Special Report from the
Chairman of Committees
Channel Tunnel Rail Link Bill
(Channel Tunnel Rail Link Act 1996)
Undertaking as to relocation of refuelling
point
Determination under Standing Order 130
On 6th November 2002 I gave the following determination
on an application to me under Standing Order 130 of the Private
Business Standing Orders concerning an undertaking given by Viscount
Goschen on behalf of the Secretary of State for Transport ("the
Secretary of State") to the Select Committee of this House
that considered the Channel Rail Link Bill in Session 1995-96.
"1. I am concerned in these proceedings
with an application for a determination under Standing Order 130
of the Private Business Standing Orders. It relates to a difference
that has arisen concerning an undertaking given on the bill for
the Channel Tunnel Rail Link Act 1996 ("the 1996 Act")
to the select committee of this House to which the bill was referred.
The undertaking concerned the relocation of a refuelling point
owned by a petitioner against the bill, Mainline Freight Limited
("MFL"). The application is made by English Welsh and
Scottish Railways Limited ("EWS"), which succeeded to
MFL's business on 12th October 1996.
THE BASIS FOR ACTING UNDER STANDING ORDER 130
2. So far as material Standing Order 130 provides:
"It shall be a condition of the acceptance by
any committee of this House of any undertaking given to any committee
by or on behalf of the promoters or any other party appearing
before the committee that any difference arising, after the discharge
of the committee, between the persons concerned with the undertaking,
in relation to the same shall be determined by the Chairman of
Committees."
3. The undertaking in question was given by the Secretary
of State in the following terms—
"The Committee's views are noted on the need
for a refuelling point for Mainline Freight locomotives at Stratford,
though with less land than the petitioners asked for. I can confirm
that arrangements will be made for such a facility at a suitable
location on the Stratford railway lands (including Temple Mills).
The terms of Mainline Freight's occupation or use will be the
subject of further detailed negotiations between LCR and the petitioner."
The persons concerned with the undertaking are EWS
("the applicant") and the Secretary of State ("the
respondent").
BACKGROUND TO THE PRESENT PROCEEDINGS
4. I turn now to the background to the present proceedings.
MFL ran a rail freight business. In early 1996, before the undertaking
was given, MFL was in occupation of so much of the teardrop (which
is so called because it is so shaped) as is shown edged black
on the plan. It ran a traction maintenance depot there, in which
locomotives were serviced and maintained. That depot included
refuelling facilities where locomotives were refuelled with diesel
(and with oil and water). MFL was also in occupation of a part
of Temple Mills, the part shown tinted pink on the plan ("the
pink land"). That land was used for marshalling and as sidings.
5. MFL was in occupation of those parts of the Stratford
railway lands under an agreement for a lease dated 24th February
1996. The agreement entitled MFL to be granted leases for 125
years at a nominal rent (£1 or a peppercorn a year) of (i)
the part of the teardrop of which it was in occupation and (ii)
the pink land. Pending the grant of the leases, MFL was in occupation
as licensee of the British Railways Board. Paragraph 15 of Schedule
1 to the template form of lease annexed to the agreement contained
what are known as "lift and shift provisions", that
is to say, provisions enabling the landlord to relocate the tenant
if the premises occupied by the tenant is required by the landlord
for the construction or installation of permanent building, engineering
or other works or the development of land.
6. The Bill for what became the 1996 Act was introduced
into Parliament by the Secretary of State. It was promoted by
him, supported by Union Railways Limited ("URL") and
the Highways Agency. MFL petitioned against the Bill in the House
of Lords. A select committee duly considered the Bill and reported
on 15th October 1996. In connection with the refuelling facilities,
they said at paragraph 55 of their Report[1]—
"There is one area in relation to transport
management where we require the promoters to meet the petitioner's
needs. Mainline Freight operate a refuelling terminal in the Stratford
railway lands, which is used by locomotives operating on the lines
to East Anglia. Without such a terminal at Stratford, the locomotives
would have to travel to and from Cricklewood in North West London,
some distance away. The promoters must allow Mainline Freight
the land at Stratford to retain such a facility, although we are
not convinced that as much land is required as the petitioners
have asked for".
It was in response to that requirement that the undertaking
set out in paragraph 3 above was given.
7. Between the passing of the Act on 18th December
1996 and EWS moving in to the new depot on 2nd July 2001, negotiations
took place for the whole of EWS's operations on the teardrop to
be relocated to Temple Mills. It was agreed that EWS should vacate
the teardrop, retain the pink land and receive additional land
north west of the pink land ("the grey land"). In lieu
of compensating EWS for its loss of its operations on the teardrop,
Union Railways (North) Ltd was to fund the construction of a replacement
traction maintenance depot, including a refuelling facility, on
the grey land. Union railways paid £9.75 million for the
construction, even though the precise terms of EWS's occupation
of the grey land had not been agreed or determined.
8. Less than six months later, on 14th December 2001,
the Secretary of State served three notices to treat as a first
step in the compulsory acquisition of all parts of the Stratford
railway lands occupied by EWS. The compulsory powers were due
to expire on 18th December 2001 by virtue of section 47(1) of
the 1996 Act. Only one of the notices affects the grey land, that
is to say, the new land provided in fulfilment of the undertaking.
That is the land to which the application for a determination
under SO 130 relates.
THE QUESTIONS FOR DETERMINATION
9. The questions for determination are as follows.
Does the undertaking prevent the Secretary of State from requiring
more than one relocation of the refuelling point? Or does it allow
the Secretary of State, provided he has the necessary powers,
to require two or more relocations within the Stratford railway
lands (including Temple Mills).
10. I need to consider not only the words used by
the committee, but also the evidence and submissions considered
by them, and then decide, having regard to those matters, what
(if anything) a reasonable and disinterested person would have
taken the committee to intend with respect to more than one relocation
of the refuelling point in the exercise of the compulsory purchase
powers. Is there also, in addition to the express requirement
that any relocation of the refuelling point must be within the
Stratford railway lands, an implicit requirement that there is
not to be more than one relocation under the compulsory purchase
powers.
SUBMISSIONS OF THE APPLICANTS
11. EWS summarized their submissions in support of
the implicit requirement as follows:
(1) By the time MFL's petition against the Channel
Tunnel Rail Link Bill 1996 came to be heard, MFL had an unconditional
agreement for lease of the sites occupied by it at Stratford (part
of the teardrop and the pink land). The leases contained "lift
and shift" provisions agreed at a time well after the Bill
had been introduced into Parliament.
(2) In evidence to the Select Committee, Mr Reeve
for MFL asked (inter alia) that the proposed compulsory
purchase powers should be qualified: a refuelling point should
be set aside for MFL on the Stratford Railway lands.
(3) The promoters resisted that request on the ground
that detailed design was necessary to see whether it could be
provided. They wanted to use the Stratford railway lands not only
for the Channel Tunnel Rail Link itself but also for non-railway
related development in the Thames Gateway to help fund the link.
(4) The Select Committee rejected the promoters'
case and required them to "allow [MFL] the land at Stratford
necessary to retain such a facility". Nothing in the terms
of that requirement suggested that they were to be free to move
MFL once again.
(5) Nor was there anything in Lord Goschen's undertaking,
given in response to the Select Committee's report, to that effect.
(6) The promoters evidently took the view at the
time that they would not be able to move EWS again because URL
confirmed the undertaking on 23.10.97, stating that they fully
accepted the requirement "to provide a permanent refuelling
facility".
(7) The same follows from the agreement in 2000 to
provide EWS with and pay for a brand-new traction maintenance
depot, incorporating a refuelling point, at a cost so far of £9.75
million - an expenditure which would be thrown away if the Secretary
of State is right in his present contention.
(8) The statutory limitations on the compulsory purchase
powers are inconsistent with any idea that the Secretary of State
should be able to use those powers to evict MFL or EWS at any
time during the lifetime of the project: they were to expire (and
have expired) five years after the Act was passed, ie on 18.12.01.
(9) It is not readily conceivable - certainly not
without any express reference to the possibility - that the Select
Committee can have intended to allow the Secretary of State to
inflict on EWS a repetition of the disruption, cost and uncertainty
which in 1996 would have been obvious in prospect and which EWS
has in fact already suffered in 2001.
(10) Hence EWS contends that the effect of the undertaking
given in 1996 was to require the Secretary of State to choose
a site from which EWS would not thereafter be displaced by the
use of the compulsory purchase powers.
12. My conclusions with respect to the submissions
of EWS are as follows:
(1) Submissions (1) to (3) are very much paving submissions.
They set the scene for what follows. They are certainly not material
to the questions in issue.
(2) Submissions (4) and (5) are incontrovertible.
But it can equally be said that neither the Select Committee's
requirement, nor the Minister's undertaking, suggested that the
promoters were not free to move MFL once again. Both are completely
silent on the point.
(3) Submission (6) cannot be relied on to determine
the issue for the reasons stated by EWS at the hearing: the balance
of authority is against allowing regard to be had to what the
parties believed their contract required for the purpose of determining
what it actually does require. Moreover the use by URL of "permanent"
is somewhat suspect. On either view, relocation can be required
under the lift and shift provisions.
(4) Submission (7) is not conclusive. The expenditure
had been incurred before the capacity of the lines into the North
Pole Depot (the depot at which Eurostar train sets were intended
to be maintained and repaired for the first 10 to 15 years) was
reassessed and found wanting. Moreover the expenditure would equally
be thrown away if the Secretary of State relocated the refuelling
facility under lift and shift provisions. The only way of avoiding
"the waste of taxpayers' money" is to achieve an engineering
solution to the problem along the lines suggested by the Secretary
of State's advisers.
(5) Submission (8) refers to the limitation on exercise
of the compulsory purchase powers. The purpose of such limitations
is to prevent land being left in limbo for too long. They ensure
that notice to treat is served within 5 years, if at all. The
position is much the same with respect to planning permissions.
They must be acted on, if at all, within 5 years for much the
same reason.
(6) Submission (9) suggests that the Select Committee
cannot possibly have intended to allow the Secretary of State
to inflict on EWS a repetition of the disruption, cost and uncertainty.
But they certainly have allowed him to do so, whichever view one
takes. If the Secretary of State were unable to proceed by way
of compulsory purchase, he could still inflict the same disruption,
cost and uncertainty under the lift and shift provisions.
(7) Submission (10) depends on, and falls with, the
preceding submissions, particularly submissions (6) to (9).
13. It was also submitted by EWS that under compulsory
purchase powers the Secretary of State could obtain possession
within as little as three months of his serving notice of entry.
The position was contrasted with that under lift and shift provisions.
EWS could not be required to move until inter alia:
- all the various matters which a relocation notice
has to specify had been agreed to by EWS (or resolved by an arbitrator);
- the alternative premises had been substantially
completed by EWS and the Secretary of State had completed all
works reasonably necessary to enable EWS to gain satisfactory
access to the alternative premises; and
- vacant possession of the alternative premises
had been given to EWS and a lease thereof had been granted.
That is of course true. But when one brings the undertaking
into the equation, the distinction between compulsory purchase
and lift and shift is not so marked. Under compulsory purchase
EWS would not get the benefit of paragraph (a) above or (judging
from past experience) the grant of a lease but, subject to that,
the position would be very much the same. The Secretary of State
could not, without being in breach of the undertaking, require
vacant possession of the premises unless and until satisfactory
alternative premises were immediately available for EWS to move
into.
14. I was also invited by EWS to speculate on what
might have happened if Mr Sullivan (counsel for the promoters
at the Select Committee hearing) had said to the Committee at
that hearing: "My Lords, it is perfectly true that we do
not envisage that we will require any land for the purposes of
the Channel Tunnel Rail Link project within the five years which
the Bill confers insofar as that land is situated at Temple Mills,
but in case we do find that we need that land, please may we have
your leave, consistent with any undertaking you may require us
to give, to move EWS a second time and, if necessary, a third
time within the five years as long as on each occasion we provide
for EWS a suitable refuelling point within the Stratford railway
lands including Temple Mills." EWS went on to suggest a number
of possible responses the Committee might have made to such a
submission. But since there is no evidence on the basis of which
the Committee's responses can be determined, or even guessed at,
I do not think that it would be right for me to accept the invitation.
SUBMISSIONS OF THE RESPONDENT
15. The submissions made by the Secretary of State
may be summarized as follows.
(1) The purpose and intent of the Minister's undertaking
was to meet the requirement of the Select Committee as stated
in paragraph 55 of its report on the Bill. The Select Committee
required the promoters to meet the petitioner's need for a "refuelling
terminal at Stratford". The reason why the Committee did
so was because it was impressed with the operational disadvantages
to EWS that would result from the displacement of its then existing
refuelling terminal away from Stratford and to Cricklewood. The
Committee did not think it acceptable for EWS's engines to have
to travel the extra distance to Cricklewood to refuel.
(2) The Bill proposed that the Secretary of State
should have power entirely to displace EWS from Stratford by compulsory
acquisition, for the purposes of the Channel Tunnel Rail Link.
The Committee, therefore, required the Secretary of State to temper
that power, to the extent stated in paragraph 55 of its report.
The Committee was willing to see EWS' refuelling terminal displaced
from its then existing location. Such displacement, however, must
not be to a location outwith the Stratford railway lands (including
Temple Mills)..
(3) The Minister undertook to meet the Committee's
requirement. He has met it by providing the existing refuelling
facility within the Traction Maintenance Depot at Temple Mills.
(4) The Minister stated that the terms of EWS's occupation
and the use of the land provided for the refuelling terminal would
be the subject of further detailed negotiations. Those negotiations
still continue. At the time of the Minister's undertaking, it
was anticipated that the need to displace EWS, wholly or in part,
from Temple Mills, would not arise before the proposed lease had
been executed and the lift and shift provisions were operable
for the purpose of relocating EWS. However, because it has become
clear that the North Pole Depot cannot satisfactorily provide
for the servicing and maintenance of Eurostar train sets, the
need to displace EWS, at least to some extent, from its existing
facilities at Temple Mills, has arisen earlier than was anticipated.
The parties have yet to reach an agreement over the grant of the
lease and so the contractual provisions are not available to the
Secretary of State. In these circumstances he has resorted to
his compulsory powers.
(5) The issue, therefore, is a narrow one: is the
Secretary of State, acting within the terms of his undertaking,
able to remove EWS' refuelling facility elsewhere within the Stratford
railway lands in advance of the availability of the lift and shift
provisions?
(6) The logic of the undertaking is that there may
be a further displacement of EWS upon contractual terms agreed
between the parties. There is no reason why that displacement
should not take place in advance of the availability of the contractual
terms, if the needs of the CTRL demand it. In either event, the
stated requirement of the Committee, that EWS continue to be able
to refuel their engines at Stratford, is fulfilled.
16. I accept the thrust of the Secretary of State's
first two submissions. The Select Committee's only concern was
to save MFL's engines the journey to Cricklewood. But I cannot
accept much of what is said in submissions (4) to (6). The last
sentence of the undertaking ("The terms of Mainline Freight's
occupation or use will be the subject of detailed further negotiations
between LCR and the petitioner") was not asked for by the
Committee. It looks like a statement of the obvious (tailoring
the terms of the existing lease to fit the new premises) and was
probably accepted by the Committee on that basis. Yet the Secretary
of State has used that sentence as a justification for trying
to renegotiate the lift and shift provisions set out in paragraph
15 of Schedule 1 to the template lease annexed to the agreement
of 24th February 1996. And he now seeks to pray in aid the fact
that the new lease has not been executed as a justification for
using compulsory purchase powers. Fortunately for his purposes,
the point is not of crucial importance.
CONCLUSION
17. My conclusion is that nothing in the undertaking
given by the Secretary of State prevents him from requiring more
than one relocation of the refuelling point under compulsory purchase
powers. Or to put it another way, the undertaking allows the Secretary
of State, acting under compulsory purchase powers, to require
two or more relocations of the refuelling point within the Stratford
railway lands (including Temple Mills). I can find no indication
in the words used by the Select Committee, or in the evidence
or submissions considered by them, to indicate an intention on
their part to do any more than restrict any relocation of the
refuelling point to those lands. I conclude that the Committee
were determined to do something to save MFL's engines the journey
to Cricklewood in order to refuel. But subject to that, they were
content to let matters lie where they fell. See paragraph 59 of
their report: "We appreciate that not all of the concerns
raised by petitioners have been referred to in this report. We
reiterate our comment that where we remain silent we are satisfied
that we do not consider it necessary to intervene on behalf of
the petitioners, or that adequate mechanisms are available to
protect the petitioners' interests."
1 HL Paper 118, Session 1995-96. Back
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