Skrytek v Secretary of State for Communities and Local Government & Ors

This appeal concerns the meaning of one word in one paragraph of the decision (“the DL”) dated 21 September 2012 by Mr Robinson, a Planning Inspector appointed by the Secretary of State. The Inspector allowed an appeal by Resource Recovery Solutions (Derbyshire) Ltd (“RRS”) against the refusal by Derby City Council to grant planning permission for a waste treatment facility in Sinfin, Derby. In the last sentence of DL [40] the Inspector stated that “the proposed waste treatment facility onthe appeal site lies higher in the hierarchy than disposal”. He concluded in DL [48] that RRS’s proposal “… meets the requirement of RP Policy 38 for the management of waste to be taken up the waste hierarchy as defined in WS 2007”.

The crucial word is “disposal” in DL [40]. Its legal importance stems from the waste hierarchy set out in Article 4 of the EC’s Waste Framework Directive, 2008/98/EC (“the Directive”) as part of its aim of achieving more sustainable waste management. The waste hierarchy classifies activities and gives priority to waste prevention and management. “Prevention” is at the top of the hierarchy, then “preparing for re-use”, “recycling” and “other recovery”. “Disposal” is at the bottom of the hierarchy. The Directive was implemented by the Waste (England and Wales) Regulations 2011, SI No. 988/2011 (“the 2011 Regulations”) and the relevant planning policies. The material part of the applicable statutory development plan is Policy 38 of the East Midlands Regional Plan 2009 (“RP Policy 38”). That (in line with the Directive) provides for the promotion of proposals resulting in the treatment of waste higher up the “waste hierarchy” in DEFRA’s Waste Strategy for England 2007 (“WS 2007”). (Footnote: ¹)

There is no issue between the parties concerning the relevant legal principles or the policy framework. It is also not disputed that the proposed facility’s operations would not initially qualify as “recovery” within the Directive. At issue is the Inspector’s treatment of the concepts of the “disposal” and “recovery” of waste. He stated that “the proposed waste treatment facility onthe appeal site lies higher in the hierarchy than disposal”. The question is whether this showed he erroneously categorised the proposed facility under consideration as a “recovery” operation rather than as a “disposal” operation, and whether, even if he did not so err, the reasoning in his decision letter is legally inadequate.

Mrs Dorothy Skrytek is a co-ordinator of the Derby Friends of the Earth group and a member of several other groups (including one called “SSAIN”) who objected to RRS’s application. She challenged the Inspector’s decision pursuant to section 288 of the Town and Country Planning Act 1990 (“the 1990 Act”). In a judgment handed down on 28 March 2013, HHJ Stephen Davies, sitting as a Deputy High Court Judge in the Administrative Court in Manchester, rejected the challenge. The judge accepted the submission on behalf of the Secretary of State and RRS that, notwithstanding the Inspector’s use of the phrase “higher in the hierarchy than disposal”, it is clear from the decision as a whole that he was not categorising the proposal as a “recovery” operation. Mrs Skrytek appealed against the judge’s Order.

This court has been assisted by the written submissions of Mr Simons, on behalf of Mrs Skrytek, Mr Moffett, on behalf of the Secretary of State, and Messrs Kingston QC and Kimblin on behalf of RRS, and by Mr Simons’ focused oral submissions at the hearing. At the conclusion of the hearing, my Lord, Lord Justice Maurice Kay, stated that the appeal would be dismissed. I now give my reasons for that decision.

My reasons are substantially the same as those given by the judge below in his admirably clear judgment: [2013] EWHC 733 (Admin). Accordingly, it is not necessary to engage in detailed analysis or to repeat in my own words the process of reasoning set out in his decision. As Mummery LJ stated in R (Balding) v Secretary of State for Work and Pensions [2007] EWCA Civ 1327 at [24], reported at [2008] 1 WLR 564, “there is no point in appeal court judges saying things at length simply for the sake of saying something”. This is in particular so where the area of dispute is as narrow as it is in this case. There is no criticism of the judge’s summary of the factual and procedural background at [2] – [10], the relevant legal principles at [13] – [28], or the material provisions of the Directive, the 2011 Regulations, and the relevant policy framework at [38] – [75] of his judgment. There is therefore no need to reiterate them here. My duty to provide the reasons for my decision does, however, require me to provide a brief summary of the factual and regulatory background and to set out the material parts of the Inspector’s decision.

RRS’s application was for a facility which would use a process involving incineration and the use of the heat to generate electricity. The Environment Agency’s permit for the proposed facility described it as an incineration facility, but one which would also generate electricity for export to the National Grid. The permit contained conditions which required the provision and maintenance of a facility for the export of steam and hot water, but did not require such heat exportation.

It was common ground that, although initially the proposed facility process would produce approximately 11MW of electricity per hour, and that 8MW per hour, sufficient to power approximately 14,000 homes, would be exported to the National Grid, the facility did not, initially, qualify as a “recovery process” within the Directive, the 2011 Regulations, or the relevant policy guidance. It did not do so because its energy efficiency did not achieve the threshold set out in a formula (“the R1 formula”) in Annex II to the Directive for operations which generate electricity. That threshold was transposed into domestic law by Regulation 3(2) of the 2011 Regulations.

It was also common ground that, once the plant was operating, residual heat could be exported, in the form of steam or hot water, to local businesses for their use. If the requisite contracts were secured, the additional use would convert the facility from an “electricity only” energy recovery facility to a combined heat and power (“CHP”) energy recovery facility. That development would enable the processes in the facility to fall within the “recovery” category under the Directive and the 2011 Regulations rather than the “disposal” category.

It is important to note that, in order to obtain planning permission, it was not necessary for the facility to be within the “recovery” category at the date it starts operating. The Directive, the 2011 Regulations, and the policy documents listed in note 1 at [2] above make it clear that the hierarchy does not have to be followed slavishly. Article 4(2) of the Directive (reflected in Regulation 12(2) of the 2011 Regulations) provided:

“When applying the waste hierarchy…Member States shall take measures to encourage the options that deliver the best overall environmental outcome. This may require specific waste streams departing from the hierarchy where this is justified by life-cycle thinking on the overall impacts of the generation and management of such waste.”

The objectors, including Mrs Skrytek, considered that the proposal was not consistent with waste treatment planning policy because incineration lies at the bottom of the “waste hierarchy” and is little better than the traditional practice of disposal of waste to landfill sites. The relevant planning policy in relation to waste treatment, RP Policy 38, was to promote proposals resulting in the treatment of waste higher up the “waste hierarchy” in WS 2007.

Before setting out the material parts of the decision, I observe that the submissions on behalf of Mrs Skrytek relied in part on RRS’s case before the Inspector and, in particular, on errors in the evidence given by its planning and development consultant, Miss Kirsten Berry, and on the closing submissions made to the Inspector on behalf of RRS. They also relied on what Mr Simons submitted was, if taken on its own, a misleading table in DEFRA’s 2011 guidance.

Miss Berry’s evidence was broadly to the effect that a “recovery process” in domestic law can be more broadly defined than under the Directive, and is not constrained by the R1 formula. It included the statement (in paragraph 3.5.21 of her proof of evidence) that Regulation 12 of the 2011 Regulations does “not limit ‘other recovery’ to incineration plant (sic) that meet the R1 formula”. It was common ground before the judge and this court that her approach on this was wrong in law. As to the table at page 6 of DEFRA’s 2011 guidance, Mr Simons submitted that, read on its own and without reference to other documents, it gave the erroneous impression that all energy recovery technologies, including electricity only, were higher in the waste hierarchy than disposal, where in fact this is contrary to the definitions used in the Directive.

In summary, it was submitted that the Inspector’s understanding and the language in his decision reflected the misleading table in DEFRA’s 2011 guidance and the erroneous aspects of Miss Berry’s evidence which were not expressly disavowed in Mr Kingston QC’s closing submissions on behalf of RRS and were , by implication, adopted by RRS.

The material parts of the Inspector’s decision are:

“Main Issues

12.

From the evidence put before me both orally and in writing, I consider that the main issues in this appeal are:

(i)

The performance of the proposal against the development plan;

(ii)

The relationship of the proposed development to the waste hierarchy and whether the development would hinder the achievement of higher recycling rates;

(iii)

The effect of the proposal on the character and appearance of the area;

(iv)

The effect of traffic generated by the proposed development on the safety and free flow of traffic on the road system in this part of Derby;

(v)

The effect of the proposal on air quality in this part of Derby; and

(vi)

The effect of the proposal on the health of those living in this part of Derby.

…

35.

Other elements of RP Policy 38 require waste to be treated higher up the waste hierarchy and for minimum targets for recycling and composting of municipal solid waste to be raised to 30% by 2010 and 50% by 2015. It forms no part of [Derby] City Council’s case as local planning authority that the proposal would fail to conform to the former or would prejudice recycling and composting targets to be met. However, others take a different view.

36.

Dealing first of all with the waste hierarchy, one of the key objectives of national policy in both PPS10 and WS2007 is to drive the management of waste up the hierarchy. This is to take the management of waste away from the old and long established practice in this country of disposing of much of our municipal solid waste to landfill. Although one of the processes of the proposed waste treatment facility is to separate out glass and ferrous and non-ferrous metals from the municipal waste that is received and send these off for recycling, I recognise that most of the waste would be treated and used as a feedstock for the gasification process to generate energy. Much has been made of the permit’s classification of the proposed facility as an incineration plant rather than as an energy recovery plant. The point was made by some at the inquiry that incineration can be regarded as disposal at the bottom of the waste hierarchy whilst energy recovery lies on the next step up in the hierarchy.

37.

This seems to me to stem from a misunderstanding of how energy efficiency from the proposed plant is treated in the permit. Initially, the proposed plant will generate electricity which will be fed into the grid. Just generating electricity does not qualify a plant to be treated as a recovery process. To qualify, a plant has to raise its energy efficiency by also exporting heat. In my view, it would be unusual for the operator to sign up customers to take any heat produced by the plant at the outset. Potential customers are likely to wait to see whether the plant comes up to expectations in terms of the amount of heat that it produces and the reliability of supply of the heat. Once they are satisfied on these points, then contracts to take the heat may well be signed. It is in the financial interests of the operator of the plant to secure customers to take any heat generated. Once heat is being exported, the operator of the plant can return to the Environment Agency to have the plant reclassified as an energy recovery facility.

38.

The important factor is that a plant is located so that potential customers for the heat are within easy reach. Long lengths of pipe work can be expensive to install and there is the challenge of ensuring that heat is not lost whilst being transported in long lengths of pipe. In this case, the appeal site lies cheek by jowl with a large area of manufacturing industry. Thus, there is considerable potential for heat produced by the proposed facility to be used by neighbouring industrial consumers.

39.

In this regard, I note that the Environment Agency through the environmental permit requires steam/hot water pass-outs to be provided and maintained. This would enable the plant to provide heat to nearby consumers once the plant is up and running and customers have been signed up. Through the permit, the Agency also requires the operator of the plant to review options for recovering heat on an ongoing basis.

In recognition that there can be misunderstanding as to how to apply the waste hierarchy in such situations, DEFRA has produced guidance on the interpretation of the hierarchy. (See a copy of DEFRA’s “Guidance on Applying the Waste Hierarchy” at CD151). The table on page 6 of the guidance, which is dated June 2011, makes it clear that all energy recovery technologies, whether electricity only, heat only or heat and power combined, come higher in the waste hierarchy than disposal.Thus, the proposed waste treatment facility onthe appeal site lies higher in the hierarchy than disposal.

…

I conclude on this issue that the proposal meets the requirement of RP Policy 38 for the management of waste to be taken up the waste hierarchy as defined in WS 2007. The proposal would also not prejudice the achievement of the higher recycling and composting target identified in RP Policy 38 for 2015. …

…

“Overall conclusion on the development plan and a consideration of benefits and harm

118.

Gathering together my conclusions on the issues that I have identified in this case, I conclude that the proposal complies with the RP in providing a centralised facility for dealing with the waste management needs of this part of the region. The proposal also complies with the RP in that it would enable waste to be managed higher up the waste hierarchy and would not inhibit recycling or prevent the RP’s recycling target or a higher target from being met. In considering the proposal against the various site specific impacts such as being compatible with the character and appearance of the locality, effect on the local highway network, impact on air quality and effect on health, I conclude that the proposal does not breach any RP, WLP [Waste Local Plan] or LP [Local Plan] policy. In short, I find that the proposal complies with the relevant policies in the development plan.”

The Inspector then went on to consider the advantages and disadvantages of the development. It suffices to give the summary of these in [36] of the judgment below.

“…In terms of advantages, as relevant to this case [the Inspector] concluded in paragraph 120 that the development would enable the last major element of the city and county’s joint waste strategy to be brought to fruition, would enable the city and county’s residual municipal waste to be dealt with in a sustainable manner by reducing the volume of waste going to landfill, would provide for the separation of recyclable elements of waste that had missed kerbside collection of recyclable materials, and would put the bottom ash to use as a recyclate. He concluded in paragraph 121 that it would offer renewable energy benefits by exporting sufficient electricity to power 14,000 homes, so that it would be a source of renewable energy contributing to lowering the reliance on fossil fuels, and that it would offer the opportunity in the future for heat to be used by local industry in the form of either steam or hot water.”

The judge stated (at [81]) that there was never any dispute about the fact that unless and until the facility operated as a CHP facility by exporting heat as well as electricity it was not capable of satisfying the R1 formula, and that the real debate before the Inspector, and the real issue which the Inspector had to decide, was whether RRS’s proposal would deliver a better overall environmental outcome than disposing of the waste to landfill or any other reasonable option.

The judge (at [114]) accepted the defendants’ submission that the logical starting-point was to understand the issue the Inspector was required to decide, and that the Inspector had correctly identified the issue as being whether the proposal would result in waste being treated higher up the waste hierarchy. He also accepted (at [115] – [116]) that the Inspector was not obliged to pose an answer to all the sub-issues which might arise, or to frame his decision in terms appropriate for a reader who had no prior knowledge of the case. That (see [117]) did not, however, relieve him of the obligation of understanding what the waste hierarchy was and what activities would, on a proper interpretation, fall within each category.

The judge stated (at [118]) that “any assessment of [the Inspector’s] decision has to proceed from the premise that in paragraphs 36 and 37 of his decision he did demonstrate quite clearly that he understood what the waste hierarchy was and that he also understood that electricity generation alone would not qualify the plant as recovery, and that it would be necessary to export heat as well to achieve recovery status.” After noting that there was no criticism of those paragraphs of the Inspector’s decision, the judge returned to DL [40]. He stated (at [120]) that:

Earlier in his judgment, the judge dealt with the submissions based on Miss Berry’s evidence and Mr Kingston’s closing submissions. As to the latter, the judge found (at [88]) that Miss Berry’s position on the construction of “recovery” was not a matter “which was positively taken up by the third defendant before the Inspector”.

The judge stated (at [121]) that he was left in no doubt that the Inspector did what he was required to do. He was satisfied (see [122]) that the Inspector did not purport to decide that the proposed waste treatment facility was properly to be categorised as “recovery” because of the express finding in DL [37] that it would not fall into that category in “electricity only” mode, and it would have been completely inconsistent with that finding to have go on to find in DL [40] that it did fall into the recovery category even in “electricity only” mode. Secondly, although the Inspector found (in DL [37]) that the facility could fall into the recovery category in the future if it became a CHP, there was nothing in DL [37] – [39] or [40] which suggests that he found in terms that it would become a CHP and would achieve the R1 threshold, so as properly to be categorised as recovery.

The judge also concluded (at [123]) that, even if he was wrong about the finding and that the Inspector did decide, or arguably decide, that the proposal fell into the category of “other recovery”, he would not have regarded that as an error of law. He stated that:

“if he had made such a finding, then it could only have been on the basis that he had made clear findings that it was more likely than not that the proposed waste treatment facility would begin to export heat once up and running, and thus that it was more likely than not that it would achieve the R1 threshold at that point. On that analysis, in my judgment, the decision that the proposal could properly be regarded as falling in the recovery category was neither irrational, perverse or Wednesbury unreasonable. I would take the view that these are conclusions of mixed law and fact which disclose no error of law and, in relation to the factual findings, are ones which [the Inspector] was reasonably entitled to reach.”

It was submitted by Mr Simons that it is important to assess the language of the last two sentences of DL [40] in the Inspector’s decision together with the misleading table in DEFRA’s 2011 guidance and the erroneous evidence of Miss Berry. Those factors, together with RRS’s failure to disclaim Miss Berry’s approach in its closing submissions, and the statement in those submissions that they were not intended to repeat evidence given to the inquiry justifies according the last sentence of DL [40] its natural meaning and not as referring to “disposal to landfill”. Mr Simons also relied on the fact that it is clear from the relevant legislative and regulatory documents that deposit in landfill is only one form of “disposal”. He submitted that the only way the last two sentences of DL [40] of the Inspector’s decision could be read consistently with his prior finding that the R1 formula had not been satisfied was if, as Miss Berry had submitted, satisfying the R1 formula was not determinative of “recovery” status.

Mr Simons submitted that the judge erred in explaining the use by the Inspector of the word “disposal” in the last sentence as “obviously shorthand”. In the light of the earlier parts of the decision, a sudden move from longhand to shorthand was inherently unlikely. It would indeed be inconsistent with the earlier parts of the Inspector’s analysis. Mr Simons particularly relied on the fact that the relationship of the proposed development to the waste hierarchy was one of the five issues identified by the Inspector as “the main issues in this appeal”. It was an issue on which several parties adduced extensive evidence. It formed a central part of closing submissions to the Inspector, and he dealt with it at some length.

Mr Simons’ alternative submission is that, in the words of Sir Thomas Bingham MR in Clarke Homes v Secretary of State for the Environment [1993] 66 P & C R 263 at 271, there is genuine and not merely forensic doubt about what the Inspector decided and why. There is doubt as to where the Inspector placed the proposed facility on the waste hierarchy and why he placed it where he did. Why, if (as was found at DL [37]) the initial operation of the facility did not mean that it qualified to be treated as a recovery process, was it to be treated as “higher in the hierarchy than disposal”? He also relied on the Inspector’s words in DL [38] and [39] about the considerable potential for heat to be exported in the future, but the absence of any statement as to whether, and if so how and to what extent, that impacted on his classification of the proposal as “recovery” or “disposal” process.

It was submitted that these factors give rise to a substantial doubt as to whether the Inspector erred in law and also that they precluded the objectors from understanding how the policy or approach underlying the grant of permission may impact upon future applications. It, therefore, maintained Mr Simons, fell below the requirements stated by Lord Brown of Eaton-under-Heywood in his much-cited statement of the duty of an Inspector to give reasons in South Buckinghamshire DC v Porter (No. 2) [2004] 1 WLR 1953.

I agree with the judge that it is not a tenable interpretation of the Inspector’s decision that he categorised the proposal as initially a “recovery” proposal for the purposes of the Directive and the waste hierarchy. Mr Simons’ submission that disposal to landfill is not the only form of disposal, and so it is not obvious that the term in the last sentence of DL [40] was shorthand for “disposal to landfill”, has considerable force if that paragraph is considered entirely independently of its context. That would, however, be inconsistent with the approach of the court to decision letters by Planning Inspectors. They should be interpreted without excessive legalism, with regard to the entirety of the document, and recognising that they are addressed to parties aware of the issues involved and the arguments advanced. I have referred to the speech of Lord Brown of Eaton-under-Heywood in South Bucks District Council v Porter [2004] 1 WLR 1953. He stated, at [36], that "decision letters must be read in a straightforward manner”.

To interpret the word “disposal” as meaning that the Inspector characterised the activity as “recovery” is untenable in the light of the express and correct direction only three paragraph earlier in DL [37]. The interpretation for which Mr Simons contends would require the conclusion that, immediately after making his correct finding, the Inspector put it aside and made a different finding. Moreover, had the Inspector put aside the correct finding in DL [37] and concluded that the activities were “recovery”, his discussion in DL [37] – [39] of how the plant would operate in the future was entirely unnecessary. This was because, as Mr Moffett stated (skeleton argument, paragraph 44(3)) the facility would have been in accordance with PPS 10 and RP 38 in any event.

I also reject Mr Simons’ submissions based on Miss Berry’s evidence. First, it appears to have been accepted on behalf of RRS at the public inquiry that the facility was properly categorised initially as “disposal” rather than “recovery”: see the judge’s reference at [83] – [85] to the evidence of Mr Smyth; paragraph 20 of the rebuttal proof of Tim Hill on behalf of SSAIN; and paragraph 7 of SSAIN’s closing submissions. Secondly, DL [37] set out at [15] above shows that, whatever RSS’s position was at the hearing, the Inspector did not accept Miss Berry’s evidence.

Finally, for the reasons I have given, when the decision letter is read as it should be, there can be no genuine or substantial doubt about what the Inspector decided and why. The Inspector’s decision letter was careful, clear, and well-structured. The jurisprudence on this topic shows a clear acceptance of an approach emphasising substance and the nature of the issue. Again, the starting point is Lord Brown of Eaton-under-Heywood’s speech in South Bucks District Council v Porter [2004] 1 WLR 1953, which has been frequently applied in this Court, recently in Tegni Cymru v The Welsh Ministers [2010] EWCA Civ 1635 and Welsh Ministers v RWE NPower [2012] EWCA Civ 311 where reasons challenges were rejected. In this case the decision letter made it quite clear that the facility would not satisfy the R1 formula unless and until heat was exported.

I agree.

I also agree.