D2M Solutions Ltd v Secretary of State for Communities and Local Government, Court of Appeal - Administrative Court, December 21, 2017, [2017] EWHC 3409 (Admin)

Resolution Date:December 21, 2017
Issuing Organization:Administrative Court
Actores:D2M Solutions Ltd v Secretary of State for Communities and Local Government
 
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Case No: CO/3030/2017

Neutral Citation Number: [2017] EWHC 3409 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

PLANNING COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 21/12/2017

Before:

MR JUSTICE HOLGATE

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Between:

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Mr Richard Turney (instructed by Kingsley Smith Solicitors LLP) for the Claimant

Miss Isabella Tafur (instructed by Government Legal Department) for the Defendant

Hearing date: 23rd November, 2017

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JudgmentMr Justice Holgate:

Introduction

  1. The Claimant, D2M Solutions Limited, applies for judicial review of the decision taken on behalf of the Defendant, the Secretary of State for Communities and Local Government (``SSCLG'') by the Planning Inspectorate (``PINS'') by letter dated 4th April 2017.

  2. In his Acknowledgment of Service, the Defendant conceded that the decision should be quashed on one of the Claimant's four grounds of challenge, ground 2. On 10 September 2017, I granted permission to apply for judicial review on all grounds (except paragraph 31a of the Claimant's Statement of Facts and Grounds which had been abandoned), on the basis that, in this particular case, it was necessary for those matters to be resolved before any redetermination took place.

  3. On 11 October 2017 PINS, acting on behalf of the Defendant, issued a further decision letter which sought to overcome the error identified in ground 2, but which was otherwise to the same effect as the earlier decision. At the substantive hearing before me, Mr Richard Turney, who appeared on behalf of the Claimant, submitted that this further decision letter was still open to challenge on part of ground 2 and applied to amend the claim to enable the court to review that aspect. Ms Isabella Tafur did not object to that application. No formal amendments of the Claim were put before the Court, but I accepted that the matter could be dealt with by oral submissions on both sides directed to the matters raised in paragraph 41a to 41c of the Claimant's skeleton.

  4. The main issues raised by this challenge are firstly whether, as a matter of interpretation, the ex gratia scheme for paying financial compensation for errors made by PINS includes a claim for loss of profits or earnings and secondly, whether the Claimant is entitled under Article 1 of the First Protocol of the European Convention on Human Rights (``A1P1'') to compensation for loss of profits resulting from such an error.

    Factual Background

  5. The background to the claim is set out in the Statement of Facts and Grounds and the witness statement of Mr. Melvyn Gillam (dated 23 June 2017), the Managing Director and the shareholder of the Claimant.

  6. The Claimant provides engineering consultancy services to clients involved in aerospace, civil engineering and renewable energy projects. It has done so since 2002. The annual turnover exceeds £100,000 and derives essentially from the fees charged by Mr. Gillam for his consultancy work.

  7. Mr. Gillam is now aged 54 and as part of his planning for retirement has sought to carry out two wind turbine developments which would provide him with a guaranteed level of return based on the Feed-in Tariff Scheme, established by the Department for Business, Energy and Industrial Strategy (``BEIS'') and administrated by the Office of Gas and Electricity Markets (``Ofgem''). As Mr. Gillam points out (paragraph 2), this strategy ``is distinct from the ongoing consultancy work performed, which is the source of the company's turnover''.

  8. The Claimant successfully acquired a site and obtained planning permission for a wind turbine development in Wales. That scheme is now operational.

  9. The second site is at Honeypot Lane, near Colsterworth, Grantham, Lincolnshire. It is said that the Claimant obtained an option for a lease of the site from the owner. On 28 June 2013, the Claimant applied to the local planning authority, South Kesteven District Council (``SKDC''), for planning permission for a wind turbine development. The Claimant appealed against SKDC's refusal of permission to the Defendant.

  10. The appeal was dealt with by way of written representations. Following a site visit, the Inspector issued his decision letter on 20 January 2015 dismissing the appeal. He said that there were four issues. In relation to the first issue, the effect of the development on the historic environment, he concluded that the development would harm the setting and significance of the Knights Templar preceptory, a scheduled ancient monument, and of St Mary's Church, North Witham, a Grade I listed building, albeit that the harm would be ``less than substantial''. The proposal therefore conflicted with policy EN1 of the South Kesteven Core Strategy. Furthermore, paragraph 134 of the National Planning Policy Framework (``NPPF'') required the ``less than substantial harm'' to be weighed against the benefits of the proposal. On the second issue, the Inspector concluded that the proposal would have a significant adverse effect on the outlook from two residential properties so as to conflict with Policy EN1 of the Core Strategy. The third issue related to the environmental benefit of the proposal as a renewable energy development. The Inspector attached ``some weight'' to the offsetting of the effects of climate change by the production of about 170,000 kWh of renewable energy. Under the fourth issue, the overall planning balance, the Inspector decided that the ``limited benefits of the wind energy development'' did not outweigh the ``less than substantial harm'' to the two heritage assets and the significant adverse effect upon residential amenity. That conclusion led him to dismiss the appeal. The Inspector referred to an objection which had been made by the Ministry of Defence (``MoD'') on the grounds of unacceptable interference to air traffic control radars at RAF Wittering, but reached no conclusion on that aspect.

  11. It is common ground that the Inspector made an error by treating the amount of renewable energy that would be produced each year as 170,000 kWh rather than 1.7m kWh.

  12. Mr. Gillam pointed out this error to PINS in an email dated 4 February 2015 and issued a claim under section 288 of the Town and Country Planning Act 1990 (``TCPA 1990'') on 26 February 2015 to quash the decision so that the appeal would be re-determined. On 4 March 2015, PINS acknowledged the error but somewhat strangely filed an Acknowledgment of Service on 12 March 2015 stating that the claim would be defended. It was not until 14 June 2015 that the Defendant conceded that the decision on the appeal should be quashed. A consent order was sealed on 7 July 2015.

  13. In the hearing before me, it was common ground that the appeal decision was quashed solely because of the error made by the Inspector as to the amount of renewable energy that would be produced each year, and not in relation to his assessment of impacts upon heritage assets and residential amenity.

  14. On 9 July 2015, PINS wrote to say that the appeal would be re-determined following the written representation procedure. They pointed out that the second Inspector might not reach a different overall conclusion. On the same date, PINS stated that redetermination appeals are treated as a priority and so every effort would be made to ensure that the Claimant's appeal would be dealt with in ``a timely manner''. From then on the Claimant and its Solicitors continued to explain to PINS why the redetermination needed to take place urgently.

  15. On 16 July 2015 both the Claimant and SKDC notified PINS that no further information would be submitted on the appeal. Although the second Inspector carried out his site visit on 29 September 2015, his decision letter was not issued until 14 December 2015. He allowed the appeal. He reached rather different judgments to the first Inspector. He concluded that the proposal would not have any harmful impact on any heritage asset (and therefore paragraph 134 of the NPPF was not engaged at all), there would be no detrimental impact upon residential amenity, no material effect upon radar or the use of RAF Wittering, the amount of renewable energy which would be produced carried ``significant weight'' and so the appeal should be allowed.

  16. The MoD sought to challenge this grant of permission by making an application under section 288 of TCPA 1990. But on 20 April 2016, Dove J refused permission to apply on the papers and the matter was not pursued any further.

  17. Unfortunately, by the time the second decision letter was issued, substantial changes had been made to the Feed-in Tariff Scheme. First, BEIS's predecessor had decided that the level of tariff should be reduced substantially. For example, in January 2016 the rate payable was approximately half that payable between October and December 2015. Second, with effect from 1 October 2015, the Department removed an operator's ability to become pre-accredited under the scheme so as to secure a particular level of tariff. The Claimant contends that by September 2015 it had met all the essential requirements for proceeding with the Honeypot Lane scheme except for obtaining planning permission, and that it was because permission had not been granted by that stage that the Claimant lost the ability to secure a favourable tariff of at least 12.49p per kWh.

  18. On 23 December 2015 the Claimant applied for an ex gratia payment under PINS scheme. The Claimant contended that if the First Inspector had not made an error in his decision, it would have been possible for the Claimant to obtain pre-accreditation at a guaranteed generation tariff rate of 12.05p per kWh, whereas, following the Government's decision to re-introduce pre-accreditation on 8 February 2016, the Claimant was only able to obtain a guaranteed generation tariff of 5.46p. This formed the basis for the main item of the claim. The difference between the two rates applied to future production over...

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