Estate owner awarded protective expenses order after Inner House rules costs would be ‘prohibitively expensive’

An estate owner who is challenging plans for a wind farm development in Ayrshire has been granted a protective expenses order following an appeal.

Judges in the Inner House of the Court of Session allowed the reclaiming motion after ruling that while the Lord ordinary applied a subjective test of whether the petitioner was able to meet the expenses, he “fell into error” in failing to apply an objective test of whether it was “reasonable” for the petitioner to be required to do so.

Lady Paton, Lord Menzies and Lady Clark of Calton heard that the petitioner, J Mark Gibson, raised judicial review proceedings against a decision of the respondents, the Scottish Ministers, not to hold a public enquiry, and to grant consent for the construction of the Dersalloch Wind Farm approximately 4.2km from his property at Craigengillan House and around 4.6km from the Scottish Dark Sky Observatory, which is located within the boundary of the Craigengillan Estate.

East Ayrshire Council had raised proceedings for judicial review to challenge the respondents’ decision but later decided to withdraw, prompting the petitioner to raise a petition himself.

In early 2015 he enrolled a motion for a protective expenses order (PEO) in terms of Rule of Court 58A.3, in which he sought to have his liability in expenses to the respondents and the interested party limited to a cumulative total of £5,000 and limiting the liability of the respondents and interested party in expenses to the petitioner to £30,000.

The Lord Ordinary refused the request for the PEO and the petitioner appealed to the Inner House of the Court of Session.

The appeal judges observed that while the petitioner could be seen to be a “wealthy man”, but it did not follow that it was reasonable for him to be required to meet the costs of the case, which were estimated to be over £170,000.

They added that requiring the petitioner to sell off parts of his estate to fund the proceedings would be “to destroy the very thing he was seeking to preserve”.

And the judges were not persuaded that it would be reasonable to require the petitioner to withdraw £170,000 from his pension fund to pay for the costs of the proceedings.

Delivering the opinion of the court, Lord Menzies said: “When considering the subjective test, it appears that the Lord Ordinary addressed the question of whether the petitioner was able to meet the expenses; we agree with counsel for the petitioner that the test is not the petitioner’s ability to pay, but whether it is reasonable, in all the circumstances, that he should be required to do so.

“The focus of the Aarhus Convention, the 2011 Directive and the authorities to which we have referred is the protection of the environment, and the removal of unreasonable financial barriers which may act as a disincentive to members of the public (whether individuals or organisations) from playing an active role in protecting and improving the quality of the environment.

“In these respects, we consider that the Lord Ordinary fell into error, and that the matter is open to us to review.”

He added: “Having regard to all of these factors, and to the fact that it is not disputed that the likely total costs of these proceedings may exceed £170,000, in applying the objective test we are satisfied that the proceedings are prohibitively expensive. It follows from the above that the court must make a PEO.”

By way of postscript, the judges expressed “concern about the length of time” the application for the PEO had taken, and the “expense incurred by the lengthy hearings” before the Lord Ordinary and the Inner House.

Lord Menzies said: “Applications for a PEO have been few and far between in Scotland, but we consider that in the particular circumstances of this case, a more expeditious disposal should have been achieved. Looking to the future, we express the hope that such applications can be disposed of much more quickly.

“They are dealt with by motion, with a limited amount of documentary material being required in support of the motion. It is not an opportunity for a respondent to subject an applicant to intrusive and detailed investigation of financial circumstances.

“In most cases, we do not consider that it will be appropriate for the court to look behind this material, or (as happened in this case) to require parties to provide competing valuations of assets such as pension funds. In exercising its powers under Chapter 58A, the court is not engaged in an analysis of evidence, nor is it hearing a proof.

“In most applications for a PEO we would expect submissions for all parties to be capable of being concluded within a total of about 1½ hours (as is the case in an application for leave to appeal), with the court usually being able to give an immediate ex tempore judgment.”