High Court of Ireland Decisions

Judgment Title: Ryanair Ltd -v- Commission for Aviation Regulation

Neutral Citation: [2010] IEHC 220


High Court Record Number: 2010 107 JR

Date of Delivery: 04/06/2010

Court: High Court

Introduction
This is an application by Ryanair for leave to apply for judicial review against a determination (the determination) of the Commission for Aviation Regulation (CAR). The determination set maximum levels of airport charges at Dublin Airport for the years 2010 – 2014. The notice party (DAA) is the body vested by statute with the management and operation of that airport.

The determination was dated 4^th December, 2009. These proceedings were commenced by the issue of a notice of motion dated 4^th February, 2010. As judicial review of a determination of CAR is governed by s. 38 of the Aviation Regulation Act 2001 (the Act), it was necessary that the application be brought on notice to it and the DAA within a period of two months of publication of the determination. Under the terms of that section, leave “shall not be granted” unless this Court is satisfied that there are substantial grounds for contending that the determination is invalid or ought to be quashed.

An Appeal
In addition to regulating the entitlement of a party to apply for judicial review, the Act also creates an entitlement on the part of an aggrieved party to appeal.

Under s. 40 of the Act, the Minister is obliged upon a request in writing from a person aggrieved by a determination (unless he considers the request vexatious or frivolous) to establish an Appeal Panel to consider such an appeal. Under the provisions of s. 24 of the State Airports Act 2004, a request for the setting up of such an Appeal Panel must be made promptly but not later than three months after publication of the notice of the determination to which it relates.

Ryanair exercised its right of appeal under these statutory provisions. It did so by letter of 18^th December, 2009 signed by Mr. Juliusz Komorek, its Director of Legal and Regulatory Affairs.

The letter reads as follows:-

“Dear Minister

I write on behalf of Ryanair, the largest user of Dublin Airport, to request the establishment of an Appeal Panel, under s. 40 of the Aviation Regulation Act 2001, to consider Ryanair’s appeal against the Commission for Aviation Regulation’s (CAR’s) decision CP4/2009 dated 4^th December 2009.

Ryanair has a number of major concerns regarding the legality of the above decision and the continuing failure of the CAR to properly or effectively regulate the Dublin Airport Authority in order to meet the reasonable requirements of users, or to prevent the continuing abuse by the DAA monopoly of its dominant position through regulatory gaming. Ryanair’s concerns with the above determination (CP4/2009) include, but are not limited to the following (please note that this list does not constitute the full terms of Ryanair’s appeal which will be filed at a later stage):-


Failure of the CAR to comply with the government’s (triple safeguard) in the delivery of T2.

The failure of the CAR to ensure proper or effective user consultation.

The failure of the CAR to survey or take account of competitive market developments.

The failure of the CAR to respond to user queries either prior to or during the consultation period.

The failure of the CAR to respond, as required by statute to user concerns in the final determination.

The inclusion by the CAR of indexed depreciation in the yield formula, which the Commissioner himself confirmed allows the DAA to ‘earn excess profits’.

The failure of the CAR to produce, verify or reconcile, audited regulatory accounts with the DAA.

The failure of the CAR to explain or justify its ‘x-factor’.

The inclusion by the CAR of an ‘equity risk’ premium, when the CAR acknowledges that the DAA suffers no equity risk.

The failure of the CAR to address the excessive size of Terminal 2 as required by the previous Appeals Panel either before or during the determination.

The failure of the CAR to address the extensive list of submissions, objections and points made by Ryanair.


The effect of this unlawful determination is to reward the DAA monopoly with excess profits as a result of its regulatory gaming. Terminal 2, which was originally promised by the DAA at a cost of €170m - €200m has now escalated to some €1.3b. This includes the early and unnecessary demolition of the eight year old Pier C, the closure of check-in area 14 (just two years after it opened, despite a promised 30 year lifespan), and the construction of an unnecessary T1X retail extension, the cost of which is now being recovered through high and uncompetitive airport charges.

Is it incomprehensible to Ryanair that any effective regulatory process (which is designed to replicate the effects of competition) would – at a time when traffic at Dublin Airport has fallen by 15% – respond to this market failure by approving a 40% increase in passenger charges, when many other governments and airports across Europe are reducing passenger charges – in some cases by 100% – in order to reverse traffic and tourism declines.

Ryanair believes that a review of the above determination by the Appeal Panel is urgently needed in order to prevent further damage being visited upon Ireland’s air transport and tourism industries through the CAR’s inept regulation, regulatory capture and the DAA’s repeated abuse of its monopoly position. We look forward to receiving details of the membership of the panel in due course, and would welcome your advice as to how we should interact with the panel and the format of any submissions which the panel may require.

Please acknowledge receipt of this request for the establishment of an Appeal Panel.”

The information conveyed by Mr. Daly did not please Ryanair. It provoked a minatory letter of 11^th January, 2010 from Mr. Komorek. The letter complained about the three month delay and went on to say:-

“An early review by the Appeal Panel is vital for the purposes of legal certainty, and we therefore request that the Department establish this panel, in consultation with Ryanair, by no later than the end of January 2010. Should the Department not accede to this request, then Ryanair will publicly expose your attempt to further protect the DAA monopoly by unnecessarily and unreasonably delaying the appeal process.”

“I wish to inform you that I will be arranging for an Appeal Panel to be established to consider appeals against the Commission for Aviation Regulations decision CP4/2009 dated 4^th December, 2009 once the three month period for receipt of requests under Section 40(2A) has expired.

I consider that this is the most appropriate approach allowing for the fact that other interested parties have until the expiry of the statutory deadline to submit requests and taking into account practical considerations, including the time required to put a panel in place. As you know this is in line with previous practice whereby one panel has been established to consider all appeals relating to a particular determination.”

The Minister’s letter of 19^th January, 2010, was in turn responded to by Mr. O’Leary on 22^nd January, 2010.

It is not necessary to repeat that lengthy letter in full but a number of aspects of it do bear examination. Its first paragraph read:-

“There is no reasonable explanation for your inordinate delay in establishing an Appeal Panel under the Aviation Regulation Act 2001 other than the continuing policy of both yourself and your Department protecting and abetting the DAA monopoly at the expense of consumers and Irish tourism.”

Second, the Minister’s explanation as set out in his letter of 19^th January, 2010 was perfectly reasonable.

Mr. O’Leary’s letter then went on to accuse the Minister of having given a “corrupt direction” to the CAR and later in the letter accused the Minister’s Department of providing “corrupt protection” to the “DAA Airport Monopoly”.

The Minister replied to this letter on 28^th January, 2010. He pointed out that as Minister he was responsible for determining the process of setting up an Appeal Panel under the statute.

A further letter described on this occasion as an “open letter” was sent to the Minister by Mr. O’Leary in which he expressed the regret of Ryanair at the ministerial decision to delay the establishment of the Appeal Panel for the three month period allowed by the legislation. He went on to accuse the Minister and his Department of sitting on their hands and doing nothing whilst the DAA monopoly “which you protect – will impose the largest airport fees increase of any EU airport in 2010, causing a further double digit decline in Dublin Airport traffic on top of the three million passenger loss of last year.”

This letter elicited an acknowledgment from the private secretary to the Minister. On 9^th February, 2010, the Minister responded personally indicating that he intended to proceed in accordance with the approach outlined in his previous correspondence.

On 3^rd March, 2010, the Minister wrote to Mr. O’Leary pointing out that he had received three requests for the establishment of an Appeal Panel and that he had now established that panel and identified the members of it.

On 5^th March, 2010, Mr. O’Leary wrote a further open letter to the Minister, the final paragraph of which read as follows:-

“We regret your repeated refusal to appoint an early Appeal Panel to consider Ryanair’s appeal against these unwarranted and unjustified (Department sanctioned) 40% cost increases. Since the three month deadline for receipt of request for appeals expired yesterday (4^th March), you cannot delay any further the appointment of an Appeal Panel. Can you please urgently confirm when this Appeal Panel will be appointed and, in the interest of efficiency and speed, that you will reappoint the members of the 2008 panel, since these people are familiar with the issues at Dublin Airport and can expedite the hearing of the appeal, hopefully before the DAA begins to impose these 40% price increases (as they have notified users they intend to) from 28^th March next.”

Of course, the Minister had, as far back as 19^th January, written to Mr. O’Leary indicating his intention to set up the Appeal Panel and two days before the press release had written furnishing the names of the members of that panel to Mr. O’Leary.

The third paragraph of the press release reads:-

“Ryanair first wrote to ‘Dozy Dempsey’ back in December calling on him to urgently form an Appeal Panel to review the Regulator’s decision. Instead of acting quickly, to protect air passengers and consumers ‘Dolittle Dempsey’ has delayed for a full three months, despite the fact that he has received no appeals other than Ryanair’s appeal last December... Ryanair believes that Minister Dempsey has deliberately delayed the appointment of the Appeal Panel so that the DAA monopoly (which his Department owns and protects) can impose these price increases before the Appeal Panel has had a chance to rule on them.”

In the course of a hearing before me on oral evidence on 26^th March, 2010, Mr. O’Leary stated that both Ryanair’s letter and its news release of 5^th March, 2010, crossed with the Minister’s letter of 3^rd March and that it had no knowledge that the Minister had made that decision when its open letter and news release were issued.

The following short extract from the transcript of that hearing is instructive:-

“Q. 120 Mr. Ferriter: Just to ask that question again Mr. O’Leary did you consider issuing a clarifying press release apologising to the Minister, once you received his letter of 3^rd March, to make it clear to the public that in fact he had set up a panel?

A. No.

Q. 121 Mr. Justice Kelly: And why not Mr. O’Leary?

A. Because the press release, your Honour, simply calls on the Minister to appoint the Appeals Panel.

Q. 122. Mr. Justice Kelly: Which he had already done?

A. With respect, we were not aware that he had already done when we issued that.

Q. 123 Mr. Justice Kelly: I know, you’ve told me that. When you did become aware, you didn’t think it right to put the matter right and say the Minister has now done it?

A. I’m not sure, why we would issue – if we issue a press release calling on the Minister to do something, why would we issue a press release subsequently saying thank you to the Minister for doing it?”

These Proceedings
This application commenced by the issue of a notice of motion dated 4^th February, 2010. It was returnable in the Judicial Review List on 15^th February, 2010.

On 17^th February, 2010, CAR issued a motion seeking to have the proceedings transferred to the Commercial List. I heard that motion on 22^nd February, 2010 and made an order pursuant to O. 63A, r. 1(g) of the Rules of the Superior Courts transferring the litigation to the Commercial List. I fixed 15^th April, 2010, for the hearing of the application for judicial review and made a number of orders to ensure that the case was in a state of readiness to proceed on that date. Ryanair also issued a notice of motion seeking an adjournment of the proceedings pending the determination of its appeal. I fixed the same hearing date for that and likewise gave directions so as to ensure that that adjournment application could be heard on the same date.

That motion was grounded on an affidavit of Mr. Kenan Furlong, a Solicitor acting for Ryanair. That affidavit was sworn on 20^th February, 2010. In it, the deponent, having referred to Ryanair’s letter to the Minister of 18^th December, 2009, swore that the Minister had not yet decided whether to form the Appeal Panel. That statement was clearly incorrect. Mr. Furlong subsequently swore an affidavit apologising for this incorrect statement being included in his affidavit. Likewise, Mr. Komorek apologised for an omission in his affidavit grounding the application for leave to apply for judicial review where he failed to disclose the decision of the Minister.

When the matter was before me on 22^nd February, the question of the judicial review proceedings and Ryanair’s appeal gave rise to debate. I gave the directions which I have already indicated and in the course of my ruling, I referred to the uncertainty concerning Ryanair’s request for an appeal and, having regard to what was contained in the affidavits to which I have just referred, I said “I don’t know when and if the Minister will set up the appellate Tribunal or at what pace it will move”. I made no criticism of the Minister whatsoever. I pointed out the discrepancy in the legislation allowing a judicial review which is required to be brought within two months and at the same time permitting an appeal where the Tribunal does not have to be set up for three months.

CAR and DAA had no better information than the court concerning the Minister’s decision to set up the appeal panel. They also believed what was contained in the Ryanair affidavits on this topic.

When CAR and DAA became aware of the true situation about the appeal they were very concerned about the misinformation which was placed before the Court and brought an application concerning it. It was, of course, a highly unsatisfactory situation where both the solicitor acting for Ryanair and its head of regulatory affairs should have misled the court concerning the Minister’s decision to set up the Appeal Panel. At a hearing before me on 26^th March, 2010, Mr. Michael O’Leary, Ryanair’s Chief Executive explained that he had not furnished a copy of the Minister’s letter to either of them nor did either deponent examine or check the file before they swore their respective affidavits.

Apologies were tendered by both deponents and by Mr. O’Leary. It is wrong that such a state of affairs should have occurred. The Court is entitled to expect that sworn testimony placed before it should not materially misstate a fact or omit the existence of a fact thereby effectively misrepresenting the true position to the Court. That is what happened in the present case. It is not demonstrative of proper care being taken by Ryanair.

That unfortunately was not the end of the matter. In the course of the hearing before me on 26^th March, 2010, I became aware of a letter written by Mr. O’Leary to Minister Dempsey on 25^th February, 2010.

The letter read as follows:-

“Dear Noel,

I refer to our previous letters of 18^th December, 11^th, 12^th, 22^nd January and 1^st February, all of them requesting you to urgently establish an Appeal Panel to consider Ryanair’s appeal against last December’s determination by the CAR (CP4/2009) which rubberstamped up to 40% cost increases in passenger charges at Dublin Airport during 2010, at a time when traffic is collapsing and there is price deflation in the Irish economy.

You have repeatedly refused to appoint an Appeal Panel and have confirmed that you will take no action on this issue until after 4^th March next, which is just three weeks before the DAA have already advised Dublin airlines of their intention to impose these excessive and unjustified charge increases.

This matter came before the High Court on Monday, 22^nd Feb and was criticised by Mr. Justice Kelly, who stated:-


‘There is a discrepancy in the legislation as far as I can see in that an application for judicial review is required to be brought within the two month period, yet this appeal mechanism provides for the Minister to set up an Appeals Tribunal and he does not even have to set it up for three months.’

Mr. Justice Kelly then went on to recommend:-

‘It seems to me that what is required is that the Act be amended so as to ensure that people cannot ride two horses at the one time and where two separate timetables are fixed by the same legislation allowing a judicial review to be heard much more quickly than the appeal.’

Both Mr. Justice Kelly and indeed the DAA’s lawyers were critical of your inexcusable delay to appoint an Appeal Panel which seems to be another attempt by the Dept of Transport to frustrate any appeal against the CAR’s determination, in order to allow the DAA monopoly to impose these unjustified and excessive cost increases from 28^th March next, long before any Appeal Panel can rule on Ryanair’s appeal.

May I again respectfully ask you to stop delaying this appeal, and in the interest of efficiency and speed, to invite the same members who formed the 2008 panel to join the 2010 panel so that people who are familiar with the issues at Dublin Airport can expedite the hearing of Ryanair’s appeal and remove the uncertainty that presently (sic) hangs over airlines and passengers at Dublin Airport.

Your repeated delay and inaction in this matter is inexcusable, but sadly unsurprising from a Minister whose only action at Dublin Airport in recent months was to order (the supposedly independent) Aviation Regulator to rubberstamp the DAA’s request for a 40% increase in airport fees during 2010, at a time of price deflation and continuing traffic collapse at Dublin Airport.

Yours sincerely

Michael O’Leary

Chief Executive.”

That statement had no basis in truth. I made no criticism of the Minister whatsoever, still less criticism of an alleged “inexcusable delay”. This part of Mr. O’Leary’s letter was a fiction.

Mr. O’Leary tried to justify what was said in the letter by reference to the two portions from the transcript quoted in it. This was, as I said at the time, a pathetic attempt to try and justify the untruth.

A further apology was forthcoming from Mr. O’Leary which I accepted at the time. I also required him to write a letter to the Minister by way of apology but only after I had vetted it. This was done.

Subsequent to the hearing on 26^th March, 2010, a further apology was proffered in relation to another letter which had been written by Mr. Komorek misrepresenting my position in like fashion.

The very unsatisfactory position which I have outlined concerning Ryanair’s behaviour is one of the matters relied upon to support the contention that Ryanair’s behaviour justifies a refusal of leave.

The Grounds
When the matter came before me on 22^nd February, 2010, the statement required to ground an application for judicial review was in a thoroughly unsatisfactory condition. In essence Ryanair sought certiorari of the determination. No fewer than twenty three different forms of relief were sought, many of them repetitious and tautologous. The grounds seeking those reliefs were in no better condition. Some were not grounds at all. One could be forgiven for thinking that they were designed to obfuscate rather than elucidate. I directed Ryanair to file and serve an amended statement of grounds identifying with clarity the precise reliefs sought and the grounds upon which they were being sought. My endeavours to bring some clarity to the situation bore only limited success. The amended statement reduced the numbers of reliefs to nine as opposed to twenty three. Five of the original grounds were deleted but the amended statement of grounds added six new ones, two of which appear to be modelled on one of the fourteen forms of declaratory relief that were contained in the original notice but which were dropped from the amended one.

CAR and DAA argue that the grounds upon which the reliefs are sought are really merits based rather than proper judicial review grounds. That conclusion, they say, can be reached not merely by a reading of the grounds but also by comparing and contrasting them with the grounds which were set out by Mr. Komorek in his originating letter to the Minister of 18^th December, 2009, seeking to appeal the decision. Those grounds were merits based.

It might be expected that I would at this stage of the judgment set out the grounds and compare them to the contents of Mr. Komorek’s letter of 18^th December, 2009. That would establish the correctness or otherwise of CAR’s and DAA’s proposition. I will not lengthen this judgment by so doing because Ryanair has made that wholly unnecessary.

As I have already pointed out, there was also listed for hearing before me on 15^th April, 2010, Ryanair’s application to adjourn the judicial review proceedings pending the outcome of its appeal. That application was withdrawn by Ryanair. However, the affidavit evidence which was adduced in support of it was before the Court. In the course of that, the following averment was made:-

“The Appeal Panel is a cost efficient, quick and satisfactory forum for the purpose of addressing the grievance that Ryanair has with the Commission’s determination. This is Ryanair’s preferred forum on the basis that, if successful, it will obviate the need for lengthy litigation, which litigation will be at the expense of all of the parties (i.e. Ryanair, the Commission and the notice party) or the airport users and members of the public who are the persons that will pay for any judicial review proceedings in the event that Ryanair is successful. I say that this litigation will potentially involve very significant costs to all the parties. In 2007, Ryanair issued similar proceedings challenging the 2007 determination entitled Ryanair v. the Commissioner for Aviation Regulation, Record No. 1246/2007 J.R. which were issued in September 2007 and determined in May 2008. In my opinion, based on the costs incurred by the same three parties in the 2007 judicial review proceedings, the combined costs of the three parties in this litigation could well be in excess of €1,000,000.”

That statement is a clear acknowledgement that the grievance which

Ryanair has with CAR can be fully dealt with by the appeal mechanism which it has invoked. Indeed that that is its preferred course.

In these circumstances, CAR and DAA contend that the Court should, at this stage, as a matter of discretion, refuse leave to apply for judicial review.

This proposition is advanced on the basis that the appeal taken by Ryanair provides a full and complete opportunity for it to advance all its complaints against CAR and thus judicial review is inappropriate.

The second ground as already alluded to is that Ryanair’s conduct and behaviour concerning this matter amounts to misconduct and misbehaviour of a type that warrants a refusal of leave. It was argued that such conduct demonstrated “an ingrained culture of disrespect for process”, including the court process, so as to disentitle Ryanair to leave to apply for judicial review.

CAR and DAA also argue that Ryanair has failed to show substantial grounds that the determination is invalid and thus fails the statutory test prescribed by s. 38 of the Act.

Normally the question of discretion arises after the court decides whether substantial grounds have been demonstrated. If they are, the court decides whether as a matter of discretion leave should be granted to apply for judicial review or not. Given Ryanair’s own evidence which I have just repeated, I am of the view that CAR and DAA are correct and that I should now deal with the question of discretion.

Alternative Remedy
If leave to apply for judicial review were granted in this case, the principal relief being sought is certiorari quashing the determination. That was so both in the original statement grounding the application and in its’ amended form.

Certiorari is not granted as of right. It is a discretionary remedy. (See The State (Abenglen Properties Limited) v. Dublin Corporation [1982] I.L.R.M. 590; De Roiste v. Minister for Defence [2001] IESC 4.)

It is nothing new for the Court to be asked to decide to refuse certiorari because of the existence of an alternative remedy. That question has been agitated in many cases over the years.

One of the principal authorities on the topic is the Abenglen case. In that case the Supreme Court had to consider how it would exercise its discretion where there was an alterative remedy available. It decided that the exercise of discretion was a question of justice and in deciding it at least three factors could be taken into account. The first was the purpose for which certiorari was being sought, the second the adequacy of the alternative remedy and the third the conduct of the applicant.

Particularly apposite are the following quotations from Henchy J. in that case:-

“The present case does not seem to me to exhibit the exceptional circumstances for which the intervention of the courts was intended. On the contrary certiorari proceedings would appear to be singularly inapt for the resolution of the questions raised by Abenglen. Certiorari proceedings, based as they are on affidavit evidence, can result only in a stark and comparatively unilluminating decision to quash or not to quash; whereas an appeal to the Board would have allowed all relevant factors to be explored (if necessary, in an oral hearing with the aid of experts in the field of planning), thus allowing an authoritative exposition to be given of the appropriate practice and procedure, aided, if necessary, by reference to the High Court on a question of law.”

“I am merely explaining why I would exercise my discretion against Abenglen in the event of the court deciding that certiorari lies as a matter of discretion. Such an exercise of my discretion would appear to accord with the practice in the United States, which is stated as follows in 14 Am. Jur. 2d:-

‘Under the prevailing practice, a writ of certiorari will not issue if there is another adequate remedy, such as an appeal or writ of error, an action at law or in equity, or intervention with the right of appeal secured. It is only in cases of unusual hardship and in the furtherance of justice that the use of the writ of certiorari is permitted to supplement the method of review expressly provided by statute (Emphasis supplied) (at 787).’

It may be that not all of the limitations in that passage on the issue of certiorari accord with the law as it has evolved in this jurisdiction; but where Parliament has provided a self-contained administrative and quasi-judicial scheme, postulating only a limited use of the courts, certiorari should not issue when, as in the instant case, use of the statutory procedure for the correction of error was adequate (and, indeed, more suitable) to meet the complaints on which the application for certiorari is grounded.”

In De Roiste v. Minister for Defence [2001] IESC 4, Denham J., speaking for the Supreme Court, identified matters which the Court might take into account in deciding whether or not to allow judicial review. She said:-

“…the court may take into account factors such as: (i) the nature of the order or actions the subject of the application; (ii) the conduct of the applicant; (iii) the conduct of the respondents; (iv) the effect of the order under review on the parties subsequent to the order being made and any steps taken by the parties subsequent to the order to be reviewed; (v) any effect which may have taken place on third parties by the order to be reviewed; (vi) public policy that proceedings relating to the public law domain take place promptly except when good reason is furnished. Such list is not exclusive. It is clear from precedent that the discretion of the court has ever been to protect justice.”

“The true question is which is the more appropriate remedy considered in the context of common sense, the ability to deal with the questions raised and principles of fairness; provided, of course, that the applicant has not gone too far down one road to be estopped from changing his or her mind.”

In the light of those sworn statements made on behalf of Ryanair it would be wholly inappropriate for this Court to exercise its discretion in favour of permitting leave to apply for judicial review.

Even if I were satisfied (and I am not) that substantial grounds were made out, I would refuse leave as a matter of discretion.

In these circumstances, the application for leave to apply for judicial review is refused.

Misconduct
In view of the conclusion which I have reached, it is not necessary for me to reach a decision on whether the conduct of Ryanair is of a type that would warrant a refusal of leave as a matter of discretion.

It has to be recorded, however, that the factual misstatements in affidavits put before the Court on its behalf misled the Court in a material way. Its chief executive in his letter of 25^th February, 2010, to the Minister seriously misrepresented the position of the court. A later letter from Mr. Komorek of 12^th March, 2010 was to like effect. There are grave matters and fall far below the standards that the Court is entitled to expect.

Earlier in this judgment, I set out the exchanges between Ryanair and the Minister and identified various misrepresentations of the Minister’s position which occurred. Whilst that is not perhaps of direct relevance, I was invited to regard it as part of the alleged “ingrained culture of disrespect for process”, including the court process, which appears to prevail in Ryanair.

Having had to consider Ryanair’s untruths to the Court, its untruths about the Court and its untruths about the Minister, one has to conclude that the truth and Ryanair are uncomfortable bedfellows.

Result
The application is dismissed.