Heathrow Hub Ltd & Anor, R (On the Application Of) v The Secretary of State for Transport

Factual and Procedural Background

This appeal concerns a judicial review of the Secretary of State's decision on 26 June 2018 to designate the Airports National Policy Statement ("ANPS") which selected the Heathrow Northwest Runway ("NWR") scheme as the preferred option for airport expansion in the South East of England. The Appellants ("HUB") promoted an alternative Extended Northern Runway ("ENR") scheme. The decision followed a lengthy process initiated in 2012 with the establishment of the Airports Commission to assess the need for additional airport capacity and how it should be met.

The Airports Commission considered multiple proposals, including the NWR scheme by Heathrow Airport Limited ("HAL") and the ENR scheme by HUB, ultimately recommending the NWR scheme in its Final Report published on 1 July 2015. The Secretary of State accepted this recommendation after further review and consultations, culminating in the designation of the ANPS in June 2018.

HUB challenged the Secretary of State's decision by judicial review, arguing legal errors in the preference for the NWR over the ENR scheme. The Divisional Court dismissed HUB's claim on 1 May 2019. HUB obtained permission to appeal on selected grounds related to competition law and legitimate expectation.

Legal Issues Presented

1. Whether the Secretary of State unlawfully breached EU competition law by requesting a guarantee or assurance from HAL as a pre-condition for selecting the ENR scheme, contrary to Articles 106(1) and 102 of the Treaty on the Functioning of the European Union ("TFEU").
2. Whether the Secretary of State breached HUB's legitimate expectation by insisting on such a guarantee or assurance, when HUB expected the decision to be made solely on the merits of the schemes.
3. Whether the Secretary of State took into account immaterial considerations or failed to consider material ones in preferring the NWR scheme over the ENR scheme.
4. Whether the Secretary of State failed to provide adequate reasons for rejecting HUB's submissions on capacity and respite.
5. Whether the Secretary of State acted unlawfully by relying on undisclosed safety concerns without giving HUB a reasonable opportunity to respond.

Arguments of the Parties

Appellant's Arguments

• The Secretary of State's request for a guarantee or assurance from HAL constituted an unlawful distortion of competition under EU law, rendering the selection process unlawful.
• The request breached HUB's legitimate expectation that the decision would be made on objective scheme-specific merits without regard to promoter-specific risks.
• The Secretary of State considered immaterial factors and failed adequately to consider HUB's evidence on capacity and respite.
• The Secretary of State failed to provide intelligible reasons regarding safety concerns and denied HUB procedural fairness by not disclosing these concerns.

Respondent and Interested Parties' Arguments

• The Secretary of State lawfully considered promoter-specific risks, including the absence of an assurance from HAL, as a potentially relevant factor but ultimately found it immaterial to the final decision.
• The Airports Commission's independent, objective assessment recommended the NWR scheme on scheme-specific grounds, which the Secretary of State accepted.
• The legitimate expectation alleged by HUB was unsupported by any clear, unambiguous promise or established practice.
• The competition law claim failed because the request for assurance had no material effect on the decision to prefer the NWR scheme and no abuse of dominance occurred.
• Safety concerns and other reasons for preferring the NWR scheme were properly considered and disclosed in the ANPS.

Table of Precedents Cited

Court's Reasoning and Analysis

The court undertook a detailed examination of the legal issues raised by HUB's appeal, focusing primarily on the legitimacy of the Secretary of State's request for an assurance from HAL and the materiality of that request to the decision to prefer the NWR scheme.

On legitimate expectation, the court emphasized the requirement for a clear, unambiguous, and unqualified promise or consistent practice to found such an expectation. It found no express promise or consistent practice by the Secretary of State or the Airports Commission that promoter-specific risks would be disregarded. The Statement of Principles expressly disclaimed any legitimate expectation. Therefore, no legitimate expectation arose that the Secretary of State would not consider the absence of an assurance.

The court distinguished between scheme-specific risks (objective risks inherent in the scheme) and promoter-specific risks (risks related to the promoter's ability to implement the scheme). The Airports Commission and the Secretary of State focused on scheme-specific merits, and the promoter-specific issue of HAL's willingness to implement the ENR scheme was immaterial to the final decision.

Regarding competition law, the court accepted that HAL was dominant in the relevant market and that the Secretary of State's request for an assurance could constitute a State Measure. However, the court held that the request and HAL's response had no material effect on the decision to prefer the NWR scheme and thus could not have enabled any abuse of dominance. The court found no distortion of competition arising from the request.

The court also addressed the admissibility of statements made by the Secretary of State in Parliament under Article 9 of the Bill of Rights 1689. It concluded that it was unnecessary to resolve these issues because the statements were consistent with admissible evidence and did not affect the outcome.

Finally, the court applied the test under section 31(2A) of the Senior Courts Act 1981, concluding that even if the Secretary of State erred, it was highly likely the outcome would have been the same, justifying refusal of relief.

Holding and Implications

The court DISMISSED the appeal.

The decision confirms that the Secretary of State lawfully considered both scheme-specific and promoter-specific factors in making the airport expansion decision, and that the absence of an assurance from HAL regarding the ENR scheme was immaterial to the final decision. The court upheld the rationality of the Secretary of State's preference for the NWR scheme based on objective merits as recommended by the Airports Commission.

No new legal precedent was established beyond affirming the application of established principles of legitimate expectation, judicial review materiality, and EU competition law in this context. The direct effect is that the designation of the ANPS and the preference for the NWR scheme remain valid and binding.