Solaria Energy UK Ltd v Department for Business Energy and Industrial Strategy
| Jurisdiction | England & Wales |
| Judge | Russen |
| Judgment Date | 22 August 2019 |
| Neutral Citation | [2019] EWHC 2188 (TCC) |
| Date | 22 August 2019 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: E91BS379 |
[2019] EWHC 2188 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS AT BRISTOL
TECHNOLOGY AND CONSTRUCTION COURT LIST
2 Redcliff Street
Bristol BS1 6GR
HH JUDGE Russen QC
(Sitting as a Judge of the High Court)
Case No: E91BS379
Guy Adams (instructed by Capital Law Limited) for the Claimant
Tom Weisselberg QC and Dominic Howells (instructed by Government Legal Department) for the Defendant
Hearing date 26 July 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HH JUDGE Russen QC
HH Judge Russen QC:
Introduction
This is my judgment upon the Application dated 12 February 2019 and issued by the Defendant (“ the Department”) against the Claimant (“ Solaria”). By its application the Department seeks the striking out of, or, alternatively, the grant of summary judgment against the Claim brought against it by Solaria. Further truly alternative relief is sought by the Department in the form of an extension of time for the service of its Defence in the event of it not persuading the court to grant the primary relief sought.
By a Claim Form issued on 21 December 2018 Solaria seeks damages in the order of £460,000 from the Department on the ground that it has “suffered loss arising as a result of the [Department's] unlawful action in accordance with s. 8 Human Rights Act 1998”. Solaria's accompanying Particulars of Claim explain that the company carries on the business of supplying and distributing solar energy products and in particular photovoltaic panels for use in solar electricity generating installations (“ PV installations”). The claim for damages is based upon loss allegedly suffered as a result of the publication on 31 October 2011 (by the Department for Energy and Climate Change (“ the DECC”) which later merged with another government department to form the Department by its present name) of a consultation document which contained a proposal to reduce the subsidy payable under the Feed-in Tariff Scheme in respect of electricity generated by PV installations (“ the Proposal”). The Department is the successor department in respect of the administration of the Feed-in Tariff Scheme (“ the FIT scheme”) which was aimed at encouraging the low-carbon generation of electricity by specified types of technology.
The making of the Proposal is alleged by Solaria to have constituted an unlawful interference with its right to peaceful enjoyment of its possessions, contrary to Article 1 of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 (“ A1P1”), for which the Department is now liable. On that basis, and A1P1 being set out in Schedule 1 to the statute, Solaria claims damages under section 8 of the Human Rights Act 1998 (“ the Act”).
The Proposal concerned the FIT scheme which had been in effect from 1 April 2010. It was that lower tariffs should be payable in respect of new PV installations with a reference date of on or after 12 December 2011. The Government had become concerned about the cost of the FIT scheme when, by the end of 2010, it had become clear that the number of PV installations was far greater than anticipated as a result, in part, of a greater than anticipated reduction in the cost of their installation (as I read from the judgments in the Breyer litigation mentioned below). The lawfulness of the Proposal was challenged in judicial review proceedings commenced in early November 2011 and by his decision on 21 December 2011, in R (Friends of the Earth) v SSECC [2011] EWHC 3575 (Admin); [2012] ACD 28, Mitting J held that it would be unlawful to implement the Proposal. The Court of Appeal dismissed an appeal against that decision on 26 January 2012. The Supreme Court refused an application for permission to appeal on 22 March 2012. The Proposal was therefore never implemented. While the first stage of that appeal process was ongoing a revised proposal was laid by the Minister before Parliament on 19 January 2012 and that revised one (with a later reference date of 2 March 2012) took effect without any challenge to its legality.
However, Solaria alleges that the publication of the Proposal was an unjustified interference with its possessions, contravening A1P1, which resulted in foreseeable loss to it. Those arguments are based upon the fact that, in July 2011, Solaria had entered into a sub-contract for the supply of photovoltaic panels and associated accessories (“ PV panels”) to a company known as GB Building Solutions Limited (“ GBBS”). GBBS later went into administration on 9 March 2015 but in 2011 the company had enjoyed the benefit of a contract with Northumberland County Council (“ NCC”) to supply PV installations at residential and commercial properties within the county. GBBS contracted with Solaria for the supply of the PV panels to GBBS (the two companies in fact occupied adjoining premises) required for GBBS to meet its commitments to NCC.
In support of the suggested merits of its claim Solaria points to the settlement the Department reached with a group of other claimants in litigation which they had brought against the DECC claiming damages for losses allegedly suffered as a result of the Proposal (“ Breyer”). Each claimant in Breyer was either a small-scale solar PV generator or a nominated recipient of payments under the FIT scheme or engaged in a business connected with PV installations (including companies supplying equipment to other PV installation companies). Their complaint was that, by the time the courts had ruled that the Proposal was unlawful, many of the PV installations that would otherwise have been completed by 1 April 2012 had been abandoned as a result of it. They sought damages on the basis that the Proposal was an unjustified interference with their peaceful enjoyment of their A1P1 possessions. Certain preliminary issues were identified for determination in Breyer (on the basis of assumed facts which would have fallen to be determined on a claim-by-claim basis had the litigation proceeded to a trial) first by Coulson J as he then was (see [2014] EWHC 2257 (QB); [2015] 2 All ER 44) and then, on the DECC's appeal and the claimants' cross-appeal, by the Court of Appeal: see [2015] EWCA Civ 408; [2015] 1 WLR 4559.
I return below to the courts' reasoning in relation to the A1P1 possessions point. It seems that all but one of the claimants in Breyer had brought their claims within the time limit of one year stipulated by section 7(5)(a) of the Act and no limitation point to be taken by the DECC at the preliminary issue stage. Shortly before the trial of the claims in Breyer was due to commence in January 2018 settlements were reached between the Department and some of the Breyer claimants which, coupled with discontinuance by others, meant that the trial never took place. I was told (and the solicitors' correspondence before me referred to the fact having been unearthed in March 2018 by a freedom of information request) that the settlements cost the Government in the region of £60 million.
I also return below to the question of loss and the suggested cause of it, in circumstances where GBBS went into administration owing Solaria significant sums in respect of PV panels supplied between January and July 2012 (and therefore after the Proposal had met its fate) but for the moment it is important to note the basis upon which Solaria says it has a claim under section 8 by reference to a contravention of A1P1.
Solaria's Claim
Looking at the circumstances in which Solaria found itself at the time the Proposal was made, paragraphs 20 and 21 of the Particulars of Claim read as follows:
“20. In the circumstances, immediately before 31 October 2011 [Solaria] had the benefit of an enforceable contract with GBBS under which GBBS was obliged to pay the contract price for the contracted works and was obliged to pay a price calculated on the same basis for the additional 300 house installations in Phase 1.2, which it had been decided by NCC and GBBS to order from [Solaria].”
“21. The benefit of the contract and/or the goodwill in that part of [Solaria's] business which was concerned with providing goods and services under the contract was a possession and/or were possessions with the meaning of A1P1. In particular:
21.1 the contract had significant economic value, namely the capitalised value of the expected future cash flow generated by the contract;
21.2 such economic value could have been realised by an assignment or sub-letting of the contract whether at law or in equity and/or a sale of that part of the business as a going concern which was concerned with providing goods and services under the contract.”
The reference in paragraph 20 of the particulars to “an additional 300 house installations in Phase 1.2” was based upon Solaria's case that (per paragraph 18) GBBS had carried out 204 PV installations by 10 October 2011 and (per paragraph 19) that NCC and GBBS had agreed on 27 October 2011 that Solaria would be employed as the supplier for another 300 house PV installations to be completed by the end of March 2012. Solaria says that Phase 1.2 was then jeopardised by the Proposal being announced a few days later.
The Particulars of Claim (at paragraph 28) state that Solaria and GBBS were at all material times after early November 2011 aware that the lawfulness of the Proposal was being challenged. They refer (at paragraphs 30 to 34) to a discussion between Solaria and GBBS about the implications of the Proposal taking effect. That not only concerned the price payable for Solaria's panels for Phase 1 but also the viability of...
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