Scottish Court of Session Decisions

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 46

P480/13

Lord President

Lord Menzies

Lord Malcolm

OPINION OF THE LORD PRESIDENT

in the RECLAIMING MOTION

in the Petition of

TRUMP INTERNATIONAL GOLF CLUB SCOTLAND LIMITED AND THE TRUMP ORGANIZATION LLC

Petitioners and reclaimers;

against

THE SCOTTISH MINISTERS

Respondents:

For the petitioners:  J D Campbell QC, Findlay;  Balfour and Manson

For the respondents:  Mure QC, Springham;  Scottish Government Legal Directorate

Interested Party - Aberdeen Offshore Wind Farm Limited;   Non-Participating Party

 

5 June 2015

Introduction

[1]        This is a reclaiming motion by the petitioners against an interlocutor of Lord Doherty dated 11 February 2014 by which Lord Doherty dismissed a petition for judicial review of a decision of the Scottish Ministers dated 26 March 2013. 

 

The planning application
[2]        On 1 August 2011 Aberdeen Offshore Wind Farm Limited (AOWFL) applied for consent under section 36 of the Electricity Act 1989 (the 1989 Act) for the construction and operation of the European Offshore Wind Deployment Centre (EOWDC), a proposed electricity generating centre, in Aberdeen Bay, off the coast of Blackdog, Aberdeenshire.  The application related to the construction of up to 11 wind turbines with a maximum power generation of up to 100mw.  The application was later amended in accordance with a supplementary environmental information statement.

[3]        Between January and March 2010 Scottish Enterprise gave funding to AOWFL of £160,000.  Between March 2011 and December 2012 the European Commission gave £1,272,362.34. 

 

The petitioners’ objection

[4]        In 2006 the petitioners made a planning application for a development on agricultural land at Menie Links, Balmedie (the Menie Project).  The project was for the construction of one or more golf courses and a golf club house; the restoration of a large mansion house and the construction of a hotel and extensive private housing.  The project was controversial.  It was widely opposed.  It was refused by the planning authority.

[5]        In December 2008, after a lengthy planning process and an appeal against the refusal of permission, the Scottish Ministers accepted the recommendation of three Reporters who had conducted a public local inquiry into it that the application should be granted on the ground of the national economic importance of the project, particularly in relation to tourism.

[6]        Much of the Menie Project has now been developed.  The nearest of the proposed wind turbines would be about 3.5kms from it. 

[7]        From the inception of the EOWDC Project, the petitioners have opposed it on planning, environmental and amenity grounds;  and have done so on a consideration of its apprehended financial impact on the petitioners’ development.  The petitioners have sent numerous letters of objection and representations to the respondents. 

[8]        The petitioners’ objection has been pursued in detail on matters of strategic and local planning policy;  landscape and seascape impacts;  and amenity and economic impacts.  The objection has been supported by a team of professionals in the relevant disciplines.  The petitioners have pursued the objection with extensive documentation, including photo-montage evidence on the question of visual impact.  It is clear from this that the petitioners have fully availed themselves of the right and the opportunity to make their objection.  It is also clear that in considering AOWFL’s application the Scottish Ministers and those advising them have been in no doubt as to the nature of the petitioners’ objection and have had before them the substantial body of technical evidence that the petitioners have submitted.

 

The report on the application
[9]        The application was considered by the respondents’ Marine Scotland Licensing Operations Team.  Mr Andrew Sutherland of Marine Scotland submitted a report dated 25 March 2013 to the Minister for Energy, Enterprise and Tourism.  He recommended that the Minister should not cause a public inquiry to be held into the application and should grant it.  Among the annexes to the report there was a draft of a decision letter in the name of Mr Sutherland intimating the granting of consent.  The draft was dated 26 March 2013.

 

The decision
[10]      On 26 March 2013 the respondents issued a letter to AOWFL framed in terms of Mr Sutherland’s draft and signed by him.  The letter intimated the decision of the respondents (1) not to hold a public inquiry into the proposal; and (2) to consent to the application under section 36 of the 1989 Act, subject to conditions.

[11]      Conditions 13 and 14 were in the following terms -

“13       Prior to the Commencement of Development a Construction Method Statement (CMS) must be submitted by the Company to the Scottish Ministers and approved, in writing by Scottish Natural Heritage, Scottish Environment Protection Agency, the Marine and Coastguard Agency, the Planning Authorities, Northern Lighthouse Board, and any such other advisors as may be required at the discretion of the Scottish Ministers.  Unless otherwise agreed in writing by the Scottish Ministers, construction of the Development must proceed in accordance with the approved CMS.  The CMS must include, but not be limited to, information on the following matters:

 

1. Commencement dates;
2. Working methods including the scope, frequency and hours of operations;
3. Duration and Phasing Information of key elements of construction, for example turbine structures, foundations, turbine locations, inter-array cabling and land fall cabling;
4. Method of installation including techniques and equipment and depth of cable laying and cable landing sites;
5. The issue of Dynamic Positioning vessels and safety/guard vessels;
6. Pollution prevention measures including contingency plans; and
7. Design statement

 

The CMS must be cross referenced with the Project Environmental Management Plan, the Vessel Management Plan and the Navigational Safety Plan.

Reason: To ensure the appropriate construction management of the Development, taking into account mitigation measures to protect the environment and other users of the marine area.

 

14        Prior to the commencement of the Development, a detailed Design Statement must be submitted by the Company to the Scottish Ministers for their written approval, after consultation by the Scottish Ministers with SNH, Marine and Coastguard Agency, Northern Lighthouse Board, National Air Traffic Services and any such other advisors as may be required at the discretion of the Scottish Ministers.  The Design Statement must provide guiding principles for the deployment of wind turbines.  The plan must detail:

 

(a) Layout location for each phase and each turbine; and

(b) Turbine height, finishes, blade diameter and rotation speed across each phase, rows and individual turbine locations; and

(c) Lighting requirements (navigation and aviation) for each turbine/row, or, as the case may be, phase including any anemometer mast; and

(d) further detailed assessment of visual impacts to inform the detailed layout and design of each location and phase of the deployment centre from selected viewpoints to be agreed with the Scottish Ministers and any other such advisors as may be required at their discretion.

 

Reason: To set out design principles to mitigate, as far as possible, the visual impact of the turbines.”

 

[12]      The prayer of the petition is for a declarator that the decision is unlawful and for reduction of it.  The grounds of challenge that are still maintained are (1) that because the applicant is not a “licence holder or person authorised by an exemption … “ as required by Schedule 3, paragraph 3 of the 1989 Act, the decision to grant consent is incompetent;  (2) that in making the decision the respondents acted in breach of natural justice by having pre-determined the issue and by displaying bias in favour of AOWFL;  and (3) that condition 14 adjected to the consent is void for uncertainty.  The petitioners moved the court to recall the interlocutor of the Lord Ordinary and to quash his decision; or to recall the interlocutor, to quash the decision and to direct the respondents to consider afresh whether to convene a public local inquiry into the application. 

 

Relevant statutory provisions

[13]      The Electricity Act 1989 (the 1989 Act) provides inter alia as follows: 

“4 - Prohibition on unlicensed supply etc.

 

(1) A person who-

 

(a) generates electricity for the purpose of giving a supply to any premises or enabling a supply to be so given … ; 

shall be guilty of an offence unless he is authorised to do so by a licence.

 

(4) In this Part, unless the context otherwise requires-

… 'generate', in relation to electricity, means generate at a relevant place …

 

(5) In this section-

 

'relevant place' means a place in Great Britain, in the territorial sea adjacent to Great Britain or in a Renewable Energy Zone; ...

 

5 - Exemptions from prohibition.

 

(1) The Secretary of State may by order grant exemption from paragraph (a), (b), (bb), (c), (d) or (e) of section 4(1)

 

(a) either to a person or to persons of a class; 

(b) either generally or to such extent as may be specified in the order; and 

(c) either unconditionally or subject to such conditions as may be so specified ...

 

6 - Licences authorising supply, etc

 

(1) The Authority may grant any of the following licences-

 

(a) a licence authorising a person to generate electricity for the purpose of giving a supply to any premises or enabling a supply to be so given (‘a generation licence’) …

 

(9) In this Part –

 

‘electricity generator’ means any person who is authorised by a generation licence to generate electricity except where that person is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence …

 

36 - Consent required for construction etc of generating stations

(1) Subject to subsections (1A) to (2) and (4) below, a generating station shall not be constructed at a relevant place (within the meaning of section 4), and a generating station at such a place shall not be extended or operated except in accordance with a consent granted by the Secretary of State … 

 

(2) Subsection (1) above shall not apply to a generating station whose capacity-

 

(a) does not exceed the permitted capacity, that is to say, 50 megawatts; and 

(b) in the case of a generating station which is to be constructed or extended, will not exceed the permitted capacity when it is constructed or extended;

 

and an order under this subsection may make different provision for generating stations of different classes or descriptions.

 

(3) The Secretary of State may by order provide that subsection (2) above shall have effect as if for the permitted capacity mentioned in paragraph (a) there were substituted such other capacity as may be specified in the order.

 

(4) The Secretary of State may by order direct that subsection (1) above shall not apply to generating stations of a particular class or description, either generally or for such purposes as may be specified in the order.

 

(5) Subject to subsections (5A) and (5B), a consent under this section-

 

(a) may include such conditions (including conditions as to the ownership or operation of the station) as appear to the Secretary of State to be appropriate; and

(b) shall continue in force for such period as may be specified in or determined by or under the consent ...”.

 

Schedule 8 governs the procedure for an application for consent under section 36 and section 37.  I need not quote the Schedule, it being agreed that it is silent on the question whether an applicant for consent requires a licence or an exemption as a precondition of its making the application.

            Schedule 38 provides inter alia as follows:

“38  Preservation of amenity and fisheries

The provisions of Schedule 9 to this Act (which relate to the preservation of amenity and fisheries) shall have effect.”

 

Schedule 9 so far as relevant provides as follows:

 

“1 - …

 

(3) In this paragraph—

…

 

“relevant proposals” means any proposals—

 

(a) for the construction or extension of a generating station of a capacity not less than 10 megawatts, or for the operation of such a station in a different manner;

…

(4) The Secretary of State may by order provide that sub-paragraph (3) above shall have effect as if for the capacity mentioned in paragraph (a) there were substituted such other capacity as may be specified in the order.

 

3 -

(1) In formulating any relevant proposals, a licence holder or a person authorised by an exemption to generate, distribute, supply or participate in the transmission of electricity -

 

(a) shall have regard to the desirability of preserving natural beauty, of conserving flora, fauna and geological or physiographical features of special interest and of protecting sites, buildings and objects of architectural, historic or archaeological interest; and

 

(b) shall do what he reasonably can to mitigate any effect which the proposals would have on the natural beauty of the countryside or on any such flora, fauna, features, sites, buildings or objects ...

 

(4) In this paragraph –

 

… ‘relevant proposals’ has the same meaning as in paragraph 1 above and, for the purposes of this paragraph, any such order as is mentioned in sub-paragraph (4) of that paragraph may be made under this sub-paragraph;

 

‘relevant functions’ means any powers conferred and any duties imposed by or under this Act … “

 

The decision of Lady Clark of Calton in Sustainable Shetland v Scottish Ministers
[14]      On 24 September 2013, while this petition was in dependence, Lady Clark of Calton gave judgment in Sustainable Shetland v Scottish Ministers ([2013] CSOH 158).  The petitioners in that case sought judicial review of a decision of the respondents not to cause a public inquiry to be held and to grant consent under section 36 of the 1989 Act for the proposed construction and operation of a wind farm;  and to direct in terms of section 57 of the Town and Country Planning (Scotland) Act 1997 that planning permission was to be deemed to be granted in respect of the proposal and any ancillary developments.

[15]      The judgment of Lady Clark of Calton was of considerable significance to the present petitioners.  She reduced the decision in that case on the ground that only a party who held a generation licence under section 6 of the 1989 Act, or had been duly exempted from holding a licence under section 5, could apply for a section 36 consent.  This issue had been raised by Lady Clark herself in the course of the hearing.

[16]      On 26 September 2013 the petitioners tendered an amendment adding as a new ground of challenge the competency point on which Lady Clark had decided the Sustainable Shetland case.

 

The decision of the Lord Ordinary in this petition
[17]      On the competency issue, Lord Doherty declined to follow the reasoning of Lady Clark in the Sustainable Shetland case.  He concluded that the 1989 Act empowered the Ministers to grant a section 36 consent to the applicant.  On the question of pre-determination and apparent bias he was not persuaded that the factors relied on by the petitioner, individually or cumulatively, would raise in the mind of a fair minded and informed observer a real possibility that the decision maker had pre-determined the issue or shown bias. 

[18]      On the question of condition 14, this was his conclusion:

“[148] In my opinion the respondents are correct to say that, strictly speaking circular 4/1998 does not apply to the conditions imposed which the Minister decided to attach to the consent.  I also agree that s 36(5)(a) confers a wide discretion on the respondents to impose conditions.  However, I do not place reliance merely on those matters.  In addition I am satisfied that the Minister cannot be said to have acted unreasonably in granting consent subject to the conditions which he imposed.  I am also content that Condition 14 is not void from uncertainty.  In my view its terms are clear.  Conditions of such a nature – which require matters to be agreed or approved by an authority – are often imposed (see eg Roberts v Vale Royal DC (1977) 78 LGR 368; R v Bristol City Council ex p Anderson (2000) 79 P&CR 358).  I am not persuaded that it is unenforceable: or that it was Wednesbury unreasonable of the Minister to proceed on the basis that it is enforceable.”

 

The decision of the Inner House in Sustainable Shetland v Scottish Ministers
[19]      While the present case was depending, the Scottish Ministers lodged a reclaiming motion against the decision of Lady Clark in Sustainable Shetland v Scottish Ministers.  On 11 February 2014 Lord Doherty issued his judgment in the present case.  Counsel for Sustainable Shetland thereafter notified the court that he would not be insisting in the plea to competency that the Lord Ordinary had sustained and that he would not present any argument based upon it.  This court therefore appointed an amicus curiae with a view to his presenting an argument on the competency issue.  The amicus lodged a written argument on the point; but shortly before the hearing he advised the court that he no longer considered that he could support the Lord Ordinary’s decision. 

[20]      In the result, there was a consensus of all counsel in the Sustainable Shetland case that the competency point was unsound.  However, since it had formed the basis of the Lord Ordinary’s decision in that case, this court thought it appropriate to mention the point in its decision.  By way of obiter dicta the court expressed the view that counsel for Sustainable Shetland and the amicus curiae were right in their decision not to support the reasoning of the Lord Ordinary on the point.  The court said that the granting of a generation licence in terms of section 6 of the 1989 Act and the granting of consent for construction or expansion of a generating station under section 36 were two separate regimes.  It considered that in the present case Lord Doherty had convincingly rejected the plea to the competency of a section 36 application.  It agreed entirely with his reasoning ([2014] CSIH 60).

[21]      These statements on the question of competency, having been made obiter, are open to reconsideration in this case.  We have reconsidered them with the benefit, not given to the Inner House in Sustainable Shetland, of detailed arguments on the point.

 

The case for the petitioners
Competency
Submissions for the petitioners
[22]      Although Schedule 8 to the 1989 Act relates to the implementation of a section 36 consent, the case for the petitioners is founded on paragraph 3 of Schedule 9, which I have quoted, and which is given effect to by section 38.

[23]      The starting point in the petitioners’ case is that AOWFL’s application under section 36 constitutes “relevant proposals” to which Schedule 9 applies (cf Sched 9, para 1(3); para 3(1), (4)).  The submission is that since paragraph 3(1) of Schedule 9, provides that “in formulating any relevant proposals, a licence holder or a person authorised by an exemption to generate … electricity” shall have regard to certain environmental priorities and take certain steps to mitigate the impact of the proposal, it is to be inferred that only a licence holder or the holder of an exemption is entitled to formulate relevant proposals. 

[24]      The restrictive interpretation of section 36 for which the petitioners contend is said to be consistent with the wider public interest in the retention of the high voltage transmission system in central control and in the protection of the environment to which Schedule 9 is directed.  The petitioners submit that there is therefore no apparent reason why licensed or exempt applicants should be subject to the criteria of Schedule 9 when they formulate relevant proposals, while those who do not have a section 6 licence, or are not exempt, can apply for a section 36 consent and, in effect, build a generating station while free of the constraints of Schedule 9. 

 

Conclusions
[25]      The central proposition for the petitioners is that although Schedule 8 does not provide that an applicant for consent under section 36 must have a licence or be exempt from having one, the provisions of Schedule 9 imply that only a licence holder or an exempt person is entitled to apply for a section 36 consent.  That argument, in my opinion, is fallacious.

[26]      The scheme of the legislation is that the granting of a consent under section 36 and the granting of a licence or an exemption under sections 6 and 5 respectively, are two separate processes.  Section 36 provides that a generating station cannot be constructed, or extended or operated, except in accordance with a consent granted by the Scottish Ministers.  Section 37 likewise provides that an overhead electric line cannot be installed or kept installed except in accordance with such a consent.  The procedure by which consent is granted under section 36 or 37 is set out in Schedule 8 to the Act.  If it was the intention of the legislation that only a licensee or an exempt party could apply for consent under section 36, I would have expected that restriction to be a matter of express provision in the section or in Schedule 8, rather than to be a matter of inference from Schedule 9.  There is an example of an express provision of that kind in section 61. 

[27]      In my opinion, the true interpretation is that the entitlement to apply for a section 36 consent is not limited to the restricted class of persons who are either licensed or exempt;  but that where an applicant under section 36 obtains consent, as in this case, for the construction and operation of a generating station, it will require to obtain a licence or an exemption before it can generate electricity in the station.  When that party, or its assignee, obtains a licence or an exemption, it then becomes subject to the provisions of Schedule 9, which governs practical considerations such as the impact of the proposal on the environment in the broadest sense.

[28]      I do not accept the submission for the petitioners that, on the view that I have taken, a non-licence holder or a non-exempt person escapes a duty to mitigate the impact of its proposal under paragraph 3(1)(b) of Schedule 9.  There is no escape from that duty.  Every successful applicant for consent under section 36 will sooner or later become subject to Schedule 9 for the simple reason that no party that is granted such a consent can thereafter generate electricity without either a licence or an exemption. 

[29]      I conclude therefore that the provisions of sections 4, 5 and 6 of the 1989 Act are irrelevant to section 36 in a case such as this. 

[30]      I am supported in this conclusion by the undisputed evidence in this case that many section 36 consents have been applied for by, and have been granted to, companies holding neither a licence nor an exemption.  That practice is reflected in the following advice of the Office of Gas and Electricity Markets (OFGEM) in its guidance for licence applicants:

“When to apply

2.6. We suggest that you only apply when you are getting close to being ready to carry out a licensable activity.  This is because we can revoke a licence if you have not commenced the relevant licensable activity within a certain time (1 or 3 years depending on the type of licence, from the date on which that licence came into force).  However, please note the timescales below concerning processing of applications when considering when to make your application.”

 

Bias and pre-determination
Submissions for the petitioners
[31]      The petitioners continue to rely on the twelve considerations listed in Statements 9 to 13 of the petition that are referred to by the Lord Ordinary.  Counsel for the petitioners accepts that most, if not all, of them when examined individually can be given an innocent interpretation.  The submission is that, cumulatively, they would justify the fair-minded and impartial observer in concluding that the decision-making process was unfair.

[32]      Counsel for the petitioners argued that if one looks at the process overall, it is clear that from its inception the project had considerable official support.  AOWFL and associated bodies received substantial financial assistance from public sources.  The project appeared to be consistent with and to support the energy and environmental policies of the Scottish Ministers.  Accordingly it was sympathetically and supportively considered by the officials of the Scottish Ministers throughout the section 36 process.

 

Conclusions
The approach to decision making
[33]      In approaching a decision of this kind, a Minister considers the proposal in the framework of the relevant governmental policies.  These may favour projects of the kind under consideration.  They may even favour the project itself.  Apart from policy, there may also be a manifesto commitment to similar effect. 

[34]      But there remain other relevant questions for the Minister;  for example, the feasibility of the proposal;  its possible prematurity;  its consistency with other policies such as policies on the environment;  its likely impacts, environmental, financial and otherwise;  and the objections that have been made to it. 

[35]      The case for the petitioners fails, in my view, to distinguish between a predisposition to favour a proposal and a predetermination to decide in favour of it, come what may (cf R (Lewis) v Redcar & Cleveland Borough Council [2009] 1 WLR 83). 

 

The December 2009 meeting
[36]      For that reason, I see nothing suspicious in the allegation that at a meeting under Chatham House rules on 2 December 2009 a remark by an official of a public body closely related to the Scottish Government, in the presence of Scottish Government officials, to the effect that the Scottish Government was keen for the project to go ahead was received without demur.  If that allegation is true, I cannot see what is in the least way sinister about it.  Nor is the presence of Scottish Government officials at such a meeting suspicious per se. 

 

The Castle Stuart remark
[37]      The petitioners’ case on this point is based on an account by the American writer of A Travel Golf Blog of an incident in August 2012.  The mise en scène was a hospitality tent at the Scottish Open at Castle Stuart in which the First Minister and other guests were having, according to this account, “an amazing lunch”.  The writer reports that his American colleague asked the First Minister whether the wind farm would ever be built, to which the First Minister replied “Absolutely”, and remarked that he would not have his energy policy “dictated by Mr Trump”.  All of this occurred on a social occasion no doubt dedicated to the appreciation of golf. 

[38]      It is difficult to take a remark of that kind, if it was made, as a considered statement of the Scottish Ministers’ intentions, especially as the decision was one that would be made by the Minister for Energy, Enterprise and Tourism in light of detailed technical advice. 

 

Failure to meet with the petitioners
[39]      It is always a matter for the decision-maker to judge whether or not a proposed meeting with a developer or an objector will be worthwhile.  The decision-maker may consider that he is already fully apprised of the points that the objector wishes to make, in which case he may consider that a meeting will serve no useful purpose.  On the other hand he may wish to meet with the developer, perhaps more than once, in order to better his understanding of the likely implications of the proposal and to indicate lines of information that may be essential to his consideration when he comes to make the decision.

 

Failure to make a site visit
[40]      In view of the detailed evidence submitted by the petitioners, the Minister may well have felt justified in concluding that a site visit would add nothing to his existing state of knowledge.

 

Promptness of the decision
[41]      If the Minister had known nothing about the issue or the facts relevant to it, there might have been substance in the petitioners’ suspicions:  but in this case the proposal and its policy context were matters with which the Minister was wholly familiar.  The report, and perhaps a draft of it, would also have been considered by the Minister’s officials.  The conclusions and recommendations were clear cut.  It is understandable that the Minister would wish to conclude the protracted consent process with a prompt decision.  The promptness of the decision, in my view, indicates neither that the decision was pre-determined nor that it was made in haste.

 

Differential treatment given to the petitioners and to AOWFL
[42]      One of the themes in the case for the petitioners is that whereas the petitioners had “run the gauntlet of the planning system” and had made their investment in the Menie project, AOWL was spared the ordeal of a public inquiry at which the petitioners could have presented their objection.  That raises no question of law.  This was separate and a self-contained decision for the Minister.  It was for the Minister to decide in the context of his policy priorities what weight to give to an objection based on the amenity of users of the petitioners’ golf resort who were more than three kilometres away and on the apprehended financial consequences of that for the petitioners. 

 

Conclusions
[43]      The emphasis in counsel’s submission was that the multiplicity of allegedly suspicious considerations when looked at as a whole pointed clearly to the conclusion that the decision was pre-determined and that the Ministers showed a bias in favour of the development.  I do not agree.  None of the considerations founded on by the petitioners comes anywhere near to supporting the petitioners’ suspicions.  I fail to see how the aggregation of them makes its case any stronger.

 

Condition 14
Submissions for the petitioners
[44]      The petitioners submitted that in the absence of an enforcement mechanism to ensure that the design principles are complied with, the consent is invalid, that the design is an important part of the development, particularly in relation to its impact on users of the petitioners’ golf course; but that as condition 14 stands, the design of the development is uncontrolled.  Before the Lord Ordinary, the petitioners submitted that the development could not reasonably be controlled by a design statement and conditions; and, in particular, that condition 14 was not in accordance with the guidance in Circular 4/1998 on the use of conditions, which I need not quote.  It was imprecise, void for certainty and unenforceable. 

 

Conclusion
[45]      It is obvious, when conditions 13 and 14 are read together, that the construction method statement and the detailed design statement are subject to the written approval of Scottish Ministers after due consultation with Scottish National Heritage.  The approval of these two documents is a condition precedent to the construction.  If a design statement is not satisfactory to the Ministers, there will be no approval of the construction method statement without which the development cannot begin.  There is no ambiguity when condition 14 is read in that way. 

 

Disposal
[46]      I propose to your Lordships that we should refuse the reclaiming motion.

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 46

P480/13

Lord President

Lord Menzies

Lord Malcolm

OPINION OF LORD MENZIES

in the RECLAIMING MOTION

in the petition

TRUMP INTERNATIONAL GOLF CLUB SCOTLAND LIMITED AND THE TRUMP ORGANIZATION LLC

Petitioners and reclaimers;

against

THE SCOTTISH MINISTERS

Respondents:

For the petitioners:  J D Campbell QC, Findlay;  Balfour and Manson

For the respondents:  Mure QC, Springham;  Scottish Government Legal Directorate

Interested Party - Aberdeen Offshore Wind Farm Limited;   Non-Participating Party

 

5 June 2015

[47]      I am in complete agreement with the views expressed by your Lordship in the chair;  for the reasons given, I agree that this Reclaiming Motion should be refused.

                                                           

 

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 46

P480/13

Lord President

Lord Menzies

Lord Malcolm

OPINION OF LORD MALCOLM

in the RECLAIMING MOTION

in the petition

TRUMP INTERNATIONAL GOLF CLUB SCOTLAND LIMITED AND THE TRUMP ORGANIZATION LLC

Petitioners and reclaimers;

against

THE SCOTTISH MINISTERS

Respondents:

For the petitioners:  J D Campbell QC, Findlay;  Balfour and Manson

For the respondents:  Mure QC, Springham;  Scottish Government Legal Directorate

Interested Party - Aberdeen Offshore Wind Farm Limited;   Non-Participating Party

 

5 June 2015

[48]      I am in full agreement with the opinion of his Lordship in the chair.  Given its importance, I wish to add some observations of my own on the competency issue.

[49]      The question is, do the Scottish Ministers have power to grant a consent in terms of section 36 of the Electricity Act 1989 to the applicants, who are neither licence holders, nor exempt persons?  Section 36 requires the terms of schedule 8 of the Act to have effect.  Section 36C makes it clear that the benefits of a consent are transferrable to another person.  Schedule 8 regulates the procedure for applications under section 36 (and also section 37).  There is nothing in either section 36 or schedule 8 to suggest that the present application is incompetent.  The contention is that a parliamentary intention that section 36 applications can be made and granted only to persons holding a licence under section 6 of the Act (or exempt persons) can be implied from other provisions in the statute.  Section 6 authorises the granting of a licence for, amongst other things, the generation, transmission and distribution of electricity.

 

The submissions
[50]      The petitioners place particular emphasis on the terms of schedule 9 to the Act, which, it is said, make it clear that only licence holders (or exempt persons) can hold a section 36 consent for a development such as that now proposed in Aberdeen Bay.  It is suggested that the overall scheme of the Act indicates that a licence or exemption is a prerequisite to the grant of a section 36 consent.  Schedule 9 sets out provisions aimed at the preservation of amenity and fisheries.  They require a licence holder, when formulating a proposal such as the present, to have regard to the desirability of preserving the built and natural environment, and to adopt all reasonably practicable mitigation measures.  When deciding whether to grant consent, the decision maker must assess whether the above duties have been met.  It is submitted that Parliament could not have intended the schedule 9 duties to be applicable to some section 36 applicants, but not others;  therefore, when schedule 9 applies to a proposed development, a section 36 consent can be granted only to those subject to the schedule 9 duties.  (It can be noted that schedule 9 does not apply to all developments which require a section 36 or section 37 consent.)

[51]      The contrary argument on behalf of the Scottish Ministers relies upon the unrestricted terms of sections 36 and 37, and of schedule 8.  The construction (or extension) of a generating station does not require a section 6 licence.  A section 36 consent does not, of itself, allow the generation of electricity from the station;  for that a licence (or exemption) is required.  The licensing and consent requirements are said to be separate and distinct – with jurisdiction for the latter now devolved to the respondents.  Stress is placed upon the fact that some section 36 proposals fall outside the scope of the duties in schedule 9, for example, offshore wind farms of less than 10MW capacity.  In any event, and whatever the position for the applicant, for all section 36 and section 37 applications the Scottish Ministers are under the paragraph 3(2) duty to have regard to the extent to which mitigation measures have been taken.  The respondents’ approach is said to be consistent with the underlying parliamentary intention to open up electricity generation and supply to competition and new entrants;  and with general practice since the Act was introduced.  In any event, in practical terms, other environmental protection measures, for example, the Environmental Assessment Regulations, prevent any risk of environmental harm flowing from the respondents’ approach to the legislation.

 

Discussion
[52]      The petitioners’ argument is heavily dependent upon the terms of schedule 9.  Does schedule 9 justify the suggested restriction on the category of persons who can apply for and be granted a section 36 (or section 37) consent?  This question provokes the immediate response that, if Parliament intended such a restriction, it adopted a strange way of expressing it.  Why do so by drafting wholly unrestricted provisions, and then imposing certain environmental protection duties on a limited class of persons making section 36 applications?  It is the absence of an express restriction or prohibition which impressed the Lord Ordinary.  Nonetheless the fact remains that schedule 9 refers to section 36 and section 37 applications, and imposes certain duties on a limited class of persons.  Why was this?  If there is a sensible answer which does not require unexpressed restrictions to be applied to the consent provisions, that would weaken the petitioners’ argument.

[53]      In my view there is a sensible answer to the question.  In part it involves a consideration of the legislation and the circumstances in the industry prior to the 1989 Act.  For the previous 40 years the electricity supply industry in the UK was founded upon the nationalisation provisions in the Electricity Act 1947.   Until that reform, electricity was generated and supplied by a proliferation of authorised undertakers (all named in a lengthy schedule to the 1947 Act), who could apply to the Board of Trade for authority to acquire land and to construct a generating station – see sections 1 and 2 of the Electricity Lighting Act 1909.  The 1947 Act established the British Electricity Authority and Area Electricity Boards which acquired the functions and property of the pre-existing undertakings.  The Minister could authorise the compulsory acquisition by any board of land required for the discharge of its functions.

[54]      The 1957 Electricity Act dissolved the Electricity Authority and created the Central Electricity Generating Board and the Electricity Council.  Generation remained in the hands of the area boards.  In terms of section 37 of the Act, when formulating and considering any proposals relating to the functions of the central or any regional board, all involved required to have regard to conservation of the natural and built environment, and to any impacts of a proposal.  Reference can also be made to certain parts of the Electricity (Scotland) Act 1979, which consolidated earlier provisions concerning the two Scottish boards and the functions of the Secretary of State, along with amendments recommended by the Scottish Law Commission.  Section 5 imposed a general duty on the boards to have regard to the preservation of the natural and built environment, and to avoid damage to fish and fisheries.  Section 10 required the boards to prepare “constructional schemes”, and section 11 gave them the necessary compulsory purchase powers.  Schedule 4 to the 1979 Act provided for an Amenity Committee and a Fisheries Committee to give advice to the Minister and the boards upon such matters, including in respect of constructional schemes.  Detailed provisions dealt with the effect of any recommendation made by a committee, including the possibility of refusal of the scheme unless the recommendation was accepted.  Schedule 5 set out the procedure for submission and confirmation of such schemes, including dealing with objections, and whether and when an inquiry would be held.

[55]      Importantly for present purposes, section 35 of the 1979 Act allowed the Secretary of State to give consent to a body or person other than one of the boards for the establishment of a new generating station operated by water power and with a plant rating exceeding 50 kilowatts.  However there was no express application of the amenity duties and procedures to such private proposals.  The Energy Act 1983, a UK statute, extended the scope for private construction of generating stations (sections 2, 3 and 4), but again with no imposition of amenity duties.  Nor was there any reference to the fishery protection measures expected of the Scottish boards.  Private schemes required authorisation, and it can be assumed that amenity considerations were, when relevant, addressed and taken into account.  However, if the above summary of the pre-1989 legislation is accurate, the Scottish Ministers’ construction of the 1989 Act is consistent with the then still recent efforts to introduce competition into the industry.  In other words, in the 1980’s, the relevant electricity supply legislation placed environmental obligations on some, but not all applicants for a construction consent.  In these circumstances one can understand, or at least construct a justification for certain parts of schedule 9 of the 1989 Act being limited to licence holders and exempt persons, who, at least initially, were likely to form the newly privatised operators in the market. 

[56]      In any event, it would be an unjustified leap to assume that, contrary to the privatising and competition based philosophy of the 1989 Act, Parliament intended to prevent section 36 and 37 applications by unlicensed persons.  Parliament would understand that, before any generating station could be put into operation, a section 6 licence would be required, and that no one would construct such a development unless it was known that it could be used for its intended purpose.  In 1989, construction applications from third parties would have been novel, and no doubt very much the exception, thus it is understandable that any potential conflict between parts of schedule 9 and sections 36/37 was not the subject of contemporary concern or comment.  Furthermore, given this history and the underlying purpose of the Act, it can be appreciated why the common practice and understanding in Government, and in a fully informed industry, was that anyone could ask for permission to construct a generating station.

[57]      The result is that there is no sound basis for inferring a parliamentary intention to limit the scope of sections 36 and 37 consents in the suggested manner, nor is any such limitation a necessary consequence of the terms of schedule 9 or of any other provision in the Act.

[58]      Furthermore, having regard to the terms of schedule 9, in my view they do not provide unequivocal support for the basic premise put forward on behalf of the petitioners.  Paragraphs 1 and 2 apply to England and Wales, paragraphs 3 and 4 to Scotland;  but the basic provisions are similar, save that the Scottish paragraphs also mention the protection of fisheries.  (In addition, paragraph 5, now repealed, applied only to Scotland – as discussed below.)  I will refer to the Scottish part of the schedule.  It is true that the environmental protection duties are placed only on licence holders (or persons with an exemption), and paragraph 3(2)(b) is open to the interpretation that it was assumed that only such persons would make section 36 and section 37 applications.  However it is relevant to note that paragraph 4 (paragraph 2 for England and Wales) requires a licence holder, within 12 months of gaining a licence, to prepare a statement setting out how he proposes to perform his environmental protection duties, including consultation procedures.  Thus, when the relevant provisions in schedule 9 are viewed as a whole, it is apparent that they are aimed at something wider than a particular section 36/37 application, namely a general commitment as to how a licence holder intends to conduct his operations.  This is consistent with the focus upon licence holders, who would be in the business of generating and supplying electricity.  It is understandable that no such general statement was required from a third party who, at that stage at any rate, was only asking for construction consent.

[59]      Furthermore, if one looks at paragraph 5 of schedule 9 (as originally enacted), the duties thereunder related to any person engaging in, or proposing to engage in the operation of a generating station driven by water.  The consultation requirements in paragraph 5(5) referred to “a person making application to the Secretary of State for consent under section 36 for such a generating station”.  All of this suggests an awareness on the part of the draftsman that the scope of paragraph 5 was wider than paragraphs 1 to 4, in that it covered applicants who were not licence holders.

[60]      As originally drafted in the Bill as first published, schedule 9 simply repeated section 37 of the 1957 Act and section 5 of the 1979 Act (see above).  However, many wanted greater protection for the environment.  The main revision was the introduction of the written statement requirement under paragraphs 2 and 4, which, as mentioned earlier, could only be applied to licence holders.  In the House of Commons, the Under-Secretary of State for Energy said that it was well understood that the environmental measures in the Bill did not stand alone, but alongside “15 Acts of Parliament and 14 EC Directives which bear on the way in which the electricity industry impinges upon the environment” (Hansard, H.C. Vol 157, cols 601-602).

[61]      Leaving the terms of schedule 9 to one side, support for the Ministers’ approach can be gained from the separation of the licensing and consent arrangements in the Act.  While not an exact analogy (in that a section 36/37 consent does not attach to the land) there is a parallel with the Town and Country Planning regime, whereby, while anyone can apply for consent for a development upon land, they may well have no right to make use of the development for a particular purpose without a separate licence, for example, for the sale of alcohol, or for betting and gaming.  In Sustainable Shetland v Scottish Ministers [2013] CSOH 158, the Lord Ordinary was impressed by the consent allowing not only the construction of a generating station, but also its operation.  In my view, little weight should be attached to this factor.  It is an understandable use of words in the context of a land use permission, and in no sense does it cut across the licensing provisions in the 1989 Act.

[62]      While not directly relevant to the proper construction of the Act, it is worth mentioning that, as exemplified in the present case, in practice environmental concerns of the kind mentioned in schedule 9 are addressed by section 36 and section 37 applicants, and by decision makers.  Thus no harm or prejudice to the environment or fisheries will flow from this decision, which is consistent with the settled practice in the industry over many years.  Nothing decided in the present case supersedes the need for a section 6 licence before the development can be used for the generation and supply of electricity.

[63]      The factors which I consider support the competency of the application can be summarised as follows.  The Act sets out separate licensing and consent regimes.  The former do not apply to the construction of a generating station.  Sections 36 and 37, and schedule 8, are unrestricted in terms of who can apply.  Before the 1989 Act, amenity duties were placed on some, but not all applicants for a construction consent.  Paragraphs 2 and 4 of schedule 4 of the Act suggest that the amenity obligations were aimed at those who intended to generate electricity, and who would thereby have to comply with the licensing requirements.  In short, too much is being read into schedule 9, especially in the context of legislation designed to break the then still largely intact monopoly enjoyed by the existing operators.

[64]      So far as the ground of appeal based on alleged bias is concerned, there is nothing I wish to add to the observations of his Lordship in the chair.  With regard to the challenge concerning the alleged unenforceability of condition 14, I agree that, when read in context, and especially alongside condition 13, it is clear that the development must comply with the approved design statement.  Reliance was placed on R (Sevenoaks District Council) v First Secretary of State [2004] EWHC 771 (Admin), a decision of Sullivan J, but it can be distinguished on its facts.

[65]      For the reasons given above, and for the additional reasons set out in the opinion of his Lordship in the chair, I agree that this reclaiming motion should be refused.