Farmiloe, R (on the application of) v Secretary of State for Business Energy and Industrial Strategy & Anor

The Domestic Renewable Heat Incentive Scheme Regulations 2014 confer a broad residual power to require further information, including a new Energy Performance Certificate, when an accreditation application is being considered. The specific examples in regulation 18(1)(b) and (c) are not exhaustive. The power may be used to investigate an apparently inaccurate or substantially overstated heat-demand figure and to protect public funds.

Published guidance and worked examples did not create an unqualified legitimate expectation that an application would be determined solely by the original EPC or that a particular subsidy would be paid. Delay is unlawful only where it is excessive and unreasonable in the circumstances. Unequal treatment is not a free-standing ground of judicial review, although a rational distinction between cases is permissible.

The claimant installed a ground source heat-pump system and applied for accreditation under the Domestic Renewable Heat Incentive Scheme. He submitted an EPC prepared when the property was heated by electric storage heaters. Following a site audit, Ofgem considered that the EPC substantially overstated the relevant heat demand and required the claimant to obtain a new EPC reflecting the installed heat-pump system.

The claimant sought judicial review on grounds of statutory unlawfulness, legitimate expectation, delay and discrimination. Ofgem conceded that the review decision breached regulation 62(4), because the reviewing officer had been involved in the original decision. The central issues were whether Ofgem had power to require a new EPC, whether the scheme materials created enforceable expectations, whether the delay was unlawful, and whether the different treatment was legally impermissible.

1. Statutory power. The claim failed on the principal statutory challenge. Regulations 17 and 18, read with Part 2 of Schedule 4 to the Domestic Renewable Heat Incentive Scheme Regulations 2014, empower Ofgem to seek information needed to assess an accreditation application and evaluate the scheme. Paragraph 2(m) of Part 2 includes a new EPC. The references in regulation 18(1)(b) and (c) to particular circumstances were not exhaustive. Regulation 19 also contemplated requests for a new EPC outside regulation 18(1)(c), in which case the 28-day period applied.
2. Ofgem was entitled to arrange a site inspection under regulation 18(2), particularly in light of the unusually high subsidy claimed, and could take account of the current approved EPC methodology. Its letters incorrectly relied on regulation 17(2)(b) rather than regulation 18(1)(d), but that error made no difference because the same Schedule 4 powers applied.
3. Legitimate expectation. The regulations and guidance described aspects of the scheme but did not promise that an original EPC would always be accepted, that a new EPC would never be required, or that an estimated subsidy would be paid. The materials were qualified and repeatedly referred users to the regulations. The claimant therefore failed to establish a clear, unambiguous and unqualified representation or settled practice.
4. Delay. The delay was regrettable but was not excessive or unreasonable. The application was unusually complex, involved a potentially high payment, required an audit and was considered by several departments. Ofgem was entitled to use the methodology in force when a further EPC was obtained.
5. Discrimination. Following R (Gallaher Group and others) v Competition and Markets Authority [2019] AC 96, unequal treatment was not a freestanding ground of review. In any event, the substantial discrepancy in the claimant’s heat-demand figures provided a rational basis for distinguishing his case.
6. The claim was dismissed, save that the review was unlawful because regulation 62(4) prohibited the review from being conducted by a person involved in the original decision. Ofgem offered a fresh review.

First-instance judicial review in the Administrative Court. The claim was dismissed on the substantive grounds, but the review decision was held unlawful by concession under regulation 62(4) of the Domestic Renewable Heat Incentive Scheme Regulations 2014.