1 Thursday, 21 March 2019 2 (10.00 am) 3 Submissions by MR KINGSTON (continued) 4 LORD JUSTICE HICKINBOTTOM: Yes, Mr Kingston. 5 MR KINGSTON: My Lords, we stopped yesterday when I was part 6 way through the submissions in relation to legitimate 7 expectation, in the speaking note at paragraph 2676. 8 LORD JUSTICE HICKINBOTTOM: Yes. 9 MR KINGSTON: We broke off in order to look at a separate 10 note dealing with material or immaterial. If I could 11 return to the speaking note at paragraph 7, and indicate 12 that I am not proposing to go through the whole of the 13 note. Your Lordships have it. Some of it repeats -- or 14 not so much repeats, it summarises the factual position, 15 so I am proposing to go relatively quickly. If at any 16 stage -- 17 LORD JUSTICE HICKINBOTTOM: Which note? 18 MR KINGSTON: The legitimate expectation note. If at any 19 stage your Lordships want me to go more slowly, then of 20 course you'll say so. 21 So, at paragraph 2.7, we are dealing still here 22 with: 23 "The making of an unambiguous and unqualified 24 representation is a sufficient, but not necessary 25 trigger." 1 1 It was a submission made in Begbie, and 2 Lord Justice Peter Gibson saying and, "I am prepared to 3 accept that is correct as far as it goes". 4 We move to Bibi, Lord Justice Schiemann's reference 5 to a practice or promise, and whether a public body has 6 done nothing. 7 But move from that point to paragraph 2.10, to what 8 we think is a more important issue, and: 9 "The wrongly equating clear unambiguous and 10 unqualified with express." 11 That is the assumption that only an express written 12 or oral promise can amount to something that is clear, 13 unambiguous and unqualified. 14 There is, we submit, no authority to support that 15 proposition. It is quite clear from the authorities 16 that conduct is sufficient and, in the consideration of 17 conduct, as we point out at the end of paragraph 2.10, 18 these cases are particularly fact sensitive. 19 I go on then to deal with Unilever and the reliance 20 by the defendant on Unilever, but really to point out 21 that the very proposition that the defendant advances, 22 effectively the MFK formulation, Lord Justice Simon 23 Brown in Unilever -- as you can see from the quote at 24 2.11 -- expressly eschewed that as being an appropriate 25 approach, something which was in his view too limiting. 2 1 On to 2.12. In the instant case, we submit there 2 was a very conscious practice and policy communicated to 3 the claimant over a significant period of time relating 4 directly to the issue as to whether or not agreement 5 would be needed by the claimant with HAL in advance of 6 the preference decision. The claimant was repeatedly 7 given assurances, both written and oral, arising from 8 the defendant's conduct that there would be no 9 requirement that there should be such an agreement with 10 HAL in advance of the preference decision. 11 We note there is an attempt to undermine, it seems, 12 the authority of Unilever, despite some reliance on it 13 by reference to Gallagher. The Supreme Court's decision 14 in Gallagher the court has. It considered Unilever. We 15 note that the ultimate conclusion was that Unilever was 16 correct on its facts. No suggestion of a disapproval of 17 it. 18 In any event, your Lordships will note that in 19 Gallagher -- and we have given you the references at 20 paragraphs 14 and 15 -- the issue was not so much 21 whether representation had been given, but 22 a representation having been given, what the 23 consequences of that were. 24 So, a different issue, with due respect. 25 Nonetheless, it is noteworthy that Lord Carnwath 3 1 endorsed the earlier authorities referring to 2 a legitimate expectation being derived from an express 3 or implied promise. 4 We have noted the reliance on Davis v Inland Revenue 5 and the Hamble case, but submit they are of no 6 assistance because, effectively, the submissions ignore 7 the central message from the jurisprudence on legitimate 8 expectation, which is: whether a legitimate expectation 9 has arisen in any case, depends crucially on the facts 10 of that case. 11 The defendant then relies on -- at paragraphs 80 and 12 81 of the skeleton -- the defendant states: 13 "Where reliance is placed on past practice, the 14 practice must be extremely widespread, well recognised, 15 and that by its nature the practice may not have the 16 same character as a promise." 17 As we note in many of the past cases the court has 18 been asked to consider, they have been taxation cases, 19 and considerations of the numbers of people embraced by 20 the promise or practice have arisen. 21 Equally clearly, as we note at paragraph 2.17, this 22 case is materially different. Here, there was the 23 bespoke process established by the defendant only 24 affecting a very limited number of parties. 25 LORD JUSTICE HICKINBOTTOM: So, there wasn't a past 4 1 practice? 2 MR KINGSTON: No, there was a practice which was arising 3 from a bespoke process here related directly to the 4 defendant. 5 LORD JUSTICE HICKINBOTTOM: When you say there was 6 a practice, on the basis of your submissions, there was 7 a clear indication, one way or another, that an 8 assurance would not be sought that HAL would guarantee 9 the implementation of this scheme. Let's say on the 10 facts that's right, and consistently the Secretary of 11 State gave that indication, and then, as it were, 12 changed that indication to require an assurance. 13 Given that legitimate expectation now is normally 14 seen as part of procedural fairness, what unfairness has 15 the claimant been subject to as a result of that change 16 of mind, which it was on the basis of your submissions? 17 MR KINGSTON: They have expended four years of time, effort 18 and a very considerable sum of money promoting a project 19 which always depended on the Secretary of State adhering 20 to the words and conduct, which he presented so clearly 21 over four years that the assurance from HAL would not be 22 a consideration. 23 LORD JUSTICE HICKINBOTTOM: So, are you saying that if the 24 assurance had been asked for at the beginning -- and 25 this is all on the basis of legitimate expectation, not 5 1 on ground 1. This is that the assurance is, as a matter 2 of public law, good. So, if he had asked for it at the 3 beginning, no difficulty under this head. 4 MR KINGSTON: That is correct, subject to the point we made 5 in the legitimate or illegitimate note, I think at 6 paragraph 1.5 or 1.6, that it would have been unlawful 7 as a consequence of the EU competition law. 8 LORD JUSTICE HICKINBOTTOM: Absolutely. It would have been 9 unlawful for the reasons in ground 1. 10 MR KINGSTON: Yes, but if the defendants had said right at 11 the beginning, "I'm going to regard it as material in 12 this consideration of where airport capacity should be 13 provided", that any scheme promoted by a non-airport 14 owner should have his stamp of approval or willingness 15 to implement it upon it before it can be taken forward. 16 If that had been said right at the beginning, then, 17 as I have already submitted to your Lordships, these 18 claimants would not have taken part in the contest 19 because they would have known from the beginning that 20 their competitor, or any competitor, any scheme from HAL 21 at Heathrow would have been able to rule them out. 22 LORD JUSTICE HICKINBOTTOM: I am not sure that is right 23 because what the claimant would have done is he would 24 have said that that was unlawful. 25 MR KINGSTON: He would have said it was unlawful in 6 1 competition terms. 2 LORD JUSTICE HICKINBOTTOM: In competition terms and in 3 public law terms. 4 MR KINGSTON: Your Lordship can well imagine, too, in 5 practical terms, the clamour that would have arisen from 6 those who would have said, if I can borrow some language 7 from my learned friend, "This is giving the monopolist 8 yet more power". 9 LORD JUSTICE HICKINBOTTOM: Absolutely, so there are all 10 sorts of reasons underground 1 why would that would have 11 been unlawful, but I am still trying to work out what 12 ground 2 adds. 13 MR KINGSTON: It adds this: that from the outset, instead of 14 saying, "Look, I'm going to make this a matter which 15 I shall take into account", the defendant was saying 16 expressly, "I am going to make this a matter which 17 I will not take into account". The merits of the scheme 18 will carry the day. The evidence on the merits of the 19 scheme will carry the day. Thereby he induced something 20 in the order of 52 participants to join in the scheme at 21 the beginning, the early sift analysis with the Airports 22 Commission. That, as I submitted yesterday, that gave 23 the process integrity. It gave it some sort of overall 24 feeling that this was a genuine search for the best 25 scheme, as opposed to saying, "I am going to rule out 7 1 anything that will not get the stamp of approval." 2 From the claimant's point of view, that was a very 3 significant consideration. It meant that evidence would 4 carry the day, and they were induced as a consequence of 5 that course of conduct. Then the conduct and words, 6 over a significant period of time, to spend and continue 7 to spend a very considerable sum of money. It was 8 a process which, as I remarked yesterday, what the 9 consequences might have been might be somewhat 10 speculative, but it was a process between July 2015 11 and December 2015, when the review was taking place, the 12 defendant had the opportunity to say, "Now, actually, 13 I've decided the Airports Commission has missed 14 something really fundamental here", and did not do so. 15 Now, at that stage, if the matter had been raised, 16 then the claimant would have had to have considered: do 17 I have a remedy so far for the very considerable sums of 18 money I have expended? 19 And to start then. But that hypothetical situation 20 we do not have to consider, because the course of 21 conduct and the words continue. 22 MR JUSTICE HOLGATE: Going back to my Lord's question, part 23 of your answer, or the thrust of your answer relies upon 24 the alleged detriment that your client has suffered 25 through the change of position, but my Lord's question 8 1 would arise at the very outset of the process. Perhaps 2 one way of answering the question would be to say that 3 if the change had occurred at the outset, it could have 4 been perhaps described as "unfair" because it moved from 5 a promise or expectation of equal treatment based on the 6 evidence as between competing schemes to a system of 7 unequal treatment. It depends how you define equality 8 or inequality. 9 Putting the point perhaps crisply, it is back to the 10 willingness point, or unwillingness. 11 MR KINGSTON: Yes. But if I may, if your Lordship will 12 forgive me, there would have been no change at the 13 beginning. If the process had started off: this is 14 going to be treated as a material consideration. 15 The question -- 16 MR JUSTICE HOLGATE: I was assuming that there was a sort of 17 rapid change towards the beginning, to actually make the 18 question arise hypothetically. 19 MR KINGSTON: Then, if it arose very early on in the 20 process, then the consideration would not have been 21 legitimate expectation. The consideration then would 22 have been material or not. 23 LORD JUSTICE HICKINBOTTOM: Absolutely yes. 24 MR KINGSTON: Material or not, lawful or not in that 25 context, and there would have been no legitimate 9 1 expectation issue. 2 Legitimate expectation, as we remarked yesterday, 3 has the conceptual difference between it as a basis for 4 action and advancing a case on the basis of: you've had 5 regard to an immaterial consideration. 6 As was said, certainly in Coughlan, I think 7 elsewhere, legitimate expectation relates to actions 8 which in many instances would otherwise have been lawful 9 on the part of the decision-maker, but are rendered 10 unlawful because, by either words or conduct over 11 a period of time, he has caused an expectation to 12 arise -- to take our instance -- that something would 13 not be material. 14 LORD JUSTICE HICKINBOTTOM: No, what you say is absolutely 15 right. That's why, conceptually, legitimate expectation 16 I find difficult in this field. I understand what the 17 authorities say, but underground 2, the criticism of the 18 Secretary of State is for taking into account a material 19 consideration. 20 MR KINGSTON: In circumstances -- it is for taking into 21 account what was potentially a material consideration in 22 circumstances -- 23 LORD JUSTICE HICKINBOTTOM: If it wasn't a material 24 consideration, you have ground 1. Ground 1, which is 25 the competition ground, but it's founded because it has 10 1 public law aspects, in terms of material considerations, 2 as we discussed yesterday. 3 But, on the basis that the guarantee was a material 4 consideration, you have been led to believe that it 5 would not be, but it was. The Secretary of State has 6 been criticised for taking into account a material 7 consideration because of the expectation he gave to you, 8 that he wouldn't take it into account. In public law 9 terms, conceptually, I find that quite challenging. 10 That is what the authorities say. 11 MR KINGSTON: It is. Will your Lordship forgive me if 12 I make a modest correction in that narrative? 13 LORD JUSTICE HICKINBOTTOM: Yes. 14 MR KINGSTON: That is that it is quite clear, we submit, 15 that throughout the process, until August 2016, neither 16 the defendant, his predecessor, or any of his officials 17 regarded the issue of the guarantee as a material 18 consideration. So, it isn't that it was material and it 19 was being regarded as such. It simply never entered the 20 lists, and it never entered the lists, not on the basis 21 that there wasn't the opportunity to think about it or 22 no one reflected on it. It never entered the lists 23 against the background of a claimant repeatedly saying 24 in the process: look, we are different, we do not want 25 to be disadvantaged. This is our difference, and 11 1 repeatedly being assured, "Look, don't worry about that, 2 we understand the situation here. You're not going to 3 be disadvantaged". 4 MR JUSTICE HOLGATE: That point indeed was summarised in the 5 official's briefing to the minister when he first met 6 your clients. 7 MR KINGSTON: Just so. 8 MR JUSTICE HOLGATE: The guarantee was then sought. 9 MR KINGSTON: Just at that point. So, its materiality 10 arose, and that's why we drew attention in the 11 materiality note to all those different potentially 12 capable of. It arose simply because at that meeting, 13 out of the blue, literally, with no briefing, no 14 evidence, the defendant said, "Actually, I think we'd 15 quite like a guarantee from you". 16 LORD JUSTICE HICKINBOTTOM: But your primary case is that it 17 wasn't material. That is your primary case, as 18 I understand. 19 MR KINGSTON: As a consequence of the ground 1 issue, but -- 20 LORD JUSTICE HICKINBOTTOM: But this, as it were, is your 21 secondary case. 22 MR KINGSTON: Yes, but by no means, if I may say so, an 23 unimportant part of it because of the circumstances 24 and -- well, the matters I have just briefly rehearsed 25 about how it arose. 12 1 LORD JUSTICE HICKINBOTTOM: But the unfairness is not, as 2 I understand it, that if this point had been raised 3 earlier, "We need an assurance, we want an assurance. 4 It is a material consideration", you would have gone and 5 got an assurance because you accept that you were never 6 going to get this assurance because of the commercial 7 realities of it. 8 MR KINGSTON: That is -- 9 LORD JUSTICE HICKINBOTTOM: Is that not right? 10 MR KINGSTON: That is the way we have put the case, but the 11 caution to enter in that regard -- and part of the 12 unfairness which I drew attention to twice today was the 13 way in which HAL responded when, in pretty short order, 14 they were being asked to give us a guarantee. You'll 15 remember the words that were emboldened in the speaking 16 note, Mr Holland Kaye's response: 17 "We are not able to provide the assurance at this 18 time." 19 The at this time. Then, that linked to the 20 complaint in paragraph 13 of the HAL skeleton, that they 21 were effectively given inadequate time in order to 22 consider whether or not they could give the guarantee. 23 They had a very short period of time, couldn't complete 24 the process. 25 LORD JUSTICE HICKINBOTTOM: That is possible. I mean, 13 1 I perhaps read that in a different way. "At this time", 2 meaning now, when we, HAL, still have NWR in the money. 3 MR KINGSTON: I agree it is capable of being interpreted in 4 both ways. 5 The first way "at this time", "Look, we are both 6 still in the running, you can't expect us to put the 7 stamp of approval on your scheme". That was the 8 practical reality recognised through the process by both 9 the defendant and his officials, until August 2016. 10 I only make the other point about the lateness of 11 the request and the shortage of time as a consequence of 12 the point made in paragraph 13 of Mr Humphries' skeleton 13 argument. So, it only arises in that way. 14 LORD JUSTICE HICKINBOTTOM: Yes. 15 MR KINGSTON: My Lords, if I can return -- 16 MR JUSTICE MARCUS SMITH: No, I do have a question. 17 MR KINGSTON: I beg your pardon. 18 MR JUSTICE MARCUS SMITH: As I understand it, you rely upon 19 the proceedings before the Airports Commission as part 20 of the foundation for the legitimate expectation you 21 allege. 22 MR KINGSTON: Yes. 23 MR JUSTICE MARCUS SMITH: Obviously, during that process, 24 your client expended money in pushing forward its 25 scheme. 14 1 MR KINGSTON: Yes. 2 MR JUSTICE MARCUS SMITH: Do you say that if at the outset 3 of the Secretary of State's involvement after the 4 Airports Commission had concluded its work the Secretary 5 of State had said, "I see what the Airports Commission 6 has done. They have looked at the schemes on their 7 merits. I'm introducing this new factor. I want an 8 assurance from Heathrow, from HAL, that they will, if 9 this scheme is preferred, build it." 10 Do you say that was something that breached 11 a legitimate expectation? 12 MR KINGSTON: Yes, I do, and the reason for that is quite 13 straightforward, and it is a reason which we looked at 14 yesterday. It arises from the Secretary of State, or 15 the defendant's extensive involvement in the Airports 16 Commission process. You'll recollect in the summary 17 I have provided you with yesterday, that the 18 Commission's process involved, as far as schemes were 19 concerned, sift criteria. Three elements of sifting, in 20 order to arrive at what were then three shortlisted 21 schemes. After the sift criteria, then the appraisal 22 framework. 23 In all of those processes, sift criteria, what's 24 relevant -- and I took your Lordship through yesterday 25 how the Airports Commission described all relevant 15 1 considerations taken into account -- in the sift process 2 and in the appraisal framework process, the defendant 3 was intimately engaged. He was not, as it were, distant 4 from the process. He was a consultee on the process, 5 had his opportunity to make an input to it, and had the 6 opportunity to say to the Airports Commission, "Look, 7 I think this is going wrong. You have missed out here 8 something which, from my point of view, is a significant 9 consideration". 10 If you'll forgive me, yesterday I -- rather 11 cryptically perhaps -- drew attention to footnote 12 number 4 in Mr Graham's witness statement, which is in 13 volume 5, tab 5. Footnote number 4 is part of Mr Graham 14 saying that the Airports Commissions processes were 15 open, and the footnote gives one the link to the 16 minutes. It hasn't been contentious so far, I hope it 17 won't be. The Airports Commission's minutes demonstrate 18 an extensive departmental involvement, and the Airports 19 Commission quite openly meeting departmental officials, 20 meeting the minister, giving briefings, talking about 21 the appraisal framework, all of which provided the 22 defendant with the opportunity that I have just 23 described. 24 MR JUSTICE MARCUS SMITH: So, it comes to this doesn't it: 25 the Secretary of State was, on your case, locked in to 16 1 the approach he had to take from the moment the Airports 2 Commission concluded its report? 3 MR KINGSTON: No, I haven't said "locked in". 4 MR JUSTICE MARCUS SMITH: I know you haven't. 5 MR KINGSTON: And I don't say "locked in" because, frankly, 6 I don't need to. He didn't change his mind then. What 7 the consequence is -- 8 MR JUSTICE MARCUS SMITH: No, I am trying to test your 9 legitimate expectation case. 10 I think all you have said is that had the Secretary 11 of State in the most explicit of terms, at the 12 commencement of his review, said, "I'm introducing this 13 factor", you are saying that would have been a breach of 14 a legitimate expectation. No matter how explicit he had 15 been about this new factor, he could not introduce it. 16 MR KINGSTON: I don't say he could not have introduced it, 17 but there may have been consequences of its introduction 18 so far into the process. 19 What those consequences might have been and the way 20 in which they might have been justiciable is an issue, 21 frankly, I don't have to wrestle with, and I find -- may 22 I resist the temptation to do so because it didn't 23 happen. 24 MR JUSTICE HOLGATE: No, but I think where we get to is if 25 the unfairness -- which we are asking to be defined -- 17 1 is defined in terms of detriment to your client through 2 the commitment he expended on the process, and indeed 3 perhaps others as well, the earlier at the point in time 4 at which the new criterion is introduced, the less the 5 extent of that detriment. 6 Conversely, you would say, if the change is 7 introduced very late on in the process, the greater that 8 detriment and it strengthens -- if the argument 9 otherwise be right -- the expectation to 10 a greater degree. 11 That's why it may be relevant to consider whether 12 there was any broader unfairness other than just simply 13 detriment, because legitimate expectation is not like 14 estoppel, it doesn't have to depend on detriment. 15 MR KINGSTON: No, it doesn't. The earlier the change 16 occurred, the more difficult it would be to establish 17 that there had been a course of conduct or words and the 18 like. 19 MR JUSTICE HOLGATE: It depends whether it is course of 20 conduct or words. 21 MR KINGSTON: It does, but the fundamental unfairness was to 22 set up the competitive process -- and it was competitive 23 in a very obvious way, as my learned friend has dealt 24 with -- and then to change the rules. And -- 25 MR JUSTICE HOLGATE: That is why I was asking the question 18 1 earlier on. Putting it in colloquial terms, if your 2 case is that what was set up was a level playing field 3 for the purposes of enabling the intrinsic merits of 4 rival schemes to be tested, maybe an element of 5 unfairness is a change from a level playing field to 6 something which ceases to be level because it's possible 7 for one participant to say, "I'm unwilling to implement 8 an alternative if that be chosen". 9 MR KINGSTON: I agree. 10 MR JUSTICE HOLGATE: That argument is not dependent upon the 11 level of detriment, but on the other hand, maybe that's 12 where the argument shades into material consideration, 13 and then my Lord then asks: what does it add? 14 I think what we are trying to test is: how do these 15 arguments undergrounds 1 and then ground 2 translate 16 into public law? 17 MR KINGSTON: They translate into public law in relation to 18 ground 2 in a straightforward way, from our point of 19 view. My Lord, I don't underestimate the difficulty of 20 wrestling with some of the authorities around legitimate 21 expectation. 22 LORD JUSTICE HICKINBOTTOM: In public law? 23 MR KINGSTON: In public law terms, but the foundation for 24 our case requires no voyage into uncharted territory, no 25 expanding of principles which have not been well 19 1 rehearsed from quite early on. 2 So, if I've given any impression that our case 3 relies on any -- if you'll forgive the pun novelty -- 4 with regard to legal approach it doesn't. We are 5 entirely conventional in our approach. One might almost 6 say boringly conventional, because we adopt a series of 7 principles the courts have rehearsed and apply a factual 8 matrix. That, as I said yesterday, the factual matrix 9 is critical because once a decision is made about 10 a proper view of the factual matrix, then, at least on 11 our view of the law, the application of the legal 12 principles become relatively straightforward. 13 LORD JUSTICE HICKINBOTTOM: Can I just pick up one point of 14 my Lord's, and that is to do with detriment, et cetera? 15 The detriment you say was that you spent a lot of 16 time and money on engaging with this process. In fact, 17 to be knocked out late on by something that probably was 18 not expected. I understand that to an extent, on the 19 basis that this was a material consideration, and what 20 else was there? What else do you rely upon? 21 MR KINGSTON: Other than the request for the -- 22 LORD JUSTICE HICKINBOTTOM: Other than that detriment. 23 MR KINGSTON: The detriment is slightly more broadly point 24 from our point of view. 25 LORD JUSTICE HICKINBOTTOM: Yes, it is. 20 1 MR KINGSTON: The expenditure of a very great deal of time, 2 effort and money. 3 LORD JUSTICE HICKINBOTTOM: I understand that. 4 MR KINGSTON: Yes, over that period of time -- 5 LORD JUSTICE HICKINBOTTOM: That is a lot, I understand 6 that. Is there anything else? 7 MR KINGSTON: No, I think that's the essence of it. The 8 detriment, if we needed to prove it, would be put in 9 those terms; that we had engaged in the process on 10 a very clearly explained basis and engaged fully. 11 LORD JUSTICE HICKINBOTTOM: You would not have done if you 12 had known the true rule. 13 MR KINGSTON: Precisely so. If we had learnt at the 14 beginning that we were to be subject to, effectively, 15 the endorsement or otherwise of a competitor, then there 16 would have been very little point, because what happened 17 in the end would have happened early on. 18 MR JUSTICE MARCUS SMITH: Mr Kingston, you -- 19 MR KINGSTON: My Lord, can I deal with one issue -- 20 MR JUSTICE MARCUS SMITH: I'm so sorry, you said a few 21 minutes ago that although the question of the consent of 22 HAL to build the project as adopted might have been 23 a material factor. It wasn't a material fact in the 24 minds of the officials in the Department for Transport 25 until August 2016; why is it not the case that, having 21 1 established the ground rules for the way in which the 2 Airports Commission would work, that is to say look at 3 schemes on their merits without the question of 4 a guarantee, why didn't the Secretary of State with the 5 Airports Commission create a process whereby what might 6 have been a material factor had the process been 7 differently set up was rendered immaterial by virtue of 8 the way in which the process was in fact set up? 9 In other words, if the process of examination of the 10 Airports Commission had been different, the question of 11 the guarantee might have been material, but because of 12 the way in which it was established, that factor, which 13 might have been material in a different counterfactual 14 world, wasn't. All he's done, in fact, is taken into 15 account an immaterial circumstance in August 2016. 16 Why isn't that the way of seeing your case? 17 MR KINGSTON: Because, as I explained yesterday, the 18 willingness or otherwise of the owner of the airport to 19 implement the scheme was something which was capable of 20 affecting deliverability. It its capability rendered 21 it -- and has throughout the process -- rendered it 22 a potentially material consideration. 23 What has happened here is a very conscious process 24 of saying: that is not going to be treated as a material 25 consideration. 22 1 If your Lordship will forgive me, just to correct 2 one matter about August 2016, it wasn't that the 3 department's officials advisers or anybody else changed 4 their mind in 2016. All of the evidence points to the 5 fact that it was the defendant himself who decided. 6 MR JUSTICE MARCUS SMITH: I don't think I said that the 7 officials changed their minds. I think I was quoting 8 you in saying that, prior to August 2016, no one 9 considered it to be a material factor. 10 MR KINGSTON: Precisely so. So, no one treated it as 11 material, despite the fact that it had that potential 12 throughout, it had the potential at the beginning. It 13 wasn't treated as material. That change is precisely 14 what undergirds the legitimacy of our expectation, the 15 unfairness in the approach which was then adopted 16 from August 2016 onwards. 17 MR JUSTICE MARCUS SMITH: You see, the difficulty I have 18 with the way you have put your case is that it seems to 19 me that your legitimate expectation is one that the 20 Secretary of State should not take into account a fact 21 that you say actually is material. 22 MR KINGSTON: No, my Lord. Let me be quite clear: it was 23 capable of being material. Capable. 24 If at the beginning the defendant had said, "I'm 25 going to treat this as a material consideration --" 23 1 MR JUSTICE HOLGATE: I think we have to be very careful 2 about our language. It depends what one means by 3 "deliverability". 4 MR KINGSTON: Yes. 5 MR JUSTICE HOLGATE: To try and simplify, to see if I am 6 keeping up with everyone else, the legitimate 7 expectation argument only arises, and only needs to be 8 relied upon if the matter that represents the change of 9 position is legally relevant. Otherwise you don't need 10 to bother with it. 11 MR KINGSTON: No. 12 MR JUSTICE HOLGATE: But when you talk about deliverability, 13 as I tried to suggest yesterday, it is one thing to ask 14 all the people who are promoting schemes: is there 15 objectively a reason why this alternative would not be 16 suitable? 17 It is another thing to say, "Well, quite apart from 18 that, would you be unwilling to do it, disconnected from 19 any objective reason?" 20 MR KINGSTON: Precisely so. 21 MR JUSTICE HOLGATE: Other than the fact I prefer my own 22 scheme to be chosen. 23 LORD JUSTICE HICKINBOTTOM: We know that the Commission did 24 take into account "deliverability". 25 MR KINGSTON: They did. 24 1 LORD JUSTICE HICKINBOTTOM: Not guarantee. 2 MR KINGSTON: No. 3 LORD JUSTICE HICKINBOTTOM: But whatever they meant by 4 "deliverability", they took that into account. 5 MR JUSTICE HOLGATE: So, when you say "potentially relevant" 6 I am treating that in my own mind as shorthand for 7 potentially relevant if deliverability is looked at in 8 a relevant way. 9 MR KINGSTON: In a particular way, certainly. That's 10 precisely so, and your Lordship's point yesterday about 11 the September 2018 meeting note goes to that point and 12 the way it was being treated. 13 MR JUSTICE HOLGATE: The more I think about this, the more 14 I am wondering whether legitimate expectation does add 15 anything, because other than the detriment that your 16 client has suffered through the -- you would say "late 17 change in the approach", it comes down to a question as 18 to whether this was an additional criterion which as 19 a matter of law it was permissible for the Secretary of 20 State to take into account. 21 MR KINGSTON: But that's exactly where legitimate 22 expectation intrudes into the decision-making process. 23 That is the conceptual difference that the authorities 24 identify. That is why, in Begbie, there is the 25 reference to an "otherwise lawful decision". 25 1 MR JUSTICE HOLGATE: Yes. 2 MR KINGSTON: What makes it unlawful is that a legitimate 3 expectation has been created which, whatever the 4 circumstance was, would not occur, or whatever the 5 process change was, the process change would not happen. 6 That is precisely -- it is the unfairness element that 7 undergirds legitimate expectation. 8 MR JUSTICE HOLGATE: The effect of the change. 9 MR KINGSTON: Precisely so. 10 MR JUSTICE HOLGATE: Sometimes you can have a change where 11 there is an unfairness, perhaps, in the change itself, 12 but I think that comes back, probably, to the earlier 13 argument. 14 MR KINGSTON: But it is precisely the unfairness element 15 that makes the facts such a critical element in all of 16 the decisions. One has only to -- 17 LORD JUSTICE HICKINBOTTOM: That's right. They are all 18 highly fact sensitive. 19 MR KINGSTON: Precisely. 20 LORD JUSTICE HICKINBOTTOM: On the basis of your analysis 21 and your discussion with my Lord, do you accept that -- 22 let's say you are right, and this factor, which within 23 ground 2 is a material consideration -- because that's 24 the premise on which ground 2 is made -- could have been 25 brought in later, for example, at the DCO stage? 26 1 MR KINGSTON: No. 2 LORD JUSTICE HICKINBOTTOM: So, it could never be taken into 3 account? 4 MR KINGSTON: Not -- once -- well. The DCO stage 5 requires -- let me just rewind that. 6 At the moment, the ANPS says -- paragraph 1.15 and 7 some later paragraphs -- that it does not specify the 8 statutory undertaker who is to bring forward the scheme. 9 It identifies the scheme, the characteristics of the 10 scheme, the scheme location, very specifically indeed. 11 But if that point is to be relied on, that is we 12 have never said that it was HAL who are to bring the 13 scheme forward, then one is left to wonder how it could 14 be regarded as material that HAL should produce 15 a guarantee. 16 LORD JUSTICE HICKINBOTTOM: I am sorry, all of that is 17 right. But, on the basis of ground 2, that it is 18 a material consideration, that the guarantee is 19 a material consideration to -- 20 MR KINGSTON: My Lord will forgive me for the repetition, 21 but it was capable of being a material consideration. 22 LORD JUSTICE HICKINBOTTOM: I am sorry, but in practical 23 terms, let's say that you are right and, at the policy 24 stage, the NPS stage, the extended northern runway was 25 chosen. At some stage after that, somebody would have 27 1 to say, "Well, how are we actually going to do this?" 2 MR KINGSTON: And all of that was explored very carefully to 3 a significant level of detail, summarised in the 4 delivery paper, which the defendant requested and the 5 claimant presented, by a transfer of intellectual 6 property, an independent valuation of it, and with 7 everyone recognising that it was reasonable to look at 8 something in the order of 30 days after the preference 9 decision and as soon as is possible thereafter. The 10 mechanism has all been explored. 11 This wasn't a voyage into the unknown. It had all 12 been explored against the background of -- 13 LORD JUSTICE HICKINBOTTOM: But HAL would have to play ball 14 with that. 15 MR KINGSTON: They would, but the defendant's own -- 16 LORD JUSTICE HICKINBOTTOM: So, somebody at some stage would 17 have to ask them: are you going to cooperate with this? 18 MR JUSTICE HOLGATE: And, if not, why not? 19 MR KINGSTON: Precisely. 20 MR JUSTICE HOLGATE: It would be the "why not" which would 21 make the consideration relevant at the DCO stage, not 22 just the answer: no, I won't. 23 MR KINGSTON: No, I won't. Precisely. But if I may -- 24 MR JUSTICE HOLGATE: Because there is no content, in the DCO 25 context to: no, I won't. 28 1 MR KINGSTON: I agree, but if I may go back to my Lord's 2 point. The defendant was advised, and advised as at 3 25 October 2016 that there was no basis to suppose that 4 HAL would not implement the scheme if it were chosen. 5 Indeed, HAL was on the record, Mr Holland Kaye was on 6 the record, which cited his public utterances: we are 7 relaxed if it's the hub scheme. As long as it's 8 Heathrow, we don't mind. 9 So, there was every confidence. 10 MR JUSTICE HOLGATE: My present way of thinking, 11 provisionally, the relevance of the question at any 12 stage depends on the reasons for the answer. 13 MR KINGSTON: I am so sorry, my Lord. I was -- 14 MR JUSTICE HOLGATE: The relevance of the question depends 15 not just on a bare answer being given, yes or no, 16 whatever stage it is being advanced, it depends on the 17 reasons for the answer either way. 18 MR KINGSTON: Yes, I agree. 19 MR JUSTICE HOLGATE: If, for example, they had said "yes". 20 MR KINGSTON: But -- 21 MR JUSTICE HOLGATE: So, you were Gatwick, and you were 22 unhappy with the Secretary of State relying on the bare 23 answer "yes". What is material is: why? 24 MR KINGSTON: Yes, just looking at how things advanced, we 25 accept, of course, legally non-binding, but the 29 1 Statement of Principles provides the flavour and, in 2 effect, brought together everything that had gone 3 before. So, there was no difficulty, no one in the 4 department was saying, "Look, this is a real problem. 5 How are we going to get this over the line if we select 6 you?" 7 The cabinet subcommittee paper for the 25 October, 8 paragraph 66, 99, it is quite clear, there is no 9 problem. This is not something we are regarding as 10 a problem, with every expectation that it would not be. 11 My Lords, may I turn to one matter related to 12 fairness. This is taken from paragraph 3.7 of the 13 speaking note. In the meetings, the claimant was 14 promised fairness, equality and transparency in the way 15 that the defendant would assess the rival bids. The 16 defendant now submits that because the claimant was in 17 a different category from other bidders it could have no 18 expectation but to be treated differently. 19 That, however, we submit, was not what the claimant 20 was told at the time when it sought an assurance that it 21 would not be treated differently. The claimant made it 22 clear it didn't want to be prejudiced by the fact the 23 implementation of its scheme would require HAL buy-in, 24 and the defendant provided that assurance. 25 You have seen a number of ways in which we put that. 30 1 An assurance that, notwithstanding the difference, there 2 would be no point taken against the claimants. 3 In short, everyone, including the defendant, 4 understood that although the claimant was in a different 5 position to the other shortlisted bidders, it had to be 6 treated in the same way in order to be treated equally. 7 The defendant clearly understood the difference 8 between the claimant and the other bidders, and had 9 every opportunity to say that would result in 10 a different approach to the assessment of 11 deliverability. He could have said during the Airports 12 Commission process, during his review of the Airports 13 Commission process, in the course of preparing the 14 Statement of Principles; he did not do so, despite being 15 fully conscious of the difference. 16 Paragraph 3.9, my Lords, I can take as read from my 17 point of view. The factual narrative of paragraph 3.10 18 and through 3.11 I've addressed. It is provided here by 19 way of summary or overview of what went on. 20 If we go to paragraph 3.13, the defendants conduct, 21 taken as a whole, met the test of being clear, 22 unambiguous and unequivocal as a representation made by 23 the defendant and his officials to the claimant. 24 In the absence of the defendant's conduct, as we 25 have indicated, we would not have engaged because we'd 31 1 have been a hostage to a rival. Equally and clearly, 2 recognised by the defendant's officials at least, had 3 the defendant made the guarantee a consideration, it 4 would have led to a process that was self-selecting. 5 We note then, at 3.14, the continued reliance on 6 post-August conduct. I addressed that yesterday in the 7 factual narrative. I don't repeat it, but rely on it in 8 the same way. 9 With regard to the parliamentary process, my Lords, 10 I have addressed the parliamentary process yesterday in 11 part. I was not now proposing, in the light of the 12 time, to go through this, unless there is a particular 13 matter your Lordships would like me to deal with. 14 We have made the point at 4.1, nothing in the 15 statutory framework prevented the defendant choosing the 16 selection criteria. It was his responsibility to 17 formulate the NPS. It was for him to decide which 18 criteria would best help him select the right scheme. 19 He put the criteria -- in terms of the terms of 20 reference of the AC -- together, reviewed their work in 21 the way we have described. 22 As we point out at paragraph 4.5, the claimant's 23 expectation was created by and breached by the 24 defendant, not by Parliament. The challenge is against 25 the defendant. 32 1 The defendant suggests the process is iterative. We 2 have addressed that at paragraph 4.6. As we say, 3 Parliament plays no role, and has played no role in this 4 case in deciding upon the matters the executive will 5 have regard to in formulating the policy. That, as we 6 pointed out yesterday, is the importance of the wording 7 section 13, that it permits a review of everything done 8 in the course of preparation of the statement. 9 We summarise the position at 4.8. Having put that 10 consideration to one side, had the defendant then chosen 11 the claimant's scheme as the best scheme, it would have 12 been up to Parliament to decide whether it wanted to 13 approve an NPS that endorsed the ENR. If Parliament had 14 decided it did not want to endorse such an NPS, the 15 claimant could not have had any legitimate complaint 16 against Parliament, not only because it is sovereign, 17 but also because Parliament had not at any stage 18 indicated it would endorse whatever scheme the 19 government put before it, or that it would restrict 20 itself to considering only the matters the government 21 had considered. 22 The defendant, we respectfully submit, cannot 23 justify his own unlawful conduct by reference to the 24 fact that another party involved in the process of 25 approving an NPS at another stage may have acted 33 1 perfectly lawfully, not having approved the NPS that the 2 defendant put before it. 3 My Lords, may I move to grounds 4 and 5? 4 LORD JUSTICE HICKINBOTTOM: Yes, thank you very much. 5 MR KINGSTON: Thank you. There is a separate speaking note. 6 LORD JUSTICE HICKINBOTTOM: Do we have that? 7 MR KINGSTON: Not yet. My learned friend Mr Palmer has, and 8 I sent it over last night. 9 LORD JUSTICE HICKINBOTTOM: Thank you. 10 (Handed) 11 MR KINGSTON: My Lord, I am conscious of the time, but 12 equally conscious that your Lordships need to follow. 13 I shall adopt a summary approach in going through the 14 note. If that's unclear at any stage, you let me know 15 and I'll explain further. 16 LORD JUSTICE HICKINBOTTOM: Yes, thank you. 17 MR KINGSTON: This is grounds 4 and 5, the general approach, 18 and issues 5 and 6. 19 Our starting point: where reasons are given those 20 reasons must meet the test of being intelligible and 21 adequate. Reasons which disclose a manifest error are 22 either unintelligible or, by definition, inadequate. We 23 rely upon Wealdon, which in effect, looking at 24 paragraph 1.2, says: I have had regard to the ordinance, 25 as it is described in Mott, of dealing with scientific, 34 1 technical and predictive assessment, an enhanced margin 2 of appreciation, but that is not an absolute. That is 3 agreed as we see it. That is that it is not an 4 absolute, the enhanced margin of appreciation in the 5 agreed statement of common ground. 6 If the court is satisfied, the reasons for 7 differentiating the schemes on ground and capacity 8 disclose a manifest error, or are wholly inadequate. 9 Then no extent of a margin of appreciation can get the 10 defendant out of difficulty. 11 In responding to these submissions -- as we have 12 noted at paragraph 1.4 -- the defendant appears to us to 13 make a series of non-points. The first of them is with 14 regard to a broad discretion as to what to include in 15 national policy, which we deal with at 1.6. That is all 16 well and good, but it simply doesn't address the key 17 issue of whether what the defendant has put into the 18 national policy is based upon a manifest error and 19 a complete misunderstanding. If he has done that, then 20 his wide discretion avails him not at all. 21 At 1.7, the reports of experts and weighted 22 political environment, social and economic 23 considerations, reasons being approved by Parliament. 24 Once again, if the work is misunderstood, if the 25 experts' reports are misunderstood, that avails him 35 1 nothing. 2 1.8, we note the reliance on O'Connor, and the 3 reference to the heavy evidential onus. You should 4 note, even in that context, it is not a bar. Where 5 a claimant seeks to establish a rationality of 6 a decision which may owe much to political, social and 7 economic considerations. But, here, as we say, context 8 is everything. Grounds 4 and 5 have nothing to do with 9 judgments concerning political, social and economic 10 considerations. Here, the context is the defendant's 11 own assertion that he followed an evidence-based 12 approach and that his conclusions arose as a result of 13 the consideration of the evidence. 14 That's the background for our challenge. 15 We note at 1.9, we are not seeking to overturn moral 16 or political judgments. 17 Then, finally, as regards the series of non-points, 18 the defendant points to the duty to give reasons is 19 prescribed by section 5(7) of the Act. Duty extends to 20 giving reasons for the policy in the ANPS. There is no 21 duty to address every representation or say why 22 alternatives are rejected. We agree, but it is 23 difficult, as we submit, to see what these points go to. 24 Given that reasons were given for the preference, the 25 question is whether or not those reasons were adequate, 36 1 intelligible and the like. 2 As we say, the point raised by grounds 4 and 5 is 3 not whether reasons were given, but whether they 4 disclose a manifest error. 5 May I turn then to capacity. This is a matter which 6 is addressed, both in the amended statement of facts and 7 grounds, and the skeleton argument. The speaking note, 8 section 2 and following, takes your Lordships through 9 the narrative. 10 What is important to understand is that the error 11 arrived at an early stage. It arrived in the Jacobs 12 work, in the way we described at paragraphs 2.2 and 2.3, 13 and it is clear from the Jacobs work that they proceeded 14 on the basis that there would be three independent mixed 15 mode runways at Heathrow Airport. 16 That's what the report says and, as we point out, 17 end of 2.3 -- 18 MR JUSTICE HOLGATE: Sorry, on the NWR scheme? 19 MR KINGSTON: Yes, on the NWR scheme. This is a complaint 20 about the NWR scheme -- 21 MR JUSTICE HOLGATE: Yes, exactly. 22 MR KINGSTON: -- and the assessment of capacity. 23 MR JUSTICE HOLGATE: Yes, exactly. Not Heathrow Airport, 24 but on the NWR scheme. 25 MR KINGSTON: On the NWR scheme, precisely. 37 1 Jacobs's starting point there was a starting point 2 which, as we submit, was then never revisited. We note 3 at 2.4, that the defendant relies on the Oakdene 4 Hollins/NAC report, but that doesn't take it any further 5 because it didn't re-examine the fundamental error that 6 had arisen in the Jacobs's report with regard to the 7 NWR. Oakdene Hollins provided a sense check in relation 8 to the claimant's scheme, not the NWR. It is telling 9 that they seem to have misunderstood the position. 10 I have drawn attention to the diagram on page 270. 11 Your Lordships will look at it in due course. 12 They seem to have assumed that had been missed out 13 by mistake from the Airports Commission work, and so 14 they add it in as a separate line. It was no mistake by 15 the Airports Commission. The Commission understood what 16 the position was, but the figures had been calculated 17 and were being endorsed on the wrong basis. 18 As paragraph 2.5 notes, HAL does not and did not 19 ever intend to operate three independent mixed mode 20 runways and, indeed, we see that Ms Low accepts that in 21 her second witness statement. 22 It follows from this as a simple mathematical 23 exercise, the capacity of both schemes is exactly the 24 same. They were proposing to operate exactly the same 25 runway configuration. So, the base calculation that 38 1 came out of the Jacobs work should have been the same 2 for each scheme. It wasn't. It wasn't because Jacobs 3 made the error they did. 4 All of this, paragraph 2.6, the defendant relies on 5 Ms Low's second witness statement, which it has asserted 6 the claimant has ignored. The difficulty is that 7 Ms Low, with due respect, provides no meaningful 8 response to the points we make. She refers to the 9 740,000 figure accepted by Jacobs as a theoretical 10 assessment and she wants to emphasise that "could 11 achieve", but with due respect, that's no answer to our 12 point. 13 The fact is the Jacobs assessment referred to what 14 was proposed, and the emphasis might be rather more on 15 the "proposed" in the Jacobs's report. 16 Finally, the defendant relies on the work carried 17 out by York Aviation. But, as we have explained in our 18 skeleton argument, York Aviation again did not revisit 19 the NWR capacity or how it had been calculated. It 20 started from the assumption that Jacobs's analysis was 21 correct and, as Ms Low herself accepts, the 22 York Aviation report does not respond to any points 23 related to the capacity of the NWR. It was specifically 24 considering the capacity of the ENR. 25 So, our complaint is not that you didn't look again 39 1 at the ENR figures. That was done both by 2 Oakdene Hollins and by York. The complaint was that the 3 defendant did not go back to say: well, where does this 4 come from? Where did we start with 740,000? 5 My Lords, may I go to ground 5? 6 MR JUSTICE HOLGATE: Are you going to deal with the 7 defendant's response to this in their skeleton, at 8 paragraph 100? 9 Because they say that you have misunderstood the 10 material and this has been explained in Ms Low's second 11 witness statement. 12 MR KINGSTON: That's just what I have dealt with. Ms Low's 13 second witness ultimately defaults to the York Aviation 14 report. It says that it was examined, and the answer is 15 that the York report does not examine -- 16 MR JUSTICE HOLGATE: No, I think what is said by the 17 Secretary of State is that part of the assessment was 18 a theoretical assessment as to what the capacity would 19 be if you made the assumption criticised, but it was 20 always made clear by HAL, at paragraph 100 of the 21 defendant's skeleton, and the defendant understood that 22 in fact, in practice, the runway would not operate in 23 that way. That's what they say. 24 MR KINGSTON: That's what they -- and that's why I have said 25 the emphasis -- Ms Low puts the emphasis on "could". 40 1 Whereas, when you read what's said, the emphasis might 2 more appropriately be put on "what is proposed" because 3 the "could" comes later in the same sentence: what is 4 proposed? 5 If your Lordships will look, perhaps in due course, 6 at the York Aviation report -- that is 17/18 at 358 -- 7 you will see what they say in terms. 8 MR JUSTICE HOLGATE: Can you give me the reference? 9 MR KINGSTON: 17/18/358. They say in terms that Jacobs 10 assessed three mixed mode runways. 11 LORD JUSTICE HICKINBOTTOM: Which part on page 358? 12 MR KINGSTON: Paragraph 11: 13 "In the Jacobs's report, HAL's NWR was assessed on 14 the basis that it would operate as three mixed mode 15 runways providing capacity, the range ..." 16 And so on. 17 MR JUSTICE HOLGATE: Then reading on: 18 "The capacity stated by HAL, the 740,000 ATM per 19 annum, lies at the low end of this range." 20 MR KINGSTON: Yes, so the endorsement, it is at the low end 21 (so it must be okay), but the starting point is still 22 the Jacobs's assessment referred to at paragraph 11. 23 The Jacobs's report is in terms clear. 24 MR JUSTICE HOLGATE: Yes, but what that -- we'll have to 25 read it, obviously. But what that begs, the question, 41 1 is whether HAL came to 740,000 by assuming three mixed 2 mode runways. 3 MR KINGSTON: Let me be clear: HAL did not propose three 4 mixed mode runways. The error was the Jacobs's error, 5 and the Jacobs's exercise was -- and was the foundation 6 for everything that followed on. 7 The Jacob's exercise was a calculation of runway 8 capacity based on three mixed mode runways for the HAL 9 scheme, taking into account resilience, respite and all 10 of those things, as the Jacobs's report says. It was 11 that figure that was never revisited in any subsequent 12 report, my Lord. 13 MR JUSTICE MARCUS SMITH: In paragraph 11, had it said, "NWR 14 was assessed on the basis that it could operate as three 15 mixed mode runways", that would be accurate. It is the 16 "would" that is the problem. 17 MR KINGSTON: In paragraph 11, it says on the basis that it 18 would operate. 19 MR JUSTICE MARCUS SMITH: Yes. 20 MR KINGSTON: That is simply confirming what I have 21 submitted to you, that Ms Low is wrong to say that 22 Jacobs were doing something which, as a figure, wasn't 23 being taken forward as a real capacity figure. This is 24 telling us that York Aviation's view is that what Jacobs 25 did is exactly what we have submitted they did. That is 42 1 to say, our starting point is three mixed mode runways. 2 That was simply wrong. 3 That figure, that starting point figure -- and it 4 was in one sense a theoretical calculation, in the sense 5 that it was a calculation that started from assessing 6 both schemes or what sort of runway configuration are we 7 going to have? 8 But, in relation to the NWR, while the ENR scheme's 9 capacity was revisited on a number of occasions, Oakdene 10 Hollins, York and the like, that basic starting point 11 for the NWR figure was not revisited. 12 Indeed, if I may say so, I think the "could" would 13 be wrong because, as I think has been pointed out, HAL 14 had said repeatedly they could not operate. 15 MR JUSTICE HOLGATE: Because of the relationship between the 16 three runways? 17 MR KINGSTON: Absolutely, it would have caused all sorts of 18 problems. 19 MR JUSTICE HOLGATE: If they had been separated by a greater 20 distance -- 21 MR KINGSTON: Then, yes, the separation distance. Yes, your 22 Lordship has obviously read it. I won't go to it. 23 Our complaint is not, as I said, that the department 24 did not go back to the figure for the ENR. They did 25 repeatedly go round, but they always misunderstood that 43 1 we were complaining that this calculation at the 2 beginning had gone wrong. 3 LORD JUSTICE HICKINBOTTOM: Yes. 4 MR KINGSTON: My Lords, then safety. I'll introduce this in 5 paragraph 3.1. The defendant's skeleton argument 6 provides no answer to the detailed explanation set out 7 in the claimant's skeleton as to why there was simply no 8 evidence at all to support the defendant's conclusion. 9 Because the ENR had no direct global precedent there was 10 greater uncertainty as to what measures may be required 11 from a safety perspective and, as such, greater 12 uncertainty as to what impact those matters may have on 13 other relevant considerations, including capacity. 14 We make two preliminary points. First, as regards 15 safety. Both the Airports Commission and the defendant 16 relied on the CAA. No one suggests that there was any 17 input from anyone else on the question of safety, 18 recognising the CAA's standing on this issue accepted by 19 Ms Low in her second witness statement. 20 The second preliminary point is that the correct 21 approach, we submit for the court, is to consider the 22 evidence that was before the defendant when he took the 23 decision to rely on safety as a differentiating factor 24 between the two schemes. Given that the evidence 25 emanated from the CAA, the focus should be on what the 44 1 CAA's representations on the matter stated. 2 With all due respect to Ms Low and what she says in 3 her witness statement, she's not an expert on aviation 4 safety and it is not her role to attempt to reinterpret 5 the documents that are before the court. It is the 6 court's role, we say, to consider them and conclude what 7 it is that they are saying. 8 The starting point here, the defendant in putting 9 forward this particular reason for preferring the NWR to 10 the ENR was that the ENR has no direct global precedent. 11 It is that which is used as the hook on which the 12 defendant hangs this justification for saying the ENR is 13 beset by greater uncertainty, and that's the critical 14 "as such" at the beginning of paragraph 360 of the ANPS. 15 The uncertain is linked back to safety. The 16 uncertainty is about what measures may be required to 17 ensure the airport can operate safely. 18 So, in analysing whether the reason has any 19 substance, the relevant question is whether the evidence 20 from the CAA gave any support to the proposition that 21 because the ENR had no direct global precedent there was 22 greater risk that safety considerations may impact on 23 other matters. 24 We note that throughout its case the defendant has 25 placed great reliance on the Airports Commission, on its 45 1 approach to the fact that it took advice from experts, 2 the advice from the CAA, and we note that whilst work 3 would be needed to confirm that ENR could operate 4 safely, there was no reason why this work would 5 jeopardise a completion date of 2026, which was the 6 claimant's estimated date for completion and, secondly, 7 work would be required on safety aspects of the NWR. 8 We note, as I noted yesterday, that the defendant 9 focuses on paragraph 11.42 of the Commission's work; 10 fails to appreciate that is not the end of the story 11 because the objective, that is the objective of the 12 exercise "When was airport capacity to be provided?" and 13 by which the performance of schemes being considered was 14 a new runway operational by 2030. That emerges from the 15 Airports Commission's final report at 11.51. 16 What follows in the Commission's report -- 11.52 to 17 4 -- is the critical assessment of delivery against that 18 objective and, in that respect, it is clear that beyond 19 peradventure that the Airports Commission took account 20 of the innovative nature of the ENR and factored it into 21 the assessment. They identify that as such. 22 The conclusion is clear, but in his focus on 23 paragraph 11.42, the defendant ignores it. 24 That was a conclusion the Commission reached on 25 commercial viability and the delivery assessment, that 46 1 was Chapter 11. 2 As I referred to yesterday, specifically on 3 operational viability, chapter 12, the Commission was 4 equally clear that there was no significant point of 5 differentiation between the schemes. Paragraph 12.29. 6 This was having taken into account issues for the NWR 7 and for the ENR, including its novel and untested 8 concept. 9 In those circumstances, there can be no doubt that 10 safety could not support a reason for differentiating 11 between the two schemes because, firstly, the defendant 12 specifically endorsed the Commission's conclusions in 13 chapters 11 and 12 on commercial viability, and delivery 14 and operational viability, which included safety in 15 its -- that is the defendant's review of the 16 Commission's final review. That's the review report 17 that I am refer to there, at 7.9/730, and paragraph 107. 18 Secondly, there is no evidence that the defendant 19 received any further evidence from either the CAA or 20 other aviation experts that contradicted this CAA's 21 evidence as accepted by the Commission and agreed by the 22 defendant in its review. 23 Thirdly, in the preparation of the ANPS, the 24 defendant confirmed that he had carried out work on some 25 issues after he had received the Commission's final 47 1 report, but did not identify delivery or safety as areas 2 where further work was required or to be carried out. 3 That's the ANPS at paragraphs 3.3 and 3.4. 4 Finally, as the defendant now accepts, Ms Low's 5 third witness statement and paragraph 8: 6 "Safety itself was not a distinguishing factor 7 between the Heathrow schemes." 8 When considering a reason that takes safety as its 9 starting point and ties uncertainty back to safety, the 10 above points, we submit, taken by themselves, show the 11 defendant had no proper basis for preferring the NWR 12 over the ENR on grounds of safety. 13 We note, at 3.12, what we think is some shifting of 14 ground on this position. The argument now appears to be 15 that getting full safety approval for the ENR, as 16 opposed to the NWR, would take longer and that safety 17 approval for the ENR would come at the cost of 18 constraining capacity. Neither argument is supported by 19 the evidence. 20 As regards deliverability, the Commission were 21 clear, as we have set out above. They took into account 22 novelty, concluded that all shortlisted schemes would be 23 delivered to the required timescale of 2030, and 24 specifically compared and contrasted ENR and NWR on 25 deliverability, and concluded on balance the delivery 48 1 risks were not substantially different. 2 Once again, the defendant confirmed he agreed with 3 this in his review. We give you the reference, 4 my Lords, for that. It is paragraphs 101 of the fourth 5 bullet point. 6 The defendant didn't identify any other evidence 7 that came to hand. 8 Can I just interpolate there that the same point was 9 made by way of summary in the paper put to the Cabinet 10 subcommittee on 25 October, when the defendant's own 11 officials identified that none of the work undertaken by 12 consultants or the department indicated that there was 13 any difficulty, safety or otherwise, with delivery. 14 That's paragraph 66 and 99 of that paper. 15 The argument on behalf of the defendant appears now 16 to have condensed to an unsubstantiated assertion that 17 the regulatory requirements of the CAA as regards safety 18 may have impacted on the ENR's capacity. 19 Our first point in response to that is: the 20 defendant cannot undertaken an evidence-based approach 21 where robustness is a top priority, and then at the 22 11th hour say, simply by way of assertion, "Well, 23 actually, I think this might be a problem". 24 The second point is that concerns about safety 25 impacting on regulatory approval were flatly 49 1 contradicted by the evidence the defendant had before 2 him from the CAA. He refers to the supplementary 3 comments on safety cases for shortlisted schemes. It 4 should be noted that was a paper which came to light as 5 a result of the FOI. 6 It might -- in order to take in the following 7 paragraphs, 3.17 to 3.19 -- be helpful just to have that 8 document to hand, my Lords. So, that's supplementary 9 bundle 15 and tab 8. 10 This is the document that we say Ms Low sets about 11 a reinterpretation of. Whereas we invite the court to 12 look at it. Let me deal, first of all, with the 13 comparison point, whether there was any difference 14 between the schemes. 15 The report itself starts at page 153 of the bundle 16 and, at 157, the comparison with the HAL and Gatwick 17 schemes, in terms of how long you would expect approval 18 to take, is undertaken. 19 Your Lordships will note that this is divided into 20 the Aerodrome perspective and then the ATM airspace 21 issues are dealt with. 22 The Aerodrome perspective concludes by saying: 23 "No reason why approval wouldn't be given within 24 normal timescales, weeks, not months or years." 25 ATM airspace, they refer to the CAA's preliminary 50 1 safety assessment. No outright showstoppers. However, 2 the number of risks that may have impacts on costs, 3 capacity or environment, "we have commented that ..." 4 and then they refer to the Gatwick scheme. The 5 concluding paragraph: 6 "For both Heathrow options, missed approach 7 procedures for both Heathrow and RAF Northolt remain 8 a major design issue and a major challenge to deliver 9 a safe and operationally effective environment due to 10 close proximity of RAF Northolt and its runway's axis." 11 You will note no distinction is drawn between the 12 schemes in a comparison of what the CAA regarded as the 13 relevant safety considerations. 14 More specifically, in relation to the issue: how 15 long would it take? Might there be some delay? The 16 CAA's response starts at 155: 17 "How long you would [is what it says, but it means 18 'would you'] expect it to take to deliver this scheme 19 fully and obtain full regulatory approval." 20 In the light of something that was said at the 21 directions hearing, it is important to note that this 22 section is divided, this response under paragraph 1, 23 into a number of different elements. 24 Firstly, the first paragraph, "Aerodrome 25 perspective", and: 51 1 "It is quite clear we don't foresee any problems." 2 The second paragraph: 3 "Need to see detailed plans, assess compliance and 4 therefore give approval. But, given the above, we 5 expect to be able to give final design approval within 6 normal timescales. Final operational approval will 7 depend on the Aerodrome operator's oversight of the 8 construction and confirmation that it meets regulatory 9 requirements." 10 Thirdly, and then specifically as a separate item: 11 "ATM/airspace perspective, as indicated in the CAA's 12 preliminary safety review, NATS' airspace efficiency 13 report. The Hub proposal is a new concept, which will 14 require the safety risk between missed approaches and 15 departures to be articulated, as well as a human factors 16 assessment. Heathrow Hub have begun to examine these 17 areas which are of most relevance and, as the CAA 18 reported in its response to the Airports Commission's 19 consultation, its view is that all schemes have safety 20 cases for this stage in the development process, but 21 each still contains certain safety risks to be 22 resolved." 23 And then 4: 24 "Assuming that work to resolve these risks is 25 carried out in a timely manner, there is no reason why 52 1 the time taken to obtain full safety approval should 2 affect the planned delivery timetable. Whichever scheme 3 is progressed under current rules, the changes to 4 airspace will be subject to an airspace change process, 5 a summary of which procedure and timings, considerations 6 is contained in the appendix ... " 7 So, the important element in relation to full safety 8 approval in the last paragraph there, no reason why the 9 time taken to obtain full safety approval should affect 10 the planned delivery timetable. 11 The planned delivery timetable was 2030, of course. 12 That was the objective. The reference to "timely 13 manner" was expressly considered by the Airports 14 Commission. That's the relevance of paragraph 11.42 in 15 the Commission's report. 16 MR JUSTICE HOLGATE: Sorry, before we leave that document, 17 it says on the cover page, 153, "March 2015", and then 18 at the bottom of the page it says, "October 2018" and 19 the same appears in the index to the bundle. 20 MR KINGSTON: One of the wonders of modern technology is 21 that the date that appears at the bottom is usually the 22 date when it was printed out. 23 MR JUSTICE HOLGATE: That is what I wondered. 24 MR KINGSTON: And many -- 25 MR JUSTICE HOLGATE: Because this appears, from the passage 53 1 you read on page 4, to have been a paper produced in 2 response to an Airports Commission request -- 3 MR KINGSTON: Yes, it was. The Airports Commission -- 4 MR JUSTICE HOLGATE: -- back in 2015. 5 MR KINGSTON: Yes. What we discovered on the FOI was -- 6 MR JUSTICE HOLGATE: I thought that was what the answer was, 7 I just wanted to be sure. 8 MR KINGSTON: Yes, the Airports Commission asked for some 9 further information in order to satisfy themselves as to 10 whether there was any difference. 11 MR JUSTICE HOLGATE: Just to understand the legal basis, 12 then, upon which ground 5 proceeds. At 3.1 of your 13 speaking note, you put the "no evidence challenge" at 14 that point. There are cases on this, particularly in 15 the planning context, but sometimes the court has held 16 that dependent upon the nature of the point which 17 a decision-maker pursues, there may be no need for 18 evidence to support that view. It may be a matter of 19 judgment. 20 MR KINGSTON: Yes, which is precisely why we have gone on in 21 the speaking note to identify the defendant was at pains 22 to say this would be an evidence-based approach and why, 23 on more than one occasion, I have drawn attention to 24 paragraph 100 of Ms Low's second witness statement, 25 which says the defendant was committed to an 54 1 evidence-based approach. 2 MR JUSTICE HOLGATE: Yes, but that doesn't answer my 3 question. You can have an evidence-based approach, but 4 that doesn't exclude the possibility that, in reaching 5 a decision, there may be some issues which are 6 nonetheless a matter for judgment, and those particular 7 issues do not depend upon having evidence. 8 MR KINGSTON: No. First of all, I agree. So, the answer to 9 your Lordship's question is: yes, that is right in some 10 circumstances, but not these. 11 This was quintessentially a very technical area in 12 which the CAA were -- as everyone agrees -- as it were, 13 the prime source of wisdom. They were being asked 14 specifically: is there any reason why we should 15 distinguish between these schemes, bearing in mind ... 16 And the question of novelty was there. 17 MR JUSTICE HOLGATE: That is why I was wanting to be clear 18 on the document you are relying upon. That is 19 a March 2015 document. 20 MR KINGSTON: Yes, and it was an input to the AC's process. 21 A critical thing to look at, not only for this document, 22 but the AC's follow through on it, which is, in 23 chapter 11, 11.42, first of all, and I have noted 11.42: 24 "Need to make a prompt start in order to deliver by 25 2026." 55 1 The point is made: well, you know, that was 2 pressure, there might be difficulty about that. 3 But 2026 was the claimant's date for delivery, not 4 the objective. 5 MR JUSTICE HOLGATE: When we look at the nature of the 6 concern that you are attacking, as you summarise it, in 7 3.1, this is a concern which relates to uncertainty 8 about a type of project for which there is little 9 evidence, because it hasn't been done before. I put it 10 crudely. 11 So, by definition, it may be rather more difficult 12 to find evidence from past experience by way of example, 13 which will tackle that point. Are we therefore more in 14 the area of judgment in a situation like that? 15 MR KINGSTON: No, with respect. 16 In an area which is so regulated and dependent very 17 much on technical considerations, the foundation of good 18 judgment is an evidence base. Good judgment is properly 19 informed, especially in technical areas, by an evidence 20 base. 21 Here, the evidence base not only did not support the 22 view that there was greater uncertainty about 23 deliverability by 2030, the evidence base actually said 24 the contrary. The evidence base said: there is no 25 reason for concluding that it will not be delivered by 56 1 2030, including uncertainty, including the novel nature 2 of the concept. So, the technical evidence winds all 3 those things in and is then presented to the person who 4 is to make the decision. 5 He is not entitled, I respectfully submit, in an 6 area of technical expertise then to say: well, that is 7 all very well and good for you to say so, but in the 8 back of my mind I have something there, it is niggling 9 away at me. 10 That is a thoroughly irrational approach. 11 MR JUSTICE HOLGATE: I was about to say, if you are of that 12 view and you have some residual concerns, it might be 13 a Tameside-type situation, where you have a question in 14 your mind and you should then take reasonable steps to 15 obtain the information to address the question. 16 MR KINGSTON: Precisely so. I am reminded of the line of 17 authorities that supports the view that the opinion of 18 the competent regulator is something. 19 MR JUSTICE HOLGATE: Prideaux and so on. 20 MR KINGSTON: Precisely. It should be given great weight. 21 Here no one disputes. 22 MR JUSTICE HOLGATE: It cuts both ways sometimes. 23 MR KINGSTON: It does. Happily, on this occasion, it cuts, 24 I say, my way. I have the relevant regulator firmly on 25 side, committed to the view that there is no difference 57 1 in safety terms, and nothing that will affect capacity 2 arising from safety. 3 LORD JUSTICE HICKINBOTTOM: Couldn't it be said, as 4 my Lord put, the extended northern runway was an 5 entirely new scheme, which had never been tried before. 6 So, there is no evidence from any airport on which this 7 has actually been done. In those circumstances, any 8 assessment must be theoretical. It can only be 9 theoretical. There is no evidence of this scheme 10 actually being put into effect. 11 Whereas in respect of other schemes, where there are 12 parallel airstrips, there may be evidence. 13 MR KINGSTON: My Lord, if you'll forgive me, I don't think 14 there is any instance of three parallel runways 15 operating anywhere in the world. 16 LORD JUSTICE HICKINBOTTOM: No, that may be the answer. 17 I accept that may be the answer. 18 MR KINGSTON: But to take my Lord's point, in those 19 situations, that's precisely why you go to the person 20 with the expertise to say: applying your judgment and 21 expertise in relation to the mass of technical and 22 regulatory requirements, what is your judgment and 23 expertise? 24 That's why the law -- the cases are legion. That is 25 why the view of the competent regulator is given weight. 58 1 LORD JUSTICE HICKINBOTTOM: Sorry, I understand that. But 2 where there is no evidence, where there is no actual 3 evidence, as opposed to a theoretical construct, there 4 must be more uncertainty. There must be less 5 uncertainty when you actually have evidence. 6 MR KINGSTON: That could be said of both schemes. 7 LORD JUSTICE HICKINBOTTOM: That might be right. I see 8 that. 9 MR KINGSTON: Even so, any judgment should be informed in 10 the way I have described. If you propose not to, then 11 the consequence ought to be, my Lords, that you say: 12 well, I am not sure about this. I think I need some 13 further information. 14 We are not in a situation here where -- well, we 15 have a very clear Airports Commission conclusion, the 16 ones I have referred to in Chapter 11 and chapter 12. 17 The defendant's decision to review, between July 18 and December 2015, is informed by his looking at the 19 Airports Commission and the very careful process 20 I referred to in appendix B of the review, which gives 21 him the opportunity to say, "I'm uneasy about this", and 22 he doesn't do so. He says in his review, actually, 23 "This isn't a problem. We are not going to do anything 24 about it". 25 Then declares in the ANPS: I am not going to do 59 1 further work on certain areas. 2 So, from the claimant's point of view, all of the 3 evidence points in one direction, and all of the 4 approach to that evidence from the defendant points in 5 the one direction, until there is -- 6 MR JUSTICE HOLGATE: It becomes a reason for differentiation 7 between the schemes. 8 MR KINGSTON: Yes. Precisely. 9 MR JUSTICE HOLGATE: It becomes a critical point. You say 10 rather makes sharper your submission that if you have 11 uncertainty, it is perhaps an obligation to do something 12 about it. 13 MR KINGSTON: Certainly not. 14 MR JUSTICE HOLGATE: But vis à vis the expert, adviser. 15 MR KINGSTON: Forgive me, yes. 16 MR JUSTICE HOLGATE: Who would be responsible in due course, 17 if the scheme were to come about, to actually deal with 18 these matters in greater detail. 19 MR KINGSTON: Yes. 20 MR JUSTICE HOLGATE: If you are looking at this in 21 conjunction with ground 1, for example, if you think 22 that ENR is still on the table and you want to know 23 whether the operator would, if it were to be chosen -- 24 that is the basis of the question: would you implement 25 it?, you perhaps need to see these two points linked 60 1 together. 2 MR KINGSTON: Perhaps so. My Lords, is there anything 3 further? 4 LORD JUSTICE HICKINBOTTOM: No, thank you very much. 5 Mr Palmer, you are next. We'll pause now for the 6 transcriber's break, and then we'll hear from you. 7 (11.30 am) 8 (A short break) 9 (11.46 am) 10 Submissions by MR PALMER 11 MR PALMER: My Lord, I am grateful. I have prepared 12 a speaking note to cover the first part of my 13 submissions. 14 LORD JUSTICE HICKINBOTTOM: We would have been disappointed 15 had you not. 16 MR PALMER: I am afraid it cannot match the elegance of 17 Mr Kingston's prostyle, but if I pass it up. It has 18 already been passed around to everyone else in court. 19 (Handed) 20 If I may just begin by just outlining the way 21 I intend to proceed, so the court knows what to expect. 22 I will begin with an overview, first of the statutory 23 scheme and then of the ANPS itself. Then, I am going to 24 come to the grounds, but I am going to begin, with your 25 leave my Lord, with the reasons grounds, that is grounds 61 1 4 and 5, ie reasons that do appear in the ANPS, before 2 I address my submissions on grounds 1 and 2, which are 3 directed at reasons that don't appear in the ANPS, and 4 which I say were not material to the decision made by 5 the government to adopt the ANPS. 6 Going through that sets the context for the 7 guarantee point, whether it is advanced underground 1 or 8 ground 2. 9 LORD JUSTICE HICKINBOTTOM: Yes. 10 MR PALMER: My Lord, starting with the statutory scheme, 11 obviously made under section 5 of the Planning Act. It 12 may be helpful just to take out the Act. So, it's tab 8 13 of bundle 1 of the authorities. 14 It is apparent from section 5(1), (b) in particular, 15 that the statement sets out national policy in relation 16 to one or more specified descriptions of development. 17 I emphasise the word "policy" because there was some 18 suggestion in my learned friend's submissions that what 19 has been produced in the ANPS is somehow different from 20 policy or somehow set aside from policy. 21 The fundamental submissions I make is it is 22 a statement of policy, nothing else. 23 At subsection 4, you can see the procedural 24 requirements -- that require consultation and 25 publicity -- set out in section 7. Then the 62 1 parliamentary requirements. The court will be familiar 2 with that. 3 Over the page, at section 5, it is explicitly set 4 out at subparagraph (d): 5 "The statement may in particular identify one or 6 more locations as suitable, or potentially suitable, or 7 unsuitable for a specified description of development." 8 It is no less a statement of policy if it does set 9 out the location, specifically. 10 And, I note for completeness, at (e): 11 "It may identify one or more statutory undertakers 12 as appropriate persons to carry out specified 13 description of development." 14 This national policy statement does not do that, 15 but, again, it is within the powers of the Act to make 16 a policy that it should be. 17 On my speaking note in the first page, I note under 18 subsection 5 that it is quite common in other contexts, 19 too, for policies to set out specific locations for 20 development. I have given some examples that might 21 appear in local plans. I have referred to an area 22 action plan prior to a CPO or a local plan for a new 23 settlement, and which local plans to choose sites to 24 allocate, often, following a call for sites. 25 It is just the same for NPS. Heathrow is not unique 63 1 in this. Both the nuclear energy NPS and the waste 2 water NPS comprise national policy for site specific 3 infrastructure. I have given you the references to 4 that, for completeness. 5 Then returning to the statutory, obviously 6 subsection (7) must give reasons for the policy set out 7 in the statement. 8 Then, moving on to section 7, four pages on, the 9 consultation and publicity requirements. At subsection 10 (2) of the requirements carried out in the consultation: 11 "In relation to the proposal." 12 "The proposal" is then defined. It means: 13 "The statement that the Secretary of State proposes 14 to designate as an NPS for the purposes of this Act or 15 a proposed amendment." 16 My Lords will see references to the "draft NPS". It 17 is sometimes called that because it was a proposed NPS 18 that was put forward for consultation. 19 Of course, what must be consulted upon includes the 20 reasons for the policy that is set out in the NPS, 21 because we know that draft must be complete, must 22 include the reasons. We know that from section 5.5. 23 Similarly, in relation to the parliamentary 24 requirements at section 9(2): 25 "The proposal must be laid before Parliament." 64 1 Then "the proposal" is defined in the same terms. 2 9(4) then provides for resolution to be made. 3 Subsection 5, for the Secretary of State to set out 4 a response to any recommendations, including 5 recommendations made by committees, such as in this case 6 a Transport Committee. 7 At subsection (9), I just note it must be done again 8 if it changes. If something other than that which is 9 laid changes, it must be laid before Parliament for 10 approval again. 11 The only exception to that is in subsection (10), 12 which is you don't need to do that if you are just 13 correcting clerical or typographical errors in what was 14 laid. 15 So, at all times, the reasons for the policy must be 16 consulted upon, must be subject to parliamentary 17 approval as part of the consultation on and approval of 18 the NPS as a whole, the proposed NPS as a whole. 19 Before then we know, turning back to -- 20 MR JUSTICE HOLGATE: Can I ask two questions about that 21 section? 22 As regards reasons, we asked this question of 23 Mr Maurici, and in terms of the duty to give reasons 24 when you come to designate the NPS, he suggested that 25 the court could have regard not just to reasons 65 1 contained in the NPS as finally designated, but also, 2 for example, the consultation response document, and one 3 or two other documents published at the same time. 4 MR PALMER: Yes. 5 MR JUSTICE HOLGATE: If the focus of section 5(7) is on the 6 national policy statement as designated, as opposed to 7 a draft, is that what it is doing, or is the focus 8 instead on the reasons for the policy in draft form? 9 So, that people, as you were submitting, can be 10 consulted on the basis, the rationale for a policy. So, 11 you don't just have the bare strategic policy, you have 12 its foundations. 13 MR PALMER: Yes, we'll look at it in due course, but when 14 the draft NPS or the proposed NPS is produced, that 15 includes the reasons for the policy. That is subject to 16 consultation and, of course, consultation responses are 17 considered and the government responds formally, with 18 another document setting out the response to the 19 consultation. 20 There is also then a parliamentary procedure, in 21 which case the NPS is laid before Parliament. If that 22 is amended in light of the consultation responses, then 23 of course that amended version must be laid before 24 Parliament, so that Parliament can see the up-to-date 25 proposal. 66 1 Once Parliament passes a resolution and approves it, 2 or otherwise the parliamentary requirements are 3 fulfilled, then the final NPS is designated, and that 4 contains the reasons as approved by Parliament. 5 Of course, there are other documents, such as the 6 consultation response, but those reasons for the policy 7 are at all times in whatever version of the NPS or 8 proposed NPS is current. 9 LORD JUSTICE HICKINBOTTOM: Full stop. So, in terms of the 10 final NPS, that's designated, do you say the reasons are 11 those set out in the NPS? 12 MR PALMER: Absolutely. 13 LORD JUSTICE HICKINBOTTOM: And no others? 14 MR PALMER: Those are the reasons which are relied upon as 15 justifying the policy. That is the formal proposal to 16 the public. 17 MR JUSTICE HOLGATE: I can see why you may be advancing this 18 submission when you come to ground 1. 19 MR PALMER: Yes. 20 MR JUSTICE HOLGATE: But it may have implications more 21 generally when this statute comes to be applied to the 22 other grounds in this case, let alone NPS's more 23 generally, because the tighter the application of 24 subsection (7) the more difficult it is for the 25 Secretary of State to satisfy the obligation to give 67 1 reasons. It will always have to be in the policy 2 statement, and no other document. 3 MR PALMER: I am not saying -- just to be clear, I'm not 4 saying "all reasons" relevant. 5 MR JUSTICE HOLGATE: Ah. 6 MR PALMER: The word is "must give reasons", not "all the 7 reasons". 8 MR JUSTICE HOLGATE: Then you are leaning more towards 9 Mr Maurici's position. 10 MR PALMER: Yes. Certainly, it does not need to contain all 11 responses to consultation or responses to objections. 12 MR JUSTICE HOLGATE: That is a different thing again. That 13 is a requirement of consultation. 14 MR PALMER: Exactly so. 15 MR JUSTICE HOLGATE: Yes. 16 MR PALMER: So, it doesn't have to give a comprehensive 17 reasoned view of everything relevant, but it does have 18 to provide reasons for it, and those are the reasons 19 which are consulted on. 20 When the public pick up the proposal for the first 21 time, to respond to the consultation, and they see what 22 is being proposed, they are also entitled, in accordance 23 with the Sedley requirements, to know -- to be given 24 sufficient information to know why it is proposed, and 25 the reasons are the points which are put forward saying, 68 1 "This is the basis upon which we are adopting this 2 policy, or propose to adopt this policy". 3 MR JUSTICE HOLGATE: Thank you for that. My other question 4 related to the first page of your speaking note, where 5 you say, "This is not anything other than policy". 6 MR PALMER: Yes. 7 MR JUSTICE HOLGATE: What's the legal implication of that? 8 It sounds -- putting it colloquially -- it's only 9 policy. What are you getting at there? 10 MR PALMER: Well, I'm saying both. Obviously, the policy 11 has significance because of the ensuing procedure under 12 the Planning Act and the application for a DCO and the 13 treatment -- 14 MR JUSTICE HOLGATE: Well, that is the question I was going 15 to ask. Because it is not mere policy, if that was the 16 implication, as you might get in an area action plan or 17 a local plan. It is policy which attracts section 104. 18 MR PALMER: Yes. 19 MR JUSTICE HOLGATE: 106, sorry. 20 MR PALMER: That is a statutory requirement as to how 21 applications should be treated in light of policy. The 22 answer is: they must be determined in accordance with 23 policy, unless certain specified matters are fulfilled. 24 It doesn't change the status of it being policy. It 25 is statute that gives it significance. But it is 69 1 policy, and it is a policy making exercise, and 2 Parliament has decreed that then that policy, having 3 been made, future applications after that would be 4 determined in the light of that policy and the way that 5 it is set out. 6 MR JUSTICE HOLGATE: More than that, you shouldn't really be 7 challenging the merits of the policy. 8 MR PALMER: I beg your pardon, my Lord? 9 MR JUSTICE HOLGATE: You shouldn't really be challenging the 10 merits of the policy, section 106. 11 MR PALMER: At that point, other than in specified ways. 12 MR JUSTICE HOLGATE: Okay. 13 MR PALMER: That is Parliament's chosen way of proceeding; 14 that the Secretary of State makes a policy and then 15 applications are determined essentially in accordance 16 with that policy. 17 The reason I emphasise that is because, when we get 18 later down the road into some of the ground 1 points, it 19 has been treated as if this policy making -- the 20 claimant's submissions treat this policy making exercise 21 as if it were a procurement exercise. They use the 22 words "akin to a procurement exercise". The first 23 fundamental submission I make is: it is not akin to 24 a procurement exercise. It was not -- 25 MR JUSTICE HOLGATE: It is policy rather than procurement. 70 1 MR PALMER: Yes, it is policy rather than procurement. It 2 is not a competitive tendering exercise. Consistently, 3 the claimants have peppered their submissions with words 4 such as "bid" and "score" on "selection criteria". 5 MR JUSTICE HOLGATE: Or "competition". 6 MR PALMER: Or competition. Competition, of course, was 7 used colloquially and ordinarily in many senses, not 8 all -- just because the word "competition" is used, 9 doesn't mean that you are in the realm of competition 10 law. We'll come back to that as well. 11 The first fundamental point I make is this is 12 a policy setting exercise, where the Secretary of State 13 is purchasing nothing, is buying nothing, is procuring 14 nothing, but deciding what the best policy would be as 15 to where future runway capacity in the South East should 16 be located, and subject to what requirements and 17 conditions and so forth. 18 LORD JUSTICE HICKINBOTTOM: Just on reasons, to make sure 19 I have this absolutely right. You say that reasons 20 obviously have to be set out in the NPS at all stages. 21 That's what the Act said. 22 MR PALMER: Yes. 23 LORD JUSTICE HICKINBOTTOM: You say that not all of the 24 reasons have to be set out. 25 MR PALMER: Not all possible supporting reasons, but the 71 1 reasons you are going to rely upon. They have to be 2 sufficient to justify what is being proposed. 3 MR JUSTICE HOLGATE: Sorry, by definition, reasons are 4 things you rely on, aren't they? 5 MR PALMER: Yes. So, the ones that you rely on are the ones 6 you publish. 7 MR JUSTICE HOLGATE: It doesn't actually answer my Lord's 8 question. 9 MR PALMER: My Lord's point is that I am being tautologous. 10 MR JUSTICE HOLGATE: Could be. 11 MR PALMER: The point I wish to make to my Lords is what is 12 clearly contemplated by Parliament by saying, in 13 subsection 7, that the national policy statement must 14 give reasons for the policy. Though it is not stated as 15 such, but as a common lawyer would interpolate, they 16 must be adequate reasons, sufficient reasons to indicate 17 why it is that what is being proposed is proposed. 18 MR JUSTICE HOLGATE: In a sense, reasons kick in in two 19 different ways, or two complementary ways. One at an 20 earlier stage when you have the draft because it helps 21 satisfy the requirement that the public is given enough 22 material to understand the policy, so that they can be 23 consulted on it. 24 MR PALMER: Yes. 25 MR JUSTICE HOLGATE: But then reasons required, if they are 72 1 required by this provision, at the end of the process is 2 to facilitate at least that part of South Bucks which is 3 concerned with enabling people to detect public law 4 errors. 5 MR PALMER: Yes. That's right on both counts, my Lord. 6 They certainly are required at the end of the process 7 because here, in section 5(1), that is the governing 8 provision, the Secretary of State may designate 9 a statement as a national policy statement for the 10 purposes of this Act, et cetera. 11 Then subsection 4: 12 "A statement may be designated as a national policy 13 statement for the purposes of this Act only if the 14 consultation and publicity requirements set out have 15 been complied with." 16 So, section 5, assumes, the power in section 1 17 assumes that those later requirements in the Act have 18 been complied with. What comes out of that process at 19 the end, upon designation, is a national policy 20 statement. That national policy statement must comply 21 with subsection 7 and gives reasons for it. 22 LORD JUSTICE HICKINBOTTOM: As well as the reasons that are 23 given, they must be sufficient to justify the policy. 24 That's how you put it. 25 MR PALMER: Yes. 73 1 LORD JUSTICE HICKINBOTTOM: But there mustn't be anything 2 outside those reasons that are material, in this sense: 3 that they might tip the balance. 4 It is not very well put. 5 MR PALMER: No, if there was something which tipped the 6 balance, it should be in the statement. 7 LORD JUSTICE HICKINBOTTOM: Possibly tip the balance. 8 Because you were talking about consultation here. So, 9 if there is a reason -- I know this is getting very 10 conceptual -- that might potentially tip the balance, it 11 has to be somewhere so that it can be consulted upon, 12 doesn't it? 13 MR PALMER: Well, yes. If it were thought by -- because, at 14 this point, it is the Secretary of State's proposal. 15 LORD JUSTICE HICKINBOTTOM: No, I understand that. 16 I understand he has to -- 17 MR PALMER: And although it is not a final decision at the 18 point of consultation -- obviously, otherwise there 19 would be no point in the consultation -- the Secretary 20 of State is putting forward a definite proposal rather 21 than options -- 22 LORD JUSTICE HICKINBOTTOM: Yes. 23 MR PALMER: -- at that stage. 24 LORD JUSTICE HICKINBOTTOM: Yes. 25 MR PALMER: A policy statement itself can allow for options. 74 1 That would be a different matter. That would still be 2 the proposal. 3 But the Secretary of State is entitled to come up 4 with a policy for a specified description of development 5 in a specific location and say, "that is my proposed 6 NPS, what do you think? The public and Parliament, do 7 you approve?" 8 They investigate and advise and recommend, and it is 9 all taken into account and all the rest of it. That is 10 the process for producing this NPS. 11 Obviously, if the Secretary of State thought that an 12 issue -- the merits of that proposal turned on 13 a particular issue, then that is a reason which should 14 be included. 15 MR JUSTICE HOLGATE: That has to be included. 16 MR PALMER: That has to be included. 17 MR JUSTICE HOLGATE: Yes, but if this analysis is right, the 18 mere fact that the reasons should be in the NPS doesn't 19 in fact preclude the possibility that a decision-maker 20 has other reasons which they have nevertheless failed to 21 put this the NPS. 22 MR PALMER: There would have to be, theoretically, that they 23 failed to put them, failed to consult upon them, failed 24 to ask for parliamentary approval for them, failed to 25 seek the recommendations of the Transport Committee on 75 1 them. That is what would follow. 2 MR JUSTICE HOLGATE: Yes, all I am saying is -- 3 MR PALMER: Here, you know, one way of viewing the 4 claimant's complaint is they say: you did have this 5 secret reason, which you haven't consulted upon, which 6 you haven't proposed, which you should have put in and 7 included because you did rely on it. 8 Of course, Mr Kingston disowns that suggestion. It 9 is a rather convoluted argument in one of his speaking 10 notes, where he explains why he is not saying that 11 because all he would be asking the court then to decide 12 is there would have been a further, on his account, 13 unlawful reason in the NPS as a further additional 14 reason as to justifying the policy which he says 15 shouldn't be there. If it were there, he would be 16 seeking to knock it down. 17 My essential submission to my Lords is: before we 18 get to grounds 1 and grounds 2, the reasons which are 19 given are all good reasons. I will deal with that 20 undergrounds 4 and 5, that is the starting point. They 21 are sufficient reasons and they are the government's 22 reasons for the national policy statement. 23 Since I have now raised that point, I will just 24 foreshadow what I mean by that. 25 Although it is the Secretary of State, under section 76 1 5(1), who ultimately may designate the statement and 2 issue it, what is in that statement sets out national 3 policy. The national policy is the policy of the 4 government, and here was issued as a government policy 5 decision; decided upon not by the Secretary of State, 6 but at Cabinet level, the Cabinet subcommittee, chaired 7 by the Prime Minister. 8 MR JUSTICE HOLGATE: Yes, but this can't be used as an 9 argument to exclude judicial review for taking into 10 account an immaterial consideration. 11 MR PALMER: No, I am not seeking to exclude judicial review. 12 MR JUSTICE HOLGATE: Because otherwise this would be 13 formalism. 14 MR PALMER: No, I am not making a formal argument. I am 15 making a substantive argument. 16 MR JUSTICE HOLGATE: Okay. 17 MR PALMER: Whatever was trailed as potentially material 18 considerations in the lead up to the decision, the 19 decision was made on the basis set out in the NPS and 20 not on some different basis. 21 MR JUSTICE HOLGATE: That must be a factual question. 22 MR PALMER: It is a factual question. 23 MR JUSTICE HOLGATE: If it is a factual question, it is not 24 determined by the content of the NPS. 25 MR PALMER: No, I am not suggesting for a moment that 77 1 my Lords should pack up and go home at this point. I am 2 just, at this point, trying to give an overview of my 3 directions, so the court has a clear understanding of 4 that. 5 LORD JUSTICE HICKINBOTTOM: Yes, thank you. 6 MR JUSTICE HOLGATE: So, we go to the ANPS. 7 MR PALMER: Yes, if we go to the ANPS. If I could ask you 8 to take the document out. It is in bundle 7. It is 9 nice to see it for the first time. 10 The ANPS, you can see here -- from the cover page at 11 page 203 -- it is presented to Parliament pursuant to 12 section 9.2 of the Planning Act. This is the final 13 version of it, presented to Parliament, which then gets 14 parliamentary approval and is then designated in the 15 form in which it was presented to Parliament. 16 You will see it is not one of those papers which 17 begins with a nice friendly photograph of the Secretary 18 of State and a forward with a signature that we often 19 see. It is a government paper. 20 If you turn to page 208, the introduction, you can 21 see that is how it is put. For example, from 22 paragraph 1.8 onwards, it is talking about the 23 government's belief that the NPS is the most appropriate 24 way to go forward, rather than by hybrid bill. At 1.10, 25 the government -- this is going back to the preference 78 1 decision -- on 25 October 2016: 2 "The government announced that a northwest runway at 3 Heathrow Airport combined with a significant package of 4 supporting measures was its preferred scheme." 5 You can see over the page, 1.13: 6 "The airports NPS sets out the government's policy 7 on the need for new airport capacity and the 8 government's preferred location and scheme to 9 deliver new capacity." 10 Contrasting, you can see the word the Secretary of 11 State used, for example in paragraph 1.15: 12 "In particular, the Secretary of State will use the 13 airports NPS as the primary basis for making decisions 14 on any development consent application." 15 Because that is the decision of the Secretary of 16 State -- the Secretary of State must in due course make. 17 If I can turn to chapter 3, which begins on 18 page 222. Just 3.1 provides an introduction, but it 19 makes clear that: 20 "This chapter sets out why the government has stated 21 its preference for the northwest runway scheme." 22 Then a summary of steps beginning at 3.11 and 12, as 23 to the process that has been gone through. 24 Then, at 3.15: 25 "The considerations fully take into account the work 79 1 of the Airports Commission, information provided by 2 a variety of stakeholders, as a result of government's 3 further work outlined above ... has considered the 4 positive and negative effects from each of the three 5 shortlisted schemes and reached its conclusion by 6 weighing these expected effects, along with considering 7 how positive effects can be enhanced and negative 8 effects mitigated." 9 Then the detail, specifically, as to why, at 10 Heathrow, the northwest runway is preferred over the 11 extended northern runway, at page 232. I appreciate 12 this passage will be familiar already. Having noted 13 some advantages of the ENR, at 356, 357 gives three 14 bullet points, which are purely sort of headlines, each 15 of which is then developed. Although slightly 16 confusingly in a slightly different order. It begins 17 with the second one: 18 "Respite from noise for local communities." 19 Making clear: 20 "The ENR scheme has much less potential respite." 21 Explaining why. I will come back to the 22 significance of that point in a moment. 23 Then the resilience, which includes that it delivers 24 greater capacity: 25 "Estimated in a like for like basis by the Airports 80 1 Commission at 740,000s flights, rather than 700 ... 2 according higher economic benefits and a broader route 3 network." 4 So, greater space for commercial development. 5 Then, the last point, again, which my Lords are 6 familiar with. 7 The headline point for that last point is 8 "Deliverability", if you like. The heading is: 9 "Deliverability." 10 Because it is a point which is relevant for 11 deliverability. "Deliverability", of course, as 12 a general topic, covers all sorts of matters, in terms 13 of, is it financially viable? Is it commercially 14 deliverable? Is it going to be delivered at all? It is 15 all relevant to deliverability. But there is a specific 16 deliverability concern raised here, at 3.60, which 17 effectively is: if this scheme, if the ENR were to be 18 delivered, would what was delivered be what was 19 promised, in terms of capacity, in particular? 20 The central concern there is: once we know what 21 safety measures are required for this novel alignment of 22 runways, what impact will those measures have on what is 23 delivered? In particular, its reliance on -- including 24 the restriction on runway capacity. I will come back 25 to -- there is a solid evidential foundation for that, 81 1 despite what you heard earlier this morning. But that 2 is the specific deliverability concern which is relied 3 on here. 4 LORD JUSTICE HICKINBOTTOM: There are two, aren't there? 5 There is greater uncertainty as to what measures may be 6 required to ensure the airport can operate safely. One. 7 MR PALMER: Yes. 8 LORD JUSTICE HICKINBOTTOM: And -- oh, I see, the impact of 9 the safety measures. 10 MR PALMER: Yes. It is not a suggestion, and never has 11 been -- 12 LORD JUSTICE HICKINBOTTOM: That it is unsafe. 13 MR PALMER: It has never been suggested that it is unsafe. 14 LORD JUSTICE HICKINBOTTOM: So, I understand this I think 15 now. You say what is uncertain -- what are uncertain 16 are the measures that will be required to make it 17 safe -- 18 MR PALMER: Which is the -- 19 LORD JUSTICE HICKINBOTTOM: -- and any impact of those 20 measures on capacity. 21 MR PALMER: Yes. It is not casting into doubt that measures 22 could be devised -- 23 LORD JUSTICE HICKINBOTTOM: To make a safe system. 24 MR PALMER: -- so that it could operate safely because, as 25 we will see, the CAA has said that. But they have also 82 1 said -- contrary to what you have been told -- that the 2 impact of those as yet unknown measures to make it work 3 safely may restrain capacity amongst other matters. 4 There are other matters, too. Capacity is singled out 5 here, but it is more general. But the restriction on 6 runway capacity is singled out. 7 That is important because, as you have seen in the 8 paragraph above, one of the big differences, also for 9 reasons of resilience, is a lower capacity for ENR. So, 10 it is lower in the first place, and the final point 11 being made here is: this is uncertain, but it may yet be 12 lower than that. It is uncertain, but it may be lower 13 than what has been promised. 14 Although these are three discrete points, they are 15 also interlinked. In particular in terms of capacity, 16 they all have an effect on capacity. Because respite -- 17 if we go back up to that -- obviously, when you have two 18 runways aligned in the way it is proposed with the 19 extended northern runway, if they are both operational, 20 with planes landing on one taking off on the other, the 21 people who live under those flight paths will be 22 affected no matter what the direction of travel that is. 23 Of course, you can do certain things such as vary 24 the flight paths once you have taken off, less so when 25 you are coming into land, you need to be coming in in 83 1 a straight line. So, there are measures which you can 2 do to soften that, but essentially if you are operating 3 both runways, the people under it don't have a break. 4 So, if you are going to provide respite, you need to 5 turn off or switch off, as it is put here, one runway 6 for a short time during non-peak periods. The result of 7 that is a reduction in capacity. 8 That point is, of course, built in, as I understand 9 it, to Hub's own estimate of their capacity at 700,000. 10 That is one of the prime reasons why the 700,000 is 11 lower than the 740,000. Again, I will show you the 12 evidence on that. 13 You will recall, as it has been put to you just now, 14 because it is said you will end up in either case with 15 two segregated runways and one mixed mode runway, it was 16 submitted to my Lords that it therefore must follow that 17 the capacity is identical. That is plainly and 18 obviously wrong because in each case you have different 19 constraints relating to respite, different constraints 20 relating to resilience, and then you also have 21 uncertainty as to whether safety measures might also 22 constrain what capacity you have. 23 So, that is the short answer to grounds 4 and 5, but 24 I will show you the evidence on which those judgments 25 were reached. 84 1 Those are the reasons, and then that is brought 2 together in the conclusion over the page, 3.71. Again, 3 repeating they have identified negative impacts and 4 beneficial effects, wider strategic objectives, legal 5 obligations: 6 "Bringing these considerations together, the 7 government's decision on preferred scheme balances this 8 range of factors, enabling it to determine which scheme 9 overall is the most effective and appropriate means of 10 meeting the needs case and maintaining the UK's hub 11 status in particular." 12 At 3.74 to 3.75: 13 "The needs case has shown the importance of 14 developing more capacity more quickly and in a form 15 which passengers and businesses want to use. The 16 Heathrow northwest runway scheme is best placed to 17 deliver this capacity, delivering the greatest benefit 18 soonest, as well as providing the biggest boost to the 19 UK's international connectivity." 20 At the end of that paragraph, over the page: 21 "Overall the Heathrow northwest runway scheme is 22 considered to deliver the greatest net benefits to the 23 UK." 24 At the end of the next sentence, after the 25 mitigation measures: 85 1 "With these safeguards [relating to mitigation] in 2 place the government considers that the northwest runway 3 scheme delivers the greatest strategic and economic 4 benefits, and is therefore the most effective and 5 appropriate way of meeting the needs case." 6 Now, that is a case, a set of reasons advanced 7 comparing the two Heathrow schemes on their planning 8 merits and reaching a very clear conclusion on the 9 planning merits. 10 There is no mention, as my Lords know, of any lack 11 of guarantee from HAL in the case of the ENR. It is 12 right that deliverability was one of the factors set 13 out, but the point made is not that the ENR might not be 14 delivered at all in the absence of a guarantee, or for 15 any other reasons. To the contrary, it specifically 16 notes the Airports Commission assessed the scheme to be 17 deliverable. The point made is that if it was 18 delivered, there would be lower capacity and, indeed, 19 uncertainty as it would be lower than stated. 20 MR JUSTICE HOLGATE: It is assuming deliverability in that 21 sense -- 22 MR PALMER: Yes, the question is what -- 23 MR JUSTICE HOLGATE: -- and these are how the relative 24 merits fall to be compared? 25 MR PALMER: Assuming it is delivered, yes. 86 1 MR JUSTICE HOLGATE: But the relative merits assessment is 2 driven, to a large extent, by the conclusions of the 3 Airports Commission? 4 MR PALMER: Yes, it accepts the recommendation because -- we 5 will go to it due course -- the starting point of 6 consideration, when it came to the Secretary of State, 7 after the Airports Commission had completed their work, 8 was they came up similarly with a very positive and 9 clear recommendation on the planning merits, and the 10 planning merits only, in favour of the northwest runway. 11 That is something which the Secretary of State 12 considered very carefully, looked at the underlying 13 reasons for, checked that he was happy with the reasons, 14 checked what evidence there needed to be, responded to 15 consultation, including further submissions from Hub, 16 amongst many others, further reports seeking to persuade 17 the Secretary of State to depart from the 18 Airports Commission's stated rationale. 19 As we will see, there was a lot of effort put in by 20 Hub saying the Airports Commission was wrong in their 21 conclusions on relative capacity. 22 MR JUSTICE HOLGATE: Unless there be any doubt about that, 23 if you go back to the passages you were emphasising on 24 page 233, paragraphs 3.58 to 3.60, each of those 25 paragraphs has a footnote cross-referenced to 87 1 conclusions in the Airports Commission final report. 2 MR PALMER: Yes, and just for your note, I have given you 3 those footnotes in my speaking note with the page 4 references. 5 MR JUSTICE HOLGATE: Thank you. 6 MR PALMER: So, yes. It is not a fully comprehensive -- 7 obviously, there are other passages in the Airports 8 Commission reports relevant to the same points, but it 9 is pointing to the headlines, just to give an indication 10 of where this has come from. The answer is it has come 11 from the Airports Commission. 12 But, after the process which I just summarised and 13 I pointed you to earlier, at 3.11, 3.12, the further 14 investigation, the further receipt of representations to 15 say, in Hub's case: the Commission has this wrong. 16 They're wrong about the capacity, about the merits of 17 the capacity. 18 All that process of evaluation of that new evidence, 19 as well as on many other points, leads the Secretary of 20 State to the conclusion that the Airports Commission was 21 right on the merits, which is why you get this set of 22 reasons, which essentially reflect what the Airports 23 Commission had said, but which put forward the reasons 24 then which are actually relied upon as justifying that 25 overall conclusion, that this was the most effective and 88 1 appropriate means of meeting the needs case for the 2 greatest capacity of the (inaudible). 3 That is what is ultimately driving this decision. 4 Of course, this is right, and we will see in due course 5 at one point there was a request for a guarantee, that 6 if the ENR were to be chosen, what certainty do we have 7 that it will actually be taken forward by HAL? 8 Of course, that is right that request was made. 9 But, of course, equally, logically, I entirely accept as 10 was pointed out during the course of yesterday, that 11 point falls away entirely if, and only if, but if you 12 reach the clear conclusion that on the planning merits 13 the northwest runway is to be preferred. 14 That is the conclusion that the Airports Commission 15 reach. That is the conclusion that the Secretary of 16 State reach. It is set out here -- and the government 17 reached, I should say. It is set out here, in terms, 18 that is our conclusion. 19 Now, when this claim was first advanced in the claim 20 form -- you will recall because we made something of 21 it -- it was said: these reasons are bogus. 22 Now, that submission has not been pursued following 23 service of our defence and our evidence, you have not 24 heard a submission from Mr Kingston that the reasons 25 contained in the ANPS are bogus. 89 1 They are original statement of facts and grounds, 2 amended statement of facts and grounds, even. It could 3 be said that the real reason was the lack of 4 a guarantee. So, on the face of it, this was a claim 5 brought to this court inviting the court to find that 6 you can disregard what was put forward, what was 7 consulted upon, what was accepted, the 8 Airports Commission's own recommendation. 9 Set all that aside, and say the real reason was 10 simply lack of a guarantee. 11 Again, I will show you that is simply wrong. Of 12 course, I accept the point was taken into account, in 13 the sense that it was requested. It is common ground 14 that a request was made. Of course, it is right that 15 the Secretary of State, in particular, was concerned, 16 and told the Cabinet subcommittee that he was concerned, 17 that if it were chosen, there was a lack of certainty as 18 to whether it would come forward. 19 But it does fall away if the government then makes 20 the decision that that aside, the northwest runway is 21 the better scheme on its merits. It just doesn't touch 22 the point. 23 Just return to my speaking note. I was at the third 24 bullet point on that page. It would have been helpful 25 to number them, I can now see. 90 1 The speaking note put forward and the submission 2 made by Mr Kingston -- note it's 6.4 and 6.5 of speaking 3 note 1 -- is incorrect. He suggested that the Secretary 4 of State had changed the position from the detailed 5 grounds of defence and was now saying that the lack of 6 guarantee was a matter set out in the ANPS. My Lords 7 may recall that submission being made. 8 That is emphatically not the case. Nothing in our 9 skeleton argument says so. The argument relies on 10 a distortion of our skeleton argument and it relies in 11 particular on reading the word "deliverability" as 12 referring only to guarantee. It makes that equation. 13 It tries to collapse those two distinct things into one. 14 The guarantee might have been an aspect of 15 deliverability, but it is not deliverability in all its 16 aspects. 17 The way we refer to "deliverability", we mean 18 deliverability in all its aspects, in particular the 19 deliverability concern and reason that was actually put 20 forward in the ANPS. It is self-evidently not 21 a reference to the lack of a guarantee, and it has never 22 been put forward by the Secretary of State as being so. 23 We then say that grounds 1 and 2 therefore, of the 24 challenge, are directed as a matter which form no part 25 of those reasons. The grounds are bad, in my 91 1 submission, in their own right. In due course, I will 2 be submitting they are bad at every single stage of the 3 analysis upon which they depend. 4 But the wide focus point I make at the outset is 5 they are misdirected because they concerned a matter 6 which didn't ultimately form any part of the ANPS. In 7 particular, that judgment as between the merits of two 8 schemes. 9 Grounds 3, 4 and 5 are different. They were 10 directed at each of the three actual reasons given. The 11 court will know that ground 3 previously directed the 12 issue of capacity and respite is no longer pursued. But 13 it is still said the reasons were inadequate in so far 14 as they related to resilience, capacity and 15 deliverability. But grounds 1 and 2 are not directed at 16 those reasons as given. I say that is a problem for the 17 claimant's case, and it is instructive to look at how 18 that problem is dealt with. I have foreshadowed this in 19 what I said earlier. They began by suggesting it was 20 manifestly bogus, and the real reason was something 21 else. 22 In their skeleton argument, there is no repetition 23 of that and there hasn't been before my Lords. But, 24 instead, there is in the skeleton argument a hitherto 25 unheralded suggestions that surviving grounds 4 and 5 92 1 served to emphasise the real reason for not selecting 2 C's bid was that the defendant had a predisposition to 3 the status quo ante of HAL at Heathrow. I haven't heard 4 that predisposition allegation previously being 5 developed in any sense. 6 The only support given in the skeleton argument is 7 a footnoted reference to an entirely irrelevant 8 document, which is a ministerial submission of the 9 7 March 2018, discussing why -- and we'll go to it later 10 in a different context -- it is important for the 11 Department for Transport at that stage to have 12 a particular relationship with HAL, in light of the 13 decision to prefer the northwest runway, in light of its 14 unique status as owner of the land, owner of the IP 15 rights in the scheme -- more important, obviously, now 16 it has been chosen -- as a statutory undertaker and so 17 forth, who would have to be involved in the delivery of 18 the NWR scheme whether or not it was delivered in 19 conjunction with or in collaboration with others, such 20 as Arora. That is what that submission is all about. 21 Post-dating the preference decision, giving no 22 suggestion at all that there was some sort of 23 predisposition before the preference decision, leading 24 to the preference decision to favour HAL. 25 Then it is asserted that it is therefore 93 1 unsurprising that the reasons attacked undergrounds 4 2 and 5 are transparently thin. I am not quite sure what 3 that means, but insofar as directed at weight, obviously 4 not on an addition at ground to JR, but I make the point 5 at this stage that -- this is not in the note -- but 6 obviously that significant weight was put on the 7 Airports Commission's report and findings, as we were 8 entitled to do. These were all reasons which come out 9 of the AC's work and were confirmed by the further work 10 that the Secretary of State undertook. 11 It is suggested in Mr Kingston's first speaking 12 note, for reasons I didn't understand, that the 13 Secretary of State was now seeking to distance himself 14 from the Airports Commission's report. I don't 15 understand that. The Secretary of State is not 16 distancing himself from the Airports Commission's 17 report. He is adopting its recommendation on the basis 18 of reasons and matters it identified and which the 19 Secretary of State shares. 20 So, this analysis of the real reason being something 21 else proceeds as if the recommendations of the 22 Commission had not been made, and had nothing to do with 23 any lack of guarantee, as if the statutory process of 24 consultation and parliamentary approval of the proposed 25 ANPR the government had put forward had never happened, 94 1 and it is an invitation to the court to assume -- I say 2 without justification -- the reasons identified by the 3 Commission and advanced by the government as justifying 4 the policy choice throughout a statutory process should 5 not be treated as the reasons by which the lawfulness of 6 the decision to designate the ANPR should be judged. 7 MR JUSTICE HOLGATE: Can I ask about that sentence? When 8 you say "should not be treated as the reasons", do you 9 mean "should not be treated as the sole reasons"? 10 MR PALMER: Well, they should not be treated as the decisive 11 reasons, is the submission. 12 MR JUSTICE HOLGATE: At some stage, you are going to have to 13 assist us in how we are to deal with Ms Low's second 14 witness statement. 15 MR PALMER: I certainly will. If I may, I'll deal with the 16 it in the chronology. I know it is a burning question 17 in my Lord's mind, but if I may, I will come to it in 18 chronological order. 19 I have referred there to paragraphs 6 to 8 of my 20 skeleton argument. They effectively make those points. 21 At paragraph 7, I say there's good reason why the 22 defendant didn't include any mention of the absence of 23 a written guarantee from HAL in any of those statements 24 in the ANPR, and that is that the planning judgment at 25 the heart of the decision to what referred did not 95 1 depend on it. The ultimate judgment was the scheme to 2 provide the greatest strategic benefits. 3 I then make the point that, of course, that could 4 have been different, as in the potential relevance of 5 the guarantee, if the underlying planning assessment had 6 been different. So, for example, if the government had 7 concluded that the merits of the NWR versus ENR were 8 equally placed, it might have come into the 9 decision-making process: well, one has more certainty of 10 being delivered than the other. That may be considered 11 a material consideration. 12 There could be arguments about whether that would be 13 right or not. That was clearly the spirit in which the 14 point was being explored in the first place. 15 Equally, if the ENR had been favoured on its merits 16 as preferable on its planning merits over the NWR, then 17 it might have been relevant to consider: well, if that 18 is the favourable scheme and we've no assurance it will 19 be brought forward, how does that affect our decision? 20 But these are hypotheticals, roads which the Cabinet 21 subcommittee might have gone down had they formed 22 a different view of the merits. But, as we know from 23 the ANPS, they formed the same view of the merits as the 24 Airports Commission had done. 25 LORD JUSTICE HICKINBOTTOM: Could your submission be put in 96 1 this way: the reasons that are given in the NPS, those 2 are, you have used the word "the decisive reasons", 3 those are the actual, but decisive reasons. 4 MR PALMER: Yes. 5 LORD JUSTICE HICKINBOTTOM: Therefore, whatever the position 6 with regard to the guarantee was immaterial. I don't 7 use that term in any planning, term of art sense, but it 8 was immaterial because it didn't matter. 9 MR PALMER: It didn't matter. 10 LORD JUSTICE HICKINBOTTOM: Because whatever the result of 11 that -- 12 MR PALMER: I do make that submission. Were this a pure 13 permission hearing, that is the point I would come to 14 you in my half hour and make. That is the point I would 15 make, and say why this case should go no further. 16 Because even if ground 1 was fully justified, for 17 example that it was a breach, taking my learned friend's 18 case at its highest, assume for the purpose of 19 submission it was a breach of Article 106, taken with 20 102, for the request to be made. The question is: what 21 materiality -- that might justify declarations saying it 22 was a breach of Article 106 that the request was made. 23 That could be a remedy. 24 Whether that does any good for the claimants, that 25 is another matter. They could go off and make a damages 97 1 action if they wanted to, in reliance on that 2 declaration if they thought they had a case on causation 3 or whatever. 4 That would be the effect. 5 But does it impact on the lawfulness of the ANPS? 6 No. That is my high level submission. That's the 7 conclusion that this whole speaking note you have now is 8 directed towards arriving at, at the same time as 9 covering the factual matters on reasons and -- 10 MR JUSTICE HOLGATE: That is your high I highest level 11 argument. 12 MR PALMER: There is a short answer to grounds 1 and 2, and 13 of course I will deal with them both on their full 14 merits, but that is the short answer. I am going to 15 deal with what I say are the reasons, first. But I say 16 once the court is able to satisfy itself that adequate 17 reasons were given in support of that planning judgment, 18 and that judgment didn't depend on the presence or 19 absence of guarantee, then grounds 1 and 2 simply become 20 a sideshow, are the words I use there. 21 LORD JUSTICE HICKINBOTTOM: Yes, they would still be quite 22 a big sideshow. 23 MR PALMER: Quite substantial and extremely elaborately 24 produced, with a great deal of sophistication and 25 knowledge and learning, but if they don't in fact have 98 1 a nexus with the ANPS, then they don't provide a basis 2 for relief on the judicial review of the ANPS. 3 MR JUSTICE HOLGATE: The materiality point you make, 4 significance if you like, is sometimes expressed as 5 a point going to discretion. 6 MR PALMER: No. Sometimes. It can be, but -- 7 MR JUSTICE HOLGATE: Because they raise very similar 8 considerations. The decision would have been the same 9 in any event because it did not depend. 10 MR PALMER: Yes, that is -- I will certainly make the 11 submission on relief when we get there. I will 12 certainly make the submission that even if I am wrong on 13 grounds 1 or 2, then the relief granted would be 14 declaratory, and not by way of quashing the ANPS because 15 of the lack of that nexus. It doesn't affect that. 16 Effectively, I say the government could remake the same 17 ANPS, for the same reasons, saying to anyone who wants 18 to listen, "This does not depend on any guarantee, or 19 lack of guarantee", but essentially providing the same 20 reasons that have been advanced, the same planning 21 judgment that has been advanced, and we have gone round 22 in a big circle for nothing because that is the planning 23 judgment. 24 So, my first submission to you on relief -- I am 25 getting ahead of myself now -- will be that because of 99 1 the lack of nexus there was no basis for the form of 2 relief sought -- 3 MR JUSTICE HOLGATE: Forgive me, if we get to discretionary 4 relief -- if -- the court is required to look at that on 5 the basis of the material for the decision-maker, not on 6 the basis of the material which might be before the 7 decision-maker on a re-determination. Otherwise it is 8 very circular. 9 MR PALMER: Yes, but my point is the basis of the 10 decision-maker at the time -- you have heard my 11 submission. 12 MR JUSTICE HOLGATE: So, in fact, it involves a review as to 13 what were the pertinent reasons which the decision-maker 14 had in mind at the time. 15 MR PALMER: That falls into the trap of confusing the 16 decision-maker as to the content of the policy. 17 MR JUSTICE HOLGATE: You will have to show us in due course, 18 when we go through the chronology, the separate briefing 19 material to the minister as to whether he should 20 exercise his discretion now to designate the policy, 21 because the Secretary of State had a separate function 22 as to whether to designate. 23 MR PALMER: Well, he had the power to designate, but he 24 could only designate -- 25 MR JUSTICE HOLGATE: That which had gone through the process 100 1 thus far. 2 MR PALMER: Nothing else. 3 MR JUSTICE HOLGATE: Certainly -- 4 MR PALMER: So, he could at that point have given up on the 5 project. 6 MR JUSTICE HOLGATE: He still had a discretion one way or 7 another as to whether to do it. 8 MR PALMER: Yes, he could theoretically have said, now we 9 have gone through that extensive process, had it 10 approved by a large majority of the House of Commons we 11 are not actually going to do it. In law that would have 12 been lawful but one may think, well -- it may even have 13 been irrational, to go through that and then say I'm not 14 going to do it, but that is not the key point at which 15 he had in mind some other considerations because if he 16 wanted to change the reasons, he would have had to go 17 through that process again of parliamentary approval 18 because it is not a typographical error that we have in 19 mind. 20 He had no reason to bring in other reasons at that 21 point. He had the authority of Parliament to do it for 22 the reasons which had been given in the statement as 23 being decisive. 24 Before I get to grounds 4 and 5 can I deal briefly 25 with respite. I don't want to take too much time 101 1 because obviously it is not a matter before my Lords 2 but, as I say, it does have implications nonetheless. 3 Obviously the point on respite is one on which 4 considerable weight was attached during the 5 Airports Commission process, and I have given you the 6 reference to that. I don't need to turn it up now but 7 you can see what they say about it. In particular, that 8 respite is particularly valued by local communities. It 9 is not hard to see why that would be so. 10 But equally, it has an impact on capacity and that 11 is not now challenged. Of course when the challenge was 12 first brought about the reasons for capacity and so 13 forth. Also in issue was the matters relating to the 14 effect of the respite measures on capacity. That is no 15 longer so. 16 So if you were to turn up, I have given you the 17 reference but I won't do it now for reasons of time, but 18 I do ask you to turn up the amended statement of facts 19 and grounds at paragraphs 54 and 59 to see what was 20 being said. Essentially what was being said is that we 21 put in all this further evidence in relation to respite 22 capacity. You haven't taken it into account, Secretary 23 of State, you haven't, to use their word, "grappled" 24 with it. But it is now accepted that it was taken into 25 account and it was grappled with. 102 1 Then resilience and capacity which is ground 4. 2 There has been some trouble in the way this is put. It 3 was originally formulated in two paragraphs of the ASFG. 4 I have given you the reference. The reason why it was 5 only as brief as two paragraphs is it followed on from 6 the now abandoned ground 3, which is not only have you 7 not taken these matters into account and grappled with 8 them, but you then didn't give adequate reasons in 9 support of the same matters. So of course there is an 10 impact of that once it is accepted that those points 11 were grappled with. 12 So what is now done, and this came by way of reply, 13 instead of that criticism there is a new witness 14 statement produced at the reply stage for the first time 15 from Mr Jock Lowe asserting that because both schemes 16 proposed two segregated mode runways and only one mixed 17 mode runway, it must follow that both schemes provided 18 identical capacity. That is the way it is pleaded in 19 the reply and that is the way you heard it this morning 20 from Mr Kingston. The defendant's alleged failure to 21 recognise that point is said to be a manifest error with 22 the supposed result that the reasons are not adequate 23 and intelligible. 24 I say that submission is wrong on the facts and 25 wrong on the law. I will deal with the facts first to 103 1 give a sense of direction. On the law I say this point 2 as now put is nothing to do with the adequacy of 3 intelligibility of the reasons. This allegation of 4 manifest error is in fact an allegation of Wednesbury 5 unreasonableness or irrationality and nothing else and 6 that is the way it is being advanced in substance. 7 I want to show you that there was an evidential base for 8 it and in particular for the identified difference in 9 capacity between the northwest runway and the ENR. That 10 is the key point that there was a difference rather than 11 being necessarily the same by virtue of the operation of 12 the runways. 13 The starting point is that the claimants submitted 14 their scheme to the Airports Commission, estimating 15 their own scheme capacity to be 700,000 air traffic 16 movements per annum. I have given you the reference for 17 that. 18 Meanwhile HAL submitted their scheme to the 19 Commission, again estimating their own scheme capacity 20 to be 740,000. It is important for the court to 21 understand that the starting point here is that these 22 figures were generated by those who were proposing these 23 solutions. They are not independently reached by the 24 Airports Commission. They were however subjected to 25 a process of validation, of sense checking: are we happy 104 1 with those estimates? Are we content that we can take 2 those proposals forward, these proposals forward on that 3 basis? Mr Graham explains -- we certainly we won't go 4 through it now, I have given you the reference there -- 5 how the Airports Commission did that exercise. 6 There are of course consultation responses to the 7 Airports Commission including Hub's own response 8 challenging the identified difference due to respite. 9 Perhaps I can take out bundle 15 now to track this 10 point through. The first reference is bundle 15, tab 7 11 which is Hub's response to the Airports Commission 12 consultation. At page 121, you can see the way they put 13 their point. It is only briefly put but it says: 14 "The Commission's assessment assumes the ENR has 15 a lower capacity than the NWR. The consultation 16 material notes the difference then of capacity between 17 the two options is due to operational constraints during 18 the early morning and late evening period during the 19 Heathrow Hub option which would have to be reduced to 20 provide local communities with respite. Our additional 21 work confirms that in fact they provide the same 22 capacity and similar opportunities for respite. The two 23 schemes should therefore be assessed on the basis of the 24 same capacity." 25 That's the sort of headline point which is put 105 1 forward. Then the response was that the Jacobs report 2 was commissioned. You have that at tab 11 of the same 3 bundle. You have seen it already. Can I just draw out 4 some points for it. 5 The first relates to the context in which these 6 numbers, specific numbers must be viewed. Page 190. 7 MR JUSTICE HOLGATE: Sorry, will you forgive me for 8 a moment. Maybe I have misunderstood this, but 9 I thought the complaint that was being made by the 10 claimant under this ground was that there was an error 11 on the part of the Secretary of State, a factual error, 12 if you like, as to the basis upon which the three runway 13 scheme would operate because it was assumed that there 14 would be three independent mixed mode runways. 15 MR PALMER: Yes, that comes from the Jacobs report we are 16 going to now. 17 MR JUSTICE HOLGATE: I see. That point is not made in this 18 paragraph. 19 MR PALMER: No, it is made later after the Jacobs -- 20 MR JUSTICE HOLGATE: You would expect that criticism to be 21 made --I see. 22 MR PALMER: Yes, their starting point was our respite 23 arrangements don't lead to a reduction in differential 24 between capacity, it should be the same. 25 MR JUSTICE HOLGATE: But there is no criticism of the use of 106 1 the 740,000 ATM figure for the HAL scheme as such. 2 MR PALMER: No. 3 MR JUSTICE HOLGATE: I just wanted to make sure I ... 4 MR PALMER: That is right. Just to be clear, on page 190 5 the second paragraph on that page, it is important 6 context: 7 "Airport capacity is not an absolute value, but 8 depends upon a number of factors, in particular capacity 9 depends upon the airlines' tolerance of congestion and 10 delay, and the airport operator's aspirations for 11 resilience and reliability." 12 Resilience, it may be obvious, relates to the level 13 of delay and cancellation. So of course you can pack 14 more in but you'll run a greater risk of delay and 15 cancellation. 16 Then the following paragraph is helpful. I ask you 17 to scan through that: 18 "Therefore the processes considered [that is the 19 considered by this report] are ..." and there are three 20 discrete points: 21 "Landing and take-off, ie use of the runways." 22 Then: 23 "Taxiing between runway and apron, ie use of the 24 taxiway network." 25 How congested is that going to get? 107 1 And use of the aprons, turning round on the stand. 2 Then over the page, again important context for 3 these numbers, 2.1, you see the sentence: 4 "All ATM values stated are rounded and are 5 indicative of the scale of capacity." 6 They can't be treated as absolute values. 7 Then the first of those three bullet points is dealt 8 with under the heading "Runway system". You can see 9 that a figure is put forward for the maximum capacity of 10 a single runway operated in mix mode is around 60 11 movements per hour, but then the point is made that 12 practically it cannot be sustained. 13 "Consequently the practical average capacity of an 14 operational day for such a single runway is likely to be 15 around 50." 16 Then that is grossed up assuming a certain number of 17 hours per day and days per year. You get to 300,000 as 18 theoretical annual capacity. 19 "In practice, such a high use of theoretical 20 capacity is not achieved and would not be expected to 21 deliver an operation that exhibited acceptable levels of 22 resilience and remember liability. Therefore, taking 23 into account external factors the achievable annual 24 throughput is between 250,000 and 300,000." 25 The next paragraph deals with Gatwick. You can see 108 1 that would be a two runway operation if that were 2 approved: 3 "The capacity stated by GAL is 560 ..." 4 That is close to the 600 theoretical practical 5 maximum. That is what they had put forward. 6 Then similarly, three independent mixed mode runways 7 proposed at Heathrow Airport by Heathrow Airport Limited 8 could accommodate an annual throughput of between 750 9 and 900. That is obviously just taking the two figures 10 of 250 and 300 and multiplying by 3. It is nothing more 11 complicated that than that. 12 "The capacity stated by HAL of 740,000 lies at the 13 low end of this range." 14 A slight inaccuracy. It is beneath that range. 15 And it said: 16 "This reflects HAL's aspiration to enhance 17 resilience and reliability." 18 Just pausing there. The criticism made here is that 19 HAL were not proposing to run the three independent 20 runways in mixed mode, which is correct. They were not 21 proposing that, and their estimate of 740,000 didn't 22 assume that they would be operating in mixed mode. 23 But there is a theoretical approach here which is 24 saying the three independent mixed mode runways could 25 generate that figure, 750 to 900, but this figure is 109 1 below that. 2 Then you go on to Heathrow hub's proposed extended 3 northern runway and there is a difference there which, 4 regardless of what is being proposed, when you have two 5 runways in a line together in that way, it is obvious 6 that you can't operate those in mixed mode together. It 7 is just simply not possible on any view of any 8 operator's plans as to how it could be done. 9 Therefore that capacity per runway is reduced from 10 50 down to 45. So the achievable annual capacity is 11 between 220 and 280 per runway operated in that mode. 12 So adding that up you get to a theoretical maximum 13 of 850,000, but practical range of 700 to 850. It could 14 be practical to go above 700 just on the basis of the 15 mixed mode and segregated runways as described there. 16 But the capacity stated by Hub of 700,000 lies at the 17 low end of this range, indeed at the bottom of that 18 range, and so comments as to why, and it includes: 19 "Hub's additional proposal to alternate movements 20 between runways to provide enhanced noise respite." 21 As soon as you are doing that it is obvious that you 22 can't reach the top of the range, and hub weren't 23 contending that they did. 24 The analysis advanced by my learned friend stops, 25 really, at that point, and says, "Well, look, if that 110 1 was right for them, given that there are two segregated 2 runways in each case, what is sauce for the goose is 3 sauce for the gander", but of course the first point is 4 that ignores the point made about respite there. 5 Of course, if you just read across the figure 6 advanced by HAL of 740,000 ATMs, that sits also low in 7 the range of 700 up to 850 in contrast to Gatwick's 8 proposal. You can see they are assuming low, even 9 within that range. 10 Then one turns on, the second factor to consider is 11 apron system. My Lords don't need to worry about that 12 because the conclusion was neither case, that doesn't 13 provide a constraint here. 14 But then taxiway system is considered. And there 15 are various problems identified with congestion and the 16 taxiways' response, first to Gatwick's second runway, 17 then to the ENR, and then to the northwest runway. Then 18 a conclusion, on balance it is reasonable to assume that 19 the Gatwick taxiway has sufficient capacity, but for 20 Heathrow it is reasonable to know that both proposals 21 present similar capacity constraints, but the degree of 22 constraint is likely to be higher for the ENR scheme 23 than NWR given, and then those three factors. 24 So, again, that was consistent with there being 25 a difference between the two schemes, first, on the 111 1 basis of respite and, second, on that basis. That was 2 Jacobs's view. 3 I am conscious of the time. It is 1 o'clock, but 4 perhaps I could briefly just finish this document if the 5 court is content? 6 LORD JUSTICE HICKINBOTTOM: Yes. 7 MR PALMER: If you turn on two pages, you are now in 8 a grid -- this is page 197 -- providing comments on 9 observations that have been made by consultees. The 10 second -- the bottom one on 197 is Heathrow Airport 11 Limited's own comments on this. They cast doubt on 12 Hub's figure of 700,000, and then there is some comment 13 on that by Jacobs. They say that the runway 14 configuration alone could accommodate a greater annual 15 throughput than 700,000, but: 16 "In general we note that the ENR unique constraints 17 not reflected in the NWR option. Therefore it is 18 reasonable to conclude that the NWR throughput rate is 19 likely to be greater than that of the ENR scheme with 20 all other parameters being held constant." 21 Then a response to Hub's comment, in the next box, 22 on the following page, where they make the comment, the 23 second half of that: 24 "We observe that both schemes are expected to have 25 broadly the same capacity since both operate the airport 112 1 at maximum throughput of one runway for arrivals, one 2 for departure, and one for both." 3 That is the segregated and mixed mode points. 4 Then they say: 5 "We agree that the ENR scheme could achieve an 6 annual throughput greater than 700,000. However, that 7 would be achieved at the expense of noise respite. We 8 also assume that the ENR could be similarly increased 9 ... therefore, as above, it is reasonable to conclude 10 that the throughput is likely to be greater than that of 11 the ENR scheme, with all other parameters being held 12 constant." 13 Then, to round this document off, at 200 you have 14 the conclusion. The achievable annual throughput rates 15 at Heathrow are likely to be the figures as stated by 16 the promoters within comparable and reasonable 17 resilience and reliability parameters. 18 The final paragraph: 19 "The comparison of annual throughput rates 20 achievable by the schemes is more nuanced when comparing 21 with Gatwick." 22 You can see the constraints being identified in 23 relation to the ENR scheme: 24 "It is reasonable to conclude the NWR throughput 25 rate is likely to be greater than that of the ENR scheme 113 1 with all other parameters held constant. The assessed 2 throughout rates, both Heathrow schemes would be 3 expected to operate with a similar level of resilience. 4 Less flexibility ... runway layout more likely to be 5 required to impinge upon its planned noise respite 6 periods in order to maintain that level of resilience 7 when operating at 700,000 compared to NWR." 8 That was Jacobs' conclusion and, after the short 9 adjournment, I'll take you to where that goes next. 10 LORD JUSTICE HICKINBOTTOM: Thank you. I know it is very 11 difficult, but how are you getting on compared with the 12 timetable? 13 MR PALMER: I have no prospect of finishing today, I have to 14 say. If the court were prepared to sit again at 15 10 o'clock tomorrow, I could be confident of finishing 16 by 12.00. Before that causes too much alarm, it is 17 possible that some time might be able to be borrowed 18 from Mr Banner, who is going to confirm that with me 19 later. 20 MR BANNER: If it helps, I can confirm that I don't expect 21 to be more than half an hour. I will use a speaking 22 note as well, if it helps. 23 MR PALMER: Mr Banner has been budgeted an hour. 24 LORD JUSTICE HICKINBOTTOM: I am just looking at the 25 timetable as it was set out. It was designed so that 114 1 you, Mr Palmer, would finish today, but you won't. 2 I understand that. Tomorrow there was HAL, Arora and 3 then the reply. So, for HAL, how long do we think that 4 will be? One and a half hours is in the timetable, is 5 that -- 6 MR HUMPHRIES: I think that is still a reasonable estimate, 7 as both myself and Mr Facenna have to address you. But, 8 at the moment, we think that is a reasonable estimate. 9 I, too, will have a note that will allow me to perhaps 10 focus on certain things and pass over other things. It 11 also depends on the things that are covered by 12 Mr Palmer. 13 LORD JUSTICE HICKINBOTTOM: I see that. Arora, possibly 14 half an hour. 15 MR BANNER: That's right, my Lord, yes. 16 LORD JUSTICE HICKINBOTTOM: So, that's two hours. Then, in 17 terms of reply, that obviously depends upon Mr Palmer to 18 a large extent. 19 We'll, as it were, keep our eye on it. Perhaps at 20 the break this afternoon we can take a view on when we 21 should start tomorrow. I mean, there are two factors 22 tomorrow. In a sense, we'll finish when we finish 23 because we have to finish tomorrow, which is -- 24 I suggest we should perhaps start earlier rather than 25 later, but if we start earlier, the time will be filled 115 1 anyway is the other tendency. But, anyway, we'll -- 2 MR PALMER: The trouble is some of these points do require 3 to go to the documents and -- 4 LORD JUSTICE HICKINBOTTOM: No, they do, and there are some 5 points which require some proper -- 6 MR PALMER: Normally, when I go second the court has often 7 seen the document already, so it is quicker. 8 LORD JUSTICE HICKINBOTTOM: Yes, good. 2 o'clock. 9 (1.08 pm) 10 (Luncheon Adjournment) 11 (2.00 pm) 12 MR PALMER: My Lords, will recall that the Jacobs report was 13 provided for the benefit of the Airports Commission 14 process, and the Airports Commission report is in 15 volume 7, at tab 7. 16 Page 515 is the beginning of the chapter on 17 operational viability assessment, which was part of the 18 deliverability considerations, but also 12.3, you can 19 see that one of the objectives was to enhance individual 20 airport and airport system resilience. 21 Over the page, at 516, is a consideration of the 22 scheme capacity beginning "Section assessment", you can 23 see the familiar figures in the table, 740 and 700. 24 I won't take time now to go through, but you see the 25 paragraphs in my speaking note, from 12.8 to 9 and 116 1 12.11. In particular, you can see: 2 "The northwest runway scheme offers the largest 3 increase in capacity due to lower anticipated congestion 4 on taxiways and also simpler respite procedures 5 associated with that scheme could keep all three runways 6 in operation throughout the day, albeit with certain 7 runways only used for arrivals and departures at certain 8 times." 9 So, that's segregation there: 10 "The extended northern runway scheme, by contrast, 11 would be more susceptible to taxiway congestion and 12 would not operate ..." 13 So, that is the conclusion at 12.11. 14 Over the page, at 12.18, you can see express 15 understanding by the Airports Commission that the only 16 doubt that they understand that the northwest runway 17 scheme has been put forward on the basis of an 18 alternation schedule, under which one runway would be 19 used for arrivals, one for departures and one for mixed 20 mode, with the configuration changing to a set schedule 21 to provide respite for communities under the flight 22 paths." 23 It is not always the same runway performing the same 24 function. 25 Then, at 12.19, some points about the ENR by 117 1 contrast, and then the conclusion, over the page at 2 12.26. You can see I am just passing by the safety 3 considerations for the moment. We'll come back to that 4 underground 5, but the conclusion at 12.26, and the 5 final sentence. The conclusions continue over the page. 6 Different matters coming into account, and each 7 paragraph dealing with a different matter: 8 "Dealing with flexibility and scheme designs ... 9 meeting industrial industry safety and security 10 standards ... maintaining and where possible enhancing 11 ... performance." 12 We will come back to those points in the next 13 ground. 14 Then "Resilience": 15 "All three schemes represent an improvement against 16 due minimum, however this improvement is strongest in 17 the case of the northwest runway scheme, and combined 18 with the greatest degree of certainty around maintaining 19 the proposed noise respite procedures." 20 Then, final paragraph, final conclusion, taking 21 everything together, final sentence: 22 "The northwest runway scheme clearly performs better 23 than the ENR scheme due to larger capacity provision, 24 less constrained airfield and greater certainty of 25 respite." 118 1 Those conclusions clearly understood the mode in 2 which Heathrow was going -- HAL was going to operate its 3 third runway, all its runways. I have given you the 4 reference to Mr Graham's witness statement at 5 paragraphs 158 to 160, where he gives evidence about 6 that understanding. 7 So, that was the Airports Commission's conclusion. 8 Just pick up here a point which arose yesterday, the 9 AC report was not challenged by way of judicial review, 10 and it is incorrect to suggest that section 13 of the 11 Planning Act would have prevented a challenge. The 12 Airports Commission was fully independent of the 13 Secretary of State, and the decision to proceed by way 14 of NPS rather than hybrid bill was only taken later, 15 in December 2015. So, a month after the final report 16 had been produced. That's reflected in the report. 17 I have given you the reference for that and, indeed, as 18 a matter of fact, the AC's interim report was challenged 19 by JR without impediment from section 13. I have given 20 you the reference to sanders. 21 So, the option would have been there. The result 22 is: there is an unchallenged conclusion by the 23 Airports Commission on this topic, as to the respective 24 capacities, which the Secretary of State, we say, was 25 evidently entitled to take into account and place weight 119 1 on, but the matter didn't stop there -- 2 MR JUSTICE HOLGATE: The only point in ground 5 is whether 3 there was some fundamental error, namely it was assumed 4 that the capacity for NWR involved three independent 5 mixed mode runways. 6 MR PALMER: Yes. 7 MR JUSTICE HOLGATE: And you have shown they didn't. 8 MR PALMER: They didn't. 9 MR JUSTICE HOLGATE: That was the simple point you made in 10 your skeleton. 11 MR PALMER: That is a simple point. 12 MR JUSTICE HOLGATE: The only point that is made to the 13 contrary in the claimant's skeleton is: that is not 14 correct. Look at the one paragraph reference, page 191 15 of the Jacobs report. 16 MR PALMER: They go further. 17 MR JUSTICE HOLGATE: We have been through that. 18 MR PALMER: They say at no point did anyone go back to that 19 740,000, which Jacobs produced on the basis explicitly 20 that it was two segregated and one mixed, rather than 21 three mixed. The short answer to that is: there is 22 another chain of consultation at which this point is 23 expressly raised during the Secretary of State's 24 process, but of course if they had, they would have gone 25 back to that very simple, non-site specific analysis of 120 1 the capacity of a runway, in the abstract, depending on 2 whether it is mixed or not, and they said: on that 3 combination you get a range of 700 through to 850, and 4 there is no reason on that basis alone, just to look at 5 that parameter, to think that 740 is wrong. 6 What you then get, of course, is reasons why the 7 Commission and the experts who have reviewed this 8 endorse the conclusion that there is a differential, 740 9 versus 700, because of those reasons of respite and 10 resilience. 11 So, in other words, that it does not follow simply 12 from the fact that you are operating runways in the same 13 place that you must have the same capacity, which is the 14 central proposition put forward by Mr Low. 15 My Lord, that is right. I will move at greater pace 16 through the rest of this point, but I do need to deal, 17 because there is still, as I understand it, a reasons 18 point about this as well and it is said that we have 19 misdirected our analysis and didn't address what they 20 did. 21 I just need to show you how Hub responded. If I can 22 go back to bundle 15, it is important to see what their 23 criticism of this was because that informed the 24 Secretary of State's response to it. 25 Bundle 15, tab 18, page 266 is the front cover, but 121 1 it is at 268. Sorry, 266 you can see what this is. It 2 is Hub's comments on the Airports Commission final 3 report. At 268, you have a heading, "Capacity", and 4 they simply say in that first paragraph: 5 "The capacity. It has been demonstrated the 6 eventual capacity is equal since both systems used three 7 runways in the same configuration." 8 That is the assertion, and then they go on to say: 9 "Therefore it should be identical." 10 That is supported by the Helios report. That is 11 annexed if you turn to 274, that is Hub's expert who 12 provides an analysis of the Airports Commission final 13 report on capacity. If you look at 275, you can see 14 that is the level of the analysis which Helios put 15 forward. They say, there is a heading: 16 "ENR and NWR fundamentally provide the same 17 capacity." 18 You can see the analysis. It is just based on the 19 way the runways are operated. The point is made at the 20 foot of 275 in the final two paragraphs, they pick up on 21 the fact that the Commission's final report does 22 acknowledge that the NWR would be used in that way, but 23 then they assert therefore it should be assigned 24 a similar capacity. They make various other comments. 25 LORD JUSTICE HICKINBOTTOM: The 740,000 was the proposal, 122 1 wasn't it? 2 MR PALMER: That was HAL's own proposal, whereas Hub -- 3 LORD JUSTICE HICKINBOTTOM: I know there was a lot of other 4 things, but it was their proposal? 5 MR PALMER: Yes, it was. 6 LORD JUSTICE HICKINBOTTOM: And Hub's proposal for ENR was 7 700,000. 8 MR PALMER: That's what they put forward. That changed, as 9 you will see in a moment, because when they saw that HAL 10 had said 740 on the basis that they said our capacity 11 must be the same, therefore we are also 740. 12 LORD JUSTICE HICKINBOTTOM: No, I don't know. I recall -- 13 MR JUSTICE HOLGATE: This point doesn't go to the error 14 alleged against you. 15 MR PALMER: The reasoning does -- 16 MR JUSTICE HOLGATE: But I didn't hear any argument on 17 reasoning yesterday. 18 MR PALMER: No, but what was said is that by the time the 19 Secretary of State commissioned his own expert report to 20 look at what was being said, it was said that the expert 21 was looking at the thing, was aiming at the wrong 22 target. I just want to briefly show you that wasn't so. 23 So, you see the conclusion at the bottom of 276, 24 that is literally all they are saying. It says the same 25 fundamental capacity because they are operating in the 123 1 same way. 2 That doesn't engage with the full reasoning of the 3 Commission, but it does allow the Secretary of State 4 properly to take that point into account. 5 Oakdene Hollins, I won't take you to it, but I have 6 given you the reference there. It emphasises the 7 advantages of NWR persist. It doesn't revisit the 8 numbers, but in my submission it doesn't need to. The 9 point is about the relative difference. 10 The claimant responded to the consultation in the 11 draft ANPS when that was put forward, and that's in 12 bundle 17. Again, I won't turn to it now. I have given 13 you those references, and say what is put forward is 14 inexplicable because they are simply ignoring what has 15 gone before and not engaging with the reasoning. 16 The point I do ask you to take from that document is 17 to note the direction of the submissions. It is not now 18 and was at no point a critique of NWR's assessed 19 capacity of 740. At no point do they say that is wrong. 20 It should be 700. They were going in the opposite 21 direction. 22 MR JUSTICE HOLGATE: What they were saying is: it should be 23 the same. We don't mind what it is. 24 MR PALMER: But they were doing that by putting theirs up, 25 rather than trying to argue NWR's down. That -- 124 1 MR JUSTICE HOLGATE: Which is now the alleged error. 2 MR PALMER: Which is now the alleged error, that we didn't 3 look at that. That wasn't how it was put. 4 Anyway, given that these are not absolute numbers 5 and are indicative, the key point is that -- 6 LORD JUSTICE HICKINBOTTOM: They should have been the same. 7 All reports were different. 8 MR PALMER: Or the same. Whichever way you look at that 9 question, you end up with the same answer. That is the 10 basis -- the Transport Committee heard evidence from Hub 11 and they raised a question, they said, "We haven't seen 12 evidence about this from the Secretary of State. We are 13 concerned about that". That led to the Commissioning of 14 the York Aviation report, and far from supporting the 15 claim that ENR could reach 740, it cast doubt on whether 16 it would achieve 700 in practice. I have given you the 17 reference for that. 18 Again, we know that 700 was ultimately accepted on 19 that basis, so I don't need to go into detail, but it 20 was certainly -- made the point that if the same working 21 assumptions were applied to both runways as -- to 22 northwest runway as Hub were now proposing, then the 23 capacity of the northwest runway would be higher still. 24 Whichever way you looked at it, on a like for like 25 basis, northwest runway came out higher. 125 1 I have given you references to the same points again 2 being advanced to the Prime Minister and to the 3 Secretary of State by Hub, the same points again, 4 responses being provided, taking it all into account and 5 providing the answer that they stood by the same 6 capacity assessments. 7 Then, finally, the ministerial submission on 8 25 June. Just pausing there. That I think was the date 9 of the parliamentary vote in favour of the resolution. 10 It was the -- the NPS was the following day, that the 11 Secretary of State did exercise his discretion to 12 designate the NPS following that. That is the last 13 ministerial submission before that act of designation. 14 I point that out because my Lord Mr Justice Holgate was 15 asking about that specifically earlier. If I may take 16 that to hand. It is bundle 18, tab 12. You can see 17 that the summary at the top is: 18 "This submission seeks your view on whether or not 19 you are minded to designate the proposed Airports 20 National Policy Statement following the debate and vote 21 in the House of commons today, and in light of 22 anticipated legal challenge." 23 There is a recommendation, there is the background, 24 and then the "Consideration", over the page, again 25 highlights correspondence from Heathrow Hub. This is 126 1 still on the point, the dispute about the differential 2 capacity. Hub were making submissions on this right up 3 to the last moment, and you can see there is reference 4 to the York report, York Aviation. A reference to 5 a further report from Hub. No change. 6 The point is that even at this last moment, this is 7 the final moment of exercise of discretion of 8 designating the NPS, it is a merits based assessment. 9 In this case, here standing by that critical difference 10 in capacity, which explains the difference in net 11 economic benefits which arise from the two schemes and 12 the capacity of each rival scheme to fulfil the 13 identified need. 14 MR JUSTICE HOLGATE: Was it being suggested, in that 15 material from the Hub, that the HAL capacity had been 16 overassessed? 17 MR PALMER: No, it is -- we could check, so I could be 18 confident, but my recollection at the moment is it makes 19 the point they had been arguing, which -- they still 20 could get up to 740. 21 MR JUSTICE HOLGATE: The change in tack. 22 MR PALMER: It is that point. Even if they had changed 23 tack, it doesn't really change the argument because 24 those are figures -- the initial evaluation of those 25 figures just proceed from being in the right range, and 127 1 then you are looking at: what are the relative 2 differences caused by respite, resilience and other 3 risks? 4 I have given the references, over the page, to 5 Ms Low's statements, which deal with these matters. My 6 learned friend says of Ms Low's second witness 7 statement, it misses the point. It doesn't -- and that 8 is the point I have just dealt with and I'll leave that 9 with my Lords. 10 The upshot is that the Secretary of State accepted 11 and maintained the Airports Commission's conclusion as 12 to relative capacities, but not on the basis of any 13 misapprehension, on the basis of expert advice and 14 detailed consideration. 15 The law, I can deal with briefly, but it does 16 overlap with ground 5 as well. 17 I am aware that Mr Maurici made some submissions on 18 the duty to provide reasons and I won't revisit those. 19 I have given you the transcript references. I know 20 Mr Maurici is burning to jump up and make the 21 submissions all over again, but I'll take that as read 22 and adopt the same position. 23 In addition to the references I have given you, 24 I have helpfully been given a further reference, which 25 is day 7, page 4, line 25 through to page 7, at line 11. 128 1 I just draw that to my Lord's attention because I think 2 that is the point that my Lord, Mr Justice Holgate, had 3 in mind earlier about the extent to which the reasons 4 need to be set out in full in the ANPS and what 5 Mr Maurici had said about that. 6 MR JUSTICE HOLGATE: I think you have advanced if I may 7 respectfully say so, the discussion because you have 8 pointed out that maybe all that section 5(7) is doing is 9 imposing a requirement as to part of the content of the 10 NPS, rather than a freestanding duty to give reasons 11 when the designation decision is made. 12 MR PALMER: That's right. 13 MR JUSTICE HOLGATE: That second aspect may be covered by 14 the common law as regards Gunning 4, or Sedley 4, 15 dealing with the output of consultation. It may be that 16 if your analysis is thus to that extent correct, it is 17 analogous of what you see in the legislation dealing 18 with development plans, which require the plan-maker, 19 the local planning authority for example, to set out 20 policy, typically in bold text, plus what we've called, 21 I think, "reasoned justification", the rationale, and 22 maybe that's what section 5(7) is talking about, the 23 reasons for the policy, otherwise the rationale. 24 MR PALMER: I endorse that suggestion, my Lord. I am aware 25 that -- I don't know where they ended up in the bundle, 129 1 but I think you were given a couple of authorities in 2 support of that parallel, the CPRE case and the 3 Bewley Homes case, but -- 4 MR JUSTICE HOLGATE: I think they were on a slightly 5 different point. They were looking at whether South 6 Bucks -- which is a case on the obligation to give 7 reasons for a decision -- translates across to 8 development plan. 9 MR PALMER: Yes, the extent to which you have to deal with 10 objection. 11 MR JUSTICE HOLGATE: It was on the supposition that one was 12 still dealing with reasons for the decision to adopt -- 13 MR PALMER: Yes. 14 MR JUSTICE HOLGATE: -- as opposed to the content of the 15 policy document, its policy, plus its rationale, which 16 I think is the extra point you have added. 17 MR PALMER: The only other point which emerges out of 18 Mr Maurici's submissions on day 7, which I have just 19 drawn attention to, is the point, of course, that the 20 NPS itself can incorporate other documents by reference 21 to footnotes. For example, my Lord saw the references 22 to the Airports Commission footnotes and, obviously, 23 that becomes part of the reasons. It doesn't have to be 24 all repeated ad nauseam, obviously, and it proceeds in 25 that way. 130 1 I am grateful. 2 So, that's the duty to provide reasons. I simply 3 say that the way it is put has morphed effectively into 4 rationality -- 5 LORD JUSTICE HICKINBOTTOM: Do you say the 5(7) obligation, 6 whatever that is -- you agree with my Lord as to the 7 area it covers -- that is the only obligation? 8 MR PALMER: That depends what my Lord means by "only". 9 I would certainly accept -- 10 LORD JUSTICE HICKINBOTTOM: In respect of reasons. 11 MR PALMER: -- you need to give reasons in relation to 12 consultation responses. Obviously, having consulted, 13 you need to respond to the consultation and explain how 14 you have taken into -- or demonstrate that you have 15 taken into account the matters which were advanced. 16 LORD JUSTICE HICKINBOTTOM: Yes. 17 MR PALMER: It is just that the place for that is not in the 18 NPS itself. It may be cross-referenced. It may -- 19 MR JUSTICE HOLGATE: Nor do you need a provision in the 20 statute to that effect. 21 MR PALMER: No, not in respect of consultation responses, 22 but what is a provision of the statute is providing the 23 reasons. I say that must mean the decisive reasons. 24 LORD JUSTICE HICKINBOTTOM: In the NPS itself. 25 MR PALMER: In the NPS itself. This is what has led to our 131 1 decision. 2 There are the authorities which are cited on -- 3 there is the suggestion of manifest error, which 4 my Lords will recall. I don't accept that is a part of 5 a reasons test. 6 I don't want to push this too far because it may not 7 make any difference in the end. But that phrase 8 "manifest error" is taken from the Secretary of State 9 for Environment, Food and Rural Affairs and Downs, in my 10 learned friend's submissions. That was an EU case, 11 manifest error is an EU term, which is essentially 12 equivalent to our notion of unreasonableness or 13 irrationality. It may be possible to draw a fine 14 jurisprudential distinction, but in practical terms, as 15 our domestic courts have endorsed -- see in Mott as 16 well -- that is what it amounts to. 17 Similarly, in the Wealdon case, that was a part of 18 a district local plan quashed on Wednesbury grounds. 19 When you look at those references, it is nothing to do 20 with the adequacy of reasons. It is just the decision 21 had relied on Natural England's advice, which had been 22 proven to be irrational and unfounded. It is a classic 23 Wednesbury challenge. 24 So, I do make the point that these aren't really, at 25 the final analysis, adequacy of reasons cases at all, 132 1 and although no irrationality claim is pleaded, and we 2 are criticised for responding to the grounds as reasons 3 challenges and not as irrationality challenges, when you 4 look at the underlying material, we are nowhere near any 5 threshold for irrationality. 6 To the extent necessary, I also adopt Mr Maurici's 7 submissions on the standard of review in that context, 8 and I have given you the reference in that. 9 MR JUSTICE HOLGATE: So, in Wealdon, the local planning 10 authority adopting it, whatever it was, core strategy, 11 had regard to -- something, which was mainly advice from 12 a consultee, which was irrational. 13 MR PALMER: Yes. 14 MR JUSTICE HOLGATE: Did that advice form part of the 15 reasoned justification part of the plan? 16 It might be interesting to look at that because it 17 is a way of testing the legal analysis you were putting 18 forward earlier. 19 MR PALMER: Effectively appropriate assessment. Mr Maurici 20 appeared in that case, which is why I turned to him for 21 the authority. 22 MR JUSTICE HOLGATE: We'll look at it because you can 23 sometimes, in a local plan context, get a challenge to 24 the vires of the decision to adopt, which relates to 25 a factor which the local authority took into account, 133 1 albeit not expressed in the reasoned justification. 2 MR PALMER: I think it appeared front and central, is my 3 understanding, but you can have a look at that. It 4 depended upon that advice, and that advice was 5 thoroughly bad, so Mr Justice Jay found. 6 MR JUSTICE HOLGATE: Thank you. 7 MR PALMER: The point I am drawing from it, for present 8 purposes, is it was assessed simply as an irrationality 9 or Wednesbury unreasonable challenge. 10 Ground 5, then, is said to be another reasons 11 challenge, but in my submission it is again really 12 a Wednesbury unreasonable point. 13 This ground consistently misses the point. You will 14 be faced, when you review the statement of facts and 15 grounds, the reply, the skeleton argument that the 16 claimant has produced, with submissions that it was 17 perfectly clear that relevant authorities had decided -- 18 the CAA had advised that the scheme was safe and was 19 deliverable. 20 LORD JUSTICE HICKINBOTTOM: That is the point you made this 21 morning. 22 MR PALMER: I did foreshadow that. That is not challenged 23 in the ANPS. It is not the point of the reason. 24 My Lord has my submissions on what the point was. The 25 link with the lack of a direct global precedent is that 134 1 the uncertainty attaching to that. 2 There is a disconnect between the pleaded case here 3 and the points which are actually made. Safety was 4 never treated as a distinguishing factor. It has been 5 suggested they say that now because that appears in 6 Ms Low's third witness statement, but it has never been 7 different. 8 The key point here is it wasn't just the Secretary 9 of State sitting back and saying, "Well, it is a bit 10 uncertain, so who knows? I am not going to take any 11 advice on it". That conclusion was based on the clear 12 advice of the Civil Aviation Authority. Although you 13 were taken this morning to the supplementary document 14 which the CAA produced, you weren't taken to their main 15 published response to the Airports Commission. 16 MR JUSTICE HOLGATE: The supplementary one was the March -- 17 sorry, March 2015. 18 MR PALMER: March 2015, exactly, when the 19 Airports Commission asked them for some further 20 information. 21 Their main response to the Airports Commission and 22 that which was published and available is that it is 23 called the "CAA preliminary safety review", which was 24 produced in 2014. My Lords have that in bundle 14, at 25 tab 16. This, again, is from the Airports Commission 135 1 process. At page 396, at paragraph 1.9, making the 2 obvious point: 3 "All aerodromes and ATC units expected to meet 4 safety standards or put in place mitigations addressing 5 the risks that the standards intend to alleviate. Often 6 the safety mitigations required will have an effect on 7 other operational performance, such as the likely 8 capacity, noise footprint or use of the aerodrome. The 9 more well established a procedure is at other airports, 10 or through the availability of international standards 11 and recommended practices, the easier it will be to 12 determine whether the mitigation is (a) suitable for the 13 risk it is trying to address and (b) anticipate other 14 impacts. Conversely, the more innovative a proposal, 15 the greater the task of safety assurance and the harder 16 it will be to predict the suitability of any particular 17 mitigation measure." 18 So, it is hard to predict what they'll be and 19 therefore it is harder to predict what the impact of 20 them will be. Over the page: 21 "Safety assurances can only be accepted after the 22 proposal approaches the approving authority with a fully 23 detailed concept of operations for how it intends to 24 meet the various safety requirements placed on it by the 25 applicable rules and regulation. Since these details 136 1 may change, for example, as a result of the conditions 2 placed and operated by planning consent, this can only 3 happen following the Commission's final report, the 4 government's publication of its ANPS, and planning 5 consent is granted. Also, some sign-offs might not be 6 possible until the operation itself can demonstrate 7 compliance." 8 So, it is not a question of the Secretary of State 9 being able to make further inquiry to progress that 10 point at this stage -- 11 MR JUSTICE HOLGATE: Because it is dependent on detailed 12 design. 13 MR PALMER: It was just an unknown. It was a known 14 unknown -- 15 MR JUSTICE HOLGATE: At least that is the advice government 16 has given. 17 MR PALMER: -- as you might say, with greater uncertainty 18 attaching to the more innovative scheme. You were told 19 in evidence earlier that there are no parallel three 20 runway airports, like the northwest runway. I am told 21 by the DfT that is not right, and Beijing is a good 22 example of an existing airport with a similar layout of 23 three parallel runways, including one offset. 24 So, clearly that is the point of principle first 25 made here at 1.9 and 1.10. 137 1 Then, if you go on to page 404, that is linked 2 expressly to Hub's proposal. 3 At 2.27: 4 "The design is a novel concept without any 5 pre-existing standards or experience globally ... 6 open-minded about safety assurance ... particular safety 7 concerns must be resolved ... need to review and make 8 a decision ... in the event that safety risks cannot be 9 mitigated sufficiently, it is expected that dependent 10 operations could be conducted, but this would result in 11 lower capacity and/or less operational flexibility." 12 I shall not read it all out, but can I just direct 13 your attention -- this section goes on all the way 14 through to 2.42, and I would invite you to read that 15 section for completeness. May I just draw out at 2.34, 16 on air traffic management, the promoter suggesting up to 17 five different modes of operation a day: 18 "... which has the potential to increase risk of 19 human error." 20 I think that is connected with the respite 21 proposals, that is why. So, that would have to be 22 assessed. 23 At 2.36: 24 "If missed approach procedures cannot be adequately 25 resolved and two northern runways will require 138 1 dependency, for example, departing aircraft may need to 2 be held until an arriving aircraft has touched down and 3 is under safe breaking control. This is likely to 4 reduce the capacity of the two northern runways or 5 reduce the opportunity to respite, and will require 6 further modelling." 7 So, it is emphatically not saying that this can't be 8 done, but it is saying there is uncertainty as to how 9 this will need to operate to be safe, and that may have 10 an impact on capacity. 11 You get that summarised at page 407 to the same 12 effect. 13 These passages I have pointed out in my skeleton 14 argument. My learned friend doesn't deal with them in 15 his submissions or note. 16 The supplementary comments, which were asked for, 17 don't change any of that advice. There is no rowing 18 back from any of it. It is a much briefer document. It 19 is at bundle 15, tab 8. The question is at page 155 20 that you were shown earlier, how long the CAA would 21 expect it would take to develop the scheme, what the key 22 risks would be, how the CAA would expect those risks to 23 be mitigated and how long that would take, and 24 a comparison, in terms of how long you would expect 25 approval to take. 139 1 None of that touched upon the points I have just 2 taken my Lords to and the points which were ultimately 3 relied upon in the decision. So, the focus here is on 4 the length of time it would be produced -- it would take 5 to be produced and, of course, there is a difference 6 identified in respect of the different times it would 7 take for various different approvals. 8 At page 157, second paragraph under paragraph 4: 9 "No out right showstoppers for any of the schemes 10 have been identified." 11 That is the preliminary: 12 "However, there are a number of risks that may have 13 impacts on cost, capacity or the environment. 14 That is simply summarising what has already been 15 said on that point, not changing it or repeating it 16 unnecessarily. 17 The Airports Commission final report, which was 18 volume 7, tab 7 again, page 511. 19 I have been accused of placing too much emphasis on 20 this paragraph, but the paragraph speaks for itself. It 21 is confirming that the furthest runway could be operated 22 in a safe manner: 23 "... but confirming this finding is likely to 24 require years of work with both UK and international 25 safety regulators, protracted process. Much of the 140 1 necessary work could only be undertaken at a more 2 detailed stage of development." 3 That is the key point in terms of uncertainty. 4 Then, in the operational viability assessment 5 section at 12.23, it is a passage I skipped over 6 earlier. I said I'd come back. Read that, but I just 7 point out 12.24: 8 "The CAA did note the lack of precedent for the ENR 9 concept. Indicated it would need more detailed 10 development. It was emphasised, however, that the CAA 11 remained open-minded on the concept. Open to further 12 engagement." 13 Then 12.28, which is in the conclusion section. The 14 paragraph of the conclusion section dealing with safety 15 notes that Heathrow schemes are more complicated, and: 16 "The ENR represents a novel and untested concept for 17 which substantial regulatory assurance would be needed. 18 However, all the schemes have the potential to meet the 19 present standards." 20 12.29 is what the claimant focuses on, and seems to 21 suggest that somehow waters down 12.28. That is what 22 was said this morning by Mr Kingston in his speaking 23 note. In my submission, they are simply different 24 points dealing with the different matters. In terms of 25 safety performance, of course it is absolutely right 141 1 that there were no significant points of differentiation 2 between the schemes. That is not the point the 3 Secretary of State was concerned with. 4 Then the overall conclusion, again, at 12.31. So, 5 that is the Airports Commission. 6 Ms Low sets out the basis of the concern in her 7 witness statement, but the central point in paragraph 71 8 of my learned friend's skeleton argument is a bad one. 9 He says that there is no basis for this in the CAA 10 evidence, and I have shown my Lords that there is. 11 Contrary to 74, this is not a new point that was 12 raised at the 11th hour, but one on which the CAA had 13 remained consistent from as long ago as 2014. 14 Essentially, nothing has happened since then to change 15 that, for the very good reason that the CAA gave, that 16 you can't really take this matter further forward until 17 the more advanced stage. 18 So, where does that leave us? 19 The upshot on grounds 3 to 5 is that the reasons in 20 the ANPS, consulted upon and put before Parliament, were 21 all soundly evidence based, rational, sufficiently 22 reasoned. The NWR outperformed the ENR. No infection 23 with predisposition. There is no trace of that in any 24 of those reasons. Nor are they transparently thin, 25 still less bogus. They are the reasons on which the 142 1 government has chosen to rely as sufficient to justify 2 the choice of the NWR scheme and its merits. My 3 submission it is fully entitled to arrive at that 4 conclusion, and that is the background against which 5 grounds 1 and 2 should be approached. 6 My Lords, I turn then to grounds 1 and 2 and, again, 7 I am going to deal with the factual matters that are 8 common to both at once. In particular, to see how the 9 guarantee point emerged and in what context, and in 10 particular to scrutinise the claimed origin of the 11 legitimate expectation relied on in ground 2. 12 But I give an overview, first, that once you get to 13 that point on the planning merits, the guarantee point 14 does not logically arise at all. That is the judgment 15 that was made for the reasons given, ie that the NWR 16 scheme was to be preferred on the planning merits. At 17 that point, any concern over how certain the ENR would 18 be to be delivered if it were chosen became academic, 19 but obviously not before that point. Before you could 20 say that's just academic and it doesn't matter, you had 21 to make that planning judgment. Before that judgment is 22 reached, the absence of any guarantee that the scheme 23 will be delivered remained a potentially material 24 consideration, and that is why it is referred to in our 25 skeleton as "potentially material consideration" not for 143 1 reasons that Mr Kingston suggested. 2 It was asked for -- that is the guarantee was asked 3 for -- at a stage when no such overall planning judgment 4 had been reached. The fact that there was not 5 a guarantee was reported to the cabinet subcommittee 6 when no such judgment had been reached, although the 7 Secretary of State responsible, ultimately, for 8 designating and issuing the NPS -- although he was 9 responsible, this was a government decision. It was 10 reported that there was no certainty that if the ENR 11 scheme was selected as the preferred scheme, it would be 12 built. Was there good reason to depart from the 13 Commission's recommendation that the northwest runway 14 outperformed the ENR, that would then have had to be 15 considered. But then what happened was that the 16 decision was made that the northwest runway was to be 17 preferred to the ENR on its planning merits. The 18 Secretary of State announced that decision, explained 19 that reasons would be provided for the decision in the 20 proposed ANPS to be published shortly afterwards and 21 those reasons, quite logically, do not include reference 22 to the guarantee request not being met by Hub because, 23 at that point, it ceased to be a potentially material 24 consideration. 25 That's just an overview of where I head. I want to 144 1 make those points good. We have set out the 2 chronological story in skeleton. I won't turn to it 3 now. I have given you the paragraphs there. I just 4 want to pick out some key points. After publication -- 5 MR JUSTICE HOLGATE: So, on this analysis, the guarantee 6 point was never really engaged? 7 MR PALMER: Well, no, that's not quite the submission, 8 my Lord. It wasn't engaged by the ultimate decision, 9 but you couldn't say it wouldn't be engaged until you 10 had reached the conclusion that the NWR scheme was the 11 better scheme. 12 MR JUSTICE HOLGATE: Perhaps I put my question badly. 13 I thought what this analysis was saying is that it is 14 all to do with timing. 15 MR PALMER: Yes, that's right. 16 MR JUSTICE HOLGATE: If the position was reached whereby one 17 scheme was preferred to another on planning grounds, and 18 it turned out to be the NWR, then the potential 19 materiality of a guarantee or no was not engaged. 20 MR PALMER: Yes. 21 MR JUSTICE HOLGATE: I was putting it in shorthand. 22 MR PALMER: We can argue uphill and down dale on grounds 1 23 and 2 whether the Secretary of State was right to treat 24 that as potentially material or whether that was a legal 25 error, but once he came to the point -- or once the 145 1 Cabinet subcommittee came to the point of choosing the 2 scheme on planning merits -- 3 MR JUSTICE HOLGATE: But this analysis does depend on us 4 being persuaded that factually that is correct. 5 MR PALMER: It does depend on that. I can't just assert it 6 and I want to make it good. It helps to flag my 7 direction, I hope. 8 MR JUSTICE HOLGATE: Yes. 9 MR PALMER: The next thing that happened after the 10 publication of the AC final report. 11 MR JUSTICE HOLGATE: Forgive me for just one moment. I am 12 trying to keep up with this. 13 If this is the right way of looking at it factually, 14 you wouldn't need to rely upon your earlier legal 15 analysis, about whether a matter which is not referred 16 to in the reasons can't be taken into account in 17 judicial review. I put it very crudely, but that was 18 the discussion you had earlier on. This is a purely 19 factual point. 20 MR PALMER: It is a purely factual point that I made. If 21 I need a further point, I will make a further point, but 22 to be crystal clear about this: my primary submission is 23 that on the facts this is what happened. I am not 24 trying to play some sort of magical "get out of jail 25 free card", immunity to judicial review, or anything 146 1 like that. I am just saying: look, there is a very 2 clear statement in the reasons for the decision -- that 3 Heathrow northwest runway is the better scheme. 4 MR JUSTICE HOLGATE: Forgive me, now you are referring to 5 reasons stated in the finally designated document. 6 MR PALMER: No. 7 MR JUSTICE HOLGATE: I thought. 8 MR PALMER: No. 9 MR JUSTICE HOLGATE: Or even the draft one. 10 MR PALMER: Yes, the draft. 11 MR JUSTICE HOLGATE: Yes, okay. But this analysis is all 12 about what happened up until the time the government 13 preferred the NWR? 14 MR PALMER: Yes, and the thing that happened immediately 15 after the preference decision is the publication of the 16 draft. 17 MR JUSTICE HOLGATE: Exactly, that is why I say it doesn't 18 matter, if this factual analysis is right, whether you 19 are right about what should then happen once you get to 20 publishing the draft. 21 MR PALMER: Yes, my Lord is right about that. 22 MR JUSTICE HOLGATE: I thought so. 23 MR PALMER: I am grateful. 24 So, we go back to the stage in time where the 25 Commission's final report has been publish and there is 147 1 a very clear recommendation for the northwest runway. 2 My Lords have seen that. 3 The next thing that happens, the Secretary of State 4 is keen to assure himself of the underlying basis for 5 that, and meanwhile to start engaging with each of the 6 promoters of the scheme to record a Statement of 7 Principles. 8 This was a means of better understanding the 9 deliverability of each of the schemes. That is 10 essentially what the Statement of Principles is about. 11 How is this going to work? How are you going to produce 12 your scheme? If it is preferred, what would happen? 13 How can we be assured of the deliverability? 14 From the outset, the Hub Statement of Principles 15 covered less ground, and that is precisely because there 16 were some matters, which only an existing airport 17 operator could commit to. It would have been 18 meaningless to ask Hub to commit in a Statement of 19 Principles to certain matters which were outside its 20 control, on the basis of its own proposal as to how its 21 scheme would be deliverable, which was essentially that 22 HAL would buy the rights for a total of 100 million and 23 build it out itself. That was Hub's own proposal to the 24 Secretary of State: choose this and this is how we see 25 this being delivered. 148 1 Of course, the Secretary of State is keen to 2 understand that, understand the mechanism by which that 3 would be done, and how the government could be confident 4 that what would be produced, what would be delivered 5 would be not only delivered at all, but would be 6 delivered in the promised way, in the promised fashion. 7 So, Hub's proposal was explicitly conditional upon 8 HAL's future consent and best endeavours. I have given 9 you Ms Low's witness statement on that. The references, 10 I would ask you to have a look at that in due course. 11 Can I go straight to the Statement of Principles, 12 which is at bundle 16, tab 2. This is the version as 13 ultimately executed in 2016. It was a product of many 14 meetings and negotiation, and probing and understanding. 15 My Lords can see, on page 58, under "Fundamental 16 principles", from 3.1, it is explained Hub is a private 17 sector entity promoting a scheme. It is acknowledged by 18 Hub that it would be for Hub to procure the development 19 and implementation of its scheme "in the manner outlined 20 in this Statement of Principles". 21 That is a matter for Hub: 22 "The Secretary of State and Hub both acknowledge 23 that in the event that the Secretary of State concludes 24 that it's the preferred scheme the development and 25 implementation of the scheme is conditional on Hub 149 1 reaching agreement with the operator to take forward 2 such development and implementation of the scheme in 3 accordance with this Statement of Principles." 4 The operator is defined, in 3.2, as HAL, Heathrow 5 Airport Limited. 6 Then 3.3 records: 7 "The operator and Hub have undertaken initial 8 commercial discussions regarding a possible agreement." 9 Further: 10 "Hub confirms that these discussions were paused 11 following the AC's report where HAL's own scheme had 12 been recommended, but should the government conclude 13 that Hub's scheme is the preferred scheme then HAL is 14 confident that commercial discussions regarding the 15 agreement would be resumed and satisfactorily concluded 16 with HAL in relation to the sale, licence or otherwise 17 transfer of appropriate rights, and the development and 18 implementation of the scheme to ensure its successful 19 delivery." 20 You have an expression of Hub's confidence in that 21 outcome there: 22 "It is acknowledged that the development and 23 implementation scheme would be conditional on the 24 operator undertaking appropriate due diligence." 25 Some of which the operator would wish to conclude or 150 1 commence as part of reaching the agreement which Hub has 2 acknowledged may include, but may not be limited to the 3 following and the following due diligence exercises the 4 court can see. 5 Accordingly, Hub will use best endeavours to enter 6 into the agreement with the operator within 30 days of, 7 and in any event as soon as reasonably practicable 8 after, receiving a notice of the scheme as the preferred 9 scheme: 10 "Hub will confirm in writing that this has occurred 11 and provide full details." 12 3.7: 13 "In the event that the scheme is the government's 14 preferred scheme, Hub will ... that the operator will 15 develop a detailed and robust proposal for the entire 16 funding of the scheme and also elaborate and develop the 17 scheme in accordance with part 2." 18 I am asked to read 3.8: 19 "Prior to entering into the agreement with the 20 operator, Hub will continue to fund all necessary work 21 in progressing the development the scheme in order to 22 ensure that delivery of the new runway capacity proceeds 23 in line with the government requirements and timescales 24 on the assumption that the scheme is the preferred 25 scheme. This commitment by Hub continues until such 151 1 time as the agreement is entered into and is 2 unconditional." 3 That is the funding of what can be done, but 4 obviously much of what can be done can only be done with 5 HAL. 6 So, they have a best endeavours agreement. Ms Low 7 explains in her statement, in the paragraphs I have 8 given you the reference to, that this was something of 9 a compromise for the Secretary of State in terms of its 10 hopes for deliverability, understood Hub's position. It 11 was unwilling, in principle, to have best endeavours 12 causes because this is not meant to be a contractual 13 document of that kind. Indeed, if you turn back to the 14 beginning of the document at page 58, you can see 2.1: 15 "The Statement of Principles is not intended to have 16 any legal effect." 17 And: 18 "In particular, Hub acknowledges that it does not 19 create any legitimate expectation whether substantive or 20 procedural in relation to the exercise of functions by 21 government or the CAA." 22 In 2.1.3: 23 "This statement is not legal binding and does not 24 create, evidence or imply any partnership, contract or 25 obligation to enter into a contract ... with any third 152 1 parties." 2 So, it is slightly odd to start introducing the 3 contractual language of using best endeavours, but that 4 was as much as could be done. 5 LORD JUSTICE HICKINBOTTOM: But the best endeavours started 6 after the choice of scheme. 7 MR PALMER: At 3.4, that obligation, yes, says within 8 30 days. But, as Ms Low explains, there is nothing to 9 prevent -- if Hub could -- engaging with HAL earlier, in 10 order to facilitate that. Indeed, it was hoped that 11 they would. The reason was the more certainty that 12 could be brought to what was uncertain -- 13 MR JUSTICE HOLGATE: The better. 14 MR PALMER: Here, I am not talking about the fact of 15 delivery necessarily, but because this Statement of 16 Principles could cover less ground than the other ones 17 did, the HAL and GAL ones, there is more that was left 18 uncertain. The greater extent to which that uncertainty 19 could be reduced, the better because there was less risk 20 in the project, and that does go to the merits of the 21 scheme. 22 So, the fundamental point I want to draw out of this 23 at the moment is: yes, of course the Secretary of State 24 committed to treating all equally, in terms of giving 25 them fair opportunities, to make their case and engage 153 1 with them all equally, met with them all equally, took 2 them into account all equally, but that should not be 3 confused with treating the merits as equal, 4 self-evidently. 5 But one of the points which goes to the merits of 6 the scheme is the level of certainty around its 7 deliverability, and it is an unavoidable fact that 8 because Hub were not the operator of the airport where 9 their scheme was proposed to be delivered and, on Hub's 10 own proposal, that is explicitly premised upon them 11 reaching an agreement which they had not yet reached, 12 there were levels of uncertainty associated with the 13 scheme, including as to its entire funding and so forth. 14 So, if you compare -- if you turn back one tab, you 15 get the HAL Statement of Principles. It is pointless 16 doing a full review, but the court will see that the key 17 principles, beginning from page 13. For example, the 18 key delivery milestones are set out in some detail, 19 regulatory framework, part 4. Turning on to mitigation, 20 compensation and so forth. Page 37, debt and equity. 21 There are matters all set out, but when one performs the 22 same exercise with Hub's, you get, for example at 23 page 65, on scheme design, far less certainty. 24 LORD JUSTICE HICKINBOTTOM: I am sorry, the point I made is 25 that in the fundamental principles, they are premised on 154 1 the basis that an agreement between Hub and HAL would 2 not have been made before the selection of the scheme 3 because it says all over the place, but, for example, in 4 paragraph 3.2, that both of the parties, the Secretary 5 of State and Hub, acknowledge that the development of an 6 internalisation scheme is conditional upon Hub reaching 7 agreement with the operator. 8 MR PALMER: Yes, but that agreement includes all of the due 9 diligence matters, and so forth, which are set out, 10 which are said can be done within 30 days. 11 My Lords will recall there was a point about the 12 shortness of time between the middle of August and the 13 October decision and so forth. 14 The clear point is it is acknowledged that agreement 15 had not yet been reached, therefore there was 16 uncertainty associated with that scheme. What the Hub 17 could offer is recorded as being confidence that 18 commercial discussions would be satisfactorily concluded 19 and all these matters would be resolved, and then would 20 use best endeavours, if they were given the green light, 21 and that's as far as they could go. 22 Simple submission I make at this stage is that was 23 fine in principle. That was accepted as the basis upon 24 which Hub's proposal was to be considered by the 25 Secretary of State and considered on its merits equally 155 1 with others, but an aspect, a feature of that 2 arrangement is a significant level of uncertainty. 3 LORD JUSTICE HICKINBOTTOM: Yes, I am sorry, in response to 4 my question, isn't the answer: yes? That it was 5 envisaged that the selection of the scheme, if it be 6 extended northern runway, would be conditional upon an 7 agreement with the operator, HAL. 8 MR PALMER: Yes. 9 LORD JUSTICE HICKINBOTTOM: So, this was all based on that 10 agreement not taking place before the scheme was 11 selected, but after the scheme was selected. 12 MR PALMER: Yes, it wasn't assumed that it would not be 13 because it could be produced, but that provision -- 14 obviously assuming that agreement had not been reached 15 and it is recorded that discussions had been paused 16 following the AC's report. So, if that did not change, 17 then when given the green light as a preferred scheme, 18 full steam ahead. Hub were saying, "We can do that in 19 30 days". 20 MR JUSTICE MARCUS SMITH: Mr Palmer, how does it work? 21 Let us suppose that, purely on the plan planning 22 merits, the Secretary of State and the cabinet 23 subcommittee had reached a different conclusion, that 24 they had reached the conclusion that the better scheme, 25 purely on planning questions, was the extended north to 156 1 runway. Are you saying that, at that point, having 2 reached a provisional conclusion on planning grounds 3 that was right, you then raise the question of 4 deliverability before you designate or take the 5 designation to Parliament? Is that how it's supposed to 6 work? 7 MR PALMER: There are two aspects. I can't give 8 a straightforward yes or no answer to that for this 9 reason: deliverability is obviously part of the planning 10 merits which need to be taken into account as part of 11 the overall planning judgment, but it would be envisaged 12 and indeed there are ministerial submissions on this, 13 that if that had come to that point where they had made 14 that decision, then the next stage would have been 15 further engagement, a further opportunity for Hub and 16 HAL to engage with each other as this agreement 17 specifically -- 18 MR JUSTICE MARCUS SMITH: No, no, I am talking about before 19 the matter goes to Parliament. 20 MR PALMER: Yes. 21 MR JUSTICE MARCUS SMITH: So, we are prior to designation, 22 and prior to parliamentary consideration of designation, 23 indeed prior to the Secretary of State putting the 24 proposal to Parliament. 25 MR PALMER: Yes. 157 1 MR JUSTICE MARCUS SMITH: Before all that, you have reached 2 a conclusion that on a pure planning basis, the Hub's 3 scheme is better. Now, can you raise the question of 4 deliverability and ask the hub to engage with HAL? 5 Surely what's going to happen is that HAL will say: we 6 are not going to engage? Because that's a way of 7 bringing their scheme back into play. 8 MR PALMER: That is possible, my Lord. What Hub's own 9 assessment was based upon, the basis upon which they 10 asked to be assessed, was that they were confident that 11 as soon as they were the preferred scheme, they would be 12 able to reach that agreement and do so within 30 days. 13 At that point, they say that they could do that. That 14 was the case they put forward and that is what is 15 recorded here. This is not the Secretary of State's 16 acceptance that that's all fine and without difficulty 17 because it may encounter the very difficulty 18 my Lord identifies. 19 But this records the deliverability proposals of 20 Hub. Negotiated, in the sense that the Secretary of 21 State was trying to get the best -- the highest degree 22 of confidence as to deliverability out of Hub, and that 23 is as far as it goes. 24 But, of course, if it had been that it was best on 25 the merits and the government had reached that 158 1 conclusion, and HAL had not played ball at that point, 2 well, further consideration would have to be given at 3 that point. I mean, to end up -- if Hub had nonetheless 4 sought to go forward towards a DCO and all the rest of 5 it, it could have done so on the basis of the strength 6 of compulsory purchase powers, which with go with 7 a DCO -- I will show you that in a moment -- in order to 8 wrest control of the airport. 9 But that was never Hub's proposal. They weren't 10 saying they had the finances or ability to do that. 11 They were simply trusting and asserting their confidence 12 that they could reach a deal with HAL very quickly. 13 MR JUSTICE HOLGATE: Leave aside CPO, but pursuing my Lord's 14 question, one possible way in which the difficulty which 15 you are both discussing perhaps could have been overcome 16 would have been if government decided that, on the 17 planning merits, the ENR was to be preferred, to 18 actually then proceed to incorporate that into an ANPS, 19 because once the ANPS had been designated, it would 20 carry with it the benefit of section 106(2). Any DCO 21 proposal by HAL for their alternative NWR scheme would 22 be outwith the ambit of the ANPS. It could be 23 a question of carts and horses. 24 MR PALMER: That's the -- it might have been a way forward, 25 although I will take instruction, I think there may have 159 1 been some difficulties with that, which occurs to me. 2 But, of course, Hub weren't saying that is how it would 3 proceed. 4 MR JUSTICE HOLGATE: What Hub say is one thing, but these 5 are questions which go to the law. 6 MR PALMER: The Secretary of State was considering the 7 proposals which were being put before him for 8 consideration in his policy making exercise by three 9 different promoters of three different schemes. 10 MR JUSTICE HOLGATE: To put the point the another way. 11 MR PALMER: He was saying: how is this going to work? You 12 tell me. 13 MR JUSTICE HOLGATE: Say the government preferred the ENR's 14 scheme, for the sake of argument, hypothetically -- it 15 goes back to my Lord's question a moment ago -- would 16 there have been an expectation that the agreement is 17 entered into before proceeding to the ANPS? 18 MR PALMER: There would have been because that is what Hub 19 committed to this in Statement of Principles. That was 20 the basis upon which they were asking for their proposal 21 to be considered. 22 Whether you could go to the ANPS regardless of 23 whether they succeeded in that raises a difficult 24 question, because Parliament would want to consider 25 a fully developed scheme. They wouldn't want to know 160 1 about half a scheme. They would want to know whether it 2 was deliverable. They would want to know whether it was 3 financeable. They would want to know how the financing 4 was going to work and so forth. 5 Hub didn't have the answers to that until they could 6 reach agreement with HAL. 7 Now, the level of that uncertainty might have been 8 reduced, of course, if HAL had already guaranteed that 9 they were prepared to take that forward. It would 10 reduce that level of uncertainty, but in the absence of 11 that guarantee, what you have is a degree of 12 uncertainty, to put it mildly, as to how that would be 13 progressed. 14 MR JUSTICE HOLGATE: If the planning merits were clearly 15 stacked up in favour of one scheme, a willingness to go 16 to the ANPS would be a way of breaking the absence of an 17 agreement. 18 MR PALMER: That is an interesting point, my Lord. Of 19 course, given the judgment that at no stage, whether 20 through the Airports Commission or at all, was there any 21 decision that this lower capacity, more uncertain risk 22 scheme was better. 23 MR JUSTICE HOLGATE: Perhaps I have gone too far. 24 MR PALMER: It doesn't arise, is the short point. So, it 25 raises an interesting question as to how this novel 161 1 proposal could have been taken forward had it won the 2 backing from a planning point of view. Of course, 3 my Lords have my essential submission on that. 4 MR JUSTICE HOLGATE: Earlier on, you were saying -- I just 5 want to make sure I understand how this fits into your 6 argument. It was about page 150 of the transcript: 7 "Deliverability needs to be taken into account as 8 part of the planning merits." 9 "Needs" to be taken, not just simply a discretionary 10 consideration, "needs" to be taken into account. 11 MR PALMER: When I used the word "deliverability" earlier, 12 I am using a big picture covering all the matters dealt 13 with in Chapter 11 and 12 of the Airports Commission, 14 that includes the financability as well as the 15 operational capacity, resilience, and all the rest of 16 it, the safety and everything that arises. All of that 17 falls under the heading of "deliverability", in the 18 sense of the practicality of delivering what is 19 promised. 20 As I will show you, Hub were limited in the extent 21 to which they could provide any insurance as to what 22 would be delivered was what was promised. Now, that was 23 an inevitable feature. It is not a point taken against 24 them. It is not that they were treated unequally for 25 that. It is just when you look at the merits of their 162 1 scheme, that is a feature of it. 2 MR JUSTICE HOLGATE: Yes, I understand that, but as we are 3 seeing, I think, in this discussion to some extent, 4 perhaps the treatment of these issues may depend on 5 timing. The point at which an issue of this nature is 6 taken into account. But I didn't want to misunderstand 7 you, when you said "deliverability'' -- because we have 8 seen this before with the claimants -- can mean 9 different things. 10 When you say that deliverability was a consideration 11 which needed to be taken into account as part of the 12 planning merits, were you meaning to include in that the 13 guarantee point? You may not have been, but we need to 14 be clear. 15 MR PALMER: Again, I am going ahead of myself in terms of my 16 submission and the guarantee point. 17 The essential point is: at no point was the presence 18 or absence of a guarantee intended to be -- as has been 19 put forward -- a selection criterion. What there is, is 20 concern about uncertainty and can you do anything to 21 improve your bid to reduce that level of uncertainty? 22 Answer: no. 23 Okay, well we assess it as it is. 24 MR JUSTICE HOLGATE: As opposed to it being a showstopper? 25 MR PALMER: Exactly, as opposed to it being a veto or 163 1 a pre-condition. I suppose it is the extent to which 2 that is being put forward. It was the pleaded case that 3 this was put forward as a showstopper, as a 4 pre-condition, as a veto, and now they seem more in the 5 territory of criticising and taking into account the 6 material consideration. 7 But I accept my Lord's point, that all these matters 8 do depend to a large extent on timing. 9 MR JUSTICE HOLGATE: By that I meant the stage at which -- 10 MR PALMER: The stage at which you've reached, but the 11 Secretary of State had -- 12 MR JUSTICE HOLGATE: -- they are brought into account. 13 MR PALMER: -- to prepare the government to take a decision 14 on the basis of different eventualities, wanted to offer 15 an opportunity to Hub to reduce the level of uncertainty 16 associated with their scheme. They couldn't provide it. 17 It doesn't mean: you couldn't provide it, so you're out. 18 That means your scheme is assessed on the planning 19 merits, on the basis on which you have put it forward, 20 on the basis of the Statement of Principles. Our 21 overall judgment is the northwest runway is much better. 22 MR JUSTICE MARCUS SMITH: Can you assist on time? I see on 23 3.4 of the Statement of Principles for the Hub, page 59 24 of the bundle, paragraph 3.4, provides a trigger point 25 which-is 30 days from the notice of the Secretary of 164 1 State in accordance with paragraph 1 of part 1. 2 MR PALMER: Yes. 3 MR JUSTICE MARCUS SMITH: Which is page 64 of the bundle, 4 page 9 of the document. 5 MR PALMER: Yes. 6 MR JUSTICE MARCUS SMITH: Can you assist us on exactly what 7 point of time that communication would move from 8 government to the Hub? 9 MR PALMER: May I check my instructions on that, my Lord? 10 MR JUSTICE MARCUS SMITH: Yes, because I must say I find 11 paragraph 1 of part 1 slightly delphic. 12 MR PALMER: "They take effect only if the government 13 conclude that HHL's scheme is the preferred scheme." 14 Is that the point my Lord is asking about? 15 MR JUSTICE MARCUS SMITH: Yes, what I want to understand is: 16 concretely, at what point in time is that 3.4 17 communication going to be coming? 18 MR PALMER: My understanding is on the date of the 19 preference decision, but let me just confirm my 20 understanding is correct. 21 (Pause) 22 It is the preference decision. So, as it happened, 23 it would be October 2016. That is the date of the 24 preference decision. So, had that -- 25 MR JUSTICE MARCUS SMITH: So, as at October, had it been the 165 1 other way round -- in other words, had ENR been the 2 favoured choice -- as of October and the announcement of 3 the Secretary of State to the House, the 30-day period 4 would have been triggered. 5 MR PALMER: Yes. 6 MR JUSTICE MARCUS SMITH: Thank you. 7 MR PALMER: I don't know if it need necessarily have been 8 announced to the House. I can check that, whether it 9 would have been announced or whether it would have 10 waited 30 days before announcing. 11 (Pause) 12 I can come back to my Lords on that. 13 MR JUSTICE MARCUS SMITH: That would be helpful, thank you. 14 MR PALMER: At the top of the next page of my notes, if we 15 are not there already, it is obviously right to have 16 regard to the fact that this was a case that this was 17 a feature of the proposal. I have given you a reference 18 to Ms Low's first witness statement at paragraph 127, 19 which identifies some of those further areas of 20 uncertainty, so that as a result the department is not 21 fully assured about elements of Hub's offers and whether 22 HAL would or could take them forward. That is explained 23 by Ms Low. 24 My Lords, I am conscious of the time and the need 25 for a break. I am about to embark on a review of the 166 1 matters which are said to give rise to a legitimate 2 expectation, it may be a convenient -- 3 LORD JUSTICE HICKINBOTTOM: Could you just remind me of the 4 dates for the Statement of Principles? 5 MR PALMER: It was executed in June 2016. It was never 6 signed in Hub's case because it would only be signed -- 7 MR JUSTICE HOLGATE: In escrow. 8 MR PALMER: Exactly. 9 LORD JUSTICE HICKINBOTTOM: But that's when it was settled. 10 Again, just with one eye on the clock and anxious to 11 press on, how are we doing in terms of time? Are you 12 still on to finish within two hours of the start 13 tomorrow morning? 14 MR PALMER: My Lord, yes. I will commit to that. 15 LORD JUSTICE HICKINBOTTOM: Thank you. 16 (3.15 pm) 17 (A short break) 18 (3.30 pm) 19 20 (3.30 pm) 21 MR PALMER: My Lords, after the Airports Commission's 22 report, obviously the process of negotiation and 23 Statement of Principles began. It is said by the 24 claimants that a legitimate expectation arose as to how 25 the government would respond to these issues of 167 1 uncertainty. I just want to show my Lords what was said 2 at the time, so my Lords can assess what, if any, 3 legitimate expectation arose through the defendant's 4 conduct or otherwise. 5 In bundle 15, tab 16, is a ministerial submission to 6 which you were taken by my learned friend. I just want 7 to go briefly back to that. You have seen this 8 document. It is 4 September 2015, early on in the 9 engagement process, where there is a submission just 10 informing the Secretary of State just to note: 11 "A decision to prefer Hub's scheme would require 12 additional time of around 2 months. [This is 13 paragraph 2] Although this estimate is highly 14 uncertain, DfT undertakes the engagement with HAL 15 through their Hub scheme at the same level of certainty 16 as the HAL and Gatwick Airport Limited schemes." 17 That reflects what was being proposed or emerging in 18 the Statement of Principles as to that. 19 Obviously, the estimate is highly uncertain because 20 it depends upon HAL's agreement, an agreement within 21 that time frame. 22 Over the page, it notes that DfT at that point is 23 not engaging with HAL on delivery of Hub's scheme: 24 "It couldn't do so whilst simultaneously engaging 25 with HAL on the delivery of its own scheme. An 168 1 engagement with Hub is largely limited to scheme design 2 and, as such, the Statement of Principles with Hub will 3 cover fewer areas and provide less certainty and clarity 4 about delivery. A selection of Hub's schemes will 5 require an additional two months, although this estimate 6 remains highly uncertain." 7 Explaining why. At the end of that paragraph: 8 "How HAL would engage with Hub remains uncertain." 9 In the event, obviously, that Hub were chosen. 10 My learned friend draw attention in particular to 11 paragraph 9: 12 "The implications of engaging with HAL on delivery 13 of a scheme other than its own do not form part of the 14 current considerations, but will be addressed if the 15 government chooses to prefer the Hub scheme." 16 That, of course, is a reference to the Secretary of 17 State or the DfT's engagement with HAL on delivery of 18 the scheme. 19 As my Lords will have seen by now, following HAL's 20 scheme being selected, the Secretary of State has 21 entered into a relationship framework with HAL to take 22 that scheme to the next stage, towards the DCO. They 23 were not considering, at this point, how they would do 24 that with HAL if Hub's scheme were selected. That is 25 what that is. It is not a suggestion that there was 169 1 difficulty for Hub to do what this outlined above. 2 The point which comes out of it is, inevitably, in a 3 sense as a feature of what is being proposed, there is 4 uncertainty around how that would be taken forward. 5 30 days was being negotiated. Two months, as suggested 6 here. We just don't know what would happen because the 7 situation didn't arise. 8 That is what was being considered at this time. 9 But the next reference in my list needn't be turned 10 up, unless you would like to, but it is Low, 11 paragraph 154, which is a note of November 2015. So, 12 two months on down the line, where it is noted that the 13 inclusion of the 30 days deadline to agree with HAL, 14 which was being negotiated, is a "hostage to fortunes". 15 That was noted: 16 "... if we consider this to be challenging, but it 17 is clearly stated to be Hub's commitment and view, and 18 not the government's. Hub has consistently resisted any 19 suggestion that there may be deliverability concerns 20 over its ability to reach agreement with HAL to take 21 forward its scheme if it was the preferred scheme at 22 Heathrow." 23 So, from the Secretary of State's point of view, 24 there is some uncertainty. Hub saying: we're confident. 25 We acknowledge no concerns about deliverability. 170 1 The government is keeping an open mind and noting 2 that level of uncertainty. 3 Going back to bundle 15, now at tab 17, there is 4 a meeting with Hub on 9 September 2015 and, at 262, SC, 5 who is a Hub representative, makes a point there. 6 Noting discussions up to the point of the final report, 7 which was published, and then CL, that is Caroline Low 8 for the DfT, explained that DfT has not been engaging 9 with HAL on Hub's scheme and is looking to Hub to do 10 this. DfT cannot just take the promise from Hub that 11 the package of recommendations from the Commission are 12 all accepted and assume, without information from HAL, 13 that this is what would be delivered. 14 So, Hub are saying: look, we've stopped engaging 15 with HAL. 16 The answer is: well, look, we are looking to you to 17 engage. 18 Answer: we are looking, we can't just take 19 a promise. 20 You can see an action point at page 265, with Hub to 21 provide DfT its discussions or plans -- or plans for 22 future discussions with HAL. Can I just show you the 23 cross-reference in the note, it's to Ms Low's second 24 witness statement, at paragraphs 112 to 113, which 25 I won't turn to now. Stick with the documents. 171 1 There is then a document at tab 19, 16 September, 2 just one week later. Regular meetings. 3 At the bottom of that page, you can see again Hub's 4 concern about their ability to engage with HAL, to 5 negotiate at that stage. 6 At the top of the next page, AL, who was DfT, 7 understood Hub's position, explained: 8 "The document acknowledges the nature of the 9 creation of the scheme and HAL would be involved in its 10 delivery ... explained that the fundamentals won't work, 11 unless Hub can absolutely clarify what their scheme 12 looks like, clarify surface access dependencies, how it 13 differs from the AC report ... Hub's working 14 relationship with HAL needs to be shown to understand 15 how Hub intends to deliver its scheme." 16 You can see how the discussion goes on the next 17 three bullet points. I won't read it all out. 18 At the bottom of the page, three lines up from the 19 bottom, CW, who is DfT's solicitor, Colin Wilson from 20 DLA Piper, explaining: 21 "DfT needs to understand the level of certainty 22 concerning Hub's ability to deliver the scheme if it is 23 selected, appreciating the fact that currently there is 24 no contract in place with HAL ... agreed there needs to 25 be some future discussions in place ... made the point 172 1 that the DfT was concerned over the level of 2 dependencies on government if Hub intends to deliver its 3 scheme by 2026." 4 And two bullets down: 5 "AL [again for DfT] explained that they had no 6 particular levers or powers to direct HAL to contract 7 with a private company such as Hub." 8 FM, under that, again from the Treasury: 9 "Needs to send back on the assumption that Hub was 10 chosen. Information relating to how the scheme will be 11 delivered and its potential timeframe. Reiterated the 12 view that the process is not about finding reasons why 13 not to do the best scheme. The process is not 14 a discrimination exercise and there needs to be an 15 explanation of how the scheme works." 16 The bottom of that page: 17 "... helpful to see discussions ... didn't want to 18 second guess Hub's relationship." 19 Over the page, just above section 2, again: 20 "DfT emphasising that the DfT was not here to 21 discriminate against Hub because they are not an 22 operator, but desire is to understand how they are going 23 to deliver this scheme if selected." 24 The following week and the following tab, page 358, 25 under Statement of Principles, again at the end of that 173 1 paragraph: 2 "Explained that DfT is happy to acknowledge the 3 history of Hub, discussions with Hub, future discussions 4 cannot be guaranteed by just confidence." 5 It was suggested to you that prior to what is 6 described in my learned friend's opening note of "the 7 big change", that none of these matters were on the 8 table, that there was some sort of shared understanding 9 that the Secretary of State was not looking beyond the 10 preference decision, and that isn't right. It was 11 a feature of the scheme that it's delivery was 12 uncertain. The DfT was simply seeking to understand, as 13 best as Hub could, what the proposal was, how it would 14 work, what level of certainty around its assurance would 15 be. 16 You get the consistent message, I hope, that this 17 was a matter of consistent concern throughout this 18 engagement process. 19 If you turn to tab 26 in the same bundle, it is 20 another ministerial submission to the Secretary of 21 State. We are now in February 2016. As you may recall 22 from the general chronology, at this point, rather than 23 the SOPs having been principally negotiated after the 24 first round, HAL was hopeful that the decision would be 25 made at that point. It wasn't, there was a further 174 1 round of engagement, principally to discuss further 2 mitigation measures that would be delivered in relation 3 to each scheme. 4 You can see, at the bottom of 388, just reporting 5 that there has been further engagement. I can go 6 straight to paragraph 16, on page 390, the last five 7 lines: 8 "The major challenge of engagement processes that we 9 are seeking "offers" from promoters, but cannot promise 10 anything in return, and unlike a procurement, it is not 11 transparent to promoters what criteria or weighting will 12 ultimately be applied to arrive at HMG's decision on the 13 preferred location for expansion." 14 I interpose that is a feature of policy making, 15 rather than a competitive procurement process, 16 obviously. 17 Annex 1, page 393 is a summary of promoter 18 engagement. Again, the non-binding nature of Statements 19 of Principles, and halfway down the page: 20 "Engagement, at this stage, has not been in 21 negotiation where government has been able to offer up 22 commitments, but has been a valuable exercise to clarify 23 promoter's schemes and how they would be taken forward, 24 including to gain a better shared understanding of third 25 party dependencies, which were of most concern to the 175 1 promoters." 2 Then, in particular, each of the statements of 3 principles, and then there is an outline of what is in 4 the Statement of Principles, but you will see 5 footnote 1: 6 "But to a more limited extent in the Hub Statement 7 of Principles where such matters would need to be agreed 8 to by HAL, as airport operator, in due course." 9 That's why, in annex 2, when you get a summary of 10 the mitigations which are being proposed, you get, just 11 above the HAL table, on page 395, an "NB": 12 "Please note that the plan for engagement with Hub 13 differs from those with HAL and GAL, as Hub is not in 14 a position to be able to offer assurances on scheme 15 delivery. That is why Hub is not covered by this 16 matrix." 17 Then, in HAL's case, you get a whole series of 18 environmental mitigations. Turning the page, noise and 19 local, and so forth, until you get to 400, where you get 20 the equivalent with GAL. A further detail about the 21 delivery of the scheme, which simply isn't available in 22 Hub's case. For a perfectly understandable reason, but 23 that was the basis upon which the schemes had to be 24 assessed. 25 Tab 28, 12 February 2016, this is a meeting between 176 1 DfT and Caroline Low, in particular, and Jock Lowe on 2 behalf of Hub. 3 In the fourth bullet point, again, it is being noted 4 that commercial delivery was important, and any further 5 clarity and assurance that Hub could provide would be 6 considered. 7 I hope my Lords are beginning to see that the 8 importance of Hub's original case, as against their new 9 case, by which I mean their original case as pleaded, 10 was what changed, suddenly there was a pre-condition 11 imposed a sort of black/white pre-condition, or an 12 effective veto, have you a guarantee; yes or no? That 13 is not so strongly impressed now, as I understand it, 14 and what is now being said is: look, the change was you 15 introduced a request for a guarantee as a material 16 consideration. What that sort of guarantee would have 17 done is it would have reduced some of these levels of 18 uncertainty as to future engagement with HAL. In this 19 context, it is not a novel point. The issue is: what 20 level of uncertainty do we have? They are probing 21 different ways in which they might be able to provide 22 that. 23 Obviously, I accept that if a black/white effective 24 veto, we are not going to consider you on the merits any 25 longer, unless as a pre-condition you can provide 177 1 a guarantee, that would be a change on its position. 2 But, of course, in my submission, that is not what 3 happened, there wasn't that requirement, absolute 4 requirement imposed, and that is not how the schemes 5 were considered. 6 But this issue of deliverability, and the level of 7 certainty associated with how it would be delivered and 8 what it would look like is very much at the fore. 9 By the time you get to tab 32, which is 10 now May 2016, we are getting towards, now, the 11 conclusion of the Statement of Principles' process. 12 Again, airport capacity: "final mitigations packages" is 13 the submission being made now. 14 There is the acknowledgement over the page, at 15 424(6)(c): 16 "We now have a better understanding of Hub's package 17 and how it might be delivered if Hub were the preferred 18 scheme." 19 That is acknowledged, that some progress had been 20 made. 21 At 427, over the page, proposed HHL package: 22 "The proposed package for Hub would be the same as 23 that outlined for HAL. It is assumed for these purposes 24 that HAL would take the Hub scheme forward as the 25 airport operator, but with two important caveats." 178 1 Then those are set out: 2 "You are already aware that we are not fully assured 3 about elements of Hub's offers and whether HAL could or 4 would take them forward." 5 After that, again, there is further detail on the 6 mitigation packages. 7 So, this has all been an effort which has made 8 progress, to an extent, through this process of 9 engagement and seeking to tie down what is being offered 10 and how it is being offered, to try to reduce the 11 uncertainty. But that level of uncertainty obviously 12 remains, and it is a feature, that level of uncertainty, 13 as to deliverability. 14 The last of these ministerial submissions to go to 15 is in the next bundle, bundle 16, tab 4, page 102. So, 16 this is now a submission seeking -- sorry, you see this 17 from 100. The purpose of this submission is to seek 18 approval for officials to sign a separate Statement of 19 Principles with each of the promoters. That is where we 20 have got to now. 21 Paragraph 11, consideration of Hub: 22 "Hub would not deliver their scheme themselves and 23 are reliant on HAL to do so. As such they are not in 24 a position to give assurance and commitments on certain 25 issues. The Hub SOP therefore gives a different level 179 1 of assurance on certain delivery issues." 2 If you turn to annex A, you then get more detail 3 about what those are. In terms with which are now 4 familiar you go to footnote 1 on page 104 and over the 5 page just above the second phase it is said: 6 "The Hub SOP provides assurance that if chosen Hub 7 would seek to transfer their scheme efficiently to 8 HAL..." 9 And records Hub's view of how the scheme may be 10 taken forward noting the dependencies. 11 That is the description of what the Statement of 12 Principles as ultimately signed was doing. 13 Turn now to bundle 4 and Caroline Low's first 14 witness statement. Paragraph 571, which is page 220. 15 After setting out the provisions of that SOP, explaining 16 best endeavours was signed up, implemented: 17 "In an ideal world they would have agreed Hub/HAL 18 would implement their scheme. I recognise that Hub made 19 attempts to but failed ultimately to achieve this in the 20 2016 subcommittee meeting. SOPs were drafted and 21 encouraged Hub to make progress on this issue ahead of 22 any preference decision as well as recognising that an 23 agreement could be sought after any preference decision. 24 Hub voluntarily signed up to this approach." 25 I take you to this because it is this paragraph 180 1 which in my learned friend's speaking note number 1, 2 paragraph 4.77 says provides explicit recognition of the 3 absence of agreement with HAL would not be taken into 4 account. 5 That isn't right, as you have seen all the way 6 through. The absence of agreement with HAL has always 7 been a factor which has been considered relevant to the 8 level of uncertainty in discussing the level of 9 assurance whilst trying to maximise what could be done. 10 It is obviously right that it wouldn't be taken into 11 account in the sense of it is a deal breaker. It is 12 a pre-condition. But it is not right to suggest that 13 there is any legitimate expectation that this issue, 14 which has been so carefully negotiated in order to as 15 far as possible reduce uncertainty, would somehow fall 16 out of account altogether as a material consideration. 17 We emphasise that at all times this was the 18 claimant's scheme and it wasn't for the Secretary of 19 State to enter into negotiations with HAL to obtain 20 assurance. 21 "The Secretary of State was responding to the 22 claimant's proposal for what the government's national 23 policy should be." 24 Seeking to understand that. 25 The following tab, the second witness of Ms Low, 181 1 paragraphs 119. This confirming that Hub didn't provide 2 us with any evidence on why they were confident they 3 could do a deal with HAL within 30 days of an 4 announcement. Beyond the statement Mr Clake said he was 5 confident he could do a commercial deal. There was 6 a discussion around reasonable endeavours, best 7 endeavours. 8 Hub's representative, Mr Costello confirmed that 9 Hub's were concerned that the position might be weakened 10 in front of ministers if the reference was not to best 11 endeavours. 12 "... viewed the SOPs as not being legally binding 13 documents ... and would have preferred not to use such 14 phrase but were willing to include the wording Hub were 15 seeking in their SOP." 16 Just looking at that about Steve Costello confirming 17 Hub were concerned that their position might be weakened 18 without best endeavours, it is recognising that there is 19 an issue as to delivery. They wanted to maximise their 20 position, wanted to show themselves off to the best 21 position, were anxious to have that for that reason, 22 even though it wasn't the department's preferred 23 wording. Again, it is contrary to any idea that these 24 things wouldn't be taken into account at the preference 25 decision stage. 182 1 Then at 121: 2 "I don't accept that the records don't support the 3 contention that we had agreed, far less recorded in the 4 SOP that the time for engaging with HAL to obtain any 5 assurances or guarantee would only be after the ENR 6 scheme was preferred. We had from the very outset of 7 our initial discussions in September 2015 been making it 8 clear it was for Hub to provide the department with 9 comfort on this issue and sought evidence of their 10 engagement with HAL. The wording of SOP was included as 11 it reflected the reality of the position were proposing 12 to the department about how it would have to take their 13 scheme forward if it had been preferred. Indeed, one of 14 the central purposes of the SOP was seek to provide 15 clarity on the commercial basis and deliverability of 16 the scheme." 17 And then 122 -- I shall not read it all out. You 18 can see at the bottom of the page: 19 "It is not true that the HAL's cooperation on the 20 scheme was the manner on which there was any common 21 understanding that would be left to be dealt with only 22 after the preference decision. 23 "It is true, as I said in my last witness statement, 24 it was drafted ... and encouraged them to make progress. 25 It was preferred ... providing greater certainty." 183 1 At the bottom of (iii): 2 "None of this indicated any view on the part of 3 officials the extent to which there could be any 4 certainty that the Hub scheme would in fact be 5 implemented by HAL would be irrelevant to the preference 6 decision." 7 So that is a process -- that took us to the signing 8 of the Statement of Principles in June 2016. There is 9 then the appointment of the new Secretary of State 10 in July 2016 and that takes us to August 2016 where he 11 laid a challenge. He is faced with this confidence that 12 they would do a deal and he says, "Here's my challenge: 13 can you get a guarantee?" Not as a requirement, as 14 I say, but because if that guarantee had been provided, 15 that would have relieved much of that remaining 16 uncertainty which had been identified in the most recent 17 ministerial submission. That would have been part of 18 the picture informing the level of certainty of 19 deliverability of the scheme as a whole. That does not 20 suggest that that was suddenly the be all and end all at 21 that point. Indeed, although it was suggested when this 22 claim was launched and evidence was produced on behalf 23 of Hub, that at that meeting he imposes as a necessary 24 requirement. For the first time yesterday you heard my 25 learned friend accept in his written speaking note that 184 1 he accepted that it hadn't been at that meeting and he 2 said perhaps the point hadn't even occurred to the 3 Secretary of State at that time. You can look back at 4 that in the transcript or his speaking note. 5 So it is now not being suggested that the way that 6 request was phrased at that meeting was suddenly: this 7 is a necessary requirement. You must do this. That's 8 right. That is consistent with must Ms Low's evidence 9 on the point. 10 If it had been obtained, if it was available, if 11 they could have negotiated that, it would have helped. 12 A failure to obtain it simply leaves the claimant's 13 scheme in precisely the same position as it had been 14 left at the conclusion of the Statements of Principles' 15 negotiation which is more information about how it would 16 be delivered than had previously been available but not 17 complete assurance as to whether it would be. In other 18 words, a failure to deliver it, the guarantee, simply 19 leaves Hub in exactly the position they were in anyway. 20 That request was made. You have seen the email in 21 which that challenge was followed up. It was said PPS, 22 my learned friend said. I make it clear it is the 23 principal private secretary. PPS is usually referred to 24 as the Parliamentary Private Secretary who is an MP. 25 The Principal Private Secretary is the person who sent 185 1 it, a member of the DfT, a civil servant, not an MP or 2 anything like that, just for clarity. 3 Then a response from Hub on 7 October 2016. I will 4 give you the reference. Positive talks. No substantive 5 issues it was said but a discussion was ongoing. The 6 letter cited HAL's public response. You heard about it 7 again earlier. But note, the internal note of HAL was 8 not so optimistic as Hub. Whereas Hub continued to urge 9 an optimistic view of capacity and resilience impact, 10 which meanwhile was not accepted by the defendant. So 11 again, they were still putting their case and seeking to 12 persuade HAL of these, we say, unrealistic capacity 13 estimates at 240,000 and seeking to persuade HAL that 14 their scheme would still deliver that. That is the 15 level of engagement that was going on. 16 Again, I emphasise that is a point that in fact the 17 Secretary of State had or would reject. The 18 Airports Commission in turn had rejected. 19 So it is not as if the evidence as far as we had it 20 was suggesting that as is suggested by some of Hub's 21 evidence was simply that HAL was being entirely cynical, 22 sitting back and saying, "We are not going to help." 23 The minutes I have shown you there, and can be turned up 24 in due course, show what level of engagement there was 25 and show, in effect, that HAL was resistance to Hub's 186 1 claims about capacity and resilience which were 2 justified in fact. We can't take it further than that. 3 Anyway, those were the discussions. Rather than say 4 hold on, you can't ask that, it is a breach of 5 legitimate expectation, you said you wouldn't do that, 6 they went off to try to get one. They didn't get one 7 and that fact was then reported, amongst all the other 8 matters, to the cabinet subcommittee which actually made 9 this decision. It is obviously quite a high profile 10 event. There is a lot of media attention, as my Lords 11 might recall. It is well trailed this is when the 12 decision was going to be made. 13 The paper for the subcommittee addressed all matters 14 in the round on the planning merits. This paper, as the 15 witness evidence explains, was circulated in advance to 16 all ministers who were going to be there, all the 17 cabinet ministers for full reading with explicit 18 instructions that it was not to be summarised by civil 19 servants. It was not to be digested. The requirement 20 was cabinet ministers read the paper. 21 It is at bundle 16, tab 16. The relevant part of it 22 dealing with the comparison of the two schemes is at 23 page 181 and from 95 or 94, but 94 through to 98 what 24 appears is what ultimately or similar to what ultimately 25 appears in the draft ANPS as the reasons for preferring 187 1 one over the other. You can see it is familiar 2 territory now. 3 Then at 99 it is explained that the promoters had 4 not been able to secure assurance from the airport's 5 owners that its scheme would be taken forward if it were 6 the government's preferred option although it seems 7 likely that the owners would ultimately accept it were 8 it to be the preferred scheme. 9 "It would be for the two promoters to enter 10 a commercial negotiation, the outcome and timing of 11 which could have a bearing on the publication and timing 12 of the government's draft NPS and subsequent 13 consultation. Notwithstanding this, the department does 14 not believe this would delay the delivery of new runway 15 capacity by 2030." 16 In other words, what cabinet ministers are being 17 advised here is there is no certainty but we think there 18 is a likelihood that a deal would be done. And if it 19 was the process of getting there wouldn't delay the 20 ultimate delivery of the runway. 21 That is the paper. Just to make it clear, on the 22 front page of that paper at 151 it is the scheme 23 preference paper by the Secretary of State for 24 Transport. Obviously civil servants prepared it on 25 behalf of the Secretary of State for Transport but it is 188 1 his paper to the cabinet explaining the Secretary of 2 State's consideration and view. 3 The following tab with the annex -- I can skip on to 4 a speaking note at tab 19, also prepared by civil 5 servants. 6 MR JUSTICE HOLGATE: In 99, line 4, I see the word used is 7 "ultimately accepted" and in the next sentence: 8 "It would be for the two promoters to enter 9 commercial negotiation, the outcome and timing of which 10 could have a bearing on the publication and timing of 11 the draft ANPS", implying there might be a delay. 12 MR PALMER: Yes. In the NPS, although assuming you get that 13 far and the deal is done, not ultimately in the delivery 14 of the runway is the assessment. 15 MR JUSTICE HOLGATE: Ultimately, yes. That's where -- 16 thank you. 17 MR PALMER: Sorry, if my Lord is asking me about the word 18 "ultimately"? 19 MR JUSTICE HOLGATE: I see the emphasis you are placing on 20 the last sentence. 21 MR PALMER: That is of course bearing in mind the 22 uncertainty above which is no certainty but we think it 23 likely that the owners would ultimately accept it. That 24 is as high as it can be put fairly at this stage. 25 A speaking note prepared, that is at tab 19. Again, 189 1 prepared on the basis that this is a paper which the 2 cabinet ministers have read already, but a presentation. 3 The Heathrow extended runway bit is at page 261. 4 This is just a note, but: 5 "Most of the benefits are similar to the northwest 6 scheme ... but also requires less land ... taking 7 houses. However, it provides less opportunity for 8 runway respite. It is clear, regardless of what the 9 promoter says, its operational uncertainty means there 10 is less confidence it can provide the same capacity as 11 the northwest runway. I have also had no certainty that 12 the airport will deliver this scheme if we chose it." 13 There is, to complete the picture, this is a cabinet 14 discussion, we know from Ms Low, chaired by the 15 Prime Minister. The Secretary of State's comments by 16 way of opening are recorded at paragraph 599 of Low 1, 17 if you can turn that up. It is back to bundle 4, tab 1, 18 page 228. 19 MR JUSTICE HOLGATE: Just going back to 261, you place some 20 reliance on this, don't you? It starts off, that 21 section: 22 "Extended runway ... most of the benefits are 23 similar to ...less land taken houses ... less 24 opportunity for runway respite. Operation uncertainty 25 ... less confidence it can provide the same ..." 190 1 Then the point you refer to in 4 and then the next 2 bullet: 3 "All this suggests that the AC recommendation is 4 well-founded but there are three key areas we need 5 consider." 6 MR PALMER: Yes. And then those three key areas relate to 7 mitigation measures relevant to the NWR scheme at 8 Heathrow and taking that forward. 9 MR JUSTICE HOLGATE: Yes. 10 MR PALMER: But the key point is that the AC -- that is at 11 the end of that long summary of all the points which 12 have been raised in relation to -- and set out in full 13 in the paper, that is not a substitute for the paper, 14 and the conclusion is that the AC conclusion is 15 well-founded. 16 That is the Secretary of State's opening for the 17 discussion. I emphasise at this point it is not his 18 decision. He is obviously responsible for having 19 brought all three schemes to this point in order to 20 present -- and then the Prime Minister chairs 21 a discussion and a decision emerges. You don't have 22 a minute of that because minutes of cabinet meetings 23 aren't disclosed for reasons of collective 24 responsibility, and we had that discussion of the DTR. 25 What we know is that from -- sticking with Low at -- 191 1 I was about to take you to the record of -- I mustn't 2 get ahead of myself, paragraph 199 of Low, bundle 4, 3 tab 1, page 228. There is a record of what the 4 Secretary of State said in regard to the ENR scheme. 5 Again, it is tracking. 6 "It would have lower land take and require fewer 7 houses to be demolished and compared to HAL's NWR scheme 8 ... cheaper as well ... provide more respite. It would 9 provide lower capacity. Its biggest issue was 10 deliverability." 11 My learned friend emphasised the word "biggest". 12 I emphasise the "deliverability". 13 Separate point: 14 "HHL will have been challenged to provide written 15 confirmation from HAL confirming they would adopt the 16 NWR scheme ... should be chosen. No such confirmation 17 had been received. No other commercial airport in the 18 world operated the model that was being proposed using 19 an untested approached at one of the word's busiest 20 airports. Heathrow would be risky." 21 That being a point going ultimately in the decision 22 to deliverability. 23 In summary, the Secretary of State set out a number 24 of reasons why the NWR scheme was preferred over the ENR 25 scheme during the October subcommittee. He did so by 192 1 providing a high level summary of the matters which have 2 been set out in more detail in the subcommittee paper. 3 I emphasise the points about uncertainty of delivery 4 and all about "if it were preferred". The 5 recommendation was the Airports Commission 6 recommendation be followed. 7 At 601 of Caroline Low you see there is an extensive 8 discussion -- overran. The Prime Minister said it had 9 been a very good discussion. After the cabinet had 10 noted the outcome the Secretary of State announced by an 11 oral ministerial statement on the same date that the NWR 12 was the government's preferred scheme for airport 13 expansion in the South East. 14 So that was the outcome of the subcommittee meeting 15 and then noted by the cabinet, at that point collective 16 responsibility against them all. 17 MR JUSTICE HOLGATE: Just going back to 599, land take dealt 18 with in (a); (b), respite point, (c), lower capacity 19 which I suppose would embrace the points you have made 20 about uncertainty regarding design, take into account 21 the -- 22 MR PALMER: No, because capacity relates to all the points 23 remember. 24 MR JUSTICE HOLGATE: Yes, it embraces a number of points of 25 which that is one. 193 1 MR PALMER: Yes, they all overlap is my point. 2 MR JUSTICE HOLGATE: And that is before you get to (d), 3 biggest issue deliverability, and then (e). 4 MR PALMER: And then (e) about that and then (f), which 5 again, this is a note taken. It says: "Would be risky". 6 It is not a suggestion that the Secretary of State was 7 saying suddenly from a safety point of view but risky as 8 to what could be delivered, whether the promise capacity 9 could be delivered in light of the mitigation measures 10 that would be necessary. I mean, this note is not in 11 the precise order of the speaking note. It is what was 12 said. It is there. But it was the Secretary of State's 13 view as to the points before it, but those views in 14 relation to the guarantee were at no point during this 15 presented first as an effective veto: can't do this 16 scheme because HAL say no, or won't guarantee. Just not 17 said, not done, appears nowhere. 18 The point was taken account but on the basis that 19 would be an issue if it was preferred. 20 MR JUSTICE MARCUS SMITH: How do we find that because the 21 speaking note, looking at page 261, simply refers to 22 "I have no certainty that the airport will deliver this 23 scheme if we choose it". I mean, it is not -- 24 MR PALMER: If we chose it, yes. That is building on the 25 written paper which I took you to as well, paragraph 99 194 1 which makes clear there is no certainty but there is 2 a likelihood and that is one of the issues. 3 MR JUSTICE MARCUS SMITH: Just to be clear then, is the 4 subcommittee deciding which is the better scheme simply 5 from a planning perspective as to which is better or is 6 it deciding which is better taking into account the 7 planning merits plus the uncertainty about the ability 8 of the Hub to deliver on its proposal? 9 MR PALMER: It has clearly had presented to it as one of the 10 material considerations to consider the fact that if 11 they chose it there was less certainty about it. That 12 is clear. But then the next question is: well, what 13 comes out of that meeting? Not what did the Secretary 14 of State say at the beginning of it but what comes out 15 of it is the question. 16 MR JUSTICE MARCUS SMITH: Yes. 17 MR PALMER: And the answer to that -- 18 MR JUSTICE HOLGATE: Just before we leave my Lord's question 19 though, reading 4 again: 20 "No certainty that the airport will deliver this 21 scheme ..." 22 In other words, that is not confined to looking at 23 certainty in terms of, for example, capacity, because 24 the issues affecting capacity are yet to be resolved. 25 It is saying: if we choose the scheme, there is no 195 1 certainty the scheme will be delivered. 2 MR PALMER: Yes, that is accurate, which is right and fair, 3 and my learned friend accepts a material 4 consideration -- 5 MR JUSTICE HOLGATE: I note the way it is drafted: 6 "I have also had no certainty." 7 The use of the word "had" sounds as if it is picking 8 up a reference to the request for a guarantee. 9 MR PALMER: Yes, it is. I accept that. You can see that 10 explicitly at paragraph 99, which -- this speaking note 11 was designed to summarise the main points. There it is 12 explicit, the word "assurance" is used rather than 13 "guarantee". 14 Page 182, my Lord, back in the paper: 15 "The promotors had not been able to secure assurance 16 from the airport owners ... although it seems likely. 17 We accept it would be the preferred scheme." 18 That is the outcome of that long process, which 19 I say is entirely fair. 20 LORD JUSTICE HICKINBOTTOM: My understanding of your 21 submission is that we shouldn't dwell too much on 4, on 22 page 261, because it simply reflects paragraph 99. 23 MR PALMER: Yes. 24 LORD JUSTICE HICKINBOTTOM: Paragraph 99 is -- 25 MR PALMER: Is the full picture. 196 1 LORD JUSTICE HICKINBOTTOM: Is the full picture. 2 MR PALMER: Shorthand note. All we have is this brief note 3 of what he was going to say, the main points. What he 4 did say, again, minuted, but not transcripted(sic), and 5 you have the paper which was fully circulated to be read 6 and forward to be understood, which explains the actual 7 nature of the point, so it is understood. 8 The next question is: what did the government make 9 of that? 10 Although we don't have the minutes of the 11 agreement -- of the discussion, for good reason, we do 12 have a statement of the outcome, which is made that same 13 day, in the afternoon, after that morning meeting, to 14 Parliament by the Secretary of State on behalf of the 15 government. That's what you see at paragraph 602. It 16 is better to go to the original, full, in core bundle 6. 17 Sorry, I have the wrong reference there. Perhaps 16 is 18 what I meant. I will just check. 19 (Pause) 20 MR JUSTICE HOLGATE: Sorry, bundle? 21 MR PALMER: I gave you the wrong reference because I wrote 22 it down wrong. It is not in bundle 6, it is in bundle 23 16, at tab 25. This is Hansard of the Secretary of 24 State for Transport's oral ministerial statement to be 25 distinguished from a free flowing debate afterwards. 197 1 You can see at page 316, halfway down, or by the first 2 hole punch: 3 "Before I outline the decision that the government 4 have reached, I want to explain how today's announcement 5 fits with the planning process and the opportunities 6 that members will have to contribute and the new year 7 will bring forward the draft national policy statement, 8 which will include the details of the proposed scheme as 9 required under the ..." 10 It is explained. 11 Then, on the next page, 317, by the first hole 12 punch: 13 "I have spent a considerable amount of time this 14 summer visiting the different schemes, talking to their 15 promoters, assessing their strengths and weaknesses. 16 I have been genuinely impressed by the quality of choice 17 available, anyone of them would bring benefits to our 18 country. At the end of its work, however, the Airports 19 Commission made a clear and unanimous recommendation to 20 the government, that we should accept the proposal to 21 build a new northwest runway at Heathrow, subject to 22 a package of measures to make expansion more acceptable. 23 Since the publication of that recommendation, my 24 department has studied in detail not only the report, 25 but new and supplementary information that has emerged 198 1 about the different options since. The Commission's 2 report subsequent information formed the basis of the 3 discussion that took place this morning at the cabinet 4 subcommittee. As a result of that discussion the 5 government have decided to accept the recommendation. 6 We believe that the expansion of Heathrow Airport and 7 the northwest runway scheme, in combination with that 8 package of measures recommended by the Airports 9 Commission offers the greatest benefit to passengers and 10 business, and will help us to deliver the broadest 11 possible benefit to the whole United Kingdom. That 12 approach will deliver the greatest economic and 13 strategic benefits for our economy. It will strengthen 14 connectivity for passengers right across the United 15 Kingdom ... a major boost to freight. It can be 16 delivered within carbon air quality limits and, 17 crucially, it comes with world leading measures to limit 18 the impacts on those living nearby." 19 So, that is an explicit statement that they are 20 accepting the recommendation of the Airports Commission 21 and, in particular, that is the scheme that offers the 22 greatest benefit to passengers and business, and will 23 help us to deliver the greatest benefit. 24 Then, at page 321, noting that this is all subject 25 to public consultation and members approving it. That 199 1 is by the second hole punch on 321. It is what the law 2 requires. Then the final paragraph on that page: 3 "Today, the government have reached a view on their 4 preferred scheme, and the national policy statement that 5 we will publish in the new year will set out in more 6 detail why we believe it is the right one for the UK. 7 It will also set out in more detail the conditions we 8 wish to place on the development, including the 9 supporting measures I outlined. We want to make sure 10 that we have heard everyone in the consultation at the 11 start of the new year and appointed Sir Jeremy Sullivan 12 to oversee that." 13 So, two things to draw from that, or three. 14 Accepting the recommendation of the Airports Commission, 15 which is clearly unanimous, and endorsing that 16 conclusion after all that further work. Nothing has 17 happened to disturb that conclusion. 18 The positive case, that it does offer the greatest 19 benefit in the broadest possible benefits to people, and 20 greatest economic and strategic benefits and so forth. 21 And making clear that it is the national policy 22 statement, or the proposed, at this stage, national 23 policy statement that we will publish, which will set 24 out in more detail why we believe it is the right one 25 for the UK. 200 1 We know what that says. It is a very clear 2 statement about the planning merits of the NWR over the 3 ENR and over Gatwick. 4 So, that is what was said in the ministerial 5 statement and that can be taken as an official statement 6 of government policy, official basis, and of course the 7 full reasons follow. The court is well aware of those. 8 There is an ensuing debate, which is not part of the 9 oral ministerial statement and is very much ad hoc. We 10 say that what is said then, at that point, cannot be 11 admitted for the reasons given by the Speaker. 12 What is sought to be admitted is the statement at 13 page 346, saying: 14 "There are two prime reasons we felt unable to 15 endorse the ENR scheme. That didn't allow for respite 16 and the scheme's promoters couldn't ultimately provide 17 the certainty that it would be built and adopted by 18 Heathrow Airport if we opted for it rather than for the 19 main route. Those are two strong reasons." 20 It is self-evidently not the defendant's case that 21 those were taken literally and in isolation, the two 22 prime reasons. Indeed, if you look at the end of that 23 paragraph, in that part of the debate: 24 "I considered very carefully whether it was the best 25 option. In the end, however, my judgment was that the 201 1 northwest runway was the better one for Britain." 2 He is not setting out all the reasons which went 3 into that because he has not been asked to do that. The 4 question was about, in fact, something completely 5 different: what is Gatwick's future following today's 6 announcement? 7 Was the question. 8 He is clearly speaking off the bat, clearly not 9 trying to recite everything that had been taken into 10 account, and had he done so, it would inevitably have 11 been the case that he would have referred, for example, 12 to the difference in capacity as impacted by respite, as 13 impacted by resilience, as impacted by uncertainty. 14 MR JUSTICE HOLGATE: How does the legal argument go, then, 15 on Article IX? 16 MR PALMER: I don't accept that, taken literally, the two 17 matters he refers to here are an accurate record of the 18 two strong reasons for the choice of the scheme. 19 I don't accept that because when the ANPS is produced, 20 it gives three prime reasons, and although respite 21 overlaps, it doesn't include this point. Logically, it 22 doesn't -- 23 MR JUSTICE HOLGATE: I think you need to be very precise 24 because my reading of the authorities, having looked at 25 them again, following the submissions we heard 202 1 yesterday, is they don't actually go as far as counsel 2 was seeking to go. 3 As I understand it, the submission of Speaker's 4 counsel is where one isn't dealing -- for example in the 5 case before Mr Justice Stewart, in that instance it was 6 to do with the accuracy of the factual matters contained 7 in statements by deceased members of Parliament, and it 8 was almost like the hearsay point that my Lord referred 9 to yesterday. 10 Counsel yesterday sought to submit that where there 11 is an issue as to interpretation as to what is said in 12 Parliament, if interpretation is disputed, then the 13 court can't deal with it, as I understand it. 14 So, we need to be clear as to what the 15 interpretational issue is to be able -- assuming the 16 point of principle is accepted, that precludes us from 17 taking this into account. 18 As I understand it, what you are doing is comparing 19 this text with what you call "the reasons" stated in the 20 ANPS. 21 MR PALMER: As presented to the Cabinet subcommittee that 22 morning, as recorded in the note of how it was 23 presented. 24 LORD JUSTICE HICKINBOTTOM: Quite. I understand that you're 25 logically prior argument is: we can't look at this. The 203 1 court can't take this into account. 2 MR PALMER: Yes. 3 LORD JUSTICE HICKINBOTTOM: But my understanding -- and that 4 is why we have spent the last hour going through the 5 chronology -- is that when this is put into proper 6 context, leave aside the NPS issue, which you raised 7 this morning, which was that we should focus -- one 8 should focus solely on the reasons -- the section 5(7) 9 reasons set out in the document. Leaving that aside, 10 when this is looked at in context, these weren't the 11 only reasons, or even the prime reasons because you have 12 identified capacity as -- 13 MR PALMER: Moreover, the Airports Commission's conclusions 14 on those issues, which he just said in the oral 15 ministerial statement, at the end of the day, there is 16 a unanimous conclusion from the Airports Commission 17 which raises all the points therein, and we have decided 18 to accept it because it delivers the greatest benefits. 19 You can't then reduce that to say that is respite and 20 uncertainty about the ENR scheme. 21 The difficulty is I could not make the submission to 22 you -- although I am sort of making it -- that you can't 23 just take this at face value because it is inaccurate, 24 because if I say that, at least on the Speaker's 25 approach, I am infringing Article IX. 204 1 LORD JUSTICE HICKINBOTTOM: I know that. I am sure we all 2 know that, but we haven't determined that issue yet. 3 MR PALMER: No. 4 LORD JUSTICE HICKINBOTTOM: So, you have to make submissions 5 on the basis that the Speaker might not be right. If 6 the Speaker is right, you may succeed on your high -- 7 but you have put three levels of submission concerning 8 this today. 9 One is the Speaker's point. Secondly, there is the 10 section 5(7) point for shorthand, that is one should 11 only look for reasons to the 5(7) reasons in the 12 document. 13 But, even if we find against you on those two, you 14 say, this looked at in context, then it's clear, you 15 say, that these were not the only reasons and you say 16 not the prime reason. 17 MR PALMER: No. 18 LORD JUSTICE HICKINBOTTOM: Those are the three levels. 19 MR PALMER: The meaning of the words used, "two prime 20 reasons we are unable to endorse it", if you read that 21 in isolation, it means what it says: in isolation. But 22 in the context, he has just said something completely 23 different in an oral ministerial statement, which is the 24 formal statement of the government's position. 25 The reality is he has just been asked a question 205 1 about one thing and he is standing up about another, and 2 this is free flowing debate and it is not a full and 3 comprehensive account of all the government's reasons. 4 LORD JUSTICE HICKINBOTTOM: That is why you say we shouldn't 5 look it because of Article IX. 6 MR PALMER: Not just because of Article IX, you will see my 7 next bullet point, top of the next page, even if 8 theoretically admissible, which we don't accept, the 9 problems for seizing on ex tempore remarks and debates 10 are well described by Ms Low, a very experienced civil 11 servant, at 604 to 606. 12 MR JUSTICE HOLGATE: I think it is actually described in one 13 of the judgments by a member of the House of Lords, 14 which might be a little bit more authoritative. 15 MR PALMER: It depends what -- 16 MR JUSTICE HOLGATE: I think what we need to do -- I am not 17 sure whether this is set out in writing somewhere, so we 18 tread carefully -- but you are comparing this obviously 19 to the ANPS, but also, I think you said, the briefing 20 note to the Cabinet subcommittee. 21 MR PALMER: Yes. 22 MR JUSTICE HOLGATE: Those really are the two. 23 MR PALMER: Before and after afterwards, in other words. 24 You don't have the discussion of Cabinet, you never do, 25 but you have the snapshot before and after. All against 206 1 the context -- this is not happening in isolation, all 2 in the context of the Airports Commission's final 3 report. Certainly not having anything to do with that 4 issue, making a recommendation and that being formally 5 accepted. 6 LORD JUSTICE HICKINBOTTOM: That broad submission, leaving 7 aside the fact this was a politician and, as 8 my Lord said, there have been judicial pronouncements 9 about that. Leaving aside that point for the moment, 10 you just have to look at this in context. 11 MR PALMER: Yes, that's right. 12 LORD JUSTICE HICKINBOTTOM: If we get to this third level, 13 you have to look at it -- and so you can't ignore -- 14 MR PALMER: You can't ignore what's around it. 15 LORD JUSTICE HICKINBOTTOM: -- what's around it. 16 MR PALMER: Exactly so. That is my submission on that. 17 You will see -- I won't read it all out because of 18 time and because this section of my speaking note is 19 quite fully set out -- I say the Article IX point is not 20 so dry in constitution. It is not a list with the 21 speaker coming up with hundreds of years ago 22 conventions. This is from a pragmatic point of view 23 really, really important, that a limit is placed on 24 scrutiny of what is said in a context such as this. 25 I don't need to turn up OGC again. I gave you the 207 1 reference at 46 and 47, but one of the underlying 2 rationales of this is to protect free speech in 3 Parliament, that's what you see at 46. If there are 4 discrepancies which arise in 47, that is something which 5 can be challenged in Parliament. If a minister were to 6 say something which wasn't the formally -- 7 MR JUSTICE HOLGATE: The accuracy pointed is the nature of 8 this particular passage as compared with something said 9 by a minister as part of a written statement, which they 10 read out. 11 MR PALMER: Yes. 12 MR JUSTICE HOLGATE: Which has been prepared. 13 MR PALMER: Which has been prepared as a formal statement of 14 what had been decided that morning. I mean, a draft has 15 been prepared in advance, but the reasons weren't -- 16 MR JUSTICE HOLGATE: The point you could make is he says two 17 prime reasons at one point, and two strong reasons 18 elsewhere, which is perhaps just indicative of the 19 nature of what was going on. 20 MR PALMER: Indeed, later on, when you get the other 21 comments relied upon, he says you get two different -- 22 it is imprecise. On any view, objectively, it is 23 imprecise, and I say this is important not to pick this 24 apart in a way that is being suggested one ought to. 25 What is being suggested is that the court should 208 1 displace all these formal statements and say: ah, look, 2 this is the real reason. This is what it really comes 3 down to. 4 I say when you look at the whole process, taken as 5 a whole over a matter of years, that is just not a fair 6 and accurate summary of what has happened in terms of 7 the identification of the best scheme and the best 8 runway. 9 LORD JUSTICE HICKINBOTTOM: Also, you rely upon that in 10 support of your Article IX point. 11 MR PALMER: I do. 12 LORD JUSTICE HICKINBOTTOM: That we shouldn't be there 13 anyway. 14 MR PALMER: I do. Could I ask, just to save time tomorrow, 15 the court read the rest of those bullet points on that 16 page and I'll pick up the chronology after that. Of 17 course, if there are any questions arising -- 18 MR JUSTICE HOLGATE: Yes, this says speaking note 1. 19 MR PALMER: I took a lead. Yes -- 20 MR JUSTICE HOLGATE: We have more? 21 MR PALMER: This was my ambition -- as far as I could get 22 today with my ambition. I haven't quite made that, but 23 I will make up time tomorrow. 24 MR JUSTICE HOLGATE: Is there another written speaking note? 25 MR PALMER: There will be. It is not fully prepared yet, 209 1 but I can do -- prepare -- the same courtesy as my 2 learned friend. We will certainly respond in kind to 3 that. 4 LORD JUSTICE HICKINBOTTOM: Yes, please. We'll start 5 tomorrow at 10 o'clock. We'll finish when we finish, 6 but we'll start at 10 o'clock. I think, calculating the 7 time estimate that we have been given, and everyone so 8 far has kept to the time that has been allocated very 9 well, but we should get through everything then by 4.30 10 tomorrow. 11 MR PALMER: Yes, I can say I will be speeding up because my 12 document heavy bit is done. 13 LORD JUSTICE HICKINBOTTOM: Yes. 10 o'clock tomorrow. 14 Thank you very much. 15 (4.35 pm) 16 (The court adjourned until the following day at 10.00 am) 17 18 19 20 21 22 23 24 25 210 1 INDEX 2 Submissions by MR KINGSTON ...........................1 (continued) 3 Submissions by MR PALMER ............................61 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 211