
[14] The pursuers' third argument (which Mr Connell candidly described as "a poor third alternative") is that, in the circumstances envisaged in para.8 of the Schedule, there is an implied extension of the wayleave which has just expired for the period from its expiry up to the determination of the defenders' application for a new one; and they claim compensation under the terms of that expired Wayleave Agreement. The heading to para.8, "Temporary continuation of wayleaves", provides some limited support for this, though it may only be intended as a shorthand for the fact that the licence holders are temporarily entitled to keep their electric lines on the land. The idea of an implied extension on the same terms as the original wayleave is supported in certain passages of Electricity Wayleaves, Easements and Consents, Litigation Practice and Procedure by Charles Hamer and Gary O'Brien, in particular at paras.8.6, 20.7 and 22.10.3, though the analysis in part proceeds on the somewhat unsatisfactory basis that the licence holder is committing some wrong in remaining on the land.. It is, of course, possible to conceive of a situation in which the licence holder who is by statute permitted to continue to maintain the lines over the land pending a determination of his application for a necessary wayleave, should continue to pay at the same rate as he was already paying under the wayleave, and in other respects to operate under the same conditions. But this would not give the pursuers what they want. The annual payment under the wayleave which has terminated was measured in hundreds, not thousands, of pounds; and I was told by Ms Higgins, though she did not have the precise figures to hand, that the defenders have in fact made periodic payments during the period in question at a rate which may approximate to that. But the pursuers are not claiming a periodic payment for the time during which the lines remained on their land. Nor does their claim as pled fall within the terms of the relevant provision (clause 5) of the Wayleave Agreement. They are claiming compensation of a wholly different sort. The claim is for over ฃ1 million, and is described in the summons as being for a range of costs under various headings which do not correspond at all to the types of matters on which a claim under the previous Wayleave Agreement might have been based. In those circumstances I do not need finally to decide whether there is any basis for an implied continuation of the previous Wayleave Agreement. The case as pled is irrelevant.
[15] In those circumstances I would be minded to dismiss the action. However, Mr Connell indicated that he had understood the debate to be concerned with issues of liability rather than quantum. He sought an opportunity to reflect on the formulation of his claim. In one sense the point taken against him as to the types of loss claimed goes to liability, rather than quantum, but I think it right to give him an opportunity to address this point. Accordingly, I shall put the case out By Order.