Town and country planning – Planning policy – Airport – Claimant companies applying for judicial review of defendant secretary of state’s Airports National Policy Statement designating third runway at Heathrow as preferred scheme for meeting need for increased airport capacity in South East England – Whether decision of defendant was lawful – Claim dismissed
The defendant secretary of state made a decision under section 5 of the Planning Act 2008 to designate the “Airports National Policy Statement: new runway capacity and infrastructure at airports in the South East of England” (ANPS). The ANPS concluded that airport capacity in the South East of England should be increased and that increase should be provided by constructing a third runway at Heathrow Airport to the north west of the current runways (the NWR Scheme).
The claimant companies, which supported the expansion of Heathrow, had promoted an alternative scheme, to which they owned the intellectual property rights, which involved an expansion of capacity at Heathrow by way of an extension of the current northern runway so that it could effectively operate as two separate runways. That scheme was known as the Extended Northern Runway (ENR) Scheme.
The first interested party was the owner and current operator of Heathrow. It had promoted the NWR Scheme. The second interested party owned a significant portion of the land within the geographic boundary of the NWR Scheme and supported the expansion of Heathrow by way of the NWR Scheme; but it proposed a different solution to the manner in which the scheme was to be implemented. Whereas the first interested party proposed new terminal facilities related to the existing facilities which it operated, the second interested party proposed a distinct terminal which it would develop and operate.
The claimants applied for judicial review of the defendant’s decision. The issues were: (i) whether the defendant had acted unlawfully in requiring the first interested party to provide a guarantee or assurance that it would implement the claimants’ scheme if it were selected as the preferred scheme for airport expansion, in breach of the claimants’ legitimate expectation that the defendant would select the ENR Scheme if he found it to be the most suitable scheme; and (ii) whether the defendant had acted in breach of articles 106(1) and 102 of the Treaty on the Functioning of the European Union (TFEU) by making the provision of that guarantee or assurance an effective pre-condition to the selection of the ENR Scheme, thereby allowing the first interested party to abuse its dominant position.
Held: The claim was dismissed.
(1) As regards legitimate expectation, the court was required to consider: (i) whether there a legitimate expectation which the defendant was under some legal obligation to fulfil; (ii) if so, whether the defendant could resile from it; and (iii) if there was a legitimate expectation from which the defendant could not resile, whether he acted unlawfully by breaching or frustrating that expectation.
Considering all the materials before the court, there was no evidential basis for the legitimate expectation alleged by the claimants. There was no express promise. Instead, the claimants relied upon all of the assurances given by both the Airports Commission and the defendant. Representations by the Airports Commission, a body independent of the Department of Trade and the defendant, were not the representations of the defendant and could not be attributed to him. Such representations could not be used for the purpose of creating a legitimate expectation binding the defendant. The defendant had agreed with the case for airport expansion, and decided to further consider the options shortlisted by the Airports Commission. In order to do so, statements of principle were agreed with the promoters of each scheme, and the defendant proceeded to consider the merits of those schemes. The defendant had considered the risks arising out of the fact that the claimants, as promoters of the ENR Scheme, neither owned nor operated Heathrow Airport after the Commission’s Final Report had been published. It was impossible to see how the bare request for an assurance in relation to the claimants’ inability themselves to deliver the ENR Scheme could itself found the alleged or any legitimate expectation. On the face of a statement of principles between the Department of Trade and the claimants, the claimants could not have thought that any express or implied assurances in the statement of principles had been legally enforceable. Given the express exclusion of rights based on a legitimate expectation in the statement of principles, a formal and carefully negotiated document, the claimants could not reasonably have considered that any of the less formal messages emanating from the defendant could be relied on as creating or supporting a legally enforceable legitimate expectation: R v Devon County Council, ex parte Baker [1995] 1 All ER 73 and R v Somerset County Council, ex parte Fewings [1995] 1 WLR 1037 considered.
(2) This was a claim for judicial review and the claimants were seeking only the quashing of the defendant’s decision to designate the ANPS. That was a public law ground and the remedy sought was a public law remedy.
The claimants had chosen to bring a competition law claim not as a self-standing claim, but within the framework of a claim for judicial review. The court had found that the promoter-specific issues regarding the ENR Scheme played no material part in the decision to prefer the NWR Scheme over the ENR Scheme. For that reason alone, the ground of challenge based on competition law failed. Had the claimants’ framed their case as a competition law challenge to the preference decision and sought to challenge that decision in late 2016, that point might not arise. However, even if it had been so framed, that claim would not have succeeded.
It could not sensibly be said that the failure on the part of the first interested party to provide a commitment or assurance to the defendant regarding the ENR Scheme could have influenced the structure of or competition in the market for the provision of airport operation services (and related services) in the South East of England, even if the defendant’s preference decision was affected by the first interested party’s failure to provide the commitment or assurance requested. That was so, given that the market in which the first interested party operated was a regulated market, where the sector regulator had a range of tools to ensure that substantial market power was not abused. The claimant’s challenge sought to question something done by the defendant in the course of preparing the ANPS, namely the preference decision, where that decision did not, even potentially, affect competition or market structure, whilst seeking to quash the designation of the ANPS. However, the designation of the ANPS was not affected by the promoter-specific risk. There was a disconnect between the breach of competition law alleged by the claimants and the decision which section 13(1) of Planning Act 2008 allowed them to challenge. Therefore, even assuming that the preference decision was materially affected by the defendant’s consideration of the promoter-specific risk, no breach of article 102 occurred and, inevitably, none was caused by a state measure under article 106(1). The preference decision was just one step towards the designation of the ANPS. By itself, it had no anti-competitive effect. The question of which scheme should be preferred had no competitive effects at all.
Martin Kingston QC, Robert O’Donoghue QC, Satnam Choongh and Emma Mockford (instructed by DAC Beachcroft LLP) appeared for the claimant; Robert Palmer QC, Alan Bates, Richard Moules and Andrew Byass (instructed by the Government Legal Department) appeared for the defendant; Michael Humphries QC, Gerry Facenna QC and Richard Turney (instructed by Bryan Cave Leighton Paisner LLP) appeared for the first interested party; Charles Banner QC (instructed by CMS Cameron McKenna Nabarro Olswang LLP) appeared for the second interested party; Sarah Hannett (instructed by Office of the Speaker’s Counsel in the House of Commons) appeared for the intervener.
Eileen O’Grady, barrister
