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Liam MacleanSince 2006 Trump International Gold Club Scotland Ltd (“TIGC”) has been developing a golf resort on the Menie Estate, Aberdeenshire. Over the same period, Aberdeen Offshore Wind Farm Ltd (“AOWF”) has been developing the European Offshore Wind Development Centre (“the Wind Farm”) at an offshore site visible from TIGC’s development. In March 2013, the Scottish Ministers granted AOWF the consent necessary to develop and operate the Wind Farm under the Electricity Act 1989. TIGC are against the Wind Farm and instituted a legal challenge to the grant of consent.

The Inner House rejected TIGC’s challenge and an appeal was made to the Supreme Court, covering two key issues:

  • Was the grant of consent under section 36 of the 1989 Act ultra vires as such consent could only be granted to party who held a licence to generate, transmit or supply electricity under the 1989 Act (or was exempt from the requirement to hold such a licence).
  • Was the consent void for uncertainty as one condition (condition 14) required AOWF to submit a design statement to the Scottish Ministers for approval, a condition TIGC argued was unenforceable and uncertain.

The Supreme Court unanimously dismissed TIGC’s appeal, with Lord Hodge giving the leading judgment.

Section 36 challenge

The Section 36 challenge was, in essence, one of statutory interpretation.

Section 36 requires, subject to some exceptions, that, in Scotland, the permission of the Scottish Ministers be secured before an electricity generating station is constructed.

Separately, in paragraph 3 of Schedule 9 to the 1989 Act there are provisions requiring the party requesting consent to construct a “relevant proposal” (an electricity generation facility with a capacity greater than 10MW) to take into account a variety of environmental concerns. Paragraph 3 specifically states that “a licence holder or a person authorised by an exemption to generate, distribute, supply or participate in the transmission of electricity” must take these matters into account when requesting consent, parties who don’t hold a licence or exemption are not mentioned.

TIGC argued that the language used in paragraph 3 of Schedule 9 gave rise to the necessary implication that only a licence holder or exempted person may competently be granted consent under section 36. The court disagreed with this interpretation, concluding that the structure and language of section 36, as well as its policy background, militated against this view.

Lord Hodge noted that the 1989 Act prohibited generating electricity without a licence or the benefit of an exemption, but it did not prohibit constructing such a generating station without a licence or the benefit of an exemption. Similarly, the language of section 36 (and Schedule 8, which sets out procedures relative to applications for section 36 consent) does not restrict the ability to apply for consent under section 36 to licenced or exempt entities. Lord Hodge suggested that if this is what the statute intended, one might have expected express language to this effect to be used.

The court also held that there was nothing in the policy background to the 1989 Act that suggested a different interpretation would be appropriate.

Condition 14 challenge

Lord Hodge concluded that, even if condition 14 was unenforceable, the section 36 consent would not be invalidated. The court held that other provisions in the consent required AOWF to construct the Wind Farm to various specifications, which adequately protected the benefits sought by condition 14. As such, the condition was not fundamental to the consent and, accordingly, its invalidity would not invalidate the whole consent.

In any case, the court held that condition 14 was not void for uncertainty. Lord Hodge relied on dicta from Fawcett Properties Ltd v Buckingham County Council [1961] AC 636, which held that a planning condition can only be void for uncertainty if it can be given no sensible or ascertainable meaning. This was not the case with condition 14, which makes clear that AOWF must submit a design statement for approval.

Nor was condition 14 invalid due to uncertainty as to what amounted to compliance. When the conditions were construed as a whole, it was clear that the consent contained mechanisms which allowed the Scottish Ministers to regulate the Wind Farm’s environmental impact and enforce their requirements on AOWF. Namely, AOWF needed submit further documents to the Scottish Ministers for approval stating how it planned to undertake the development of the Wind Farm. The Scottish Ministers could require AOWF, in these documents required by other conditions of the consent, to lay out how they would comply with the condition 14 design statement.

Given its view on the proper interpretation of condition 14 and the consent as a whole, the court did not need to come to a view on whether terms could have been implied in to ameliorate any deficiencies in the drafting. However, Lord Hodge gave the view that there is no complete bar to implying terms into the conditions of planning permissions. Moreover, Lord Hodge stated that he did not believe the case law on conditions under the planning legislation was directly applicable to conditions to consents under the 1989 Act. TIGC had argued the opposite. These points were discussed further in Lord Carnwath’s supplementary judgment.

Lord Hodge also offered some interesting obiter regarding interpretation and implication. His Lordship noted that an exercise of interpretation would need to be undertaken before it can be ascertained whether an implication of terms in necessary.

On interpretation, Lord Hodge noted that, while there was a move towards general rules of interpretation, the different nature of some documents will influence the extent to which the court may look at their factual background. In particular, there is less scope to look at extrinsic material evidencing the knowledge of the parties to public documents (such as planning permissions or consents) in which third parties may have an interest. This is particularly so if breach of the public law consent gives rise to criminal liability.

On implication, Lord Hodge stated that such an exercise would be undertaken when the court concludes that a proper interpretation of a document suggests that it was intended to have a particular effect but the words required to create that effect are absent. His Lordship stated that the courts will exercise great restraint in implying terms into public documents, but that there is no bar on them doing so (casting doubt on previous cases which suggested there was such an absolute bar in respect of planning conditions). Lord Mance adds his own thoughts on the implication of terms in a supplementary judgment.

Comment

The Supreme Court has provided some useful comments on both statutory and non-statutory interpretation in this judgment.

Lord Hodge’s common sense approach to the interpretation of s36 is a reminder that overly literal statutory interpretation arguments are unlikely to be successful when they run against the grain of (i) the overall wording and structure of a provision and (ii) its policy background and rationale.

Similarly, his Lordship’s comments on condition 14 is a reminder of the high bar to be reached before a planning condition can be said to be void for uncertainty and his comments on interpretation and implication (along with the supplementary judgments of Lord Carnwath and Lord Mance) are a useful roadmap for exercises involving the construction of public documents such as planning permissions or statutory consents.