High Court of Ireland Decisions
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Cite as: [2015] IEHC 51
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Judgment
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Neutral Citation: [2015] IEHC 51 HIGH COURT COMMERCIAL [2014 No. 61 MCA] IN THE MATTER OF AN APPEAL PURSUANT TO THE EUROPEAN COMMUNITIES (ELECTRONIC COMMUNICATIONS NETWORKS AND SERVICES (FRAMEWORK) REGULATIONS 2011 (SI No. 333 OF 2011) AND IN THE MATTER OF COMMUNICATIONS REGULATIONS ACTS 2002 TO 2011 BETWEEN EIRCOM LIMITED APPELLANT AND
COMMISSION FOR COMMUNICATIONS REGULATION RESPONDENT AND BY ORDER OF THE COURT
VODAFONE IRELAND LIMITED NOTICE PARTY JUDGMENT of Mr. Justice Cregan delivered the 13th day of January, 2015 Introduction 2. The notice party is seeking its costs against Eircom only and not against Eircom and Comreg. Background 4. In its originating notice of motion Eircom sought the following reliefs:
2. A declaration that the positive net cost of Eircom’s universal service obligations constituted an “unfair burden” within the meaning of article 13 of Directive 2002/22 EC on universal service and users rights relating to electronic communications networks and services. 3. An order directing Comreg to establish a “sharing mechanism” pursuant to regulation 12 (2) of the European Communities (Electronic Communications Networks and Services) Universal Service and Users Rights (Regulations SI 337 of 2011) 4. Alternatively an order remitting the appellant’s universal service fund application for the year 2009-2010 to the respondents for consideration in accordance with the directions of the court. 6. The full case was at hearing before the High Court for two weeks in July 2014 and it almost certainly would have required a further two weeks to complete. The underlying facts in the case and the regulatory regime in the telecommunications industry are complex. In addition the legal issues raised in the appeal were complex. A significant number of expert reports on affidavit were furnished to the court. In addition numerous affidavits and voluminous exhibits also formed part of the application and were opened extensively during the course of the hearing. 7. On or about 21st October, 2014 the proceedings were settled between Eircom and Comreg. The terms of the settlement were reduced to writing and were produced to the court. It is not necessary to set out the terms of the settlement in full. However some of the elements of the settlement were that:
(b) The parties would bear their own costs in connection with the appeal; (c) The parties agreed that the respective positions of each party adopted in the course of this funding appeal would be preserved for the purpose of any appeal from a future decision of Comreg concerning an application by Eircom for USO funding and that neither party would be estopped from relying on any of the grounds raised in the current appeal. In particular Comreg agreed that it would not rely on the withdrawal of the appeal in this case (on agreed terms) to assert in any future challenge to a Comreg decision that Eircom was in any way estopped from raising the same grounds in any future challenge relied upon by Eircom. Submissions of the parties. 10. Vodafone also submitted that it sought to be joined to this proceedings on the primary but not exclusive basis that it was “vitally interested” in the third relief of Eircom’s notice of motion (i.e. an order directing the establishment of a sharing mechanism in respect of the cost of providing the universal service obligation in Ireland). It submitted that if this relief was granted it would have a detrimental effect on Vodafone and could impose a financial burden upon it. Vodafone submitted that it could not simply depend on Comreg to defend the decision in the expectation that, should the appeal be successful, Vodafone would enjoy a further right to be consulted in relation to any sharing mechanism which Comreg might be required to consider. Thus Vodafone submitted that the nature of the relief sought by Eircom meant that Vodafone’s interests could be adversely effected by the outcome and that its interests and those of Comreg might not necessarily be identical. 11. Vodafone also submitted that, in considering whether to apply to be joined as a notice party, it was mindful that in a previous case - Vodafone Ireland Limited v. Comreg (2012/465 MCA) Cooke J. (in an ex tempore ruling on 30th September, 2013) had held that it was not appropriate to allow third party operators make submissions in relation to remedies in circumstances where they had not availed of an earlier opportunity to be joined as notice parties to proceedings challenging the relevant decision. 12. Vodafone also sought to place some emphasis on the fact that on days 2 and 4 of the hearing, Eircom indicated that - although it was not abandoning the third relief in its notice of motion - it recognised it might be unlikely to obtain such a relief and that at the close of day 4 Eircom indicated that reliefs 2 and 3 might be “left behind” and that a successful challenge could result in a remittal to Comreg. However in my view that was by no means a concluded view on the part of Eircom and Vodafone accept that the relief was never formally abandoned. 13. In opposing the application, Eircom submits that the appeal centred on two major issues. These were:
(b) The allegation that Comreg had erred in the manner in which it assessed whether the acknowledged burden imposed on Eircom was in fact “unfair”. (This is set out at para. 1 of the notice of motion.) 15. Eircom also argued that Vodafone made submissions in support of both sides on different issues. These were:
(b) The inclusion of consultancy costs as a reckonable cost in assessing the burden on Eircom of providing universal service. (On this issue Vodafone supported Comreg’s stated position.) Applicable legal principles and review of authorities 18. Order 99 r. 1 (4) provides
(a) Whereas there was an element of public interest, the application as originally drafted sought specific remedies potentially detrimental to the notice party; (b) The notice party was a necessary party; (c) The notice party participated fully in the trial; (d) The notice party was an entirely innocent party and acted in good faith at all times; (e) The notice party was successful in the proceedings; (f) No compelling reasons have been established as to why the costs should not follow the event; (g) The learned trial judge exercised his discretion in accordance with law; 21. The question then is what are the principles which should be applied by a court in considering the exercise of its discretion in a case such as this. 22. The notice party submitted that a public law challenge which results in the decision appealed against remaining intact and the proceedings struck out is “tantamount to an abandonment of the claim or a discontinuance of proceedings”. It was submitted that the court in those circumstances remained entitled to exercise its costs jurisdiction and relied in this regard on Call agy v. Minister for Education (unreported Supreme Court 23rd May, 2003) and Nearing v. Minister for Justice [2009] IEHC 489. 23. However in my view this analogy is incorrect. There is a difference in principle between proceedings which have been settled by agreement between the parties - even if the decision being appealed against remains intact - and other proceedings where the claim is abandoned or discontinued. In the latter case there is no element of settlement or agreement to the compromise of the proceedings. Moreover, in my view, this argument of the notice party is to ignore entirely the fact that the settlement agreement in this case, like the settlement agreement in many cases, is agreed as a finely balanced exercise of concessions and reliefs, of advantages and disadvantages. It is inappropriate to select one feature only of the settlement agreement (i.e. the fact that Eircom agreed to withdraw its appeal) and to ignore entirely the other agreed terms of the settlement agreement 24. The notice party also relies on USK and District Residents Association v. Environmental Protection Agency [2007] IEHC 30, where Clarke J awarded costs to the notice party (Greenstar) who had been awarded a waste licence by the EPA which was being challenged by the applicant. 25. However an important point of distinction between USK and the present case is that in USK the matter went to a full judicial hearing as opposed to the present case where the proceedings were settled by agreement between Eircom and ComReg. It seemed to me that, as a matter of principle, fundamentally different considerations apply to cases which are settled. 26. The notice party also placed considerable reliance on a decision of Herbert J in Eircom v. Director of Telecommunications Regulations [2002] IEHC 72 because it also involved a telecoms regulatory appeal, an agreement between the applicant and the respondent to strike out the proceedings without regard to the notice parties and an application by the notice party for their costs. In that case Herbert J made an order for costs in favour of the notice parties as against the applicant on the grounds that the applicant had in effect conceded the right of one notice party to be joined and unsuccessfully opposed the application of the other to be joined. 27. However in that case the dispute between Eircom and the Director of Telecommunications Regulation (which concerned an application for an order of certiorari quashing a decision of the respondent) became moot through circumstances entirely outside the control of either the applicant or the respondent. Again there is a difference in principle between such a case and the present case. In Eircom the proceedings became moot and both parties agreed to strike out the proceedings as a consequence; in this case the parties agreed a settlement between them and as a consequence they agreed to strike out the proceedings. 28. I have also considered the case of Telefonica O2 v. Comreg [2011] IEHC 380. In this matter the High Court considered the issue of the costs of a notice party of an inspection motion in a telecoms judicial review where the substantive proceedings were subsequently settled between the appellant and Comreg. 29. As Clarke J. stated in Telefonica at para. 7.2 :
7.3 It seems to me that the balance of justice favours the award of costs to the Minister and to BT. For the reasons already analysed, the involvement of those parties was necessary, reasonable and proportionate to the interests which they sought to advance. The manner of their involvement was not such as added in any inappropriate way to the costs of the motion with which I am concerned. No final result of that motion was determined and will not, for the reason set out, now be determined. However, the reasons why BT and the Minister have been deprived of the opportunity of satisfying the Court that they were entitled to resist the motion from the beginning is because of the settlement of the proceedings generally. To take but a simple example, if the result of the first module had been to the effect that the standard of review went no higher than O’Keeffe irrationality, then it is clear the motion for inspection/discovery would necessarily have failed. In those circumstances, and having regard to the involvement of the notice parties, it is difficult to see how they would not have been entitled to their costs. However, we will now never know what the result of the first module might have been. It would seem to me to be a greater injustice to deprive the notice parties of their costs in circumstances where they might well have achieved a situation of winning the motion, thus entitling them to their costs, where the reason why we will never know whether they would have won has been the settlement of the proceedings between O2 and ComReg. 7.4 While it remains true that O2 might equally have been successful in obtaining some disclosure which was resisted, it is O2’s own action in settling the proceedings which has created the situation whereby we will never know whether O2 would have succeeded. On that basis, the equities are not, in my view, equal. 8.1 It follows that the Minister and BT are entitled to their reasonable costs of participating in the motion. 8.2 In summary, I will, at this stage determine that both the Minister and BT are entitled to their costs as against either or both of O2 and ComReg but leave over the question as to the entity or entities against whom the order should be made to further argument.” 31. It is also of some significance that in the present case the notice party is only seeking its costs against Eircom. In the Telefonica case the parties sought a costs order against both parties to the settlement. As Clarke J. stated in para. 2.4 of his judgement
34. However the above case whilst important can be distinguished because in Treasury Holdings the case went to a full hearing and in her judgment the trial judge dismissed the applicant’s claim for orders of certiorari. In the present case however the proceedings were settled by agreement. Assessment of legal principles 36. Moreover in circumstances where proceedings have been settled by agreement it is difficult to see on what basis in principle a notice party could seek its costs against one party to the settlement rather than the other. In this case it is difficult to see on what principled basis Vodafone should seek its costs against Eircom rather than against both parties. However the reason the notice party has not done so and has instead sought to obtain its costs against Eircom is based on its analysis that “Eircom has elected to strike out its appeal and the consequence of that the impugned Comreg decision remains intact”. However that is, in my view, to single out one element of the settlement agreement to the exclusion of all others. It is true that Eircom withdrew its appeal to the actual decision under challenge. However it did so as part of a carefully calibrated settlement agreement with Comreg. It withdrew its appeal on agreed terms. Moreover it expressly reserved the right to argue again its points in relation to the decision under appeal in respect of any future decision Comreg might make. 37. Moreover the court should also consider the regulatory context in which this appeal was brought. Whilst the decision under review remains intact, a similar decision may have to be made in subsequent years by Comreg and it may be the case that issues emerged in the running of this case which gave both parties an opportunity to reflect on matters afresh. Clearly it had this effect as the parties agreed to settle the proceedings rather than pursue them to a court decision. In a complex regulatory regime such as the telecommunications regime the court should have regard to the fact that some regulatory decisions may have to be made on an annual basis or must be revisited every number of years. In those circumstances it is possible that parties might agree to settle proceedings and to leave a regulatory decision intact in order to fight the battle in a different way on a further occasion. 38. Whilst it was of course reasonable for the notice party to seek to be joined as a notice party to the proceedings, it does not follow as a matter of logic that it is therefore entitled to its costs when those proceedings are subsequently settled. 39. The question then becomes one of principle as to who bears the risk of a notice party’s costs in cases where proceedings settle. Much depends on the circumstances of the case. 40. However where as here, a notice party applies of its own motion for its own commercial interests to be joined as a notice party to the proceedings then it seems to me it must run the risk that the proceedings might settle without reference to it and its costs. 41. In the circumstances I am of the view that it would be unjust and unfair to award the costs of the notice party against Eircom and I refuse the application. |
