Solaria Energy UK Ltd v Department for Business Energy And Industrial Strategy

Contractual rights constitute possessions under Article 1 of the First Protocol only where they have an identifiable and readily realisable monetary value. A profitable contract is insufficient if its value is not marketable or transmissible. Unconcluded future orders and anticipated income are not possessions, and cannot be recast as goodwill.

Goodwill may qualify where the business has been organised so that a distinct, monetised and realisable goodwill value can be identified. Under Human Rights Act 1998, section 7(5), the one-year period is a limitation period. The claimant bears the burden of showing that an extension is equitable. The court may consider delay, its explanation, evidential prejudice and the merits, but lengthy and unexplained delay may itself defeat an extension.

Solaria claimed approximately £460,000 in damages under section 8 of the Human Rights Act 1998. It alleged that the publication of a proposal to reduce Feed-in Tariff subsidies unlawfully interfered with possessions protected by Article 1 of the First Protocol.

The alleged possessions were contractual rights under a photovoltaic-panel supply sub-contract, associated goodwill, and an anticipated further order. The Department applied to strike out the claim or obtain summary judgment, relying principally on the absence of an A1P1 possession and the expiry of the one-year limitation period in section 7(5). The central issues were whether the claimed interests were possessions and whether a late claim should be permitted.

1. Summary judgment. The Department obtained summary judgment. Solaria had no real prospect of establishing that the claimed contractual interests or anticipated order were A1P1 possessions.
2. Contractual rights. Following Murungaru v Secretary of State for the Home Department, [2008] EWCA Civ 1015, the touchstone was whether the rights constituted an asset with a monetary value capable of being marketed. Transmissibility was not conclusive, but was highly relevant. Solaria’s sub-contract could not be assigned without consent. Sub-letting would leave Solaria responsible for performance and would not realise the value of its contractual rights. The rights therefore lacked a readily realisable or marketable value.
3. Goodwill and future income. The reasoning in Breyer, [2014] EWHC 2257 (QB) and [2015] EWCA Civ 408, distinguished present goodwill from the discounted value of future income. Marketable goodwill requires an identifiable monetary value separate from the tangible assets of the business and capable, at least in principle, of being realised. Solaria produced no evidence that the sub-contract value had been treated as goodwill. The unplaced Phase 1.2 order was merely prospective and could not constitute a possession or goodwill.
4. Limitation. Section 7(5) creates a one-year limitation period. The discretion to extend time is wide but must produce an equitable result, and the burden lies on the claimant. Relevant considerations include the length and reasons for delay, evidential deterioration, prejudice to the public authority, responses to requests for information and the merits. The doctrine of laches does not govern the exercise.
5. Solaria gave no good explanation for delaying nearly five years, excluding the standstill period. The Department suffered evidential and financial prejudice, including difficulty disentangling the alleged loss from later market events and investigating the conduct of GB Building Solutions. Even assuming Solaria had a viable A1P1 claim, it was not equitable to extend time.