High Court of Ireland Decisions
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Cite as: [2015] IEHC 97
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Judgment
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Neutral Citation: [2015] IEHC 97 THE HIGH COURT JUDICIAL REVIEW [2014/15 JR] BETWEEN CYRIL BERRY, PETER BURKE, DAVID BYRNE, BRIAN DOLAN, PATRICK GALVIN, FERGAL GRIFFIN, FINTAN GRIFFIN AND MARK SINNOTT APPLICANT AND
SHANNON FOYNES PORT COMPANY RESPONDENT JUDGMENT of Ms. Justice Murphy delivered the 9th day of February 2015 1. This is an application for an Order of Mandamus directing the respondent to refer to a person nominated pursuant to section 59 of the Harbours Act 1996, a dispute between the parties relating to the pilotage charges imposed by the respondent as and from the 1st January 2014. 2. Background 3. The applicants are self-employed pilots licensed to provide pilotage services to shipping entering the Shannon Foynes port area in accordance with an agreement made in 2002 with the Shannon Foynes Port Company pursuant to section 59 of the Harbours Act 1996. In the various items of correspondence exhibited in the course of these proceedings the pilots are referred to, and refer to themselves, as being self-employed. The nature of their duties and the manner of their payment also indicates a self-employed status. The Court, for the purposes of this application, is satisfied that the applicants are in fact self-employed. 4. Pilotage is compulsory in the Shannon Estuary. The Shannon Foynes Port Company sets the rate for pilotage pursuant to section 64 of the Harbours Act 1996. It collects the pilotage charges from shipping entering the harbour and distributes that among the licensed pilots, less the agreed administration costs, in accordance with the pilotage agreement. 5. The applicants are dissatisfied with the process according to which the pilotage charges for 2014 were determined. They contend that from the inception of the Pilotage Agreement in 2002, pilotage charges have been agreed annually between the pilots and the Company’s Harbour Master. They maintain that in coming to that agreement the relative difference in charges for the different ports in the estuary remained unchanged, these having been historically determined. They contend that the charges imposed for 2014 amount to a restructuring of pilotage charges in the pilotage district at a considerable loss to the pilots and further contend that such a significant alteration could not be effected without their agreement. The remedy which they invoke to address this perceived wrong is an Order of Mandamus directing the respondent to refer to a person nominated pursuant to section 59 of the Harbours Act 1996, the question as to whether clause 4 of the Pilotage Agreement (which sets the basis for pilotage charges) ought to be amended to include a term enabling the Port Company, on a once off basis, to vary the pilotage charges on criteria other than gross tonnage as heretofore. They propose a particular term for arbitration which would ensure that a pilot’s income would not be reduced by more than 7.5%. In the alternative, they seek such further or alternative Order of Mandamus for a referral pursuant to section 59 of the Harbours Act 1996, as the Court may deem appropriate. Leave to apply for an Order of Mandamus was granted ex parte by Peart J on 13th January 2014. 6. In its grounds of opposition filed on 14th March 2014, the respondent denied that pilotage charges had been agreed annually between the parties but accepted that it had engaged in consultation with the pilots in respect of pilotage charges. The respondent maintains that pursuant to section 64 of the Act it is not merely entitled, but is obliged to determine the rates of pilotage in its district and that since the function is statutorily assigned to the respondent, pilotage charges could not form part of any pilotage agreement as that would amount to an abrogation of its duty and an unlawful fettering of its statutory discretion. The respondent further maintained that section 59, properly construed, has no application to the current disagreement. Whether mandamus lies in this particular case depends on the construction of the Harbours Act 1996 and in particular section 59 thereof. 7. The 1996 Act
8. In the event that a company opted to have a system of licensed pilots as opposed to employed pilots, section 59(1) provides for the making of a pilotage agreement between a port company and its licensed pilots. For the purpose of concluding such an agreement section 59(1) allows the pilots to nominate a person or persons for the purpose of concluding such an agreement. In this case the pilots nominated SIPTU to represent them in negotiations with the Company. 9. Sections 59(2) and 59(3) are of particular relevance to this application and they read as follows:
(3)(a) In this subsection relevant representatives means the person or persons nominated under subsection 1 or 2 to enter into- (i) A pilotage agreement with the company referred to in this subsection, or (ii) An agreement providing for the variation of a pilotage agreement to which the said company is a party or (iii) A pilotage agreement which will replace a pilotage agreement referred to in sub-paragraph (2) and references in this subsection to a pilotage agreement shall be construed as references to a pilotage agreement referred to in sub-paragraph (i), (ii) or (iii), as may be appropriate. (b) If a company and the relevant representative cannot agree as to whether a particular term or terms ought to be included in a pilotage agreement they may refer the matter to a person who shall be nominated by them or in the event of them being unable to agree as to the person to be nominated for that purpose, to a person who shall be nominated by the Minister. (c) The person nominated under paragraph (b) shall, having considered the matter referred to him or her under that paragraph and any submissions which the company concerned and the relevant representatives have made to him or her in relation thereto (being submissions made to the person within such reasonable period of time as he or she shall specify for the purposes of the matter, decide whether the particular term or terms ought to be included in the pilotage agreement and his or her decision shall be binding on the company concerned and the relevant representatives. 11. Section 59(5) provides for the cancellation of a pilotage agreement to be replaced by employment of pilots but this power can only be exercised by the port company if a majority of the licensed pilots vote in favour of the proposal in a secret ballot. Thus once a company opts for a licensed pilot system, it cannot alter that arrangement without the consent of the pilots. 12. Section 64 is the next section of relevance to this application. That section deals with pilotage charges. It provides:
(2) Without prejudice to the generality of subsection 1 the pilotage charges that may be imposed under this section shall include- (a) pilotage charges by way of penalties payable in cases where the estimated time of arrival or departure of a ship is not notified as required by byelaws made by the company under s.71 or where a ship does not arrive or depart at the time notified in accordance with such bye laws, and (b) pilotage charges in respect of the cost of providing, maintaining and operating pilot boats for the pilotage district. (3) (a) Different rates of pilotage charges may be imposed by a company in different circumstances. (b) Without prejudice to the generality of paragraph (a) charges may be imposed in a similar manner and in the circumstances as provided for under subsection (9) of section 13 in respect of harbour charges and that subsection together with subsection 10 of that section shall also apply to pilotage charges in the same manner as they apply to harbour charges, as if references to harbour charges were references to pilotage charges. (4) Pilotage charges shall be recoverable by:- (a) The company concerned or (b) If a pilotage agreement provides that the licensed pilots for its pilotage district shall recover pilotage charges in that pilotage district, those licensed pilots, from the person on whom they are imposed as a simple contract date in any court of competent jurisdiction. 14. The Agreement
15. Operation of the Agreement 16. The Dispute 17. The Issue 18. Counsel for the applicants advanced to the Court a construction of the statute which was based on what he described as an interplay between section 59 and section 64 of the Act. He contrasted the current position with that which pertained under the now repealed Pilotage Act 1913. Prior to the introduction of the Harbours Act 1996, the whole of pilotage, including charges, was administered by bye-laws. 19. Section 6 of the 1913 Act provided that the Board of Trade or pilotage authority, before making any amendments had to take steps to ascertain the opinion of the pilots at the port with respect to the matter in question, if there were no pilots directly represented on the board or authority. Section 17(f) gave the pilotage authorities power to make byelaws to fix pilotage rates. Section 18 allowed anybody, including licensed pilots, to come back to the Board of Trade and ask for a byelaw to be changed. Therefore, even a byelaw itself was not written in stone. Therefore the pilots were protected in a number of ways by the process under the Pilotage Act 1913. 20. Counsel submits that what previously done by byelaws is now imposed by section 64 of the 1996 Act which provides that a port company may impose pilotage charges at such rates as from time to time are determined by it. He accepted that section 64(1) gives the Port Company the power which they claim but he contended the Port Company has incorrectly claimed this as an exclusive, absolute or unfettered power. Section 64 is only one side of the coin. The other side of the coin, he maintains, is section 59 whereby, as a supplier of services to ships, the respondent must actually procure the services from the applicants by entering into a Pilotage Agreement which accommodates what they propose to do. 21. He pointed out that section 56 of the Harbours Act requires that port companies must ensure the provision of pilotage services either by employing the pilots or by continuing to licence them, subject to a pilotage agreement. He states therefore that where the pilots are not subject to a contract of employment and the pilotage charges go directly to the pilots (except charges which go to the pilots boats and subject to a number of deductions provided for in the 1996 Act), there is almost a direct relationship between section 64 and what the pilots actually receive. Therefore, if section 59 is to have any meaning, there must be agreement about pilotage charges before they are passed on under section 64. It was pointed out that section 64 comes after section 59 and while the respondent is free to determine its charges which relate to other matters, including what is to be received by the pilots, this should happen subsequent to an agreement being reached with the pilots in relation to what is to be received by them, pursuant to section 59. According to counsel for the applicants section 64 cannot be taken out of context, the Act must be construed as a whole. In essence counsel for the applicants accepted that the company had power to set the rates for pilotage pursuant to section 64, but argued that they were not at large in doing so; that they had to agree the rate with the pilots and, in default of agreement, had to refer the matter to arbitration pursuant to section 59(3)(b). 22. In support of this construction he drew an analogy with the provisions of the Act relating to disputes between harbour companies relating to harbour fees and pilotage charges. As a result of the amendment to section 64 under the Harbours (Amendment) Act 2009, section 64(3)(b) gives a landlocked company which has a grievance in relation to pilotage or harbour charges imposed on their harbour users by another port company, the opportunity to complain to the Minister who can refer the matter to arbitration. The wording in the relevant section for an arbitration between port companies is the same as that contained in section 59(3)(c) in relation to a pilotage agreement and from that he extrapolates that in the event of a dispute between the pilots and the company about pilotage rates the same provision applies. Counsel for the applicant also contended that if section 64 was construed as conferring on the respondent the exclusive right to set pilotage rates then the Company was in effect acting as a judge in its own cause. If the respondent had an unfettered right under section 64 in administering the pilotage legislation, the respondent would not be entitled to take their own commercial interests into account, since they would be the deciding authority and that would make them a judge in their own cause. This scenario was avoided he maintained by construing section 64 with section 59 and in those circumstances, the Port Company is entitled, in making an agreement with the pilots, to further its own interests in negotiations. Therefore, it was submitted, the pilotage charges must be arrived at by taking the pilots’ views into account through engaging in negotiations under section 59, and referring the issue to an independent person if this becomes necessary. 23. From the start of this dispute, the respondent’s position has been clear. It contends that it has sole and exclusive power to determine the rate for pilotage in its district pursuant to section 64 of the Act. Were there a precondition to the exercise of that power that it must agree rates with the pilots, the Act would have said so. The new regime for fixing pilotage rates is broadly similar to that contained in the Pilotage Act 1913, contrary to what counsel for the applicant has suggested, save that the power to fix charges has been upgraded in the 1996 Act to a legislative power as opposed to a power to make byelaws. While the opinion of the pilots had to be sought under the old regime, they had no power of veto in respect of the fixing of the rate which was the function of the pilotage authority. 24. As to the applicant’s suggestion that the conferring of such an unfettered power would offend the principle of nemo iudex in causa sua, the respondent points out that it is expressly conferred with the statutory power to determine rates of pilotage charges subject to section 64(1), and the exercise of that power involves a range of considerations, which include the meeting by the respondent of its statutory obligations (including its obligation in respect of its own financial position). The applicant’s submission is completely misconceived. The respondent is a commercial entity which has been created by statute and is not carrying out judicative functions. It is required to have regard to commercial considerations and to balance the books and it is free to set charges in order to ensure that the books are balanced. Analogies to administrative decision making are simply incorrect in this case. 25. The respondent also maintained from the outset and throughout this application that the provisions of section 59 dealing with pilotage agreements has no application to this dispute. By way of illustration counsel for the respondent pointed out that the measure upon which the pilots were seeking arbitration is one which would provide a guaranteed income for pilots so that the income of the pilots shall not be reduced “by more than 7.5% less than the average income of each pilot averaged over the years 2010, 2011, 2012, as a once off reduction in income similar to other persons working in the public service”. Such a clause according to the respondent could never be lawfully inserted in a pilotage agreement as it would amount to a usurpation of the powers of the respondent conferred by section 64. The Act connects the pilots’ earnings to the charges and the respondent company must be free to set the charges because that is the clear intention of the legislature. That was the system which operated under the 1913 Act. To write a minimum level of remuneration into the pilotage agreement would mean that charges would have to be fixed to ensure this minimum level of remuneration and that flies in the face of the scheme created by the Act. 26. Counsel for the respondent also contended that on a proper construction of section 59(2) it is a precondition of the variation or replacement of the pilotage agreement that the parties agree that it should be varied or replaced. Section 59(3)(b) only comes into play in the context of such an agreement to vary or replace the pilotage agreement. 27. Decision of the Court
29. The option to refer a term or terms to an arbitrator in section 59(3)(b) is clearly, in the Courts view, predicated on an agreement to vary or replace the Pilotage Agreement. The comparison by analogy with the statutory provisions for resolving disputes between port companies in respect of harbour fees and pilotage fees is in the courts view a false analogy. Those companies, unlike the parties to this dispute, do not have contractual arrangements and accordingly it is appropriate that the statute provide a mechanism for the resolution of any dispute which might arise between them. 30. The Court is satisfied that on a proper construction of section 64, it is clear that the rate of pilotage charges is a matter for determination by the Port Company. Section 64(1) empowers the company to impose charges in respect of pilotage services and those charges may be imposed at such rates as are from time to time determined by it. Section 64(3) provides that different rates of pilotage charges may be imposed by a company in different circumstances. This appears to the Court to confer on the company a wide discretion in relation to fixing the rates for pilotage. It is inherent in this power that rates may go down as well as up. However, in fixing the rates, the Company must do so by reference to gross tonnage, because that is what they agreed with their pilots in the Pilotage Agreement concluded in 2002. The functions statutorily conferred by section 64 on the Company are those previously exercised by the pilotage authority by means of byelaws. Under the old regime any person aggrieved by the rates set, could complain to the Board of Trade. However, there was no right of veto given to any party in respect of pilotage rates. Under the new regime which aspires to create commercially vibrant port companies independent of the dead hand of state bureaucracy, there is no equivalent right of complaint. However, in the Court’s view it is significant that Part IV of the Act reserves to the Minister a power of oversight of pilotage charges at a policy level . Section 80(2) provides that the Minister after consultation with the company, may give a direction in writing to a company requiring it to comply with policy decisions of a general kind made by the Minister in relation to the levels of pilotage charges imposed by a company or companies and the company shall comply with any such direction. To that extent, but to that extent only, there is fettering of the Company’s discretion. Even if the Court is wrong in its construction of the provisions of section 59 the Court is satisfied that by virtue of the provisions of section 64 no arbitrator could lawfully insert into a pilotage agreement the term which the applicants seek to have inserted. Their clause seeks a contractual guarantee of minimum remuneration. Such a clause would amount to a usurpation of the statutory powers conferred by section 64 and as such would be invalid. 31. In circumstances where there is a binding pilotage agreement between the parties which the respondent has not agreed to vary or replace, the court is satisfied that no Order of Mandamus lies pursuant to section 59(3)(b) of the Act. Such differences as exist between the parties (and the Court stresses that it is expressing no view on the substantive dispute) fall to be decided by civil law remedies in contract and/or equity. For these reasons, the Court dismisses the application. |
