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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Solaria Energy UK Ltd v Department for Business, Energy And Industrial Strategy [2020] EWCA Civ 1625 (Hearing 4 November 2020) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2020/1625.html Cite as: [2020] WLR(D) 674, [2021] 1 WLR 2349, [2021] WLR 2349, [2020] EWCA Civ 1625 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
BRISTOL DISTRICT REGISTRY
(HHJ RUSSEN QC)
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE COULSON
and
LADY JUSTICE ROSE
____________________
SOLARIA ENERGY UK LIMITED |
Appellant |
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- and - |
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DEPARTMENT FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY |
Respondent |
____________________
Tom Weisselberg QC and Dominic Howells (instructed by Government Legal Department)
for the Respondent
Hearing Date: 4th November 2020
____________________
Crown Copyright ©
LORD JUSTICE COULSON:
1. INTRODUCTION
(a) The claims for loss and damage at paragraph 49 of the Particulars of Claim, said to represent a loss of marketable goodwill (calculated as "the capitalised value of the expected future cash flow generated" by Solaria's sub-contract), did not amount to a possession pursuant to A1P1. The primary ground for this submission was that, unlike the assumed facts in Breyer, the sub-contract was not capable of assignment and therefore, by reference to the authorities, could not in law amount to a possession.
(b) The claim was statute-barred. The claim had not been brought within the one year period identified in section 7(5)(a) of the Human Rights Act
("HRA"), and the Department submitted that, by reference to the alternative provision at section 7(5)(b), it would not be equitable to allow the claim to be brought so long after "the act complained of" (ie the proposal of 31 October 2011).
2. THE FACTUAL BACKGROUND
"Assignment and Sub-letting
Non-Assignment
3.1 The Sub-Contractor shall not without the [prior] written consent of the Contractor assign this Sub-Contract or any rights thereunder.
Consent to sub-letting
3.2 The Sub-Contractor shall not without the [prior] written consent of the Contractor (which consent shall not be unreasonably delayed or withheld) sub-let:
.1 the whole or any part of the Sub-Contract Works; or
.2 the design for the Sub-Contractor's Designed Works.
The Sub-Contractor shall remain wholly responsible for carrying out and completing the Sub-Contract Works in all respects in accordance with this Sub-Contract notwithstanding any such sub-letting and the Contractor's consent to any such sub-letting of design shall not in any way affect the obligations of the Sub-Contractor under clause 2.13.1 or any other provision of their Sub-Contract."
3 THE JUDGMENT
"52. In the light of the decision in Murungaru, which was followed by Coulson J in Breyer, I regard the key question to be whether or not the contractual rights which Solaria enjoyed under the contract had a monetary value which could be marketed for consideration. Although Solaria had negotiated with GBBS a contract which had an economic value to it at the date of the Proposal (and in that respect this business contract was clearly in a different category from Dr Murungaru's ongoing medical treatment) the weight of authority indicates that, as with goodwill, whether or not that value is marketable is the central consideration. I have already noted that Lewison J said that transmissibility was not necessarily the touchstone but he said it is "a highly relevant factor" and went on to note the significance which the Court of Appeal in Malik had attached to rights which were not transferable and therefore lacked economic value. The bundle of rights could not be viewed as an "asset". In Breyer, by contrast, Coulson J noted that, on the basis of the assumed facts, the contracts before him were assignable...
54. By an amendment to the JCT 2005 Design and Build Sub-Contract in the present case, it was agreed that Solaria would not assign the sub-contract or any rights under it without the prior written consent of GBBS. A similar restriction was placed upon the "sub-letting" of the whole or any part of the sub-contract, with the proviso that GBBS's written consent would not be unreasonably withheld or delayed. The Department contends that the absence of a right in Solaria to assign the contract without GBBS's consent means that its economic value was not a marketable one. The sub-contract also contained certain warranties given by Solaria direct to NCC and they included the warranty that Solaria would continue to perform its obligations under the sub-contract (and not assign that warranty).
55. In response, Mr Adams' skeleton argument made the points contained in paragraphs 41 and 42 of Mr Jones' witness statement which I have already quoted above. He submitted that Solaria might have realised value for the contract by dealing with it even without GBBS's consent and that the point is reinforced by the reference to the obligation upon GBBS not to unreasonably withhold or delay its consent to a subletting.
56. I am satisfied, to the standard which reflects the ultimate burden upon the Department as the applicant for summary judgment, that this is not a good response."
"76. In truth, Solaria has no intelligible answer to that question. The facts show that instead of promptly bringing its A1P1 claim against the DECC, before October 2012, Solaria continued to deliver PV panels to GBBS until July 2012. It did so in return for being paid at the rate of £1.10 per watt, rather than £1.35 per watt, but on its own case upon the post-Proposal agreement reached with GBBS it did so in circumstances where (the Proposal having subsequently foundered) it should have been entitled to payment at the full rate. Indeed, in July 2013 Solaria issued an invoice to GBBS for the greater part of what it now seeks to recover from the Department under the categories (1) and (2) heads of loss; and on 26 August 2014 it issued proceedings against GBBS for recovery of the difference. As I have already noted, those proceeding were stayed following the appointment of administrators of GBBS in March 2015."
"106. The failure to bring proceedings over the Proposal before the effective date of the Standstill Agreement (namely 21 December 2016 when the letter of claim was sent) clearly has prejudiced the Department. Within weeks of the Proposal being published Solaria knew of the legal challenge to its proposed implementation. If Solaria had acted promptly by looking to the DECC for the loss that had in fact resulted from it receiving from GBBS the lower rate of £1.10 per watt for PV panels (even if that should not have been the legal consequence of its agreement with GBBS) its claim could have been managed alongside the ones in Breyer.
107. As things now stand, however, the Department would be faced with the prospect of the evidential and financial implications of a claim commenced only at the conclusion of the Breyer litigation. I accept Mr Weisselberg's submission, which is supported by the evidence from Mr Olsen of the GLD, that the evidential difficulties would not only reflect the inevitable consequences of further fading memories on the part of those behind the publication of the Proposal but also the difficulties likely to be encountered in disentangling the effect of the Proposal from a falling market in PV installations caused by the revised one which took effect, without challenge, whilst Solaria continued to supply GBBS. As to that, I have already referred to the apparent strength of the Department's likely defence based upon GBBS's novus actus. Yet the Department would be expected to attempt to adduce evidence from the officers or representatives of GBBS, to explore the reasons why Solaria were not paid the full £1.35 per watt, when that company went into administration over 4 years ago. Mr Olsen also makes the incontrovertible point (which chimes with what Rix LJ said in M) that bringing this very late claim is at odds with the public policy objective of encouraging the efficient use of public resources which I believe I am entitled to assume was in the Department's mind when reaching its settlement with the Breyer claimants."
4 ISSUE 1: THE A1P1 CLAIM
4.1 The Law
"… The licence itself is not the "possession" and…whether the economic interests that flow from it are a possession depends on the facts, one of which may be the marketable goodwill that can flow from the exercise of a licensed trade…"
Another case under A1P1 involving potentially vague and non-contractual rights was R (Countryside Alliance and Others) v Attorney General [2008] 1 AC 719, which concerned the right to fox hunt.
"45. Some of the characteristics of the contract in the present case are not in doubt. First, the benefit of the contract is incapable of assignment. Dr Murungaru could not confer the right to medical treatment on anyone else. Second, as a contract for personal services it cannot be vicariously performed. No other doctor could perform the treatment. Third, if, for example, Dr Murungaru were to become bankrupt under English law, the contract would not vest in his trustee. If he died, his personal representatives would not be able to take advantage of the contract. Fourth, it is incapable of being enforced by injunction or specific performance. Fifth, there is no suggestion that Dr Murungaru has paid for any medical treatment in advance. If, having received medical treatment, Dr Murungaru refused to pay for it, the doctors would be entitled to recover the agreed payment by action. The debt would be a chose in action which the doctors would be entitled to assign to someone else. Likewise, if the doctors refused to treat Dr Murungaru, he would be entitled, at least in theory, to recover damages for breach of contract, and his right to damages would itself be a chose in action capable of being assigned to someone else. But although breach of the contract may give rise to claims capable of being choses in action, I doubt whether the underlying contract itself is a chose in action. To take an analogy: a claim for damages for personal injury (say, a broken leg) is undoubtedly a chose in action. But one would hardly say that the fracture itself is property…
58. In the present case, Dr Murungaru's contractual rights have none of the indicia of possessions. They are intangible; they are not assignable; they are not even transmissible; they are not realisable and they have no present economic value. They cannot realistically be described as an "asset". That is the touchstone of whether something counts as a possession for the purposes of A1 P1. In my judgment Dr Murungaru's contractual rights do not."
"49. As I have said, the distinction between goodwill and loss of future income is not always easy to apply. But in my view, the judge was right to see a clear line separating (i) possible future contracts and (ii) existing enforceable contracts. Contracts which have been secured may be said to be part of the goodwill of a business because they are the product of its past work. Contracts which a business hopes to secure in the future are no more than that. For this reason, I would uphold the judge's classification."
4.2 Analysis
5 ISSUE 2: LIMITATION
5.1 The Law
"7 Proceedings.
(5) Proceedings under subsection (1)(a) must be brought before the end of—
(a) the period of one year beginning with the date on which the act complained of took place; or
(b) such longer period as the court or tribunal considers equitable having regard to all the circumstances, but that is subject to any rule imposing a stricter time limit in relation to the procedure in question…"
"30. It was common ground in the submissions to us that a court should not add to or qualify or put any gloss upon the words "equitable having regard to all the circumstances" when considering the exercise of the discretion under s.7(5)(b) of the HRA (which I have set out at paragraph 9 above). The words of the sub-section meant exactly what they said and the court should not attempt to re-write it…
32. In my view, it is desirable to follow a similar approach in relation to the HRA and not to list the factors or to indicate which factor may be more important than another. It is for the court to examine in the circumstances of each case all the relevant factors and then decide whether it is equitable to provide for a longer period. It may be necessary in the circumstances of a particular case to look at objective and subjective factors; proportionality will generally be taken into account. It is not in my view appropriate to say that one particular factor has as a matter of general approach a greater weight than others. The court should look at the matter broadly and attach such weight as is appropriate in each given case.
"33. The three first instance cases cited to us might at first sight indicate a more prescriptive approach, but on analysis I do not consider that any of these decisions did more than highlight the factors that the judge thought of greatest weight on the facts of that case.
i) In Weir v Secretary of State for Transport [2004] EWHC 2772 (Ch) ([2005] UKHRR 154), a large number of shareholders in Railtrack Group plc brought a claim against the Secretary of State in respect of the Administration Order made for the company. Lindsay J extended the period under s.7(5)(b) in circumstances where the Secretary of State had known for a long time that a HRA claim might be made and the raising of the issue by amendment had caused no surprise. The judge described his approach at paragraphs 36 and 57:
'36. So it seems to me that the proper approach, having in mind Lord Woolf's observations [in R v Commissioner for Local Administration ex Parte Croydon London Borough Council [1989] 1 All ER 1033 at 1046] is that an absence of prejudice, so far as s.7(5)(b) is concerned is a highly material factor but is not of itself conclusive in favour of an extension of time being granted. I cannot say simply because the defendant suffered no prejudice ergo there should be an extension of time. Delay, as it seems to me, must always be a relevant consideration.
57. I have to consider whether here it would be proportionate to deny the Claimants the right to raise the Human Rights aspect of the case simply because a claim form or a stand-still agreement was not sought within the period.'
ii) Cameron v Network Rail [2006] EWHC 1133 ([2007] 1 WLR 163) was a claim under Articles 2 and 8 arising out of the Potters Bar railway accident; Sir Michael Turner in declining to extend the period under s.7(5)(b) referred to the provisions of s.33(1) of the Limitation Act 1980 at paragraph 43:
'43. Section 7 of the HRA prescribes a limitation period of one year from the date of the occurrence giving rise to, and the initiation of, the proceedings except that, if the court considers it equitable to extend the period, it may do so. The word 'equitable' in this statutory context has an obvious resonance with its use in the Limitation Act 1980. Section 33(1) of that Act permits the court to direct that the primary period of limitation shall not apply if it appears to the court that it would be 'equitable' to allow an action to proceed, having regard to the extent to which prejudice would be caused to the claimant or the defendant as the case might be. While it would not be right to incorporate all the circumstances to which the court is enjoined to have regard as set out in subsection (3) of section 33, which are inclusive and not exclusive of "all the circumstances", it would not make any sense to disregard them as having no relevance to the circumstances which the court should consider in exercising its discretion whether or not to extend time under these provisions of the HRA.'
After setting out the facts and commenting that he did not consider that there were any circumstances which would make it equitable for time to be enlarged, Sir Michael continued:
'47. As a matter of the proper construction of the section, the presumption has to be that the need to prove that it would be 'equitable' not to apply the limitation provisions rests on those who seek that result. In other words, the burden must be on the claimant to prove that there are circumstances which make it 'equitable' why the defendant should not be able to take advantage of the limitation provisions. There are, in my judgment, no circumstances present in this case where it would be appropriate to rule that they should not apply. Quite clearly, a huge administrative burden would fall on the defendant if it was forced to meet the claim on its strict merits. The disadvantage to the claimant is that he has lost the claim, but that is the consequence of failing to issue his proceedings in time...'"
"20. Thus section 7(5) of the HRA itself recognises by that language that it is dealing with a time limit just like any Limitation Act time limit and recognises also that a Limitation Act time limit may be stricter than a time limit imposed by section 7(5) itself. That, it seems to me, is a critical and decisive answer to Mr Simblet's submission. But I would go on to observe, although it is not necessary to my decision, that if Mr Simblet's submission were correct, then the argument for saying that the need for a claimant to be a victim of the unlawful act referred to at the end of section 7(1) would itself be a matter going to jurisdiction. Mr Simblet himself seemed to accept that such a conclusion would be counterintuitive even though, given the language of the Act, there would be a stronger case for saying that the need for the claimant to be a victim went to jurisdiction than to say that a time limit which is so much akin to an ordinary Limitation Act time limit went to jurisdiction. However subsections (3) and (4) of section 7 indicate that the need for the claimant to be a victim related, in effect, to what, in the context at any rate of judicial review, would be considered to be a sufficient interest in England or a title and interest to sue in Scotland. It seems to me that these considerations support the view that section 7(5) is not dealing with a jurisdictional matter. It would be very surprising if everyHuman Rights Act claim by an alleged victim which was opposed on the ground that the claimant was not a victim was a matter which had to be dealt with under Rule 11 of the CPR.
21. Therefore I would reject Mr Simblet's first ground of appeal to the effect that the defendants had failed to take a jurisdictional point in time. There is, in my judgment, no jurisdictional point. It also follows from what I have said about Mr Simblet's attempt to distinguish the language of section 7(5) and that of the Limitation Act, that there is nothing in the distinction between section 7(5) limitation and limitation in the Limitation Act to raise a critical interpretative difference of approach for the court."
"23 . It seems to me that there is that difference in language but that the burden remains, as Mr Simblet accepts, acknowledging in this respect the decision of Sir Michael Turner in Cameron v Network Rail, on the claimant to bring himself within section 7(5)(b), and that being the case, the burden must be the normal burden of someone who wishes to persuade the court to adopt an approach to its discretion which he is advocating. The judge, of course, has to balance all the factors which are in play in the light of all the circumstances of the case. The burden is that of the ordinary civil burden of proof where matters of fact are in issue and otherwise it is a burden of persuasion. Quite how the burden of persuasion is discharged by a claimant must ultimately depend not upon the particular form of the statute in question but upon the nature of the factors in play before the court."
"167. It has been held in Cameron v Network Rail Infrastructure Ltd [2006] EWHC 1133 (QB), [2007] 1 WLR 163, para 47 that the burden of establishing that it is equitable to extend time under s 7(5) is on the party seeking the extension. As Field J observed, at para 120, however, few cases of this type lend themselves to a ready resolution by the application of a burden of proof and I prefer to approach the question (as did the judge) by an open ended examination of the factors that weigh on either side of the argument that this is a case in which the discretion of the court should be exercised to extend the time under section 7 (5) (b)."
Speaking for myself, I consider that Lord Kerr was using slightly different language to make precisely the same point as Rix LJ made in M at paragraph 23.
"116. The judge placed at the forefront of his account of the relevant legal principles that "there is a significant public interest in public law claims against public bodies being brought expeditiously" (para 119). That is of course true in judicial review, when remedies are sought to quash administrative decisions which may affect large numbers of people or upon which other decisions have depended and action been taken. It is normally a prospective remedy, aiming not only to quash the past but also to put right the future. Expedition is less obviously necessary in a claim for a declaration in vindication of the claimant's human rights, upon which nothing else depends, or of a claim for damages. These are retrospective remedies, aimed at marking or compensating what has happened in the past. Public authorities are no longer in any different position from other defendants in the general law of limitation (see Limitation Act 1980, s 37(1)). This claim is more akin to a tort claim than to judicial review."
Again, it seems to me that those observations are uncontroversial: they are not dissimilar to the approach adopted by this court in Secretary of State for Transport v Arriva Rail and Others [2019] EWCA Civ 2259.
5.2 Analysis
5.2.1 Timing and 'All The Circumstances'
5.2.2 Onus and Unfairness
5.2.3 Other Limitation Periods
5.2.4 Exercise of Discretion
LADY JUSTICE ROSE:
LORD JUSTICE HENDERSON: