About this case:

• Judgment:
  External link

Justice Colton concluded that the balance which the Regulations strike between the public and private interests is a fair one, and one which is within the Department’s margin of judgment.

The Applicants

The first applicant was an organisation representing RHI operators - the Renewable Heat Association of NI; the second applicant “DA” a poultry farmer who installed four biomass boilers which were accredited by October 2015.

DA purchased the boilers with a loan from the bank, and contended that this was based on the tariff commitments under the 2012 Regulations.

The applicants contended that the 2017 Regulations constituted a breach of their rights under Article 1 Protocol 1 (A1 P1) of the ECHR – which provides that “every natural or legal person is entitled to the peaceful enjoyment of his possessions and that no one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law”.

The Department for the Economy disputed the argument on the basis that “a mere prospective loss of future income is not a possession”.

High Court

Sitting in the High Court in Belfast, Mr Justice Colton said that the case resolved into an assessment of the requirements of fairness; at issue was the clash between the private interests of the applicants and the public interest asserted by the Department.

The Court had to assess whether the 2017 Regulations were so unfair that Parliament could not have intended that the Department had the power to make them.

The A1 P1 and legitimate expectation arguments turn on the strength of the general interest asserted by the Department and the proportionality of the steps taken to assert that interest by interfering with the rights of the beneficiaries under the 2012 Scheme

Mr Justice Colton came to the conclusion that the interference was “in the general interest” in that it sought to pursue the following legitimate aims:

There was an unacceptably high rate of return for businesses taking advantage of a non-domestic scheme in Northern Ireland – therefore the continuation of the 2012 Scheme, absent the 2017 Regulations, would have severe consequences for the Northern Ireland budget.

The interference was “provided for by law” on the basis that the Department was entitled to make the regulations under Section 113 of the Energy Act 2011 subject to public law considerations and the issue of fairness.

There was also an obvious and significant public interest in ensuring that expenditure on the scheme remained within HMT budgets.

Considering Cusack v London Borough of Harrow UKSC 40, Justice Colton was satisfied that the interference with the original commitment struck the “requisite fair balance between the demands of the general interest of the public and the requirements of the protection of the individual’s fundamental rights”.

Indeed the Regulations did not purport to recoup payments already made, and “most operators will already have received more than their original outlay”.

In considering the public or general interest, it had to be considered that there was “a public interest in ensuring that members of the public are entitled to rely on government regulations and are entitled to organise their affairs on that basis”- as such, there was a “high burden” on the Department to justify the change – i.e. there was the need for a “special justification”.

Notwithstanding, the Department should enjoy a margin of appreciation in assessing the public interest – the Regulations were approved by the Assembly and therefore carried “substantial democratic legitimacy”.

Mr Justice Colton determined that the interference under the 2017 Regulations constituted a control of DA’s possessions rather than a deprivation.

Having regard to the particular circumstances of DA, he said he did not consider that a failure to provide him compensation as a consequence of the 2017 Regulations rendered the interference unlawful.

This was underlined by the overall purpose of the regulations and the fact that they are an interim measure.

In terms of the legitimate expectation to consultation the judge considered that the departure was justified in this case.

The circumstances of extreme political urgency and practical impossibility created a unique imperative on the respondent to act before the dissolution of the Assembly

He did not consider that the Regulations impose a disproportionate or excessive burden on the persons affected given the actual impact on the individuals of the 2017 Regulations.

He said he took a similar view in relation to the particular circumstances of DA who has already benefited beyond what was anticipated in the original scheme and who will continue to receive payments under the 2017 Regulations in accordance with those objectives.

The judge did not consider that the Regulations represented an abuse of power.

There was a compelling public interest justifying the interference with the rights of the affected persons under the 2012 Regulations and that the 2017 Regulations struck a requisite fair balance between the public interest and the individual rights of the affected persons.

He recognised that the introduction and operation of the RHI Scheme has had a damaging effect on public confidence in good administration in this jurisdiction.

Dismissing the application for judicial review, Justice Colton concluded that: