Charity loses liability challenge in windfarm planning decision

A judge in the Outer House of the Court of Session ruled that the proposed proceedings would not be “prohibitively expensive” for the applicant, in what is thought to be the first case in which the question has had to be considered in an application by a non-governmental organisation.

Lord Philip head that the petitioners, the John Muir Trust, an NGO promoting environmental protection, had lodged a petition for judicial review of a decision dated 6 June 2014 of the respondents, the Scottish Ministers, not to hold a public inquiry but to grant consent to the interested party, Scottish & Southern Energy Renewables, for the erection of 67 wind turbines in Fort Augustus.

The petitioners enrolled a motion under Rule of Court 58A.3 for an order limiting their liability in expenses to the respondents and any other party entering the process to £5,000, and limiting the liability in expenses to the petitioners of the respondents or of any other party entering the process to £30,000 in total. Alternatively, they sought a protective expenses order in such terms as the court considered appropriate.

On behalf of the petitioner, it was submitted that the NGO, as a charity, needed “certainty” as to its potential liability in expenses and “could not risk a potential open-ended liability”.

The estimated expenses which the petitioners, the respondents and the interested party would incur for the three-day hearing were approximately £53,000 each, bringing out a total of approximately £160,000.

In relation to the funds available to the petitioners for the conduct of the litigation, a figure of £5,000 had been budgeted for. Donations of £48,000 had been received in response to an appeal for assistance with the litigation, and in addition they had pledges of £51,500, though there was “no guarantee” that these pledges would be honoured, it was said.

Referring to the judgment of the European Court of Justice in the case of R (Edwards) v Environment Agency (No. 2), counsel for the petitioners argued that the court had the discretion to make an order even although the cost of the proceedings were not prohibitively expensive. In support of this argument, it was submitted that rule 58A.5(i) required the court to take account of “all the circumstances”, and not only those listed.

For the Scottish Ministers, it was emphasised that the test was whether or not the petitioners could reasonably proceed with the proceedings in the absence of a protective expenses order.

The question whether the likely expenses were beyond the applicant’s available income and capital required to be decided objectively, not on the petitioners’ own subjective views, and it was argued that their resources “far exceeded” the estimates of the costs for the first hearing.

The court heard that the artist Perpetua Pope, who had died in early 2014, had left a legacy of £300,000, and that the petitioners were awaiting payment of a total of £980,000 in legacies from the estates of donors who were already dead.

In any event the payment of any expenses would not fall due for approximately one year by which time the petitioners’ circumstances would have improved as approximately £100,000 had been collected in donations in 2014 to date and future donations could be expected to continue at that level, it was submitted.

The judge rejected the petitioners’ submission that the court had a discretion to make a protective expenses order even although the predicted expenses of the proceedings would not be prohibitively expensive for the applicant.

“The fundamental pre-requisite for the granting of a protective expenses order is that the court should be satisfied that the expenses to be incurred would be prohibitively expensive for the applicant. How the various factors listed … will fall to be taken into account remains to be seen in individual cases, but there is no question of the requirement for prohibitive expense being departed from,” he said.

In considering the resources which might be available to the petitioners to meet the expenses likely to be incurred, Lord Philip noted that the petitioners, after launching an appeal, had received donations amounting to approximately £100,000 and he treated the suggestion that some of the pledges might not be honoured as “mere speculation”.

In addition, the judge noted that the petitioners were due to receive a legacy of £300,000 from the estate of the late Miss Pope, with a further £989,000 from estates in the course of being wound up.

It was also pointed out by counsel for the respondents that the petitioners’ accounts for the year ended 31 December 2013, showed that the petitioner had available free reserves of over £1 million, which could have been available to meet the expenses of the litigation.

Delivering his opinion, Lord Philip said: “In the absence of further explanation, and standing the existence of pending legacies totalling approximately £1.3 million, I consider that this petition can be reasonably proceeded with by the petitioners in the absence of a protective expenses order. Accordingly, I am not satisfied that the envisaged proceedings will be prohibitively expensive for the petitioners.”