CONTRACT – Construction – Conditions – Consent to construct and operate wind farm – Condition requiring submission of detailed design statement for approval prior to commencement of development – Whether condition enforceable – Whether void for uncertainty – Whether possible to imply terms into consent – Electricity Act 1989 (as amended by Energy Act 2004, s 93, Water Environment and Water Services (Scotland) Act 2003 (Consequential Provisions and Modifications) Order 2006, art 2, Sch.1, para.1(2),Planning Act 2008, s 36, Sch 2, para 32 and Marine and Coastal Access Act 2009, s12(7)(a)), s 36)

ELECTRICITY – Generating station – Consent to construct and operate – Scottish Ministers granting consent for construction and operation of wind farm – Wind farm company neither holder of licence to generate, transmit or supply electricity nor person exempted from holding such licence – Whether power to grant consent – Electricity Act 1989 (as amended by Utilities Act 2000, ss 29, 30, Energy Act 2004, ss 93, 136, Sch 19, para 16, Water Environment and Water Services (Scotland) Act 2003 (Consequential Provisions and Modifications) Order 2006, art 2, Sch.1, para.1(2), Planning Act 2008, s 36, Sch 2, para 32 and Marine and Coastal Access Act 2009, s12(7)(a)), ss 5, 6, 36, Sch 9, para 3

Trump International Golf Club Scotland Ltd and another v Scottish Ministers

[2015] UKSC 74; [2015] WLR (D) 524

SC: Lord Neuberger of Abbotsbury PSC, Lord Mance, Lord Reed, Lord Carnwath, Lord Hodge JJSC 16 December 2015

The granting of a consent under section 36 of the Electricity Act 1989 for the construction of an electricity generating station was not restricted to holders of a electricity generation licence or persons exempted from holding such a licence.

Although a court would exercise great restraint in implying terms into public documents which had criminal sanctions there was no principled reason for excluding implication altogether.

The Supreme Court so held in dismissing an appeal by the petitioners, Trump International Golf Club Scotland Ltd and the Trump Organization LLC, against the decision of the Inner House of the Court of Session (the Lord President (Gill), Lord Menzies and Lord Malcolm) 2015 SLT 369 to refuse their reclaiming motion against the dismissal by the Lord Ordinary (Doherty) in the Outer House of the Court of Session 2014 SLT 406 of their petition for judicial review of the decision of the Scottish Ministers on 26 March 2013 to grant consent under section 36 of the Electricity Act 1989 to Aberdeen Offshore Wind Farm Ltd for the construction and operation of an offshore wind deployment centre off the coast of Aberdeenshire.

LORD HODGE JSC, with whom LORD NEUBERGER OF ABBOTSBURY PSC, LORD MANCE and LORD REED JJSC agreed, said that the petitioners had developed a golf club and resort in Aberdeenshire. In 2011 Aberdeen Offshore Wind Farm Ltd (“the company”) applied for consent under section 36 of the Electricity Act 1989 to construct and operate an offshore wind deployment centre, consisting of up to 11 wind turbines, off the coast of Aberdeenshire. The petitioners, concerned that the proposed development would materially diminish the amenity of the golf resort, opposed the application. The Scottish Ministers granted consent for the development and operation of the wind farm subject to conditions. The two grounds on which the petitioners now sought to have the consent quashed were that (i) the Scottish Ministers had no power under the 1989 Act to grant consent to the wind farm application because only a licence holder under section 6 or an exempt person under section 5 could apply for and be granted a construction consent under section 36; and (ii) condition 14 of the consent (which required the submission and approval of a design statement) was void for uncertainty. His Lordship was satisfied that neither the language of the 1989 Act nor its policy background supported the interpretation which the petitioners advanced on the first ground. As to the second ground, the short answer to that challenge was that if, contrary to his Lordship’s view, condition 14 were unenforceable, the consent would not be invalidated. Important elements of the benefits which condition 14 promoted were contained within the supplementary environmental information statement. The Scottish Ministers could insist on compliance with that document and those principles in the construction of the development. Condition 14 therefore could not be seen as a fundamental condition which determined the scope and nature of a development and which, if invalid, would in turn invalidate the consent. Even if condition 14 could not be enforced so as to require the company to construct the wind farm in accordance with the design statement, the condition would not be void for uncertainty. It would have effect to the extent that the developer would have to produce a design statement and obtain its approval by the Scottish Ministers before it could start the development: see Fawcett Properties Ltd v Buckingham County Council [1961] AC 636, 678. His Lordship did not accept that the condition was invalid because of any uncertainty as to what amounted to compliance with its terms. What would amount to compliance with the design statement would depend on (a) its terms and (b) the way in which the Scottish Ministers incorporated its requirements into the construction method statement, which was the subject of condition 13. When one construed the conditions as a whole, it was clear that the consent contained a mechanism which could enable the Scottish Ministers to enforce compliance with the condition 14 design statement in the construction of the development.

Although it was not therefore necessary to consider whether one could imply into condition 14 an obligation that the construction of the development had to be in accordance with the design statement, his Lordship would deal with it briefly. The petitioners submitted that the court should follow the approach to planning conditions in Sevenoaks District Council v First Secretary of State [2005] 1 P & CR 13 and hold that there was no room for implying into condition 14 a further obligation that the developer had to construct the development in accordance with the design statement. His Lordship was not persuaded that there was a complete bar on implying terms into the conditions in planning permissions, and did not see the case law on planning conditions under planning legislation as directly applicable to conditions under the 1989 Act because of the different wording of the 1989 Act. When the court was concerned with the interpretation of words in a condition in a public document such as a section 36 consent, it asked itself what a reasonable reader would understand the words to mean when reading the condition in the context of the other conditions and of the consent as a whole. That was an objective exercise in which the court would have regard to the natural and ordinary meaning of the relevant words, the overall purpose of the consent, any other conditions which cast light on the purpose of the relevant words, and common sense. While the court would, understandably, exercise great restraint in implying terms into public documents which had criminal sanctions, his Lordship saw no principled reason for excluding implication altogether. If necessary, his Lordship would have readily drawn the inference that the conditions of the consent read as a whole required the developer to conform to the design statement in the construction of the wind farm.

LORD MANCE and LORD CARNWATH JJSC gave concurring judgments.

Appearances

John Campbell QC and James Findlay, both of the Scottish Bar (instructed by Balfour & Manson LLP, Edinburgh) for the petitioners.

James Mure QC and Kay Springham, both of the Scottish Bar, (instructed by Solicitor to Scottish Ministers, Edinburgh) for the Scottish Ministers.

Reported by: Jill Sutherland, Barrister.