Halite Energy Group Ltd v Secretary of State for Energy and Climate Change

An inquisitorial examination for a development consent order must remain fair and transparent. Where an examining authority reaches adverse conclusions on a principal issue through undisclosed scenarios or reasoning, it must give the parties a fair opportunity to respond. Requiring an applicant to establish geological matters beyond reasonable doubt may constitute an error of law and procedural unfairness. Paragraph 2.8.9 of NPS EN-4 requires a detailed geological assessment demonstrating the suitability of the site and storage medium. It does not impose an absolute requirement that site capacity be established within that assessment. Capacity may instead be addressed in the environmental statement and the application as a whole.

The claimant challenged the Secretary of State’s refusal of its application under Planning Act 2008, section 37, for development consent and related hazardous substances consent for an underground gas storage facility at Preesall, Lancashire. The Examining Authority had recommended consent subject to further geological surveys and a minimum storage capacity requirement. The Secretary of State refused consent, relying on uncertainty in the geological data and concluding that the requirements of paragraph 2.8.9 of NPS EN-4 had not been met. The issues were whether the examination and decision-making process was unfair, whether paragraph 2.8.9 required capacity to be demonstrated as part of the geological assessment, and whether the decision was irrational.

1. Claim allowed. The Secretary of State’s decision could not stand.
2. The examination process under the Infrastructure Planning (Examination Procedure) Rules 2010 was inquisitorial, iterative and capable of seeking further information. It nevertheless had to be fair and transparent. Where material concerns related to a principal controversial issue, the Examining Authority had to give the parties an opportunity to address them before reaching adverse conclusions. The guidance in Castleford Homes Ltd v Secretary of State for the Environment, Transport and the Regions and LB Croydon v Secretary of State for the Environment was applicable.
3. The Examining Authority had not sufficiently explored with the claimant the three scenarios and calculations later relied upon in its report concerning possible reductions in storage capacity. Those matters went to the heart of whether the proposed development could be constructed and contradicted the position recorded in the statement of common ground. The claimant therefore lacked a fair opportunity to respond.
4. The repeated references to proving the geology “beyond reasonable doubt”, together with references to certainty and full demonstration, indicated that the Examining Authority had applied, or was likely to have applied, an excessively high standard of proof. That was an error of law and procedurally unfair. An applicant for planning permission was not required to prove its case to a criminal standard, applying R (Bleaklow Industries Ltd) v Secretary of State for Communities and Local Government.
5. Paragraph 2.8.9 of NPS EN-4, construed objectively in accordance with Tesco Stores v Dundee City Council, required a detailed geological assessment demonstrating that the site and proposed storage medium were suitable for the proposed type of underground storage. It did not make capacity an absolute component of that assessment. Capacity could be addressed in the environmental statement and the application viewed as a whole.
6. The Secretary of State adopted the flawed approach to geological assessment and gave no adequate reasons for rejecting the Examining Authority’s recommendation on the basis that a different decision involved different considerations. Those defects rendered the decision irrational. The matter was left for submissions on the final order and costs.

The judgment does not state any prior appellate decision in the same proceedings. Permission for judicial review was initially refused on the papers, but was granted on renewal by Ouseley J.