The King (on the application of British Gas Trading Ltd) v Secretary of State for Energy Security and Net Zero
| Jurisdiction | England & Wales |
| Judge | Lord Justice Singh,Mr Justice Foxton |
| Judgment Date | 31 March 2023 |
| Neutral Citation | [2023] EWHC 737 (Admin) |
| Docket Number | Case Nos: CO/4460/2022 CO/4479/2022 |
| Court | King's Bench Division (Administrative Court) |
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The King (on the application of
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The King (on the applications of
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[2023] EWHC 737 (Admin)
Lord Justice Singh
and
Mr Justice Foxton
Case Nos: CO/4460/2022
CO/4477/2022
CO/4479/2022
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Paul Harris KC, Azeem Suterwalla and Ewan West (instructed by Towerhouse LLP and Shearman & Sterling (London) LLP) for BGT
Kieron Beal KC, Naina Patel and Warren Fitt (instructed by Allen & Overy LLP) for ScottishPower
George Peretz KC, Julian Gregory and Harry Gillow (instructed by Pinsent Masons LLP) for E.ON
Jason Coppel KC, Malcolm Birdling, Patrick Halliday and Alastair Richardson (instructed by the Treasury Solicitor and Hogan Lovells International LLP) for the Defendant
Tom Hickman KC and Sean Butler (instructed by Linklaters LLP) for the Joint Energy Administrators and Bulb
Lord Pannick KC and Will Bordell (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for Octopus
Hearing dates: 28 February – 2 March 2023
Approved Judgment
This judgment was handed down remotely at 10 a.m. on 31 March 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Lord Justice Singh and
Introduction
The Claimants, British Gas Trading Limited ( BGT), Scottish Power Retail Energy Limited and SP Smart Meter Assets Limited ( ScottishPower) and E.ON UK plc, E.ON Next Energy Limited and E.ON UK plc ( E.ON), seek permission to bring a claim for judicial review to challenge two decisions made by the Defendant, the Secretary of State for Energy Security and Net Zero (formerly and at all times relevant in these proceedings, the Secretary of State for Business, Enterprise and Industrial Strategy). We will refer to the Secretary of State as SoS and his department, as it was known at all relevant times in these proceedings, as BEIS. The decisions under challenge were taken on 27 October 2022 and 7 November 2022 and arose out of the transfer of the business of Bulb Energy Limited ( Bulb) to Octopus Energy Group Limited ( Octopus). That transfer had been sought by the Joint Energy Administrators ( JEAs) of Bulb.
At the “rolled up” hearing before this Court we heard submissions from Mr Paul Harris KC for BGT; Mr Kieron Beal KC for ScottishPower; Mr George Peretz KC for E.ON; Mr Jason Coppel KC for the SoS; Mr Tom Hickman KC for the JEAs; and Lord Pannick KC for Octopus. We are grateful to them and for all of their teams for the work which went into enabling this case to be heard expeditiously and efficiently. Although there are three separate claims before the Court, with slightly differing grounds, the parties co-ordinated their written and oral submissions in order to avoid duplication so far as possible. We will take a similar approach rather than treating each claim separately.
There is a Confidentiality Ring in this case, so as to limit access to sensitive commercial information to those who need to see it (including this Court). Where necessary we have redacted such confidential information from the publicly available version of this judgment. This does not detract from the public's ability to understand the reasons for our decision in this case.
The Core Facts
In this section we will set out the core facts, which we did not understand to be in dispute. In the next section we will set out our findings of fact in more detail.
In 2021 Bulb ran into serious financial difficulty. On 24 November 2021 an Energy Supply Company Administration Order ( ESCA Order) was made by the High Court (Insolvency and Companies Court).
The JEAs then embarked upon a process for the sale of Bulb's business. This included Phase-1, launched on 7 March 2022 with a deadline for indicative offers of 4 April 2022, although this was subsequently extended at the request of certain potential bidders.
On 16 March 2022 E.ON withdrew from the sales process.
BGT made an indicative offer on 7 April 2022. The only other bid in Phase-1 was by an entity referred to in this case as Tulip, on 8 April 2022.
At that stage both Octopus and ScottishPower made it clear that they would not be making a bid.
From mid-April 2022 there were communications with Octopus to see if it would be willing to consider re-entering the process to make a bid. Whatever the precise details of what may or may not have been said (which we address below), including in telephone calls, what is clear is that there were not precisely the same communications and discussions with these Claimants as there were with Octopus.
On 25 April 2022 Lazard & Co Ltd ( Lazard) began the Phase-2 process with the two surviving bidders, requesting bids by 30 June 2022: BGT and Tulip.
On 24 May 2022 Octopus' re-entry into the process was approved.
Octopus submitted its Phase-2 offer on 00.22 on 1 July 2022. A revised formal offer was put forward on 26 July 2022.
In the ensuing months the JEAs recommended that this bid should be accepted. Ernst & Young LLP ( E&Y) were retained by BEIS to provide an independent review of the JEAs' final recommendations.
On 23 October 2022 the Accounting Officer ( AO) provided their assessment ( the AOA) of the proposed transaction, recommending that the Government ( HMG) agree to the Octopus bid and on the same date BEIS provided its subsidy control assessment ( SCA). The Octopus transaction was signed on 28 October 2022. On 29 October 2022 HMG published a press release stating that it had approved the acquisition of Bulb by Octopus. This has become known as the Funding Decision in these proceedings.
On 7 November 2022 the SoS granted approval for the Energy Transfer Scheme ( ETS): this has become known as the Approval Decision in these proceedings.
The Facts
The Approach to the Issues of Fact
It has frequently been noted that “the processes of the Administrative Court, which are designed to permit the speedy auditing by the Court of the legality of decisions, are not well suited to resolving disputes of fact” ( R (LXD) v Chief Constable of Merseyside Police [2019] EWHC 1685 (Admin) at [107], Mr Justice Dingemans). The court hearing a judicial review application will normally only receive evidence in writing, and does not set about determining disputed questions of fact ( R (St Helens Borough Council) v Manchester Primary Care Trust [2008] EWCA Civ 931; [2009] PTSR 105 at [13], May LJ).
However, issues of fact can arise in judicial review cases, and the procedures for judicial review are sufficiently flexible to accommodate the determination of such disputes. These include orders for disclosure, for the cross-examination of witnesses (which was not sought), and the court's ability, in appropriate cases, to draw inferences from the evidence which is before the court ( R (Olabinjo) v Westminster Magistrates' Court [2020] EWHC 1093 (Admin) at [4], Holroyde LJ and Mr Justice William Davis).
Where, as was the case in these proceedings, no order is made for the cross-examination of witnesses, the general approach is to assume the correctness of the defendant's evidence unless other material before the court shows that “the evidence cannot be correct” ( R (Safeer) v Secretary of State for the Home Department [2018] EWCA Civ 2518 at [16], Nicola Davies LJ; R (FDA) v Minister for the Cabinet Office [2018] EWHC 2746 (Admin) at [11], Mrs Justice Simler; R (Soltany) v Secretary of State for the Home Department [2020] EWHC 2291 (Admin) at [87]–[88], Mr Justice Cavanagh). It was submitted on behalf of BGT that this principle did not extend to the evidence of the Interested Parties. There was a certain irony in this submission, because it was the Claimants' case that the SoS had, in effect, delegated his (alleged) responsibility for conducting an open, fair and transparent process to the JEAs, with the effect that the way in which the JEAs and their advisors had conducted that process could (indirectly) be subject to a public law challenge. To the extent that the manner in which the JEAs conducted the process for selling Bulb's business or customer book ( the M&A Process) is...
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