Court roundup: Five key legal judgments you shouldn't miss

Courts have ruled recently on a North Sea drilling permit, compensation for the sale of unreliable biomass boilers, and a fraud-hit fuel recycling business, planning permission for an energy-from-waste plant and low traffic neighbourhoods in London. Here’s what you need to know

BP's Vorlich oil field in the North Sea is set to go ahead. Photograph: BP BP's Vorlich oil field in the North Sea is set to go ahead. Photograph: BP

North Sea drilling permit ruled lawful

Greenpeace’s attempt to overturn permission granted to BP to drill the Vorlich oilfield in the North Sea has failed.

In a ruling delivered by Lord Carloway, Scotland’s most senior judge, the Inner House of the Court of Session found that greenhouse gas emissions resulting from the use of the oil from the field were irrelevant for legal purposes when considering the climate change impact of the project, part of the environmental impact assessment (EIA) process.

“The question is whether the consumption of oil and gas by the end user, once the oil and gas have been extracted from the wells, transported, refined and sold to consumers, and then used by them are ‘direct or indirect significant effects of the relevant project’. The answer is that it is not,” says the judgment.

He also rejected Greenpeace’s contention that a consultation on the project’s EIA had been insufficiently publicised.

The campaign group said it would appeal the judgment for a second time, taking it to the Supreme Court.

Read the full ENDS story.

Case: Greenpeace Ltd v Advocate General (ex parte the Secretary of State for Business, Energy and Industrial Strategy) and the Oil and gas Authority

Date: 7 October

Ref: [2021] CSIH 53

 

Compensation ordered over ‘broken’ biomass boiler

The Technology and Construction Court has ordered the payment of £11m compensation to a company that bought the operator of two biomass boilers that never properly worked and breached emission limits.

Infrastructure investor Equitix bought Gaia Heat Ltd from the nine defendants (eight individuals and a company, Aqua Ventures International FZE) in August 2016. Gaia was set up to supply heat to Greenergy Biofuels Ltd’s site in Immingham.

The former plant manager summed up the situation as “a bloody shambles”. The judgment says that there was a fire in an ash removal system that February, only virgin (rather than waste) wood could be used, there were substantial exceedances of air pollution limits and one of the two boilers exploded just before the sale to Equitix was agreed.

Greenergy cancelled its contract the following year, citing the plant’s unreliability.

Equitix succeeded in its claim that warranties supplied by the defendants were false, Judge Kerr finding that “commissioning certificates were worthless”, “poor quality feedwater was used” and that the boilers had been subjected to excessive dosing with lime and urea (used to control acid gases and nitrogen oxides, respectively). Warranties for compliance with permit conditions and maintenance were also given falsely, he concluded.

The defendants had also not properly indicated that Greenergy had indicated an intention to terminate the contract prior to the sale, for which the judge said they “have no defence”. The upshot was that the value of Gaia was around £1m, far less than the £14.45m claimed.

However, the contract limited liability to only £11m.

Read the full ENDS story.

Case: EQUITIX EEEF BIOMASS 2 Ltd v Fox & Ors

Date: 27 September

Ref: [2021] EWHC 2531 (TCC)

 

Court backs £875,000 claim against fuel recycling business

The Commercial Court, sitting in Manchester, has ordered a widow to pay £875,000 to the company that bought her late husband’s fuel recycling operation, finding that warranties contained in the deal were breached.

Jean Blundell sold Centec International Ltd, which would process the contents of petrol tanks that had been filled with diesel, for example, to BIP Chemical Holdings Ltd for £1.4m in 2019. The two firms neighboured each other on a Cheshire industrial estate. The acquiring business had been told that profit for the year was expected to be around £250,000.

The sale contract warranted that Centec, “was not, or was not in negotiations to become, bound by or entitled to the benefit or any agreement or arrangement, or subject to any liability, of an unusual, onerous or abnormal nature or not of an entirely arm's length nature,” according to the judgment.

However, BIP claimed that Centec “had been subject to a prolonged and systematic fraud” by one of its directors and Refuels Ltd, which supplied contaminated fuel, wrote judge Neil Cadwallader. The arrangement was alleged to have been paying more than the fuel was worth and splitting the difference between them. The contract with the firm was cancelled in response, leading Refuels to threaten to obtain an injunction and sue for unpaid invoices exceeding £130,000. However “nothing further was heard” from it, says the judgment.

But the Refuels contract “was all that made Centec a viable concern”, leaving it with no business to conduct.

On the evidence presented to the court, the balance of probability is that Refuels “did defraud Centec in conspiracy with Mr Davies”, Cadwallader found. “It is telling that they have apparently decided to let sleeping dogs lie, and have not themselves pursued outstanding invoices,” he added.

The warranty was therefore worthless, though the judgment stresses that Blundell was unaware of the all

Case: BIP Chemical Holdings Ltd v Blundell

Date: 9 September 2021

Ref: [2021] EWHC 2590 (Ch)

 

Appeal over North Lanarkshire energy-from-waste plant refused

The Scottish government’s rejection of plans to build an energy-from-waste (EfW) plant east of Glasgow has been upheld by the Inner House of the Court of Session.

The dispute arose as North Lanarkshire Biopower Ltd, associated with the series of biomass plants and projects under the Cogen brand, claimed that ministers had made the decision last year unlawfully.

The planning history of the site in Carnbroe is complex. An original application to build an EfW facility there was refused by the local council, then overturned following a public inquiry. North Lanarkshire Council then twice attempted to appeal the decision.

The application put before the court, which sought to make changes to the existing permission, was turned down by the council in 2018. They included new buildings closer to existing and prospective residential areas, a much higher stack and being able to process up to 204,000 tonnes of waste per year, up from only 24,000t.

The Scottish government subsequently refused the proposal on appeal, which the company sought to challenge, despite the plan being supported by a planning reporter. According to a note sent to officials, the responsible minister considered that the scheme was “so materially different that it is a new application”. He added that the 80-metre high stack would “dominate the surrounding area” and would be unacceptably close to housing, while criticising its lack of connection to a district heating scheme or other avenue for reusing waste heat.

However, the official reason given was that the visual impacts “significantly and demonstrably outweighed” its benefits. The minister’s other views were not mentioned.

The appellant argued that the rejection was unfair, as they were not offered the opportunity to respond to the original reasons offered.

However, as the three judges who considered the case wrote: “The minister may have had four reasons in mind at some point earlier in the process, but those did not form part of the eventual decision. There is nothing unusual about that.” The process that was followed is, therefore, “not capable of successful challenge,” they concluded.

Case: North Lanarkshire Biopower Ltd v Scottish Ministers     

Date: 14 September 2021

Ref: [2021] CSIH 47

 

Challenge to low traffic neighbourhoods falls

A judge has thrown out an attempt to bring a stop to controversial ‘low traffic neighbourhoods’ (LTNs) in the London borough of Hackney.

LTNs are places where through motor vehicle traffic has been removed or reduced. While improving air quality within them, they can displace traffic outside, potentially worsening pollution in other areas.

HHRC Ltd – standing for Horrendous Hackney Road Closures – advanced four grounds that the council’s emergency transport plan, intended to respond to the impacts of Covid-19, were unlawful. It argued that Hackney Borough Council:

  • Failed to discharge its duty under section 16 of the Traffic Management Act 2004, by not considering the impact on the strategic highways network surrounding LTNs. 

  • Did not properly investigate the plan’s impact on air quality.

  • Breached its public sector equality duty under section 149 of the Equality Act 2010 by failing to have due regard to the LTNs’ impact on protected groups of people.

  • Failed to properly consult on the plan, contrary to common law.

All four grounds were found not to have merit and the application for judicial review was dismissed, leaving the plan standing.

Case: HHRC Ltd v Hackney Borough Council

Date: 3 September 2021

Ref: [2021] EWHC 2440 (Admin)

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