The Renewable Heat Association and Another Application for Judicial Review and in the matter of an application for leave to apply for Judicial Review by Thomas Forgrave
| Jurisdiction | Northern Ireland |
| Judge | Keegan LCJ |
| Judgment Date | 21 February 2023 |
| Neutral Citation | [2023] NICA 13 |
| Date | 21 February 2023 |
| Court | Court of Appeal (Northern Ireland) |
1
Neutral Citation No: [2023] NICA 13
Judgment: approved by the court for handing down
(subject to editorial corrections)*
Ref: KEE11912
ICOS No: 2017/119010/01
2019/02/01
Delivered: 21/02/2023
IN HIS MAJESTY’S COURT OF APPEAL IN NORTHERN IRELAND
___________
ON APPEAL FROM THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
KING’S BENCH DIVISION (JUDICIAL REVIEW)
___________
IN THE MATTER OF AN APPLICATION BY THE RENEWABLE HEAT
ASSOCIATION AND ANOTHER FOR JUDICIAL REVIEW
AND IN THE MATTER OF AN APPLICATION FOR LEAVE TO APPLY FOR
JUDICIAL REVIEW BY THOMAS FORGRAVE
___________
Mr Gerald Simpson KC with Mr Richard Shiels (instructed by A&L Goodbody Solicitors)
for both Appellants
Mr Tony McGleenan KC with Mr Paul McLaughlin (instructed by the Departmental
Solicitor’s Office) for the Respondent
___________
Before: Keegan LCJ, Horner LJ, Huddleston J
___________
KEEGAN LCJ (delivering the judgment of the court)
Introduction
[1] These appeals have been listed together as they raise common issues of fact
and law in relation to the operation of the Renewable Heat Incentive Scheme in
Northern Ireland (“the RHI scheme”). The first named proceedings were taken in
2017 against the Department of the Economy (“the Department”) by a group of
boiler owners under the umbrella of the Renewable Heat Association for
Northern Ireland and one individual, Mr Alastair Dale, a boiler owner. Those
proceedings challenged the legality of changes made by regulations which reduced
payments provided under the original scheme. This challenge raised claims based
on domestic law and Article 1 Protocol 1 (“A1P1”) of the European Convention on
Human Rights (“ECHR”) which is the right to peaceful enjoyment of property.
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[2] The second set of proceedings were brought in 2019 by an individual boiler
owner, Mr Thomas Forgrave. He also challenged changes to the payment structure
under the RHI Scheme. In addition, this appellant raised a human rights challenge
based on A1P1 of the ECHR.
[3] Colton J dismissed the first challenge in a judgment delivered on 21 December
2017 ([2017] NIQB 122). Humphreys J granted leave but dismissed the second
judicial review challenge in a judgment delivered on 14 October 2021 ([2021] NIQB
92).
[4] The history of this case is comprehensively examined in the decision of each
judge at first instance and so we need not repeat it here. This subject matter has also
been scrutinised at the public inquiry which was conducted by Sir Patrick Coghlin.
We have considered all the material provided to us. In the interests of economy, we
will only reference the points of most relevance to our consideration.
[5] We are concerned with those who entered the RHI Scheme at the initial stages
and were accredited between 22 November 2012 and 17 November 2015.
[6] At the outset we recognise that our adjudication arises at a particular stage in
the history of the now infamous RHI scheme. At first instance, the cases were
brought with a degree of urgency given impending legislative change. There were
also claims for interim relief. The landscape is now altered in that the proposed laws
have been passed which govern tariffs. In addition, a further round of legislation is
contemplated to either close the scheme or revise tariffs. It is within that context that
we adjudicate upon the appeals.
Core Background Facts
[7] The starting point in this consideration is the Renewable Energy Directive
2009/28/EC (“the Directive”). This European Directive imposed obligations upon
Member States within the European Union to reach renewable energy targets. These
were legally binding obligations to ensure that by 2020 Member States delivered
minimum targets for the percentage of energy consumption derived from renewable
sources. In the case of the United Kingdom, (“UK”) the minimum target was set at
15%. The Directive also permitted Member States to introduce support schemes to
achieve these targets. These support schemes could include initiatives which
promoted the use of energy from renewable sources by means of financial incentive.
[8] As the UK is made up of devolved administrations, energy initiatives were
progressed on a bespoke basis in each jurisdiction. To achieve the UK target, each of
the devolved administrations agreed a separate target, taking account of the
renewable energy consumption levels within each area and the potential for change.
This was mandated by the Northern Ireland Executive and encompassed within its
Programme for Government. The Executive included a target of producing 4% of
heat from renewable sources by 2015 and a further target of producing 10% of its
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heat from renewable sources by 2020 – targets that were included within the
strategic energy framework approved by the Executive.
[9] The provision of renewable energy required a particular structure to be put in
place with the necessary checks and balances. In the event, different schemes were
set up for domestic heating and non-domestic heating.
[10] In these appeals we are concerned with non-domestic use of renewable
energy sources in small and medium enterprises. The fundamentals underpinning
this scheme found expression in formal documentation described as the Renewable
Heat Premium Payment (May 2012) Scheme followed by the Non-Domestic
Renewable Heat Incentive Scheme (November 2012) and the Domestic Renewable
Heat Incentive Scheme (December 2014). This scheme was described as one bespoke
to Northern Ireland.
[11] A budget of £860m was available to incentivise renewable energy schemes
across the entire UK. Northern Ireland was allocated £25m of this money by Her
Majesty’s Treasury (“HMT”) to support the introduction of incentive schemes within
this jurisdiction. This allocation was made to Northern Ireland in addition to its
block grant.
[12] Thereafter, expert reports were commissioned to inform the shape of the RHI
scheme. These reports specifically advised on suitable tariffs for various sizes of
biomass boilers that would allow renewable heat to be created. Consultation then
followed. It is not necessary to set out all aspects of the pre-scheme information
which was generated in detail. We have considered the comprehensive affidavits
which deal with these matters and the bundle of core materials which contain the
relevant reports and simply refer to some salient elements of the pre scheme
information as follows.
[13] The expert report which frames the original scheme is the Cambridge
Economic Policy Associates Ltd (“CEPA”) Report. This is the most significant report
to read when examining the genesis of the scheme as it informed the regulations
which brought the scheme into operation. In brief, the CEPA Report made
recommendations for adapting the methodology applied in Great Britain (“GB”) for
renewable energy to Northern Ireland. That said, there were differences between the
jurisdictions. It is abundantly clear from the affidavits that one substantial difference
between the jurisdictions was the existing pattern of fuel usage. In simple terms, it
appears that most businesses in GB used gas burning heat technology whereas in
Northern Ireland most businesses used oil burning systems. This differential
affected baseline cost conditions for both fuel and maintenance and an expectation
that the rate of subsidy required in Northern Ireland would be lower than in GB.
[14] The different operating conditions we have referred to also resulted in a
recommendation that in Northern Ireland, tiered tariffs would not be required. This
was on the basis that the estimated difference in cost between oil and renewable fuel
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