PETITION OF WILLIAM TRACEY LIMITED AGAINST (1) THE SCOTTISH MINISTERS; (2) THE ADVOCATE GENERAL FOR SCOTLAND AND (3) THE LORD ADVOCATE
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 131
P1088/14
OPINION OF LORD GLENNIE
In Petition of
WILLIAM TRACEY LIMITED
Petitioner
against
(1) THE SCOTTISH MINISTERS; (2) THE ADVOCATE GENERAL FOR SCOTLAND
AND (3) THE LORD ADVOCATE
Respondents
SP TRANSMISSION PLC
Interested Party
Petitioner: Gale QC, Irvine; Pinsent Masons LLP
Respondents: Burnet; Scottish Government Legal Directorate
Interested Party: Wilson QC, Walker; DWF LLP
14 September 2016
Introduction
[1] The question in this case is whether an owner or occupier of land over which a necessary wayleave has been granted under Schedule 4 to the Electricity Act 1989 (“the 1989 Act”) in respect of an overhead power line, tower and associated apparatus (collectively “the apparatus”), and who is entitled under the 1989 Act to compensation in respect of that grant, is entitled also to compensation for the period, or any part of it, when the apparatus was on his land prior to the date of the grant. Although the question arises in the context of a particular dispute about a particular site, the point is of general application.
The relevant circumstances
[2] The petitioner is the owner of land at 49 Burnbrae Road, Linwood, Paisley (“the Linwood Site” or “the Site”) and the operator of a major waste management and recyclate processing facility (“the facility”) on the site. The facility currently processes over 280,000 tonnes of waste a year and has a licenced capacity for up to 500,000 tonnes a year. Measured by tonnage it is the largest stand-alone recycling facility in Scotland, processing material from all over the country. The facility is also used for the manufacture of biomass fuel and refuse-derived fuel. It has a wide and diverse client base, domestic, European and international, including 12 local authorities as well as a number of firms of different sizes within the private sector. The facility allows both public and private sector clients to manage waste and achieve their regulatory objectives under the Waste (Scotland) Regulations 2012 in line with Scotland’s “Zero Waste Plan”.
[3] The Linwood Site is bisected by an overhead electricity line running in an east/west direction. The Interested Party, SP Transmission plc (“SPT”), is the owner and operator of the electricity transmission network in central and southern Scotland and is a licence holder for the purposes of the 1989 Act. The line forms part of the Elderslie to Johnstone 132kV overhead power line known as the AU Route. The overhead line is supported by a lattice steel tower identified by the alphanumeric AU005. The tower is located within the Linwood Site, close to its eastern boundary. The conductors of both circuits of the overhead line overhang an area of the Site used for wood recycling. They also overhang an area of the Site which has been identified by the petitioner as suitable for the manufacture of refuse derived fuel and the construction of a connected biomass waste-to-energy facility. In normal conditions the height of the cables across the Site varies between 9.5 and 14 m above the ground, though the petitioner says that at extremes of temperature and load the cables are prone to sag. The statutory minimum clearance for such cables is 6.7 m above the ground. The presence of the overhead line, the tower and associated apparatus (collectively “the apparatus”) has a significant adverse impact on the petitioner’s use of the Site. There may be some disagreement about the character and extent of that adverse impact but I need not go into that in any detail for present purposes.
[4] The Linwood Site was purchased by the William Tracey Private Pension Fund (“the Pension Fund”) in or around 1998. At that time the petitioner entered into a lease of the Site from the Pension Fund. Since then the petitioner has been in possession of the Site. On 3 April 2006 the petitioner purchased the Site from the Pension Fund. Its newly acquired title was registered in the Land Register on 13 April 2006. The Linwood Site remains in the petitioner’s ownership and under its occupation.
[5] In 1998, when the petitioner first took possession of the Site, the apparatus was already in situ. There had been a wayleave agreement in place between the owner of the Site and Scottish Power plc (the then owner, operator and licence holder of and in respect of the apparatus). That express wayleave agreement came to an end on the acquisition of the Site by the Pension Fund and its occupation by the petitioner. Thereafter there was no express written or oral wayleave agreement in place in respect of the apparatus between the Pension Fund, the petitioner, Scottish Power plc or SPT (who succeeded to the responsibilities of Scottish Power plc). The apparatus remained in situ, its position being governed by the terms of the 1989 Act (see below).
[6] During the course of 2005, and subsequently, SPT requested a wayleave from the petitioner but that request was declined. I was told by Mr Gale QC, who appeared for the petitioner, that the petitioner’s preference was for the pylon to be removed whereas SPT wanted it to remain. Following protracted discussions between the parties, agents for the petitioner wrote to SPT on 8 December 2010 requiring the removal of the apparatus from the Site within three months from the date of the letter. It is now a matter of agreement that that letter amounted to a notice of removal in accordance with paragraph 8 of schedule 4 to the 1989 Act.
[7] On 3 March 2011 SPT applied to Scottish Ministers for a necessary wayleave in terms of paragraph 6 of schedule 4 to the 1989 Act. (In June 2012 SPT made a further application for a necessary wayleave in respect of an area of ground not thought to be covered by their previous application, but the two applications were dealt with together and nothing now turns on this.) The petitioner intimated that it wished to be heard in relation to the application. A Reporter was appointed to hear parties and produce a Report. After sundry drawn out procedure, during the course of which the process was sisted for significant periods, the matter came to a hearing before the Reporter on 19 December 2013 and 30 January 2014. By this stage the petitioner and SPT had entered into an agreement which provided for the removal of the apparatus from the Site and had also agreed that a wayleave was required to allow for matters in the agreement to be addressed. However, the parties had not reached agreement on the terms of the wayleave, and specifically from the date from which the necessary wayleaves ought to be granted. The petitioners argued that it ought to be granted retrospectively, from the date of the application, whilst SPT argued that it could only be granted prospectively, from the date of signature of the grant. This became the matter in controversy between them.
[8] On 2 April 2014, the Reporter submitted his report to Scottish Ministers. The Scottish Ministers granted a necessary wayleave on 13 August 2014 on terms and subject to conditions set out in an attachment to their letter of that date. Critically, so far as this dispute is concerned, the Scottish Ministers specified that the wayleave was to be in force from the date it was signed because “there is nothing in Schedule 4 to the 1989 Act which would allow them to grant a wayleave which had effect from a date earlier than the date of their decision.”
The statutory framework
[9] The powers and duties of licence holders such as SPT are set out in sections 9 and 10 of the 1989 Act. In terms of section 9, a licence holder is under a duty “to develop and maintain an efficient, co-ordinated and economical system of electricity transmission”. A licence holder’s powers are summarised by Lord Brodie in paragraph [3] of his Opinion in William Tracey Limited v SP Transmission plc 2016 SLT 678 as follows:
“The powers include the acquisition of wayleaves, these being consents to the installation and keeping installed of electrical lines on, under or over land and to subsequent access to the land for the purposes of inspection and maintenance etc. Provision is made for the acquisition and temporary continuation of wayleaves by paras 6 to 8 of schedule 4 to the Act. A wayleave may be granted by agreement between the owner or occupier of the land and a licence holder (a ‘voluntary wayleave’) or it may be granted by the Scottish Ministers on application being made to them by the licence holder in the event of it being necessary or expedient to install etc. an electric line in circumstances where the owner or occupier of the land has failed to give a wayleave when required by the licence holder to do so (a ‘necessary wayleave’). Where a necessary wayleave is granted by the Scottish Ministers, paragraph 7 of schedule 4 provides for the recovery by the occupier/owner of the land of compensation in respect of the grant. The wayleave, whether it be a voluntary wayleave or a necessary wayleave, is of the nature of a personal right. It confers no interest or in the land on the licence holder. It does not bind a singular successor as the owner or occupier of the land.”
[10] It is necessary to look more closely at the provisions of paras 6, 7 and 8 of schedule 4 to the 1989 Act, which is headed “Other Powers etc of Licence Holders” and applies by virtue of section 10(1) of the Act.
“SCHEDULE 4
OTHER POWERS ETC. OF LICENCE HOLDERS
...
Acquisition of wayleaves
6.-(1) This paragraph applies where-
(a) for any purpose connected with the carrying on of the activities which he is authorised by his licence to carry on, it is necessary or expedient for a licence holder to install and keep installed an electric line on, under or over any land; and
(b) the owner or occupier of the land, having been given a notice requiring him to give the necessary wayleave within a period (not being less than 21 days) specified in the notice-
(i) has failed to give the wayleave before the end of that period; or
(ii) has given the wayleave subject to terms and conditions to which the licence holder objects;
and in this paragraph as it so applies "the necessary wayleave" means consent for the licence holder to install and keep installed the electric line on, under or over the land and to have access to the land for the purpose of inspecting, maintaining, adjusting, repairing, altering, replacing or removing the electric line.
(2) This paragraph also applies where-
(a) for any purpose connected with the carrying on of the activities which he is authorised by his licence to carry on, it is necessary or expedient for a licence holder to keep an electric line installed on, under or over any land; and
(b) the owner or occupier of the land has given notice to the licence holder under paragraph 8(2) below requiring him to remove the electric line;
and in this paragraph as it so applies ‘the necessary wayleave’ means consent for the licence holder to keep the electric line installed on, under or over the land and to have access to the land for the purpose of inspecting, maintaining, adjusting, repairing, altering, replacing or removing the electric line.
(3) Subject to sub-paragraphs (4) and (5) below, the Secretary of State may, on the application of the licence holder, himself grant the necessary wayleave subject to such terms and conditions as he thinks fit; and a necessary wayleave so granted shall, unless previously terminated in accordance with a term contained in the wayleave, continue in force for such period as may be specified in the wayleave.
(4) The Secretary of State shall not entertain an application under sub-paragraph (3) above in any case where-
(a) the land is covered by a dwelling, or will be so covered on the assumption that any planning permission which is in force is acted on; and
(b) the line is to be installed on or over the land.
(5) Before granting the necessary wayleave, the Secretary of State shall afford-
(a) the occupier of the land; and
(b) where the occupier is not also the owner of the land, the owner,
an opportunity of being heard by a person appointed by the Secretary of State.
(6) A necessary wayleave granted under this paragraph-
(a) shall not be subject to the provisions of any enactment requiring the registration of interests in, charges over or other obligations affecting land; but
(b) shall bind any person who is at any time the owner or occupier of the land.
(7) Where in pursuance of a necessary wayleave granted under this paragraph a licence holder has erected on any land supports for an electric line, he shall be deemed to have an interest in that land for the purposes of section 7 of the Mines (Working Facilities and Support) Act 1966.
(8) In this paragraph "dwelling" means a building or part of a building occupied, or (if not occupied) last occupied or intended to be occupied, as a private dwelling or, in relation to Scotland, a private house, and includes any garden, yard, outhouses and appurtenances belonging to or usually enjoyed with that building or part.
Provisions supplementary to paragraph 6
7.-(1) Where a wayleave is granted to a licence holder under paragraph 6 above-
(a) the occupier of the land; and
(b) where the occupier is not also the owner of the land, the owner,
may recover from the licence holder compensation in respect of the grant.
(2) Where in the exercise of any right conferred by such a wayleave any damage is caused to land or to moveables, any person interested in the land or moveables may recover from the licence holder compensation in respect of that damage; and where in consequence of the exercise of such a right a person is disturbed in his enjoyment of any land or moveables he may recover from the licence holder compensation in respect of that disturbance.
(3) Compensation under this paragraph may be recovered as a lump sum or by periodical payments or partly in one way and partly in the other.
(4) Any question of disputed compensation under this paragraph shall be determined by the Tribunal; and section 4 of the Land Compensation Act 1961 or sections 9 and 11 of the Land Compensation (Scotland) Act 1963 shall apply to any such determination.
Temporary continuation of wayleaves
8. -(1) This paragraph applies where at any time such a wayleave as is mentioned in paragraph 6 above (whether granted under that paragraph or by agreement between the parties)-
(a) is determined by the expiration of a period specified in the wayleave;
(b) is terminated by the owner or occupier of the land in accordance with a term contained in the wayleave; or
(c) by reason of a change in the ownership or occupation of the land after the granting of the wayleave, ceases to be binding on the owner or occupier of the land.
(2) The owner or occupier of the land may-
(a) in a case falling within paragraph (a) of sub-paragraph (1) above, at any time after or within three months before the end of the period specified in the wayleave;
(b) in a case falling within paragraph (b) of that sub-paragraph, at any time after the wayleave has been terminated by him; or
(c) in a case falling within paragraph (c) of that sub-paragraph, at any time after becoming the owner or occupier of the land by virtue of such a change in the ownership or occupation of the land as is mentioned in that paragraph,
give to the licence holder a notice requiring him to remove the electric line from the land; but the licence holder shall not be obliged to comply with such a notice except in the circumstances and to the extent provided by the following provisions of this paragraph.
(3) Where within the period of three months beginning with the date of the notice under sub-paragraph (2) above the licence holder makes neither-
(a) an application for the grant of the necessary wayleave under paragraph 6 above; nor
(b) an order authorising the compulsory purchase of the land made by virtue of paragraph 1 of Schedule 3 to this Act,
the licence holder shall comply with the notice at the end of that period.
(4) Where-
(a) within the period mentioned in sub-paragraph (3) above the licence holder makes an application for the grant of the necessary wayleave under paragraph 6 above; and
(b) that application is refused by the Secretary of State,
the licence holder shall comply with the notice under sub-paragraph (2) above at the end of the period of one month beginning with the date of the Secretary of State's decision or such longer period as the Secretary of State may specify.
(5) Where-
(a) within the period mentioned in sub-paragraph (3) above the licence holder makes an order by virtue of paragraph 1 of Schedule 3 to this Act authorising the compulsory purchase of the land; and
(b) that order is not confirmed by the Secretary of State,
the licence holder shall comply with the notice under sub-paragraph (2) above at the end of the period of one month beginning with the date of the Secretary of State's decision or such longer period as the Secretary of State may specify.”
References to the Secretary of State are now, of course, to be read as references to the Scottish Ministers: c.f. Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999/1750.
[11] Placing the facts of this case within the framework of the relevant provisions of the Act, upon the sale of the Site to the Pension Fund in 1998 and the occupation of the Site by the petitioner at that time, the wayleave granted by the previous owners of the Site ceased to be binding: paragraph 8(1)(c) of schedule 4. There was, however, no immediate obligation placed on the operator or licence holder to remove the apparatus from the site. The notice of 8 December 2010 requiring the removal of the apparatus from the Site within three months was a notice of removal in accordance with paragraph 8(2)(c) of schedule 4. SPT applied to the Scottish Ministers for the grant of a necessary wayleave under paragraph 6 on 3 March 2011. Accordingly, in terms of paragraph 8(2) and (3)(a) of schedule 4, SPT was not obliged to comply with that notice of removal until such time as the application was determined. The wayleave granted by Scottish Ministers on 13 August 2014 was a necessary wayleave granted under paragraph 6(3) of the 1989 Act. It entitled the petitioner, as occupier and owner of the land, to compensation in respect of that grant under paragraph 7(1) and/or 7(2) of schedule 4, in the form of a lump sum or by periodical payments or both (paragraph 7(3)). However, the Act says nothing about any entitlement to compensation for any period prior to the grant of the necessary wayleave.
The issue between the parties
[12] The point at issue between the parties is a short one, namely as to the period for which compensation ought to be awarded. The petitioner argues that it should be awarded as from the date of its own notice to remove served on 8 December 2010 or, at latest, from the date of SPT’s application for a necessary wayleave made on 3 March 2011. SPT says that compensation should be awarded only from the date the necessary wayleave was granted and signed.
Submissions
[13] Parties lodged detailed Notes of Argument. In summary the arguments were as follows.
[14] On behalf of the petitioner, Mr Gale QC argued that, as with all other statutory provisions providing compensation for compulsory acquisition of rights over private property, paragraph 7 of schedule 4 was based on the principle of equivalence; and compensation was therefore to be assessed from the perspective of the party having suffered the loss. From the point of view of the owner/occupier of the land, the position after service of the notice to remove and/or SPT’s application for a necessary wayleave was indistinguishable from the position after the necessary wayleave was granted. The apparatus was on the Site without the petitioner’s consent. It had been held in Patersons of Greenoakhill Ltd v SP Transmission Ltd 2010 SLT 115 (upheld on appeal on 13 January 2011, unreported) and in William Tracey Limited v SP Transmission plc, supra, that the owner/occupier had no right to damages for encroachment during such period. Accordingly, if compensation under the 1989 Act were available only after the necessary wayleave was granted, the owner/ occupier of the Site would be denied any compensation whatsoever for the period before the wayleave was granted, notwithstanding that the imposition of the de facto wayleave – which is the effect of the provisions in paragraph 8(2) and (3) in terms of which the licence holder is not obliged to comply with a notice to remove if he makes an application for a necessary wayleave within a period of three months from the date of the notice – is the same as that imposed once the necessary wayleave has been granted. That had been identified as a “lacuna” by Lord Brodie in William Tracey Limited v SP Transmission plc, supra, at paragraph [31]. The question was not so much whether compensation ought to be made available but how (ie by what legal route) this could be achieved.
[15] Mr Gale argued that a wayleave could be granted under the 1989 Act which had effect from a date earlier than the date of the decision. The Scottish Ministers had erred in law in holding that there was nothing in schedule 4 to the 1989 Act which allowed them to grant a wayleave on this basis. Para 6(3) of the schedule permitted them to grant the necessary wayleave subject to such terms and conditions as they thought fit. That was in the widest possible language. It included the power to make the grant of the wayleave retrospective, to backdate it to the time of the application or of the notice to remove, or require compensation to be awarded for that period. That was so on the plain meaning of the words used in that paragraph; but it also derived support from the fact that the date of the wayleave was entirely arbitrary, and the period before the wayleave was granted might be very prolonged without any fault on the part of the owner or occupier of the land. There might be delays in the conduct of the inquiry by the Reporter, or after the production of his Report. In the present case the wayleave was not granted until some 4 months after the Reporter produced his Report. Why should the Act be interpreted in such a way that delays in the process delayed the period in respect of which the owner or occupier of the land received compensation? That would make no sense. In any event, as noted above, it made no practical difference to the owner or occupier of the land whether the wayleave had been granted or not. The inconvenience and damage occasioned by the enforced presence of the apparatus on the land against the wishes of the owner or occupier, in respect of which the owner or occupier is to be compensated, is to all intents and purposes the same before the grant of the wayleave as it is thereafter.
[16] Mr Gale also developed an argument based on Article 1 of the First Protocol to the European Convention on Human Rights (“A1P1”). He referred to the discussion of A1P1 by Lord Reed in AXA v Lord Advocate [2012] SC (UKSC) 122 at paras [107]-[108]. A1P1 guarantees the right of property, comprising three distinct rules: the first a rule of a general nature, enunciating the principle of peaceful enjoyment of property; the second covering deprivation of possessions; and the third containing a recognition that states are entitled to control the use of property in accordance with the general interest. Assessment of whether there has been a violation of A1P1 involves a consideration of whether “possession” exists, whether there has been an interference with possession and, if so, the nature of that interference, in particular whether it constitutes a deprivation of the possession falling within the second rule or a control on use falling within the third, or whether it falls within the more general principle enunciated in the first rule. It had to be remembered that the second and third rules were only particular instances of that general interference with the rights guaranteed by the first rule. Mr Gale submitted that the grant of a necessary wayleave was not very different in practice to compulsory acquisition of the land or rights over it: R (Samuel Smith Old Brewery (Tadcaster)) v Secretary of State for Energy & Climate Change [2012] EWHC 46 (Admin). The aim of schedule 4 to the 1989 Act included that of enabling licence holders to develop and maintain an efficient, co-ordinated and economical system of electricity transmission. The public interest might therefore require that the Scottish Ministers had the right to grant a wayleave permitting the installation and retention of electric lines and associated apparatus on land. That was not in dispute. The question was as to the proportionality of that interference. Any interference must achieve a fair balance between the demands of the general interests of the community and the requirements of the protection of the individual’s fundamental rights: Salvesen v Riddell [2013] SC (UKSC) 236, per Lord Hope at paras [34]-[35] setting out “firmly established” tests to be applied. There must be a reasonable relationship of proportionality between the means employed and the aim pursued. The issue here was not whether the aim was legitimate or whether interference was potentially justified, but whether the owner or occupier of the land should be compensated for that interference. Translated into the present case, the issue was whether the decision of the Scottish Ministers to grant the necessary wayleave from the date of signature, rather than from the date of notice to remove or from the date of the application, without providing for any compensation in respect of the pre-decision period, struck a fair balance between the general interests of the community under the Act and the protection of the petitioner’s right to peaceful enjoyment of his possessions under A1P1. The answer was obvious given that the detriment to the owner or occupier of the land was effectively the same both before and after the date of signature. These considerations pointed to an interpretation of schedule 4 to the 1989 Act which permitted the grant of the necessary wayleave to be made effective from the date of the notice to remove or from the application for the wayleave. If the terms of the Act did give Scottish Ministers a broad discretion in this regard, they also pointed clearly to how that discretion should be exercised. The availability of compensation was an important factor – often the critical factor – in the assessment of proportionality. There was a presumption in favour of compensation: Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] AC 1016 at paras 52-53, and c.f. Jahn v Germany (2006) 42 EHRR 49 at paragraph 117 (for an example of the unique context in which compensation might not be required). It was for the court to assess whether the balance struck was proportional: Recovery of Medical Costs for Asbestos Diseases (Wales) Bill, supra, at paragraph 52. The court will ask simply whether, weighing all relevant factors, the measure adopted achieves a fair or proportionate balance between the public interest being promoted and the other interests involved. Significant respect may be due to the legislature’s decision, as one aspect of the margin of appreciation, but the hurdle to intervention will not be expressed at the high level of “manifest unreasonableness”.
[17] Finally, Mr Gale submitted that Article 14 ECHR was also engaged. The interference with the petitioner’s property rights was, at the very least, “linked to, or … within the scope or ambit of” A1P1: see Mathieson v Secretary of State for Work and Pensions [2015] 1 WLR 3250 at paragraph 17. The result of the decision by the Scottish Ministers to grant the wayleave only from the date of signature was that the owner or occupier of the land subjected to a de facto wayleave was treated differently, and less favourably, than an owner or occupier in respect of whose land a necessary wayleave had been granted. That afforded the petitioner sufficient “other status” for the purposes of Article 14. The words “other status” (or, in the French, “toute autre situation”) had been given a wide meaning: Carson v United Kingdom (2010) 51 EHRR 13 at paragraph 70. The petitioner was being discriminated against on the basis of that other status. The damage was effectively the same in each case, and the petitioner was in a “relevantly similar” situation (Laduna v Slovakia, Application no 31827/02, 13 December 2011, at paragraph 56) to owners or occupiers of land in respect of which a necessary wayleave had been granted, but in one case there was no right to compensation whereas in the other there was. The petitioner having shown a difference in treatment, it was for the respondents to show that that difference in treatment was justified (Guberina v Croatia [2016] ECHR 287 at paragraph 74), but the respondents had not suggested any legitimate aim underpinning this difference of treatment. In those circumstances no proportionality argument arose; the discrimination was necessarily in violation of Article 14 (Darby v Sweden (1991) 13 EHRR 774 at paras 33 – 34, Laduna v Slovakia, supra, at paras 71-73).
[18] Mr Burnet opened his submissions on behalf of the Scottish Ministers by pointing out that the petitioner’s case was periled on there being a lacuna in the legislation and on the Scottish Ministers having the power to fill that lacuna by backdating the grant of the necessary wayleave. He submitted that the Scottish Ministers had no such power. If there was a lacuna in the legislation, it was not for this court to fill it: c.f. Transport for London v Spirerose Ltd [2009] 1 WLR 1797 at paras 41 and 129-131. He did not accept, however, that there was a lacuna. Two particular facts were relevant in this context. The first was that, in terms of paragraph 7 of schedule 4 to the 1989 Act, compensation in respect of the grant of a wayleave, whether under sub-paragraph (1) or in respect of any damage caused by the exercise of a right conferred by such a wayleave under sub-paragraph (2), could be in the form of a lump sum or by periodical payments or partly in one way and partly in the other. It could, for example, be in whole or in part assessed by reference to a diminution of the value of the land. In terms of the wayleave granted by the Scottish Ministers, that was to be determined by the Lands Tribunal for Scotland: see paragraph 9 of the Standard Necessary Wayleave Terms and Conditions applicable to the grant of a necessary wayleave. The refusal of the Scottish Ministers to backdate the grant of the necessary wayleave did not, therefore, carry with it any necessary implication that the owner or occupier of the land would be left without adequate compensation. The second relevant fact was that the lengthy period in the present case between, on the one hand, service of the notice of removal in December 2010 and the application for a necessary wayleave in March 2011 and, on the other, the grant of the necessary wayleave in August 2014, a period of nearly 4 years, was highly unusual. It was not necessary to go into the reasons for that. It would often be only a matter of weeks between the application and the grant. The guidance issued by the Scottish Government on applications for necessary wayleaves showed that the standard term was 40 years from the date on which they were granted. In that context, a delay of weeks or months between the application and the grant of the wayleave was de minimis. If there was a lacuna, in the sense of a gap between the application and grant, in respect of which no compensation was payable, it would in most cases be of little importance.
[19] Mr Burnet argued that it was wrong to characterise the right under paragraph 8 of schedule 4 to the 1989 Act – ie the right not to comply with a notice to remove in circumstances where an application was made for the grant of a necessary wayleave – as amounting to a de facto wayleave or a wayleave of any description. It was simply a right to leave the apparatus on the land. It did not carry with it the associated rights of access for the purpose of inspecting, maintaining, adjusting, repairing, altering and replacing the apparatus conferred by the grant of a wayleave in terms of paragraph 6(1) and (2) of the schedule. It was in the public interest that there should be an interim period for assessing whether a wayleave should be granted. It was quite reasonable that there should be no compensation for this interim period. Typically, the application would become necessary when a wayleave terminated due to a change of ownership of the land, as contemplated in paragraph 8(1)(c) of the schedule – but in such circumstances the new owner will have purchased the land in full knowledge of what was going to happen. That might have been reflected in the price paid for the land. In other cases the lack of compensation during this interim period might operate as a disincentive to the giving of notice to remove. In William Tracey Limited v SP Transmission plc, supra, at paragraph [25] Lord Brodie had observed that the 1989 Act favoured a voluntary wayleave as the mechanism for obtaining consent and this would be consistent with the Act imposing a legitimate disincentive to a party wishing to proceed down the statutory route. By comparison, the imposition of an obligation to pay compensation would place a strain on the resources of the licence holder and provider of the electricity.
[20] So far as concerned the construction of the provisions of the 1989 Act, Mr Burnet argued that the terms of paragraph 7 of schedule 4 to the 1989 Act were clear. Para 7(1) provided that the owner or occupier of the land could recover compensation from the licence holder “Where a wayleave is granted … in respect of the grant”. The compensation was only available, therefore, in respect of the grant of the wayleave; it was not available in respect of the presence of apparatus on the land before the wayleave was granted. Further, paragraph 7(2), which provided for the right to compensation for damage caused to land or movables, was expressly limited to damage caused in the exercise of a right conferred by a wayleave. It did not apply to damage caused when the apparatus was on the land prior to the grant of the wayleave. The wording of the schedule gave no room for the construction advanced by the petitioner. Nor was it necessary to imply anything into schedule 4 to achieve this: see the Opinion of the court delivered by Lord Marnoch in the Inner House in Patersons of Greenoakhill Ltd v SP Transmission Ltd, supra, at paragraph [2]. To do so would amount to judicial legislation. In so far as compensation had been assessed for a period prior to the grant of the wayleave in Welford v EDF Energy Networks (LPN) plc [2007] 2 P&CR 15, that appeared to have been done as a matter of agreement between the parties rather than pursuant to any legal determination by the court: see paragraph 4. It provided no precedent for the petitioner’s arguments.
[21] So far as the petitioner’s arguments under A1P1 and Article 14 ECHR were concerned, Mr Burnet did not disagree with the test advanced by Mr Gale under reference to AXA and Salvesen, supra. But he did not accept the suggested analogy with compulsory acquisition of land. The interference with the owner/occupier’s enjoyment of the land was much more limited than that. During the interim period before the grant of the necessary wayleave the licence holder/operator did not have all the rights (rights of access for maintenance etc.) which he would have had under the wayleave. There was no great burden imposed on the owner or occupier of the land. In those circumstances, there was a public interest in the continuity of an efficient electricity supply. It was a legitimate aim of government to protect that supply and, in the short term, to maintain the status quo pending a decision on the application for a necessary wayleave. Such an approach was reasonably proportionate and struck a fair balance. The legislation envisaged a short period between the application for a necessary wayleave and the grant or refusal of that application. It was in the public interest that the line and associated apparatus should remain on site during that period. And, at the end of that process, either the owner or occupier of the land succeeds, in which case he achieves the removal of the interference on his land; or he fails, in which case he is compensated for the future. In summary, there was a legitimate aim justifying the presence of the line and associated apparatus on the Site during the intermediate period; and the requirement for proportionality did not militate in favour of compensation prior to the grant of the necessary wayleave.
[22] Mr Burnet submitted that the Article 14 argument also failed. The distinction between an owner or occupier whose land was subject to interference pre-and post- grant of a necessary wayleave was not a relevant identifiable characteristic or status in terms of that Article. It was simply a natural consequence of the process. Prior to the decision to grant or refuse the necessary wayleave, every application, every applicant and every owner or occupier of land potentially affected by the application was treated equally. It was not surprising that there should be a difference in outcome for someone who has had a relevant application determined as against someone who has not yet had an application determined.
[23] Ms Wilson QC, who appeared for SPT as an interested party, pointed out that in the present case the protracted period in the present case between the notice of removal in the grant of the necessary wayleave had been caused, in part at least, by complex negotiations which, if successful, might have led to the grant of a voluntary wayleave. The parties had willingly engaged in such negotiations and, to that extent, in the length of time involved in the process. There had been some discussion in the Notes of Argument as to who was at fault for the process taking so long, but that was not relevant to the issue of statutory construction. If, on its proper construction, schedule 4 to the 1989 Act gave the Scottish Ministers a discretion to award compensation from the time prior to the grant of the necessary wayleave, then the court could grant declarator to that effect and remit the matter to the Scottish Ministers to consider how to exercise that discretion. That would be the time at which considerations of delay, and who was at fault, might be relevant, if they were relevant at all. But they were not relevant in construing the scope of the Scottish Ministers’ powers under the schedule.
[24] Ms Wilson emphasised the duty placed upon electricity distributors and licence holders in terms of section 9(1) and (2) of the 1989 Act. A duty was placed on each of them “to develop and maintain an efficient, co-ordinated and economical system of electricity distribution [or transmission]” and “to facilitate competition in the supply and generation of electricity”. It was not simply their own commercial interests which were at stake. The 1989 Act sets out a statutory regime regulating the respective rights and interests of land owners, occupiers and licence holders, all in the general interest of the public which requires an uninterrupted supply of electricity: per Lord Brodie in William Tracey Limited v SP Transmission plc, supra, at paragraph [23]. That public interest was affected by any burden placed upon the licence holder in terms of cost or compensation; costs involved in diverting the existing overhead line, or putting it underground, would be passed on to the consumer, as would any compensation payable under schedule 4 to the 1989 Act.
[25] Turning to the construction of the relevant provisions of schedule 4 to the Act, Ms Wilson emphasised the wording of paragraph 7(1) which provides that “where a wayleave is granted to a licence holder” the owner or occupier of the land may recover compensation “in respect of the grant”. That made it clear that compensation could not be awarded in respect of a period before the grant of the wayleave. It had been common ground in Arnold White Estates Ltd v National Grid Electricity Transmission plc [2014] Ch 385 that the valuation date for the purpose of quantifying compensation under that paragraph was the date of the grant of the wayleave: see per Briggs LJ at paragraph 13. So far as concerned compensation in respect of damage caused in the exercise of a right conferred by a wayleave, paragraph 7(2) recognised that such damage might occur at any time “during the period for which the wayleave is granted”: ibid.
[26] Ms Wilson accepted that the principle of equivalence was of general application in this field. It was explained in Arnold White Estates, supra, at paras 14-16. But it only applied where there was a right to compensation. That was the very issue here.
[27] Ms Wilson adopted Mr Burnet’s submissions relative to A1P1 and Article 14. In respect of the latter she added a further point. She submitted that the petitioner’s suggested construction of the schedule, which required compensation to be awarded as from the date of the application, gave rise to another anomaly. In terms of paragraph 7 of schedule 4, compensation was only available “where a wayleave is granted”. Accordingly, the petitioner’s argument would lead to a situation where an owner or occupier of land was only entitled to compensation for a de facto wayleave (as the petitioner characterised it) if a necessary wayleave was ultimately granted. He would not be entitled to compensation where a necessary wayleave was refused. That would strike most observers as perverse, since it would mean that compensation could be awarded when the presence of the apparatus on the land was ultimately considered acceptable but not where it was so unacceptable that the application had to be refused.
[28] In a brief reply, Mr Gale referred to the decision of the House of Lords in Ghaidan v Godin-Mendoza [2004] 2 AC 557 for guidance as to the obligation laid on the court by section 3(1) of the Human Rights Act 1998 to read and give effect to legislation in a way which was compatible with Convention rights “so far as it is possible to do so”. He submitted that paras 6-8 of schedule 4 could and should be construed in a way which give effect to the petitioner’s A1P1 rights and did not discriminate contrary to Article 14. Accordingly, if it were necessary to do so in order to achieve this, the words “in respect of the grant” in paragraph 7(1) of the schedule should be interpreted as referring to the grant of the wayleave “as a whole” and not just to the date on which the wayleave was granted. That paragraph was capable of bearing that meaning. He was not inviting the court to go further and insert a provision for retrospectivity if no such provision could be found by means of a Convention compliant approach to interpretation.
Discussion
[29] It is not necessary to rehearse in detail the scheme of the 1989 Act. It is clear, as Lord Brodie put it in William Tracey Limited v SP Transmission plc, supra, at paragraph [23], the Act sets out a statutory regime regulating the respective rights and interests of landowners, occupiers and licence holders all in the general interest of the public. Those interests are served by the provision of an uninterrupted supply of electricity. To that end section 9(2) of the Act places a duty on a licence holder, similar to that placed on an electricity distributor, “to develop and maintain an efficient, co-ordinated and economical system of electricity transmission”. That can be regarded as the legislative aim behind the provisions in the Act with which I am concerned and it is not suggested that is other than a legitimate aim.
[30] To achieve that aim it is necessary that a licence holder is able to obtain rights enabling it to construct or keep in existence power lines and related apparatus over, under and on land belonging to others. As noted in paragraph 11 of the judgment of Briggs LJ in Arnold White Ltd v National Grid, supra, section 10(1) of the 1989 Act provides two methods whereby these rights can be acquired. The first is by compulsory acquisition of the necessary land pursuant to schedule 3 to the Act. The second is by acquisition of wayleaves pursuant to schedule 4. In the case of compulsory acquisition, provision for compensation is effected by the incorporation into schedule 3, with some adjustments, of the provisions of compulsory purchase legislation. The grant of a wayleave, however, involves no outright acquisition of land, compulsory or otherwise, and therefore schedule 4 makes bespoke provision for compensation. That provision is contained within paragraph 7 of schedule 4.
[31] In some cases, I do not know how many, a wayleave may be granted before the erection of the relevant line or the installation of any related apparatus. In such cases there should be no obvious impediment to the availability of compensation, though, as illustrated by the English cases to which I was referred, issues may arise as to the method of quantification.
[32] However, and for all I know this may be the more common situation, an application for a necessary wayleave may be made where the line and associated apparatus is already in place: see paragraph 6(2) of schedule 4. The circumstances in which that may occur are set out in paragraph 8 of the schedule. A wayleave may be determined by the expiration of the period specified therein: paragraph 8(1)(a). Or it may be terminated by the owner or occupier of the land in accordance with a term contained in the wayleave: paragraph 8(1)(b). Or it may cease to be binding on the owner or occupier of the land due to a change in ownership or occupation thereof: paragraph 8(1)(c). In such cases the owner or occupier of the land simply allows the line and associated apparatus to remain on the land while discussions take place with the licence holder as to the terms of a voluntary wayleave. But if the owner or occupier of the land does not wish to take this course, or if he finds that any discussions are not proceeding to his satisfaction, he may give to the licence holder a notice (referred to as a “notice of removal”) requiring him to remove the line and associated apparatus from the land: paragraph 8(2). In such cases the licence holder is not obliged to comply with the notice of removal except in certain circumstances. Leaving out of account any application for a compulsory purchase order, unless he makes an application for a necessary wayleave in terms of paragraph 6(2) of schedule 4 within three months of the notice of removal, he must comply with the notice at the end of that three month period: paragraph 8(3). If he does apply for a necessary wayleave within the three month period, then he may keep the line and associated apparatus on the land until such time as his application is decided. If his application is refused, then he must comply with the notice of removal within a period of one month from the date of that refusal or such longer period as the Scottish Ministers may specify. But if his application is successful then, of course, he need not comply with the notice of removal but may keep the line and associated apparatus on the land for the duration of the necessary wayleave which he has been granted and in accordance with its terms.
[33] In all such cases (ie in all cases where the necessary wayleave is not in place before the erection of the line and the installation of the associated apparatus) the line and apparatus will have been on the land without there being in place a necessary wayleave and, where one has been applied for, before a necessary wayleave is granted. The question for decision is whether the owner or occupier of the land is entitled to compensation for some or all of that period.
[34] The provision for compensation is contained within paragraph 7 of schedule 4 to the 1989 Act. It is convenient to repeat its terms here. It provides as follows:
“7.-(1) Where a wayleave is granted to a licence holder under paragraph 6 above-
(a) the occupier of the land; and
(b) where the occupier is not also the owner of the land, the owner,
may recover from the licence holder compensation in respect of the grant.
(2) Where in the exercise of any right conferred by such a wayleave any damage is caused to land or to moveables, any person interested in the land or moveables may recover from the licence holder compensation in respect of that damage; and where in consequence of the exercise of such a right a person is disturbed in his enjoyment of any land or moveables he may recover from the licence holder compensation in respect of that disturbance.
(3) Compensation under this paragraph may be recovered as a lump sum or by periodical payments or partly in one way and partly in the other.”
[35] On the plain meaning of the words used in that paragraph, it is clear that paragraph 7(1) makes provision for the owner or occupier of the land to be compensated only when a wayleave is granted under paragraph 6. Further, he may only recover compensation “in respect of the grant”. In other words, that paragraph makes no provision for compensation for the presence of a line and other apparatus on his land otherwise than pursuant to the grant of a necessary wayleave. I regard those words as unambiguous. However, for good measure, that construction appears to be consistent with the provision, to be found in the opening five words of that paragraph, that compensation is only to be recovered in cases “where a wayleave is granted”. If the application for a wayleave is refused no compensation is recoverable. The clear link is between the grant of the wayleave and the right to compensation under the Act.
[36] That same link is to be found in paragraph 7(2) of schedule 4 where there is a right to compensation in respect of damage caused to land or other property “in the exercise of any right conferred by such a wayleave”. The statutory provision for compensation does not cover damage caused to land or property in circumstances where the line and other apparatus is on the site otherwise than in accordance with a wayleave. That is not to say that no compensation is recoverable in respect of such damage; it is simply not recoverable under the statutory scheme.
[37] This construction of paragraph 7(1) is consistent with the remarks of Thomas LJ, as he then was, in Welford, supra, at paragraph 4: “The statutory provisions only provided for compensation as at the date the wayleave was granted”. It is true that there was no need for the court to rule on the point in that case. Parties reached agreement in terms of which the owner or occupier of the land was to receive compensation for the period prior to the grant of the wayleave, such compensation to be determined by the Lands Tribunal. But the description of the provision in that passage is consistent with my interpretation. In paragraph 3 of his judgment in Arnold White Estates Limited, supra, Briggs LJ recorded it as being common ground that the valuation date for the purpose of the quantification of compensation under paragraph 7(1) was the date of the grant of the wayleave. There was no need for the court to make any decision on the point, but the fact that it was common ground is indicative, in my view, of the proper construction to be afforded to those provisions. So far as Scottish authority is concerned, I came to that same view in Patersons of Greenoakhill Ltd v SP Transmission Ltd, supra: see paragraph [12]. It was on that basis, ie because the statutory provision for compensation applied only from the date the necessary wayleave was granted, that the argument was advanced that the owner or occupier of the land was entitled to recover damages for delict in respect of the period when no wayleave was extant. I held that he was not. My decision was upheld by the Inner House. In Patersons of Greenoakhill Ltd v SP Transmission Ltd and William Tracey Limited v SP Transmission plc, supra, it was decided that no delict is committed by a licence holder who maintains a line and associated apparatus on land after being served with a notice to remove prior to the expiry of the time limits for compliance with such a notice laid down in paragraph 8 of schedule 4. The owner or occupier of land was not entitled in such circumstances to damages for unlawful encroachment by the licence holder. The same applied where the line and associated apparatus remained on the land after determination (or termination or expiry) of a wayleave and before any notice of removal. In addition, I held in Patersons of Greenoakhill, supra, that there was no right to compensation on the basis of some implied continuation of the pre-existing wayleave. That decision too was upheld by the Inner House, which held that it was unnecessary to imply anything into schedule 4 so as to achieve the award of compensation to an owner or occupier of land in circumstances where a line or associated apparatus was on his land prior to the grant of a necessary wayleave. The Inner House took the view that if Parliament had thought about the matter at all, “it might well have decided to leave the situation in which the parties found themselves to be governed by common law remedies such as implied contract or Unjust Enrichment”.
[38] The petitioner’s argument in the present case represents another attempt to achieve the result that the owner or occupier of the land is entitled to compensation from a date prior to the grant of a necessary wayleave. In this case the argument differs from that advanced previously. The argument is that paragraph 6(3) of schedule 4 gives the Scottish Ministers a wide discretion to grant a necessary wayleave “subject to such terms and conditions as [they think] fit”. They are therefore entitled to grant it with retrospective effect. The point is novel, though none the worse for that. But it seems to me that it must fail, essentially for the same reasons as arguments advanced by owners and occupiers of land have failed in previous cases. The provision for compensation is contained within paragraph 7 of schedule 4. That specifically provides that compensation may be recovered in respect of the grant where a necessary wayleave is granted. It does not, as I have already noted, make any allowance for recovery of compensation other than in respect of the grant. If the discretion as to terms and conditions contained within paragraph 6(3) was as wide as argued for by the petitioner, that would completely cut across the specific provision for compensation in paragraph 7. I do not regard such a construction of paragraph 6(3) as permissible.
[39] Mr Gale sought to get around this by suggesting a construction of paragraph 7(1) so as to allow recovery of compensation in respect of the grant “as a whole”, which I understood to mean that compensation could be awarded to cover the whole process from the notice of removal and/or the application for a necessary wayleave. That would, in my view, present problems. First, it stretches beyond breaking point the words “in respect of the grant”. Second, it produces the oddity (some might say absurdity) that compensation might be recovered in respect of that whole process, but only where ultimately the application for the wayleave was successful – since the opening words of paragraph 7(1) show that the compensation may only be recovered “where a wayleave is granted” – and not where it was unsuccessful, despite the latter case being (one would have thought) more deserving of compensation. So I reject this suggested construction.
[40] So far as concerns the argument under A1P1, there was no difference between the parties as to the correct approach. In the present case it was accepted that the legislative aim, namely to develop and maintain an efficient, co-ordinated and economical system of electricity distribution and to facilitate competition in that field, was a legitimate aim and necessarily involved some interference with the enjoyment of land over which it was necessary to run power lines and on which it was necessary to install towers and other apparatus. The question arises as to the proportionality of that interference. The focus of the argument was on the provisions made for compensation to owners or occupiers of land so affected. It is for the court to assess whether the balance struck in the statutory scheme is proportional.
[41] In my view this is not to be regarded as a case were the legislature has sought to impose its will without any provision for compensation. On the contrary, paragraph 7(1) of schedule 4 makes it clear that where a wayleave is granted the owner and/or occupier of the land may recover compensation in respect of the grant. Any dispute as to compensation is to be determined by the Lands Tribunal. So far so good, it may be said, but what about the position where the wayleave is not granted or as regards the period before a wayleave is granted?
[42] In answering this question is seems to me to be necessary to get some idea of the scale of the potential problem. Mr Burnet suggested two matters of relevance in this connection. First, the period between an application for a necessary wayleave and its grant or refusal is likely, in the ordinary case, to be a very short one; when measured against the likely duration of the necessary wayleave (usually 40 years) a period of weeks or even months before the grant of the wayleave is insignificant. Second, compensation may well be awarded in whole or in part on the basis of diminution in the value of the land. In other words, compensation will not necessarily be in the form of periodic payments, with the effect that any delay in the grant of the application for the necessary wayleave will adversely affect the owner or occupier of the land. It is perhaps equally likely, if not more so, that the date of the grant of the necessary wayleave will simply fix the date as at which assessment of the land value and diminution in value will be assessed. That may benefit one party or the other, but it will not necessarily result in the owner or occupier of the land being left uncompensated for any particular period for the presence on his land of the line and associated apparatus. A date has to be fixed for that exercise and the date of wayleave is granted might appear to be as good as any. I consider that there is considerable force in these points. It means that in the ordinary case the absence of compensation prior to the date of the grant of the necessary wayleave is unlikely to cause problems. And in an exceptional case such as the present, where the period between application for and grant of the necessary wayleave has run into years, it is always open to the owner or occupier of the land to bring matters to a head by insisting that the application be decided one way or the other.
[43] It therefore seems to me that the problem posited by the petitioner, the interference with peaceful enjoyment of the land without compensation for considerable periods, is somewhat exaggerated. In those circumstances I do not consider that there is any real force in the submission made on behalf of the petitioner that the scheme under schedule 4 to the 1989 Act results in interference in the use and enjoyment of the land without compensation. There is a statutory scheme for compensation which is appropriate in most, if not all, reasonably foreseeable circumstances. I therefore reject the argument based on A1P1.
[44] I also reject the argument on discrimination contrary to Article 14. It does not seem to me that the situation of an owner or occupier of land before the grant of a necessary wayleave gives him any particular status as compared with that which he and others enjoy after the necessary wayleave has been granted. Further, even if he did enjoy a separate status, a finding that the owner or occupier of land before the grant of a wayleave ought to be treated in terms of compensation in the same way as the owner or occupier of land after the grant of a wayleave gives rise to a further and less palatable anomaly in terms of discrimination in that he would then be treated better than an owner or occupier of land where the application for a necessary wayleave was ultimately refused. Given that refusal might be on grounds that the interference with the use of the land was wholly unacceptable, the absence of compensation in such a case would jar with the award of compensation in a case where the interference was less extreme. If, to avoid this difficulty, the argument were to be advanced that in both cases (ultimate grant or ultimate refusal) an owner or occupier of land ought to be compensated prior to the decision being made on the application for a necessary wayleave, then this would involve a more radical re-drafting of paragraph 7(1) of schedule 4. No such argument was advanced.
Disposal
[45] For all the above reasons I shall repel the pleas in law for the petitioner, sustain the first to third and fifth to seventh pleas in law for the Scottish Ministers, sustain the first to sixth pleas in law for the Interested Party, and refuse the petition.
[46] I shall reserve all questions of expenses.