Tag Archives: Renewables

Community donation immaterial consideration invalidating planning permission

The High Court case of Wright, R (on the application of) v Forest of Dean District Council & Anor [2016] concerned whether or not a local community donation, based on turnover generated by a wind turbine, amounted to a material consideration which it was lawful for the council to take into account when granting planning permission for the wind turbine.

The Environmental Report accompanying the planning application had offered benefits including:

“Annual community donations will also be made based typically on 4% of turnover (estimated at an average of around £15k to £20k each year for 25 years of operation – up to £500k to help address current and future community needs)…..”

The main ground of challenge to the permission was that this was not a material consideration that the council could lawfully have taken into account.

The court agreed:

“Simply being a contribution for community benefit related to a local strategy for health, social or cultural wellbeing does not make that contribution in and of itself material to a planning determination. It must pass the Newbury test and be for a planning purpose and be fairly and reasonably related to the development proposed. It is difficult to see how the provision of waterproof clothing for a play group or lunches for senior citizens has any proper bearing on the issues relevant to the regulation of land use and control of development which are at stake when considering whether or not to grant planning permission for a wind turbine. The opportunity to make provision for them from the turnover of the scheme is not a planning purpose and is not fairly and reasonably related to the development.”

The council was not entitled to take into account the offer of the local community donation as a material consideration in their planning decision. As a consequence the decision was unlawful.

The court “was not prepared to accept that there would have been no substantial difference to the outcome of the members’ decision-making process had they appreciated that they could not take account of the community donation in determining whether consent should be granted.”

The council’s decision should be quashed.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Tail piece to planning condition may subvert democratic and statutory planning processes

In a planning condition attached to a planning permission, a “tailpiece” to that condition may on it’s face enable development to take place which could be very different in scale and impact from that applied for, assessed or permitted.

It thereby purports to enable a development to be carried out in a way that bypasses any statutory planning process.

In R (Midcounties Co-operative Ltd) v. Wyre Forest DC [2009] outline planning permission was granted for a new class A1 supermarket. The description of development in the planning permission did not specify the floor space permitted, but the application incorporated the specifications of floor space.

Condition 6 of the planning permission granted provided that the food store approved should not exceed the specified maximum “unless otherwise agreed in writing with the Local Planning Authority.” The High Court held that the tailpiece to condition 6 was unlawful as it undermined the effect of specifying floor space limits. Worse still the condition could not be severed from the planning permission. The floor space limits were of central importance.

In Hubert v Carmarthenshire County Council [2015] condition 21 to the grant of planning permission was that the wind turbine approved should be 40 metres to the centre of the hub and 67 metres to blade tip, unless given the written approval of the local planning authority.

The High Court ruled that the Midcounties principle applied here, the tailpiece to the condition was bad. The officer’s report had recognised the importance of the turbine’s dimensions, but condition 21 as drafted allowed all the safeguards to be sidestepped.

Given the centrality of condition 21 to the subject matter of the permission and the significance of the turbine’s dimensions to it’s environmental effects. The words of the tailpiece would permit variations in height so that the scale and impact of the turbine would be different from that covered by the planning permission actually granted.

The breadth of the words used in the condition meant that it could not be interpreted as being restricted to minor variations.

The condition allowed variations, up or down, and without any restriction either way, from the dimensions the Council had assessed and specified.

Indeed, the permission itself admitted that the conditions imposed could permit something different from that applied for because it expressly said that the development being permitted was that defined in the application materials “unless amended by any attached condition”.

It would be quite wrong for the planning permission to be the subject of public debate and democratic decision-making in the Council, only then to be capable of being side-stepped by use of the tailpiece. The tailpiece was therefore unlawful and had to be severed from condition 21.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planning Appeal: mistake of fact gave rise to mistakes of law

The case of Ecotricity Next Generation Ltd v Secretary of State for Communities and Local Government & Anor [2015] was an application made under s.288 of the Town and Country Planning Act 1990 to quash the decision of the Inspector to refuse an appeal to grant planning permission for a wind energy development including the erection of one wind turbine.

In East Northamptonshire DC v Secretary of State for Communities and Local Government [2014] , the Court of Appeal gave guidance on the approach under Section 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990:

“Parliament’s intention in enacting s.66(1) was that decision makers should give ‘considerable importance and weight to the desirability of preserving the setting of listed buildings when carrying out the balancing exercise’.”

A failure properly to understand and apply a relevant policy will constitute a failure to have regard to a material consideration, or will amount to having regard to an immaterial consideration and will, therefore, be an error of law, open to challenge in the courts.

In the Ecotricity Next Generation Ltd case the local church was a Grade 1 listed building. The Inspector mistakely found that the church tower would be seen in the same views as the turbine and so “the turbine would be apparent in the setting of this heritage asset.”

Whether or not “the church tower would be seen in the same views as the turbine” was not a matter of planning judgment within the exclusive domain of the decision maker.

A decision maker is under a duty to properly inform himself of the information relevant to his decision.

A mistake on an established fact which was uncontentious and objectively verifiable giving rise to unfairness is a separate head of challenge on a point of law if it can be shown that the mistake had played a material, though not necessarily decisive, part in the tribunal’s reasoning.

The Inspector’s finding that “the church tower would be seen in the same views as the turbine”, was “a mistake as to an established fact which was uncontentious and objectively verifiable” and played a material part in the Inspector’s reasoning.

The error gave rise to unfairness to the Claimant and amounted to an error of law.

Or it could be said that the Inspector fell into error by failing to properly inform herself of evidence indicating only one location at which there could be a view of the church tower, behind the proposed turbine – and then only distant.

Having regard to section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990, there was at least the possibility that the overall balance would have been different if the Inspector had proceeded to determine the appeal on the correct factual basis. Accordingly the High Court quashed the Inspector’s decision to refuse the appeal.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planners’ usual duty “to have regard to” required only specific consideration

East Northamptonshire District Council v Secretary of State for the Communities and Local Government [2014] concerned granting planning permission for development that affected a listed building or its setting. Here the planning inspector had the duty, under section 66 (1) of the Planning (Listed Buildings and Conservation Areas) Act 1990 (“the PLBCAA”), to “have special regard to” the desirability of preserving the building or its setting or any features of special architectural or historic interest which it possessed. It was ruled there that the planning inspector had not complied with it.

In Howell v Secretary of State for the Communities and Local Government [2014] the claimant tried to quash a planning inspector’s grant of planning permission for a single wind turbine on farmland fringed by the Norfolk Broads.

Relying on the above case the claimant said the inspector had failed to comply with section 17A of the Norfolk and Suffolk Broads Act 1988 (“the NSBA”) which required the Secretary of State, and his representative the inspector, to “have regard to” the purposes of conserving and enhancing the natural beauty, wildlife and cultural heritage of the Broads in exercising or performing any functions relating to, or affecting land in the Broads.

The court distinguished the East Northamptonshire case.

There the words “have special regard to” in section 66(1) of the PLBCAA meant that considerable importance and weight had to be given to the desirability of preserving a heritage asset and its setting, when balancing the development proposals against other material considerations. It created a presumption against granting planning permission.

But in this case section 17A of the NSBA applied, and it imposed on the local planning authority or the inspector, a lesser duty to “have regard to”.

This meant only that the issue had to be specifically considered. I.e. not that it had to be given more weight than other issues.

So the court rejected the claimant’s application to quash the inspector’s decision.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

DB Contractor’s absolute performance obligation not qualified by other reasonable care duties

Absolute obligations are obligations requiring full performance and only full performance will fulfil that obligation.

Professionals are generally expected to perform their obligations with reasonable skill and care – a lesser standard to comply with the terms of professional indemnity insurance (PII) policies.

Defects caused by an employer’s specification are not a contractor’s responsibility unless the contractor guarantees the construction to be fit for a specific purpose or otherwise expressly undertakes responsibility for those defects.

In MT Høgjaard A/S v E.ON Climate and Renewables UK Robin Rigg East Limited and others [2014] the employers, E.ON Climate and Renewables UK Robin Rigg East Limited (“E.On”), required MT Høgjaard A/S (“MTH”) to provide the design, fabrication and installation of the foundations for wind turbine generators for an offshore Scottish wind farm.

MTH’s basic contract obligation to E.On was to provide its services with the “due care and diligence expected of appropriately qualified and experienced designers, engineers and constructors.”

When MTH undertook the design, MTH did not know that an international standard for the design of offshore wind turbines and grouted connections contained an error.

One of the performance requirements in MTH’s contract with E.On was that “the design of the foundations shall ensure a lifetime of 20 years in every aspect without planned replacement…”

The foundations were defective and the remedial work cost EUR 26.25 million.

Was MTH liable to E.On for those defects?

Although MTH had itself relied on an incorrect standard for the foundations’ designs, MTH had, in the contract, warranted to E.On that the foundations would have a service life of 20 years. Due to that fitness for purpose guarantee it gave, it was still contractually obliged to provide a design that met that guarantee despite there being an error made by someone else. This was not in any way qualified by the co-existence of reasonable skill and care obligations elsewhere in the same contract.

The court pointed out that construction contracts usually contain both reasonable skill and care and absolute obligations and here the different standards were not in conflict.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Local development plan did not exclude Planning Committee’s right to find benefits outweighed detriments

Plant, R (On the Application Of) v Pembrokeshire County Council & Anor [2014] concerned planning for a wind farm close to an iron age fort.

The Planning Committee found that the development proposal was contrary to Policies GN1 (landscape) and GN38 (historic environment) of the Local Development Plan (“LDP”) but concluded that the development was “environmentally acceptable” and thus in compliance with Policies GN4 (renewable energy) and SP1 (sustainable development).

The claimant submitted that a development which contravenes any environmental policy within Policies GN1 to GN4 and GN33 to GN38 could not, legally, be “environmentally acceptable”, and hence could not be in compliance with Policy GN4 or Policy SP1 or, indeed, with the LDP.

So any adverse effect of a proposed development on landscape character – or on any landscape of historical, cultural or archaeological importance, including setting, meant that development could not be in accordance with the LDP.

The claimant said it was a policy that was unlikely to be overridden by any other material considerations including benefits that might accrue from the project – however small the adverse impact of the landscape or however great the benefits-even where those might have been environmental benefits.

The High Court said Policy SP1 was concerned with “sustainable development”. It required only that proposals demonstrate how positive impacts would be got and negative effects minimised, so that an informed decision could be made on sustainability.

Anyway, a development did not become “unsustainable” simply because, in one respect, it had an adverse economic, social or environmental impact; or because it was contrary to one of the GN policies.

Whether a development is sustainable needs an assessment of whether overall the development achieves a positive economic, social and environmental impact; i.e. whether, on the basis of all the material factors, the proposed development is appropriate and acceptable in planning terms.

Nothing in the LDP entrenched the landscape character in the way in the claimant suggested. It would have been contrary to the overarching aim of the LDP.

Policy GN4, required the support of development which enabled the supply of renewable energy through environmentally acceptable solutions. That required judgment as to whether, based on all material considerations weighted as the planning authority considered appropriate, the development applied for was environmentally acceptable overall.

The policy could not exclude a development because a single aspect had some adverse environmental impact.

Here with other material considerations, the adverse environmental impact caused by the proximity of the scheduled ancient monuments, had to be balanced against the positive environmental impact of contributing to renewable energy resources.

It had been concluded by the report to the Committee that the adverse impact of the former was outweighed by the latter. In other words, that, overall, the development was environmentally beneficial. That was a planning judgment Committee had clearly, been entitled to make.

This blog is posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Compliance with later discredited employer’s specification put contractor in breach of contract’s performance requirement

In The Steel Company of Canada Ltd v Willand Management Ltd [1966] the Supreme Court of Canada held that when:

– a contractor expressly undertakes to carry out work which will perform a certain function in conformity with particular plans and specifications and

– it turns out that the work so constructed will not perform the function

the express obligation to construct work capable of carrying out the relevant function overrides the obligation to comply with plans and specifications.

So, the contractor’s payment claim failed even though it had carried the work out in accordance with plans and specifications provided by the employer which turned out to be defective.

In MT Højgaard A/s v E.ON Climate And Renewables & Ors [2014], in 2006 the Claimant contractor, MT Højgaard a/s (“MTH”) entered into an agreement with the Defendant employers, E.ON Climate and Renewables UK Robin Rigg East Ltd and E.ON Climate and Renewables UK Robin Rigg West Ltd (“E.ON”) for the design, fabrication and installation of the foundations for 60 wind turbine generators (“the turbines”) for the Robin Rigg offshore wind farm in the Solway Firth.

Section 3.2.2, General Design Conditions in the construction contract, contained the following provisions:

“3.2.2.2 Detailed Design Stage

The detailed design of the foundation structures shall be according to the method of design by direct simulation of the combined load effect of simultaneous load processes (ref: DNV-OS-J101). Such a method is referred to throughout this document as an ‘integrated analysis’

The design of the foundations shall ensure a lifetime of 20 years in every aspect without planned replacement.”

In 2004 an independent classification and certification agency called Det Norske Veritas (“DNV”), had produced DNV-OS-J101 (“J101”) as an international standard for the design of offshore wind turbines and grouted connections in particular. However, the value attributed to a variable used in one of the standard’s equations was underestimated by a factor of about 10.

MTH’s designer, Rambøll Danmark A/S (“Rambøll”), like everyone else at the time, did not know of this error when it carried out the design.

In 2009 it was discovered that movement was taking place in grouted connections which had been designed using the standard. It was then that the mistake in the standard’s equation was exposed.

Following the Canadian case discussed above, the Court of Appeal concluded that the words of clause 3.2.2.2 were clear and were not inconsistent with the other terms of the contract or the intentions of the parties as reflected in the rest of the contract.

MTH had assumed full responsibility for design as stated in section 3.1, subject only to a qualification about the life of the coating.

MTH had warranted that the foundations would have a service life of 20 years and E.ON was entitled to rely on that warranty notwithstanding that other parts of the contract had required MTH to design the grouted connections in accordance with J101. Since those connections had failed within 2-3 years, MTH had breached that obligation.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Grid contributions would not exempt new power plant from adjudication under Construction Act

Where a contract does not contain any written provision for adjudication, the only way for adjudication to apply would be if the contract is a construction contract under the Housing Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009, (“the Act).

In such cases, under s.108(5) of the Act, the Scheme for Construction Contracts (“the Scheme”) would apply.

In Laker Vent Engineering Ltd (“Laker”) v Jacobs E&C Ltd (“Jacobs”) [2014], a sub-contract, dated 30 March 2012, (“the Sub-Contract”) provided for Laker to supply, fabricate and install pipe-work at Markinch Biomass Combined Heat and Power (CHP) Plant (“the Plant”) in Fife, Scotland.

Under the main contract (“the Main Contract”) with RWE Npower Renewables (Markinch) Limited (“RWE”), Jacobs had contracted for the design, manufacture, supply, construction, installation, testing and commissioning of the Plant.

As a preliminary point, Jacobs said the Sub-Contract did not contain an adjudication provision, so, the only way for adjudication to apply under the Act and the Scheme would be if the Sub-Contract was a “construction contract” under the Act.

Jacobs said that the Sub-Contract was not a construction contract because it was not an agreement for carrying out of construction operations under s.104(1). This was because the operations under the sub-contract were not construction operations. Instead, the work under the Sub-Contract comprised the assembly and installation of plant on a site where the primary activity was power generation. Such projects were expressly not “construction operations” under S105(2)(c) of the Act.

The High Court found that the whole site, including the land leased by Tullis Russell to RWE, and the whole paper mill complex, was the relevant “site”.

First, whilst part of the site shown on the plans was leased to RWE, Tullis Russell were owners of the entire freehold and, at the end of the lease, RWE’s leased part would revert to being part of the overall site.

Secondly, the aim of the power plant at that location was to provide steam and power to Tullis Russell. After 60 years their existing coal and gas burning plant was life expired. So the Plant was providing steam and electricity to serve the whole “site”.

Thirdly, the Plant occupied a mere 10% of the total paper mill site. And the Plant was generally described as being at the Tullis Russell paper mill, and, its postal address referred to the Tullis Russell paper mill.

Fourthly, the Plant was located where it was because it was to provide a power and steam facility for the Tullis Russell paper mill. That location defined the “site”. The fact that the Plant was increased to contribute to the national grid, 6% of Scotland’s renewable energy target, was merely incidental

Fifthly, the Plant did not have a continued existence after the limited period for which Tullis Russell had leased the relevant land to RWE. That demonstrated that this was not an independent power station but, rather, one which depended on its relationship with Tullis Russell.

So there was no way Jacobs could defend the proceedings on the basis that Laker’s work was carried out on a “site” where the primary activity was power generation, rather than paper making.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Court reconciles requirements of NEC3 based Civil Engineering Construction Contract

In RWE Npower Renewables Ltd v J N Bentley Ltd [2014] the Court of Appeal had to reconcile two apparently conflicting contractual requirements in a contract for civil engineering works.

Bentley agreed to carry out the works namely: (i) a power house, for the plant and machinery; (ii) the turbines and switchgear; (iii) a pipeline for water from the upper reaches of the river to go into the turbines (“penstock pipeline”); and (iv) a pipeline returning the water to the lower reaches of the river after it had gone through the turbines (“tailrace”).

The contract was on standard terms derived from the NEC3 Engineering and Construction Contract, June 2005 edition (with amendments June 2006).

Late in 2012 a dispute arose between RWE and Bentley as to the required date for completion of section 2 of the works.

The answer turned on whether Bentley’s obligation was governed by clause 6.2 of the Works Information or Option X5 in Part 1 of the Contract Data, and if the latter, what was the extent of its obligation?

The court said the contract documents should, as far as possible, be read as complementing each other, and, it was only in the case of a clear and irreconcilable discrepancy that it would be necessary to resort to the contractual order of precedence of obligations, that the contract had laid down, to resolve it.

In the present case both clauses had purported to define the content of section 2. Both had referred to the completion and testing of the penstock pipeline, which strongly suggested Bentley having to complete the whole pipe runs.

The result was that Bentley’s obligation had been to complete the pipelines by 27th May 2011.

If, in fact, there had been a genuine discrepancy between Option X5 and clause 6.2 of the contract, the contract document’s provisions for precedence would have come into play and the court would have had to interpret the language of Option X5 without regard to clause 6.2.

The court was reluctant take the order of precedence as forcing a choice between one entire clause and another if they could be construed harmoniously. Only to the extent that they could solely be interpreted as imposing different obligations in relation to the same subject matter was it necessary to apply the contract’s order of precedence.

Option X5 defined the scope of section 2 for the purpose of imposing an obligation to pay liquidated damages for delay, whereas the aims of clause 6.2 were rather less clear. But in each case, there was a single obligation, namely, to carry out the whole of the required work so as to complete section 2. So if there was a discrepancy between Option X5 and clause 6.2, the court thought it impossible to extract the part of Bentley’s obligation which related to the pipelines and treat it as a free-standing obligation that was subject to a different and less demanding timetable than the rest of the section 2 work.

Furthermore there were three strong pointers to the contracting parties having contemplated that the pipelines would be completed and tested in their entirety before the work of installing the hydro plant began.

1. Clause 3 of Part 1 of the Contract Data contained the primary terms for the period for performing the contract work.

Bentley’s work was limited to the civil engineering elements of the project i.e. construction of the power house, penstock pipelines and tailrace. Completion of the intake was due by 22nd November 2010 and completion of pipeline testing by 24th November 2010. This was a clear indication that the parties intended that the pipelines should be completed and tested by the end of November 2010, even before the powerhouse had been made weathertight.

Option X5, updated these dates and instead required the powerhouse to be weathertight by 14th February 2011, and the pipelines to completed by 27th May 2011, because, by the time the contract was signed, the date of delivery of the hydro plant had been put back.

Howerver this underlined, and was no way inconsistent with, the parties’ original intention which had been for the pipelines to be completed before the hydro plant was installed and there was no reason to think that their intentions had changed in that respect.

2. Bentley’s Tender Query response dated 12th March 2010 and its production of a revised programme for the works. It provided a good indication of what the parties had in mind at the time they entered into the contract. The response showed the pipelines being completed by the end of November 2010. The programmes therefore all tended to reinforce the conclusion that when entering into the contract the parties had contemplated completion of the pipelines well before the hydro plant was due to be delivered.

3. The language of Option X5 itself. Bentley had argued that section 2 should be read as requiring completion of the pipelines only so far as needed to enable the hydro plant to be installed. However, in section 1 the parties had been more explicit in distinguishing works where only partial completion was required by a specific milestone.

In contrast they had not found it necessary to talk about partial completion in Section 2 suggesting it had not been contemplated as being sufficient for the pipelines to be partially completed by the stated deadline date.

The court reached this conclusion even though only a very short length of each pipeline adjacent to the powerhouse had to be in place to enable the hydro plant to be installed. However the court insisted its interpretation was consistent with (and therefore supported by) indications to be found elsewhere in the contract.

So section 2 of the works had not been completed until the whole of the penstock pipeline had been completed and tested.

Therefore the court dismissed Bentley’s appeal.

This blog has been posted out of general intereest. It does not remove the need to get bespoke legal advice in individual cases.