Drax Power Ltd, R (On the Application Of) v Secretary of State for Energy And Climate Change

Wednesbury review is supervisory. The court asks whether the decision was reasonably open to the primary decision-maker on the material before it. The intensity of review depends on the subject matter, and technical assessments drawing on an authority’s experience require considerable caution.

An applicant for a competitive statutory support contract must explain cogently how the absence of support would delay generation, including why an alternative support regime would not avoid the delay. Requiring evidence of the causal connection does not impose a new percentage or duration threshold. Procedural fairness is context-dependent and does not necessarily require a further opportunity to repair an inadequate application.

Drax sought an Investment Contract for the proposed conversion of Unit 3 at Drax Power Station from co-firing to full biomass generation. The Secretary of State, acting through DECC, decided at the final Binding Application stage that Drax had not demonstrated the Key Criterion: that without the contract there was a significant risk that the relevant generation would not occur or would be significantly delayed.

Drax brought judicial review proceedings. Andrews J quashed the decision, declared that the Key Criterion was satisfied and remitted the application for reconsideration: [2014] EWHC 2377 (Admin). The appeal concerned whether DECC’s decision was irrational, whether the procedure was unfair, and whether DECC had failed to take reasonable steps to obtain relevant information.

Richards LJ delivered the leading judgment. Laws LJ and Gloster LJ agreed. The appeal was allowed and the judicial review application was dismissed.

1. Wednesbury review. The court exercises a supervisory jurisdiction and asks whether DECC’s view was reasonably open to it on the material before it. It must not substitute its own interpretation of the documents. The intensity of review depends on the subject matter. The guidance in R v Ministry of Defence, ex parte Smith [1996] QB 517 was applicable. Although this was not a policy-laden, esoteric or security-based decision, the assessment was sophisticated and technical, and drew on DECC’s experience of renewable-energy regimes and technologies. Considerable judicial caution was therefore required.
2. The Key Criterion. DECC was entitled to reassess the criterion at the Binding Application stage. The material reasonably appeared to present a changed case: the earlier applications suggested that conversion itself depended on an Investment Contract, whereas the later material suggested that conversion was commercially feasible under the Renewables Obligation. DECC was entitled to require a clear causal explanation of how the absence of an Investment Contract would delay generation. Asking about the amount and timing of any shortfall illustrated the issue and did not introduce a new threshold requirement.
3. Evidence and the alternative regime. The Binding Application and clarification letter did not clearly state that Unit 3 might operate below full capacity after conversion without an Investment Contract. The fuel-supply graph did not itself demonstrate how much generation would be lost or delayed. It was reasonable for DECC to require an explicit explanation of why conversion under the Renewables Obligation would not avoid the alleged delay. The decision that Drax had failed to demonstrate the Key Criterion was reasonably open to DECC and was not irrational.
4. Procedural fairness. Fairness depends on context. This was a competitive process for awarding a new contract, with no minded-to stage. Drax had been repeatedly warned of the need to satisfy the criterion and had been given an opportunity to clarify its case. Fairness did not require a further opportunity to repair an inadequate application. The observation in Abbey Mine Ltd v The Coal Authority [2008] EWCA Civ 353 was context-dependent. DECC was also under no further duty, on the materially different facts, to take additional steps to obtain information: Secretary of State for Education and Science v Tameside MBC [1977] AC 1014 was distinguishable.

The High Court order was set aside so far as it quashed DECC’s decision, declared the Key Criterion satisfied and made a costs order. The application for judicial review was dismissed. Costs and consequential matters were left for written submissions if not agreed.

• Court of Appeal (Civil Division) — Allowed the Secretary of State’s appeal, set aside the material parts of the High Court order and dismissed the judicial review application.
• High Court of Justice, Administrative Court — Andrews J quashed DECC’s decision, declared that the Key Criterion was satisfied and remitted the application for reconsideration: [2014] EWHC 2377 (Admin).