Epuk Investments UK v Environmental Protection Agency; Epuk Investments UK v Commission for regulation of Utilities

• Jurisdiction: Ireland
• Judge: Mr Justice David Holland
• Judgment Date: 22 March 2023
• Neutral Citation: [2023] IEHC 138
• Court: High Court
• Docket Number: Record no. 2022/859 JR

Between:

EPUK Investments Limited

Applicant

and

Environmental Protection Agency

Respondent

Between:

EPUK Investments Limited

Applicant

and

Commission for Regulation of Utilities

Respondent

2023 IEHC 138

Record no. 2022/859 JR

Record No. 2022/860 JR

THE HIGH COURT

JUDICIAL REVIEW

Judicial review – Public interest – Costs – Respondents seeking costs – Whether costs should follow the event

Facts: The applicant, EPUK Investments Ltd (EPUKI), in its proceedings against the Environmental Protection Agency (the EPA), impugned the EPA’s alleged decision, by way of an e-mail of 18 July 2022, adopting a particular interpretation of certain Best Available Techniques conclusions issued by the European Commission, to be applied by the EPA in awarding Industrial Emissions Licenses (IELs) for, inter alia, Open Cycle Gas Turbine electricity generation plants in Ireland. In its proceedings against the Commission for Regulation of Utilities (the CRU), EPUKI impugned the CRU’s “ARHL De-Rating Decision” decision to introduce a “ARHL De-Rating” factor in Capacity Auctions in the All-Island Single Electricity Market. By that decision, the electricity generation capacity which a generator such as EPUKI would be allowed to bid in such auctions to provide generation capacity would be de-rated by reference to Annual Run Hour Limits imposed by the IELs applicable to the electricity plant in question. On 10 February 2023, the High Court (Holland J) dismissed both claims for relief by way of judicial review: [2023] IEHC 59. The CRU and the EPA sought their costs as following the event of the dismissal of both proceedings. EPUKI sought that no order as to costs be made on the basis either that s. 50B of the Planning and Development Act 2000, as amended, applied in both proceedings or on the basis that Holland J should exercise his general discretion in their favour having regard to the public interest in the proceedings. Alternatively, EPUKI said that a Veolia costs order (Veolia Water Consortium v Fingal County Council (No. 2) [2007] 2 I.R. 81) should be made as to the motions to exclude evidence and, in the case of the CRU, by reference to its failed argument that EPUKI had impugned the wrong decision.

Held by Holland J that, in the EPA case, he rejected EPUKI’s invocation of s. 50B on the basis that he upheld the EPA’s position that it neither made a justiciable decision nor purported to do so; that the EPA’s e-mail of 18 July 2022 was alleged by EPUKI to have been a decision did not make it a purported decision. He held that its impugned e-mail was not sent “pursuant to a statutory provision” as s. 50B requires; it was sent in a non-binding non-statutory consultation in contemplation of an IEL application not yet then made. In the CRU case, he rejected EPUKI’s invocation of s. 50B on the basis that its impugned De-Rating Decision was not made pursuant to a statutory provision that gave effect to a provision of the Industrial Emissions Directive (IED) or of any other Directive listed in s. 50B(a)(iii). He found that the CRU in making the impugned De-Rating Decision did not have, or purport to exercise, any role, function or competence pursuant to any statutory provision that gave effect to a provision of the IED. Remembering that the general rule that costs follow the event should be departed from only when justice demands, it did not seem to him that justice demanded such a departure in this case by reference to the public interests engaged. He held that the case against the ERA was decided on fairly mundane law of judicial review as to justiciability in the context of EPUKI choosing an ill-judged vehicle for its alleged efforts to vindicate public interests. While the legal bases of his dismissal of the proceedings against the CRU were more variegated, none seemed to him to have raised issues of public importance of a degree sufficient to justify departure from the default rule as to costs. He did not see that a Veolia order was required.

Holland J awarded the costs of each set of proceedings, to include any reserved costs and the costs of the motion to exclude evidence, against EPUKI and in favour of the CRU and the EPA. As the EPA and CRU had been entirely successful as to costs, he ordered that the costs of the costs hearing would follow that event.

Costs awarded to respondents.

RULING ON COSTS BY Mr Justice David Holland GIVEN ON 22 MARCH 2023

Contents

RULING ON COSTS BY MR JUSTICE DAVID HOLLAND GIVEN ON 22 MARCH 2023	1
INTRODUCTION	2
LAW AS TO COSTS	4
General Rule, Departure From It and Public Interest Litigation	4
Conduct	5
Nature & Circumstances Of Case & Public Interest	6
Section 50B & Heather Hill	11
Veolia Orders & Section 168(2)	13
DECISION	15
Section 50B	15
Public Interest Litigation	16
Veolia Order	18
Result	19
Costs of the Costs hearing	19

INTRODUCTION

1 On 10 February 2023 I dismissed both of the above-entitled claims for relief by way of judicial review. 1 I will in this ruling as to costs take that judgment as read. To the extent that the brief account of the proceedings set out below is necessarily somewhat imprecise and incomplete, the content of the main judgment prevails. The main judgment will also assist as to the meaning of certain terms used below.

2 Both proceedings were tried together in a 3-day trial. Incorporated in the trial was, in each case, a motion by the Respondents (the “CRU” and the “ EPA”) to exclude expert evidence tendered by the Applicant (“EPUKI”). But those motions took up very little time as the parties all but rested on their written submissions on those regards.

3 The CRU and the EPA seek their costs as following the event of the dismissal of both proceedings. EPUKI seeks that no order as to costs be made on the basis either that s. 50B PDA 2000 2 applies in both proceedings or on the basis that I should exercise my general discretion in their favour having regard to the public interest in the proceedings. Alternatively, EPUKI say that a Veolia costs order should be made as to the motions to exclude evidence and, in the case of the CRU, by reference to its failed argument that EPUKI had impugned the wrong decision.

4 In its proceedings against the EPA, EPUKI impugned the EPA's alleged decision, by way of an e-mail of 18 July 2022, adopting a particular interpretation of certain BAT 3 Conclusions issued by the European Commission, to be applied by the EPA in awarding Industrial Emissions Licenses (“IEL”) for, inter alia, Open Cycle Gas Turbine electricity generation plants (“OCGTs”) in Ireland.

5 In the other proceedings, EPUKI impugned the CRU's “ARHL De-Rating Decision” decision to introduce a “ARHL De-Rating” factor in Capacity Auctions in the All-Island Single Electricity Market (“SEM”). By that decision, the electricity generation capacity which a generator such as EPUKI would be allowed to bid in such auctions to provide generation capacity would be de-rated – i.e. reduced – by reference to Annual Run Hour Limits (“ARHL”) imposed by the Industrial Emissions Licenses applicable to the electricity plant in question.

6 The relationship of the two Impugned Decisions, as alleged by EPUKI, lies in the fact that EPUKI interpreted the EPA's e-mail of 18 July 2022 as intimating that ARHLs would not be imposed in IELs awarded to OCGTs in Ireland, whereas the NIEA 4 is expected to impose such ARHLs in licensing OCGTs in Northern Ireland. EPUKI asserted that the combination of the imposition of ARHLs on OCGTs north of the border, their non-imposition by the EPA south of the border and the imposition by the CRU of ARHL De-Rating on new OCGTs on both sides of the Border would unlawfully disadvantage its intended operation of OCGTs at a cost to it of, it alleged, €64 million. EPUKI also emphasised what it considered would be the effect of the Impugned Decisions on its decisions as to investment in OCGTs and its return on such investments. Wisely in my view for reasons set out in the judgment, a pleaded Francovich damages claim was only tepidly pursued, if pursued at all. What matters for present purposes is that the allegation of apprehended loss illuminates the essentially – indeed predominantly — commercial purpose of EPUKI's proceedings, from its point of view.

7 I dismissed the proceedings against the EPA on the basis that the e-mail of 18 July 2022, was not in law a justiciable decision.

8 In dismissing EPUKI's proceedings against the CRU, 5 I rejected EPUKI's complaints

• • of inadequate consultation before adopting ARHL De-Rating.

• • that the CRU had failed to properly interpret the Industrial Emissions Directive and/or the BAT Conclusions. I held that the CRU had no role or competence in interpreting or applying those instruments.

• • that the CRU had, in adopting ARHL De-Rating, also adopted the EPA's erroneous interpretation of the BAT Conclusions. I held, in essence, that the CRU

  had taken no view as to the error or otherwise of any interpretation of the BAT Conclusions. It simply reacted to the terms of IED permits (IELs in Ireland) imposed by the respective competent Authorities north and south of the border.

• • that the CRU was obliged in its administration of the Capacity Market, and specifically as to ARHL De-Rating, to correct for the EPA's allegedly erroneous interpretation of the BAT Conclusions.

• • of discrimination, irrationality and distortion of competition.

LAW AS TO COSTS

General Rule, Departure From It and Public Interest Litigation

9 S. 169(1) of the Legal Services Regulation Act 2015 (“the 2015 Act”) codified what had long been the default rule that “ costs follow the event”. In Godsil 6 McKechnie J described that as the “ general principle” and the “ overarching test” the application of which is the “ overriding start point on any question of contested costs” to which “All of the...