Electricity Supply Board and Eirgrid Plc v Killross Properties Ltd

 
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[2018] IESC 22

THE SUPREME COURT

Finlay Geoghegan J.

The Chief Justice

O'Donnell Donal J.

MacMenamin J.

O'Malley Iseult J.

Finlay Geoghegan J.

[Record Nos. 32/17 and 40/17]

Between/
Electricity Supply Board

and

Eirgrid plc
Plaintiffs/Appellants
and
Killross Properties Limited
Defendants/Respondents

Statutory interpretation – Electricity (Supply) Act 1927 – Chief executive – Appellants seeking to appeal against an order of the Court of Appeal setting aside an order of the High Court – Whether s. 9 of the Electricity (Supply) Act 1927 permits the authorisation of the appellant of its chief executive to exercise its power under that section

JUDGMENT of Ms. Justice Finlay Geoghegan delivered on 18th day of April, 2018
1

This is an appeal and cross appeal from an order of the Court of Appeal (Peart J., Hogan J., and Cregan J.) of 21st December 2016. The relevant substantive order to which the appeal and cross appeal relate is an order setting aside the order of the High Court and granting in lieu thereof an order of certiorari quashing the notice served by the Electricity Supply Board (‘ESB’) on Killross Properties Limited (‘Killross’) on or about the 28th June, 2013 pursuant to s.53(3) of the Electricity (Supply) Act, 1927 (‘1927 Act’) as amended and remitting the issue of damages to the High Court.

2

In the High Court there had been several related proceedings between the parties. Ultimately the High Court order, which was the subject of appeal to the Court of Appeal, was made pursuant to a written judgment delivered by Hedigan J. on 19th December, 2014, in these proceedings and a related judicial review application brought by Killross against ESB. In the plenary proceedings in the High Court the plaintiffs had sought certain declarations and injunctions and orders restraining Killross from interfering with their access to the lands in question. The High Court made restraining orders, granted injunctions, and made declarations in favour of the plaintiffs of their entitlement to enter the lands of Killross, including in exercise of the ESB's powers pursuant to s.53 of the 1927 Act, as amended.

3

The order of the Court of Appeal was made for the reasons set out in written judgments of Hogan J. and Cregan J. delivered on 11th July, 2016. Each judgment concerns discreet issues, and the issues in respect of which leave was granted by this Court were determined in the judgment of Cregan J., with whom the other members of the court concurred.

Factual Background
4

The immediate cause of these proceedings (and the related judicial review proceedings) was the notice served by ESB on Killross pursuant to s.53(3) of the 1927 Act on 28th June, 2013. The notice was on ESB headed notepaper, took the form of a letter to a Mr. McKenna the Company Secretary of Killross, and was signed by Eoin Waldron, described as ‘Authorised Officer.’ The notice informed Killross that the ESB pursuant to powers conferred by s.53 of the 1927 Act, as amended, intended to carry out certain temporary works across Killross's lands as part of the repair and alteration works being carried out to existing specified 110kV lines from Maynooth. The lands of Killross over which the existing lines crossed were identified, as were the intended nature of the temporary works and the position and manner in which they were to be carried out. It is not in dispute that the temporary works were to divert electricity on a temporary alternative route for the duration of the proposed upgrade works on the existing 110kV transmission lines.

5

Mr. Waldron's authorisation to issue and serve the notice pursuant to s.53 of the 1927 Act is a document signed by a Mr. Jerry O'Sullivan, described as ‘Executive Director Networks’, and addressed to the Chief Executive of ESB. It is headed ‘Authorisation to Sign Statutory Wayleave and Tree Cutting Notices’ and is dated 3rd September, 2012. It states:-

‘Board decision No. 7(b) of 13th November 1973 authorised the Chief Executive to delegate to nominated officers the authority to exercise the powers and functions of the Board under Section 53(3) and Section (3) [sic] and Section 98(2) of the Electricity Supply Act 1927 i.e. to sign the above noticed [sic] on behalf of the Board.

The staff listed in the attached Appendix have been nominated to exercise the functions.

Your approval is requested to the authorisation of these staff to sign the notices.’

6

As appears, it is a document addressed to the Chief Executive (of the ESB) seeking his approval and it is signed as approved by Mr. Pat O'Doherty, Chief Executive of the ESB. Mr. Waldron is one of the members of staff listed in the Appendix. The Board decision of 1973 referred to in the document was not before the courts. The recital of its contents as set out above is not in dispute. It is the 1973 authorisation which the Court of Appeal held to be ultra vires the ESB. The other facts which are relevant, in particular, to the issues on the cross appeal are the changes to the statutory functions and business of the ESB resulting from the liberalisation of the Irish electricity market and unbundling of various functions which were once concentrated in ESB. This is set out in great detail in the judgment of Cregan J. It suffices for the purposes of the issues before this Court to summarise them as follows.

7

ESB originally had a monopoly on the provision of electricity in the State. It was responsible for generation, supply, transmission and distribution, and also retail sale of goods. Various European Directives - commencing with 96/92/EEC - concerning common rules on the internal market in electricity required liberalisation measures to be taken. The Electricity Regulation Act 1999 (‘the 1999 Act’) and subsequent Regulations including the European (Internal Market in Electricity) Regulations 2000 (S.I. No. 445/20000 (‘the 2000 Regulations’), gave effect to these.

8

The 1999 Act established the Commission of Electricity Regulation as the independent body responsible for regulating the electricity industry in Ireland. It subsequently became the Commission for Energy Regulation and regulates the electricity, natural gas and water industries in Ireland (the ‘CER’) and is now the Commission for Regulation of Utilities (the ‘CRU’). It has overseen subsequent measures for the liberalisation of the Irish electricity market. There are now four relevant functions in relation to each of which the CER had granted licenses at the time of the events giving rise to these proceedings as follows:-

i. transmission system owner (‘TAO’): ESB is the licensed owner of the electricity transmission system,

ii. transmission system operator (‘TSO’): Eirgrid Plc, a state owned entity established pursuant to statute and separate from the ESB group is the licensed operator of the transmission system,

iii. distribution system owner (‘DAO’): ESB is the licensed owner of the electricity distribution system, and

iv. distribution system operator (‘DSO’): ESB Networks Limited a separate company which is a wholly owned subsidiary of ESB is the licensed operator of the distribution system.

9

The works and notice giving rise to these proceedings relate to the role of ESB as TAO and to that of Eirgrid as TSO. It is not concerned with the distribution system. Nevertheless, ESB Networks Limited is of some relevance by reason of what is contended to be a separate and distinct management role from its functions as DSO.

10

As explained, in the affidavits sworn on behalf of ESB, as a condition of its TAO and DAO licenses respectively, it was required to designate a division of its business which would be functionally separate from all other parts of its business to carry out its functions under these licenses. The division is not a distinct legal entity from the ESB. Somewhat confusingly the ESB has designated this ring fenced business unit as ‘ESB Networks’. It is not a separate legal person or company. It is, however, a ring fenced business unit with dedicated staff. It forms part of ESB and must be distinguished from the distinct company, ESB Networks Limited, which is a subsidiary of ESB.

11

However, there is potential for further confusion by reason of the fact that the subsidiary company ESB Networks Limited has a dual role. First, it is the licensed DSO. Secondly, and contended by ESB to be entirely separate, ESB Networks Limited has entered into a contractual arrangement with ESB whereby it manages for ESB the ESB Networks business unit in the performance of ESB's TAO and DAO functions.

12

Mr. Waldron is an employee of ESB working within the ESB Networks division. He and other ESB staff working within the Networks division are managed by ESB Networks ltd in the performance of ESB's TAO and DAO functions. The arrangement is approved by the CER.

13

The functions of ESB as TAO and Eirgrid as TSO are set out in the 1999 Act and the 2000 Regulations, referred to further below. They were also required to enter into an agreement pursuant to the 2000 Regulations and as part of their obligations as TAO and TSO license holders respectively. This agreement is the ‘Infrastructure Agreement’ dated 16th March, 2006. Insofar as relevant to the issues on the cross appeal, it is considered below.

Relevant Legislative Provisions
14

ESB was established pursuant to s.2 of the 1927 Act, which insofar as relevant...

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