There will be no State Aid by a public authority if a rational private investor might have entered into the transaction on the same terms, having regard to the foreseeability of obtaining a return and leaving aside all social and policy considerations. Where the authority acts in a way that corresponds to normal market conditions, the transaction cannot be regarded as State Aid. This is the market economy investor principle.
The principle has been considered by the Court of Appeal in R (Sky Blue Sports & Leisure Ltd) v Coventry City Council (2016) EWCA Civ 453. The Court of Appeal held that a loan of £14.4 million by the City Council was not State Aid.
The loan was to a company that was at the time the City Council’s half-owned subsidiary, which operates the Richoh Arena, which contains the Stadium where Coventry City Football Club and now also Wasps Rugby Club play. A commercial interest rate in accordance with EU Commission guidelines was charged, the loan was in other respects on commercial terms, and there was a realistic prospect of the City Council’s shareholding in the company acquiring significant value. There was no selective advantage for the company. A private investor in the position of the Council would not have focussed exclusively on the loan to value ratio.
Tomlinson LJ observed that the analysis of risk involved in the application of the market economy investor principle requires public undertakings, like private undertakings, to exercise entrepreneurial skills which, by the very nature of the problem, implies a wide margin of judgment on the part of the investor: paragraphs 11, 16, and 23-29, especially 25.
… in R ota Khan v SSHD [2016] EWCA Civ 416, a decision of 4th April 2016. Beatson LJ, setting aside permission to appeal (the other judges agreeing), said
35 The duty to disclose all material facts known to a claimant in judicial proceedings including those which are or appear to be adverse to his case prior to applying for permission is well established …
36 Notwithstanding the provision by CPR 54.8 for a respondent to judicial review proceedings to file an acknowledgement of service and summary grounds, it remains the case that a claimant in judicial review proceedings must ensure that the judge dealing with such an application has the full picture in order to make the relevant decision …
Peter Oldham QC
Two important points are confirmed by Ouseley J in St Modwen Developments v SoS for CLG and East Riding of Yorkshire Council [2016] EWHC 968 (Admin). First, there is no requirement for a site to have existing planning permission in order for the site to be available for housing supply for the purposes of NPPF para 47. Second, the LPA had been entitled not to assess housing need only by reference to their own area.
The felling by a local highway authority of trees in the highway, including its pavements and verges, is not “development” under the Town and Country Planning Act 1990. It does not require planning permission, or an environmental impact assessment, or consultation. On the contrary, when such a tree is a source of danger or obstruction or needs to be moved in order to facilitate highway repairs, the authority is under a statutory obligation to remove the tree pursuant to its Highways Act 1980 duty to repair and maintain the highway. So held in R (Dillner) v Sheffield City Council (2016) EWHC 945 (Admin).
At the beginning of March this year, I wrote a paper on the legal mechanics of Brexit. (You can find it here if you are interested.) One of the things it discusses is how the UK – or in some cases England and Wales, and (separately) Scotland – would go about retaining or replacing EU-derived law if the UK left the EU.
On 19th April 2016 the Information Commissioner’s Office put out this statement:-
“The UK will continue to need clear and effective data protection laws, whether or not the country remains part of the EU.
The UK has a history of providing legal protection to consumers around their personal data. Our data protection laws precede EU legislation by more than a decade, and go beyond the current requirements set out by the EU, for instance with the power given to the ICO to issue fines. Having clear laws with safeguards in place is more important than ever given the growing digital economy, and is also central to the sharing of data that international trade relies on.”
Data protection is an interesting example of how Brexit might affect our law, and throws up the sort of questions which would apply across the legal board in the event of a “leave” vote.
Much of our data protection law, though derived from EU instruments, is embodied in primary legislation, the Data Protection Act 1998 – so that the repeal of section 2 of the European Communities Act 1972 (if that happened) would not in itself result in the repeal of our data protection framework. The same is not true in many other fields, which are governed by statutory instruments made under section 2 of the ECA 1972, rather than primary legislation.
But the DPA is currently to be to understood in the light of EU-derived principles and caselaw. If we left the EU, and kept the DPA, would those principles and the caselaw have grown domestic roots and continue to shape the interpretation of the DPA?
Another question. To what extent would leaving the EU allow the UK to reconsider what sort of data protection regime it wanted? Principles of privacy are separately embodied in Article 8 of the ECHR, which will remain enforceable under the Human Rights Act 1998, regardless of the outcome of the vote on 23rd June. And if a significant information protection gap were left as a result of the re-shaping of our data protection law post-Brexit, common law or equity might step in.
This leaves out of account questions of what (if any) information protection arrangements the EU might be looking for from the UK in bilateral trade and security arrangements. But that is a political question.
Peter Oldham QC
In Case C-147/15, Provincia di Bari v Edilizia Mastrodonato srl, Advocate General Kokott, in her Opinion delivered on 21 April 2016, observed that the Italian Region of Apulia continually confronts the ECJ with environmental questions. By way of example only: how, in the light of the Habitats Directive, are certain decisions of a City Council to be judged? Does that Directive prohibit the installation of wind turbines in bird protection areas? Was there any illegal waste disposal site in that Region or not? She further observed that perhaps these cases have contributed to an increased awareness of the competent authorities, so that they were keeping a critical eye upon plans for backfilling a former quarry with waste.
In any event, the authorities were in dispute with the operator of such a project as to which the strict provisions of the Landfill Directive are applicable or just the general law on waste. At the basis of the dispute is the fact that the Mining Waste Directive refers to the Landfill Directive for the backfilling of excavation voids with waste. The Court must now ascertain whether this reference is to the legal ground or the legal consequences, that is whether the conditions for application of the Landfill Directive must be met or whether its legal consequences are applicable to backfilling without further examination. This question is influenced by differences in the language versions in which the reference to the Landfill Directive is formulated. Moreover, the Court must in particular address whether and under which conditions the backfilling of a quarry with waste is a waste recovery operation or a waste disposal operation.
In order to clarify whether the backfilling of the quarry falls under the Landfill Directive, the Advocate General identified three questions: (1) whether the Landfill Directive is always applicable to the backfilling of a quarry with waste; (2) whether the Landfill Directive is applicable only to operations consisting of waste disposal or also to recovery; and (3) whether the backfilling of a quarry with waste is to be seen as disposal or recovery.
She answered the first question that backfilling with waste other than extractive waste is subject to the Landfill Directive when the conditions of application of that Directive are met.
She responded to the second question, as to the scope of application of the Landfill Directive, as follows. The distinction between the disposal and the recovery of waste is of central importance in the EU law on waste. In the hierarchy of waste, disposal is in last place, being the worst option, whereas recovery is in the second to last place. Recovery is therefore in principle to be preferred over disposal. Recovery serves as a sensible use of waste, as the waste replaces other materials which would otherwise have been used to fulfil a particular function. Recovery of waste through the deposit of waste onto or into land does not fall under the Landfill Directive.
She concluded that the Landfill Directive is not applicable to recovery of waste, but only to the disposal of waste through its deposit onto or in the ground. However, only after suitable waste is completely recovered through some procedure, and thus has acquired the same properties and characteristics as a raw material used for backfilling, could it fall outside the application of the law on waste.
Thirdly, in order to establish whether the specific provisions of the Landfill Directive or just the general stipulations of the Waste Directive apply to backfilling quarries with waste, it must be clarified whether, or under which conditions, this use is to be seen as waste disposal or waste recovery. She said that this question is to be answered on the basis of the currently applicable Waste Directive, as so far no waste has been deposited in the quarry. All waste coming into question must as a result be treated in accordance with the currently applicable provisions. The fact that the authorisation procedure for backfilling the quarry was initiated when the consolidated former Waste Directive was still in force cannot alter that conclusion. The definition of “disposal” in Article 3(19) of the Waste Directive encompasses any operation which is not recovery, even where the operation has as a secondary consequence the reclamation of substances or energy. Article 3(15) of the Waste Directive defines “recovery” on the other hand as any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy. This definition largely corresponds to the case-law of the Court on the old Waste Directive.
Recovery has two conditions, namely that first the waste must serve a useful purpose and secondly must replace materials which would otherwise have been used to fulfil a particular function. The first condition is essential, as only a useful employment of waste can even be recognised as a recovery of waste. The use of waste for backfilling quarries seems in principle to be useful. However, the definition of disposal already shows that the reclamation of substances or energy does not preclude a disposal, and that a useful employment of waste in itself is not sufficient. More crucial to a recovery operation is that the waste replaces materials which would otherwise have been used to fulfil a particular function. The UK rightly points out this characteristic. Because of high costs, this Member State doubts that quarries would typically continue to be backfilled when no waste is available for it. The fact that backfilling may possibly be a condition of the authorisation for the quarry alters nothing, as authorisation as a general rule reflects the plans of the operator and can also normally be changed if it should emerge that backfilling would cause disproportionate costs.
At first glance this view is surprising, as the ECJ has already in principle recognised backfilling as a recovery operation. However, those cases concerned the backfilling of galleries which, without long term backfilling, were in danger of collapsing, which could result in damage on the surface. Comparable risks for disused quarries are clearly much more limited. Where such risks exist, complete backfilling is probably not necessary to counter them. It does not appear necessary in every case to backfill a quarry in order to be able to use that land for other purposes.
Accordingly says the Advocate General the UK is correct in its view that the competent national authorities must carefully assess whether other materials are in fact being replaced through backfilling a quarry with waste. An important indicator in this regard is whether the operator of the quarry has to pay for the waste used or whether he is paid for its use. In the latter case there are strong grounds for the assumption that the quarry would not be backfilled without the waste and it is therefore a case of waste disposal.
The third part of the question is to be answered in the sense that backfilling a quarry with waste other than extractive waste constitutes a waste recovery operation if the competent authorities determine that the waste serves a useful purpose by actually replacing other materials, which in particular requires the suitability of the waste as a replacement for those materials.
By a change to its housing allocations policy, Ealing Council introduced a Scheme whereby 20% of all available lettings would be removed from the general pool and would be reserved for (a) “Working Households” and (b) “Model Tenants”. In brief, a working household was one where the applicant or another member of the household worked for at least 24 hours per week. A model tenant was an applicant for transfer who already had a Council secure tenancy but who was seeking more appropriate accommodation and who had complied with the terms of the tenancy. The broad aims behind the Scheme are to incentivise tenants to work or return to work and to encourage good tenant behaviour.
In R (H) v Ealing LBC [2016] EWHC 841 (Admin) the High Court has ruled the Scheme unlawful. The four grounds of successful challenge included that the Scheme unlawfully indirectly and without justification discriminated against women, the disabled and elderly persons. The High Court also found unjustified ECHR discrimination against those who do not hold council tenancies, breach of the PSED, and breach of the Section 11 Children Act 2004 duty to safeguard and promote the welfare of children.
Ejusdem generis has no place in the interpretation of planning conditions, the Court of Appeal has held in R (XPL Ltd) v Harlow Council [2016] EWCA Civ 378, a Judgment on 15 April 2016 on appeal from a first instance decision on 28 November 2014 with respect to a breach of condition notice served by the Council on 3 June 2014.
Lindblom LJ reiterated the principles at paragraphs 16 and 17. The general rule relating to the interpretation of a planning permission that is clear, unambiguous and valid on its face, is that regard may only be had to the planning permission itself, including the conditions, if any, imposed upon it and the reasons given for those conditions in the decision notice itself. The planning permission and its conditions must be construed as a whole, as a “reasonable reader” would. If there is ambiguity in the wording of the permission, one can look at extrinsic material, including the application, to resolve it. There is only limited scope for the use of extrinsic material in the interpretation of a public document, such as a planning permission. It is also relevant to the process of interpretation that a failure to comply with a condition in a public law consent may give rise to criminal liability.
The Court of Appeal found that the planning condition in the Harlow case satisfied the three conditions for validity: relevance to planning, a reasonable relationship to the development permitted, and reasonableness in the sense of its not being perverse. Lindblom LJ said, at paragraph 27, that in interpreting it he did not accept that the “ejusdem generis” principle “has any place” in the interpretation of planning conditions. He described the suggestion that it did as “novel”. In any event he saw no need to resort to it.
At paragraph 30 he added:-
“… there is no ambiguity either in the condition itself or in the condition and its reason read together. It follows that there is no need to go in search of extraneous material … as an aid to interpretation. Conditions and their reasons should be interpreted, if they can be, in a benevolent way, and not in a search for inconsistency or lack of precision …”