Trump International Golf Club Scotland Ltd v Scottish Ministers

(with whom Lord Neuberger, Lord Mance, Lord Reed and Lord Carnwath agree)

Trump International Golf Club Scotland Limited ("TIGC") has developed a golf club and resort at Menie Estate and Menie Links, Balmedie, Aberdeenshire. In 2011 Aberdeen Offshore Wind Farm Limited ("AOWFL") applied for consent under section 36 of the Electricity Act 1989 ("the 1989 Act") to construct and operate the European Offshore Wind Deployment Centre in Aberdeen Bay, off the coast of Blackdog, Aberdeenshire. The application concerned the construction of up to 11 wind turbines, which might be of different sizes, with a maximum power generation of 100MW. The proposed windfarm, if constructed, would be located about 3.5 kilometres from the golf resort and would be seen by people using the resort. TIGC, concerned that the proposed windfarm development would materially diminish the amenity of the golf resort, opposed the application. On 26 March 2013 the Scottish Ministers granted consent for the development and operation of the windfarm subject to conditions. TIGC has challenged that decision on various grounds in the courts in Scotland without success. Two grounds of challenge remain in this appeal.

The two grounds on which TIGC now seeks to have the consent quashed are:

(i) because the Scottish Ministers had no power under the 1989 Act to grant consent to the windfarm application as only a licence holder or an exempt person may apply and be granted a construction consent under section 36 of that Act; and

(ii) because condition 14 of the consent (which requires the submission and approval of a design statement) is void for uncertainty.

I shall refer to the first ground as "the section 36 challenge" and the second ground as "the condition 14 challenge".

The section 36 challenge raises a question of statutory construction. In essence, TIGC relies on the wording of paragraph 3 of Schedule 9 to the 1989 Act in support of its contention that only the holder of a licence to generate, transmit, or supply electricity, which is granted under section 6 of the 1989 Act, or a person exempted under section 5 of that Act from holding such a licence, may apply for a construction consent under section 36. Paragraph 3 of Schedule 9 (so far as relevant) provides:

"(1) In formulating any relevant proposals, a licence holder or a person authorised by an exemption to generate, distribute, supply or participate in the transmission of electricity -

(a) shall have regard to the desirability of preserving natural beauty, of conserving flora, fauna and geological or physiographical features of special interest and of protecting sites, buildings and objects of architectural, historic or archaeological interest; and

(b) shall do what he reasonably can to mitigate any effect which the proposals would have on the natural beauty of the countryside or on such flora, fauna, features, sites, buildings or objects.

(2) In considering any relevant proposals for which his consent is required under section 36 or 37 of this Act, the Secretary of State shall have regard to -

(a) the desirability of the matters mentioned in paragraph (a) of sub-paragraph (1) above; and

(b) the extent to which the person by whom the proposals were formulated has complied with his duty under paragraph (b) of that sub-paragraph.

(3) Without prejudice to sub-paragraphs (1) and (2) above, in exercising any relevant functions each of the following, namely, a licence holder, a person authorised by an exemption to generate or supply electricity and the Secretary of State shall avoid, so far as possible, causing injury to fisheries or to the stock of fish in any waters."

The references to the Secretary of State in relation to section 36 applications in Scotland should be treated as references to the Scottish Ministers: Scotland Act 1998, section 117.

Section 36 of the 1989 Act provides inter alia that a generating station shall not be constructed, extended or operated except in accordance with a consent which in England and Wales is granted by the Secretary of State and in Scotland by the Scottish Ministers.

Mr John Campbell QC for TIGC submits that paragraph 3 of Schedule 9 to the 1989 Act gives rise to a necessary implication that only licence holders or exempt persons may be granted a section 36 consent. Were it otherwise, there would be two classes of section 36 applicant, namely those with duties under paragraph 3(1) of Schedule 9 and those without such duties. There is, he submits, no reason for two such classes. Secondly, under paragraph 3(2) of Schedule 9, the Scottish Ministers when considering any relevant proposals which require a section 36 consent, are to have regard to the extent to which the applicant has complied with his duty under paragraph 3(1)(b) of Schedule 9. That presupposes that the applicant is under such a duty. Only licence holders and exempt persons are under those duties. If an applicant were able to obtain a section 36 consent and construct a generating station or other relevant proposal before he obtained a licence to generate, he could complete a significant development before he became subject to the environmental duties of paragraph 3 of Schedule 9.

Looking more generally at statutory policy, Mr Campbell submits that the statutory policy is to secure that only operators who are suitably qualified in the electricity generating industry will apply for consent to construct a generating station or other development which is a relevant proposal. There is, he submits, a logical progression by which, first, an applicant establishes his competence to generate electricity by obtaining a section 6 licence or a section 5 exemption, secondly, he formulates his proposals for the development in a section 36 application, thirdly, he prepares and publishes a statement (under Schedule 9, paragraph 4) setting out the manner in which he will perform the Schedule 9 paragraph 3(1) duties, before, finally, he implements the section 36 consent by constructing the relevant proposal.

Like Lord Doherty and the First Division of the Inner House of the Court of Session, I am satisfied that this challenge fails. I examine first the structure of and the language used in the 1989 Act and then discuss the wider policy background to the Act.

The relevant starting point is section 4 of the 1989 Act, which makes it a criminal offence to generate electricity or to carry out other specified activities without authorisation by a licence. Section 5 empowers the Secretary of State to grant an exemption from the requirement of a licence. Section 6 empowers the Gas and Electricity Markets Authority to grant, among others, a licence to generate electricity. There is no express prohibition in section 4 from constructing a generating station without a licence, as one might have expected if only licence holders or exempt persons alone were to be given a section 36 consent.

Section 36 places no restriction on who may apply for a consent to construct a generating station. Neither does Schedule 8, which section 36(8) relates to consents under section 36 and also consents to the installation of overhead lines under section 37. Schedule 8 sets out the procedures to be followed when seeking or objecting to applications for consent or challenging a decision whether to hold a public inquiry. Again, one might have expected an express restriction on the applicants for a section 36 consent in these provisions if one were intended.

Section 38 provides:

"The provisions of Schedule 9 to this Act (which relate to the preservation of amenity and fisheries) shall have effect."

Paragraphs 1 and 2 of Schedule 9 relate to the preservation of amenity in England and Wales and paragraphs 3 and 4 contain similar provisions for the preservation of amenity in Scotland. Two considerations point away from Mr Campbell's interpretation. First, neither paragraph 1( 1) or 3(1) contains any express restriction on who may apply for a section 36 consent for the construction of a generating station which is large enough to be a "relevant proposal". If there were to be such a restriction, I would have expected an express provision. Secondly, not all section 36 applications are affected by Schedule 9, but only "relevant proposals", which are defined in Schedule 9, paragraph 1(3) as the construction or extension of a generating station with a capacity of not less than 10MW. Offshore generating stations with a capacity of 1MW or more require a section 36 consent (the Electricity Act 1989 (Requirement of Consent for Offshore Generating Stations) (Scotland) Order 2002 (( SSI 2002/407), article 3). But they are not relevant proposals to which Schedule 9 applies if their capacity is below 10MW. As offshore installations with a capacity of under 10MW can have a significant impact on the environment and amenity, this limitation suggests that Schedule 9 was not intended to be a regime for controlling the environmental effects of constructing generating stations but, as I suggest in para 20 below, is a survivor from prior legislation when the electricity generating market was organised differently.

In my view, Mr Campbell's strongest point is that sub-paragraph 3(2)(b) requires the Scottish Ministers, when considering any relevant proposals in a section 36...