[2024] UKUT 345 (AAC)

I will deal first, and so out of sequence from the order in which these arguments were developed before me, with the ground concerning whether compliance with regulation 30(3)(c) is a condition of an energy plan being a green deal plan. It seems to me sensible and necessary to deal with this question first because it frames what effect the other grounds under regulation 30(3)(c) may have.

There was some debate before me about whether the FTT in its preliminary decision had decided that as a matter of law compliance with regulation 30(3)(c) was a necessary condition to an energy plan being a green deal plan. The real question, however, is whether either or both FTT’s proceeded on a wrong legal basis that regulation 30(3)(c) is such a necessary legal condition. That is a question of statutory interpretation based on the wording of the enabling powers and the relevant parts of the Framework Regulations.

Before addressing that issue of statutory interpretation, I will deal first with what the FTTs said about it.

I have summarised above what the preliminary decision of the FTT had to say on this issue. The material parts of its decision read as follows:

“D)

What is a green deal plan?

16)

The Parties describe this issue as being largely uncontroversial. They agree that a green deal plan is defined in the legislation as an energy plan that meets the requirements of s.1(3) &(4)(a)-(e), which must be read with ss. 4 & 5, and with the requirements of regulations 30 – 36 when read with regulation 29….

31)

Having considered these submissions and the relevant legislative provisions I conclude as follows:

i)

For an energy plan to be classified a green deal plan it must meet the requirements set out in s.1(3) & (4)(a)-(e) of the Act, which must be read with ss. 4 & 5, and with regulations 30 – 36 read with regulation 29. For reasons of clarity I will refer to these requirements collectively as ‘legislative requirements’ and individually as ‘qualifying conditions’.

ii)

Accordingly, there are a number of qualifying conditions that an energy plan must meet.

(a)

It must relate to qualifying energy efficiency improvements that are made to a property, which are to be paid for wholly or in part by instalments (s.1(3)(a)).

(b)

It must also, at the time it is made, meet all of the requirements of s.1(4)(a) – (e). The view that all requirements must be met is supported both by the unambiguous language of s. 1(3)(b), and by the analogous decision of Morgan J in Southampton City Council [v Hallyard Ltd [2008] EWHC 916].

(c)

The language of ss. 1(4)(c) & (d) makes clear that the energy plan must also meet all the conditions set out in ss. 4 & 5.

(d)

Further, since s. 1(4)(c) refers to a requirement that the “conditions mentioned in section 4 as to assessment of the property and other matters” (emphasis added) are met then, pursuant to s. 4(1)(b), this requirement also extends to “such other conditions… as are specified in the framework regulations.”

(e)

Regulation 29 specifies additional (‘other’) conditions as being those set out in regulations 30 – 36.

iii)

I further conclude that an energy plan must also meet the requirements of regulations 27 & 28 in order to be classified as a green deal plan….

Conclusion

32)

An energy plan that fails to meet the legislative requirements of a green deal plan will, by necessity, remain an energy plan rather than a green deal plan. The applicable legal framework thereafter would fall to be determined, and would be a matter in relation to which this Tribunal would have no jurisdiction.

33)

The extent to which the Regulations or the Code of Practice will continue to apply to an energy plan that is not a green deal plan is an issue requiring further submissions in the context of a substantive case. However, the following passage from the 2013 Guidance on Green Deal Sanctions and Appeals (‘the Guidance’) is noted:

“Where the Green Deal Provider has failed to ensure that the statutory conditions for the establishment of a Green Deal Plan have been satisfied, the Green Deal Provider is in breach of regulation 26 of the Framework Regulations, which is a relevant requirement, and the Secretary of State is able to cancel the plan. The plan is, technically, an Energy Plan – because the conditions required to establish a Green Deal Plan were not met”

34)

Where there is a dispute as to whether an energy plan should be classified as a green deal plan, this should be determined by establishing whether each of the qualifying conditions for a green deal plan have been met. Such a determination is likely to be a largely factual, and can only be made on a case by case basis.”

The FTT in the substantive decision dealt materially with this issue as follows (the quoted passage also covers issues germane to the other grounds of appeal concerning regulation 30(3)(c)):

“Issue 1 – Does Ms Heaney have a ‘Green Deal plan’?

39.

The Preliminary Decision sets out the ‘qualifying conditions’ for a Green Deal plan. Unless all of them are met, an energy plan is not a Green Deal plan….

C. Were the notification requirements met?

55.

Regulation 30(3) provides as follows:

(3)

The Green Deal provider must, before the plan is entered into, notify the improver of—

(a)

the improvement-specific first year savings;

(b)

the improvement-specific savings period;

(c)

the amount of the first year instalments attributable to each improvement (the “improvement-specific instalments”); and

(d)

the period over which instalments are to be payable for each improvement (an “improvement-specific payment period”).

56.

The parties agree that compliance with this qualifying condition is in issue before the Tribunal. The Tribunal begins with some points concerning interpretation. First, the Tribunal agrees that “first year instalments” means the “estimated total of instalments that are proposed to be payable in the 12 months commencing on the date with effect from which instalments are to be included in electricity bills for the property. The second point is that “improvement-specific” is defined by reference to the “improvement” in question. Regulation 2 defines “improvement” as “an energy efficiency improvement in respect of a property”, the same term already discussed in relation to section 4(3). Arguments such as the configuration of solar panels must be approached accordingly.

57.

The Sanctions Notice found that while the necessary information had been given on paper, the final sentence of (the related) paragraph 47A of the Code of Practice had still been breached because the information had still not been properly explained. This position has shifted somewhat, both respondents’ Amended Responses now putting Ms Heaney to proof that notification was never given. Neither refers to any documents that contain the required notification. The only document containing any first year improvement-specific payment figures is the Occupancy Assessment under the heading “Expected Green Deal repayment in year 1”. These are ‘expected’ figures and must be subject to the wide range of estimated costs in the first column of figures. The Tribunal cannot see that this meets regulation 30(3)(c), as the final products installed did not match those listed – the Tribunal has already accepted the respondents’ separate point that the precise products are determined at a later stage, but nor do the types match nor are reasonable estimates given. The GDAR and November EPC do not contain the information, nor does any of the documentation surrounding the loan despite containing the total amounts payable. In his submissions on regulation 30(4), Mr Wilcox engaged the Tribunal in elaborate reverse engineering of what some of the figures might have been. The Tribunal accepts Ms Urell’s post-hearing submission that those figures cannot be calculated with any confidence. The first annual statement from GDFC contains daily rate figures broken down by improvement, but that is both insufficient and too late.

58.

Mr Streeten confirmed that there are no documents available to the parties that contain the required notification. He told the Tribunal that his client’s experience was instead “that salespeople do provide explanations orally” and that he had encountered these in other cases on telephone recordings. Ms Heaney had not denied being provided with the information, saying that she could not recollect having been provided it. Ultimately, he submitted, whether she had been given the information was an evidential question for the Tribunal, but Ms Heaney’s lack of a positive denial meant she could not meet her burden of proof. Ms Urell agreed, pointing out that events took place some 8 years ago and that it was no surprise that Ms Heaney could not remember now.

Consideration

59.

Contrary to the respondents’ submissions, regulation 30(3) cannot be satisfied by oral notification. Regulation 3 provides as follows:

3.

Notices

A notice under these Regulations:

(a)

must be in writing; and

(b)

may be transmitted by electronic means unless the recipient has indicated unwillingness to accept notices in that way.

60.

Notification is synonymous with ‘give notice’, absent clear statutory intention. There is no reasonable basis upon which to consider that these regulations draw such a distinction, not only would it be contrary to the scheme’s objects but it would be fanciful to suggest that some of their other notification obligations could be satisfied by telephone. Moreover, Ms Heaney’s position is less equivocal than the respondents suggest. The relevance of her assertion that there is “no evidence” of notification being given is first to confirm that she has no undisclosed relevant documents. Second, her complaint has always been accepted on the factual basis that she was required to sign some documents by the agent without being able to read them, and that the agent took at least some of them straight back. She has never in any position to put forward a positive evidential case that no documents ever gave her the required notification, and that situation has arisen from the mis-selling itself.

61.

Regard must also be had to the facts of Ms Heaney’s complaint – she has always claimed that she never knew the plan involved borrowing or repayment at all. The facts of her complaint are consistent with those cited in the Citizens Advice Scotland report, were believed by FOS, and then in turn by the Secretary of State…

63.

Notwithstanding the careful attention given to this case by Ms Heaney, the CAB, the Secretary of State, GDFC and the ECC no documents have emerged that give the notification required by regulation 30(3). Importantly, nor does the evidence suggest when such notification might have been given. The Tribunal has all the usual jigsaw pieces of a Green Deal plan: the EPC, GDAR, GDIP and the credit agreement with its explanatory documents. No suggestion has been made that any documents are missing that would usually be encountered, and it would have been straightforwardfor either respondent to tell the Tribunal that it is missing a particular expected document. Indeed, the Tribunal was told that the Secretary of State’s experience is that notification would be given verbally.

64.

Considering the evidence therefore, the Tribunal finds that the written notification required by regulation 30(3) was not given. This is not simply due to an absence of evidence to the contrary, but is the proper conclusion to draw after having assessed the wider evidential picture.

65.

Insofar as it might remain relevant, was notification given orally? The Secretary of State’s experience gives weight to it not having been done in writing, but does not establish that the telephone script was followed on every occasion. It certainly falls well short of being evidence that can undermine the fundamental basis upon which the sanction was issued, being that HELMS never discussed with Ms Heaney that she was taking out a loan at all. The Tribunal therefore takes the findings in the Sanction Notice as answering whether the required information was verbally communicated on this occasion. For the avoidance of doubt, the Tribunal would reach the same finding itself on the evidence. Ms Heaney has always claimed to have never been told that she would be required to pay anything apart from an initial £1,000, let alone what she could expect to pay in her first year in respect of each individual improvement. Her account has been believed by the FOS, the Secretary of State and, now, the Tribunal. In this case there is the added feature of the unusual circumstances surrounding the 2013 defective credit agreement and December EPC. There is reason to think that even the usual procedures might have gone awry on this occasion.

66.

The Tribunal presumes that the tension between Mr Streeten’s present instructions and the Sanctions Notice arose from concerns that the latter might be forced by formal operation of the burden of proof to yield to Ms Heaney’s present lack of precise recollection. Such concerns would be misplaced. The Tribunal will also only resort to the burden of proof when unable to resolve an issue of fact by simply evaluating and examining the evidence, including the wider context – Re B [2008] UKHL 35 at [32], [72]; Verlander v Devon Waste Management [2007] EWCA Civ 835 at [18]-[19].

67.

The Tribunal finds that HELMS did not comply with the obligation under regulation 30(3) to notify Ms Heaney of the amount of the first year instalments attributable to each improvement. This being a qualifying condition, the plan is not a Green Deal plan. To the extent that other issues in the appeal therefore fall away, the Tribunal nonetheless considers them in the alternative.”

GDFC argue that regulation 30(3)(c) is not legal requirement for an energy plan to be a green deal plan, and the FTTs were wrong to decide otherwise. The Secretary of State and Mrs Heaney disagree, as do I.

The most useful starting point, in my judgement, is regulations 29 and 30 of the Framework Regs. Regulation 29’s terms are clear and emphatic, “[a]n energy plan is not a green deal plan unless the conditions in regulations 30 to 36 are met”. On its face, regulation 29 clearly means what it says: if the conditions in regulations 30 to 36 are not met, the energy plan is not a green deal plan. The only issue in terms of the Framework Regs would therefore appear to be whether regulation 30(3)(c) itself contains a condition.

In my judgement, regulation 30(3)(c) does contain a condition. The terms of the regulation have been set out already but are worth repeating. It provides (with my underlining for emphasis) that “[t]he green deal provider must, before the plan is entered into, notify the improver of…(c) the amount of the first year instalments attributable to each improvement”. As a matter of ordinary language, this is plainly imposing a legal obligation on the green deal provider to do something before the plan is entered into. I struggle to understand how that does not amount to a condition in regulation 30.

Staying within the regulations, I was not persuaded by GDFC’s argument based on footnotes to the Framework Regs. The argument was based on regulation 30 being set out thus:

“30.

—(1) The first year instalments must not exceed the estimated first year savings (1).

(2)

The payment period must not exceed the savings period (2).

(3)

The green deal provider must, before the plan is entered into, notify the improver of—

(a)

the improvement-specific first year savings;

(b)

the improvement-specific savings period;

(c)

the amount of the first year instalments attributable to each improvement (the “improvement-specific instalments”); and

(d)

the period over which instalments are to be payable for each improvement (an “improvement-specific payment period”).

(4)

The improvement-specific instalments must not exceed the improvement-specific first year savings.

(5)

The improvement-specific payment period must not exceed the improvement-specific savings period.

(6)

In this regulation “first year instalments” means the estimated total of instalments that are proposed to be payable in the first year of the plan.

(1) This is the seventh condition for the purpose of section 4(8) of the Act.

(2) This is the eighth condition for the purpose of section 4(9) of the Act.

GDFC’s argument was that the absence of a footnote to regulation 30(3)(c) supported its argument that it was not creating a condition for the purposes of regulation 29 or under the Energy Act 2011.

There are a number of persuasive answers to this argument.

First, this is a tail wagging dog approach to statutory interpretation. The Upper Tribunal’s function is to construe the words of the legislation in their statutory context: see paragraphs [29]-[31] of the Supreme Court’s decision in R (O) v Secretary of State for the Home Department [2022] UKSC 3; [2023] AC 255.

At highest, the footnotes are no more than guidance or the view of the drafter of the Framework Regulations. As Lord Hodge put it in paragraph [30] of R(O) (with my underling added for emphasis):

“External aids to interpretation therefore must play a secondary role. Explanatory notes, prepared under the authority of Parliament, may cast light on the meaning of particular statutory provisions. Other sources, such as Law Commission reports, reports of Royal Commissions and advisory committees, and Government White Papers may disclose the background to a statute and assist the court to identify not only the mischief which it addresses but also the purpose of the legislation, thereby assisting a purposive interpretation of a particular statutory provision. The context disclosed by such materials is relevant to assist the court to ascertain the meaning of the statute, whether or not there is ambiguity and uncertainty, and indeed may reveal ambiguity or uncertainty: Bennion, Bailey and Norbury on Statutory Interpretation, 8th ed (2020), para 11.2. But none of these external aids displace the meanings conveyed by the words of a statute that, after consideration of that context, are clear and unambiguous and which do not produce absurdity.”

I should perhaps add at this point that I do not consider reading regulation 30(3)(c) as a condition of a green energy plan produces a legislatively absurd result such that Parliament cannot have intended the matters in regulation 30(3)(c) to be a condition of a green deal plan, even assuming that the presumption against absurdity applies in respect of delegated legislation. The matters provided for in regulation 30(3)(c) are plainly an important aspect of ensuring the plan is entered into by the householder on a properly informed basis. If it is shown that this was not the case, it is not absurd that what was entered into was not a green deal plan. Moreover, it is important to have in mind that legislative absurdity is not necessarily the same as a statutory provision being felt to act unfairly in some cases. As was pointed out by Lords Sales in paragraph [43] of R (PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28; [2023] WLR 2594 (again with my underlining for emphasis):

“….The width of the concept is acceptable, since the presumption against absurdity does not apply mechanistically but rather, as [Bennion points] out in section 13.1(2), “[t]he strength of the presumption … depends on the degree to which a particular construction produces an unreasonable result”. I would add that the courts have to be careful to ensure that they do not rely on the presumption against absurdity in order to substitute their view of what is reasonable for the policy chosen by the legislature, which may be reasonable in its own estimation. The constitutional position that legislative choice is for Parliament cannot be undermined under the guise of the presumption against absurdity.”

Second, the absence of a footnote referring to other empowering provisions in the Energy Act 2011 (for example, sections 1(4)(c) and 4(1)(b)) does not show those empowering provisions did not apply.

Third, as Ms Heaney points out, if the footnotes (or absence thereof) are a key, or important, diviner of statutory intent, this would mean that nothing in regulations 31 to 36 of the Framework Regulations could be a condition for the purposes of regulation 29, which would both be absurd and render otiose most of regulation 29’s wording.