Supreme Court of Ireland Decisions

16 January 1997

KEANE J: [Nem Diss.]

Introduction

The Respondent in this appeal (hereafter "the Commission") was established by the Radio and Television Act 1988 (hereafter "the 1988 Act") with the object principally of entering into contracts for the provision of radio and television services additional to those already provided by RTE. The huge commercial implications of the granting of franchises to private interests for the provision of radio and television services and the profound influence of the media in modern conditions made it obviously of great importance that the process should take place in a scrupulously fair, public and impartial manner. Those priorities were reflected, not merely in the legislation, but in the appointment of a former member of this court, Mr Justice Henchy, as the first Chairman of the Commission.

The Commission, having been granted a licence by the Minister for Communications (hereafter "the Minister") under s 4(3) of the 1988 Act and having gone through the procedures required by Part III of the same Act, entered into a sound broadcasting contract in respect of the Limerick area with the applicant. This contract was to be for a seven year period from the 14 October 1989, subject to a termination and suspension clause. The Applicant in due course began to transmit its programmes in the Limerick area and has continued so to do up to the present day.

One of the journalists employed by the Applicant was Ms Eileen Brophy (hereafter "Miss Brophy"). She was appointed head of news in January 1993, but left its employment in November 1993. The circumstances which led to her departure were the subject of dispute between her and the Applicant and unfair dismissal proceedings under the relevant legislation were instituted by her. When the matter came before the Employment Appeals Tribunal on February 9 1994, the parties settled the dispute. At about that time, Ms Brophy was appointed a member of the Commission by the Government and is still a member.

Following a series of events, discussions and correspondence between the Applicant and the Commission, the Commission on 26 February 1996 served what purported to be a notice of termination of the contract pursuant to its terms. The persons on either side principally concerned in the sequence of events which led to this action on the part of the Commission were the respective chief executives of the Applicant and the Commission, Mr Gerard Madden (hereafter "Mr Madden") and Mr Michael O'Keeffe (hereafter "Mr O'Keeffe").

On the 11 March 1996, the High Court (McCracken J) gave the Applicant leave to apply for, inter alia, an order of certiorari in respect of the decision of the Commission to terminate the licence and an injunction restraining them from terminating the licence. The grounds on which the Applicant relied can be shortly summarised as follows:-

(1) That the Applicant had not been guilty of "serious or repeated breaches" of its obligations under the contract or the Radio and Television Act 1988, thereby entitling the Commission to terminate the contract as alleged by them;

(2) That the action of the Commission in terminating the contract was disproportionate having regard to the nature of the alleged breaches;

(3) That the decision was unreasonable and constituted unfair discrimination against the Applicant;

(4) That the actions of the Commission were prompted by bias on the part of one of its members, ie Ms Brophy.

A Notice of Motion applying for the reliefs in question and a Statement of Opposition having been filed on behalf of the Applicant and the Respondent, the matter came on for hearing before Smyth J. A number of affidavits had been filed on behalf of both parties and some of the deponents, including Mr Madden and Mr O'Keeffe, were cross-examined at the hearing. In a reserved judgment delivered on the 14 October 1996, the Applicant's claim was dismissed by the learned High Court judge. From that judgment the Applicant now appeals to this court.

An interlocutory injunction had been granted in the High Court restraining the Commission pending the hearing of the proceedings from terminating the licence and contract. That injunction was discharged by Smyth J, he having noted an undertaking by the Commission to permit the Applicant to continue to operate under the terms of the contract pending the next appointment by the Commission of a local sound broadcasting operator for the Limerick area.

An application for the expedited hearing of the appeal to this Court having been made, a date was fixed for the hearing of the appeal last term. The undertaking given to the High Court was continued and a further undertaking was given by the Commission that no appointment would be made of a sound broadcasting operator for the Limerick area pending the determination of the appeal.

The factual background

It is now necessary to consider the facts in more detail.

In the Notice of Termination, the Commission listed seventeen matters which they alleged constituted breaches of the Applicant's obligations under the contract or the Radio and Television Act 1988. They also alleged that fifteen of these breaches were "serious" within the meaning of the contract or the Act. The Notice also stated that the Commission would consider any written representations on behalf of the Applicant which it received prior to the date of termination and it is not in dispute that representations, both in writing and orally, were made on behalf of the Applicant to the Commission before the Notice of Termination was implemented.

The matters of which the Commission complained can be summarised as follows:-

(1) The exceeding by the Applicant of the time permitted under the relevant provisions of the Act for the broadcasting of advertising and the failure to provide the required proportion of news and current affairs;

(2) The broadcast of an unapproved programme on 14 November 1994;

(3) The broadcast by the applicant of programmes which were alleged to be, in effect, promotions for particular shops in the Limerick area and hence constituted advertising significantly in excess of what was permitted under the Radio and Television Act 1988 or the contract;

(4) The blacking out of 40 seconds of a news bulletin which consisted of a report by Ms Brophy in her capacity as a journalist which was being carried in the relevant news bulletin provided to the Applicant by a service called "IRN";

(5) The failure of the Applicant to supply the Commission with tapes of programmes broadcast by them as required by the 1988 Act and the contract;

(6) The failure of the Applicant to provide financial information to the Commission as required by the contract;

(7) The refusal of the Applicant to permit an inspection of their operations under the terms of the contract;

(8) The failure of the Applicant to notify the Commission of changes in the Board of Directors of the Applicant and changes in the ownership of shares in the Applicant and to obtain approval from the Commission for what was claimed to be a material reconstruction of its business;

(9) The failure of the Applicant to bring their acoustic facilities into compliance with the contract until threatened with termination of the contract.

It was accepted during the hearing in the High Court and again on the appeal to this court, that some of the breaches alleged were unquestionably of a minor nature or, even if serious, had been remedied at the time of the purported determination and could not, on any view, be regarded as justifying of themselves the termination of the contract. The complaints which appeared to loom largest in the troubled relations between the Commission and the Applicant, and which culminated in the determination of the contract, were the 'blacking' of the news item supplied by Ms Brophy, the outside broadcasts which, the Commission claimed, were essentially a form of illicit advertising, the failure to provide tapes of the programmes broadcast by the Applicant and the alleged refusal to co-operate with the inspection authorised by the contract. These are now considered in more detail.

(i) The 'Blacking' of Ms Brophy's Report

One of the Applicant's contractual obligations was to obtain the approval of the Commission of any arrangements it made to obtain news programmes from a third party. With the approval of the Commission, the Applicant was, at the relevant time, availing of the national news service provided by the Dublin local radio station, 98 FM, described as "Independent Radio National News", abbreviated to "IRN". On February 17 1995, Ms Brophy, who, as already noted, after her departure from the Applicant was working as a freelance journalist, supplied a report for the IRN service on the Limerick aspect of a national bus strike which was taking place at the time. The part of the IRN news bulletin consisting of this item was blacked out by the Applicant and replaced by music. Mr Madden said that the reason this was done was that the IRN report of the Limerick aspect of the dispute had become "outdated" and the bulletin in question was been followed by their own local news report which was based on up to date information.

Mr O'Keeffe said that the Commission became aware on the following Monday that IRN bulletins running throughout the previous Friday had been "interfered with" by the Applicant. He said that the interference took the form of the deletion in each news bulletin of the item from Ms Brophy. He said that in order to verify the situation he requested a tape from the Applicant but was told that they could not provide a tape of that date because of technical problems. He then received a copy of the tape from the IRN itself which confirmed that the relevant item had been deleted. He said that he had never encountered any other instance with any station of a news bulletin being interfered with in this manner and had never received from the Applicant a tape so as to verify whether, as he had been informed, the same editing had occurred in the earlier bulletins that day.

(ii) The Outside Broadcasts

The Commission were supplied with tapes of the programmes broadcast by the Applicant on the 14 November 1994. The programmes broadcast included outside broadcasts conducted at three shops in Limerick ie the RTV Store, Homestyle Bakery and McInerney's Hardware Store. In their letter of complaint on the 20 February 1995 to Mr Madden, the Commission said that these outside broadcast included, in addition to the usual advertisement breaks, extensive references to the products and services available at the shops in question. This, it was said, resulted in an excessive level of advertising and was a serious breach of the relevant statutory provisions. In a further letter of November 30 1995, they complained that there had been a similar broadcast from a fashion shop.

Mr Madden said that, in the course of programmes designed to encourage listeners to shop in Limerick, the Applicant's outside broadcast units visited various shops, stores etc with a view to ascertaining price levels, the range of goods etc. He agreed in cross-examination that, while no direct payment was made to the Applicant by the firms concerned for the publicity admittedly afforded to them by the broadcasting of these programmes, the stores were in general selected on the basis that they had paid advertising fees to the Applicant within the preceding 12 months in the order of £1,000.

Mr Ronan O'Connor, a technical engineer and director of a company which provides outside broadcast services for local radio stations throughout the state, said on affidavit that outside broadcasts of the type objected to by the Commission in the present case were "unexceptionable and commonplace" by the standards of local and national radio and that he had heard similar types of broadcasts on local radio in the course of his work. Mr O'Connor was not cross-examined on his affidavit.

(iii) Supply of Tapes of Programmes to the Commission

It appears from the correspondence between the Commission and the Applicant that the latter was requested to furnish the Commission with programme tapes for the 6 June 1995, 25 August 1995 the 6 December 1995 and the 9 January 1996. As already noted, programme tapes for the 17 February 1995 had also been requested but not furnished. In a letter of 19 January 1996 to Mr Madden, the Commission said that the reason given for the failure to submit the programme tape for 17 February 1995 was because of the a faulty dry joint in the video recorder which would be repaired. As to the 6 June tape, it was said that the relevant tape was received on 21 August but contained very short excerpts for entirely different dates. As to the tapes for 25 August it was said that these were not received until 4 October, after many telephone calls, that one was for the incorrect date and that the majority of another tape was blank.

Mr Madden said that the failure to provide the programme tapes was due to "constant technical difficulties". He said that these difficulties were not peculiar to the Applicant's station and were experienced by other broadcasters. Mr O'Connor also said that he was aware that many local radio stations encountered difficulties with logging tapes. Mr O'Keeffe, while agreeing that other stations had experienced technical problems, said that the record of the Applicant was the worst of any station at present broadcasting.

(iv) The Failure to Supply Information and Co-Operate with an Inspection

Under the provisions of the contract, the Applicant was obliged to pay a levy to the Commission of a specified percentage of their gross advertising and sponsorship revenue. On February 8, 1995 the Commission wrote to Mr Madden seeking information which, they said, was necessary in order to enable them to determine the levy payable. In the course of further correspondence, the Commission requested the Applicant to furnish them with detailed financial information. Some at least of the information sought was furnished by the Applicant, but the Commission was not satisfied with the adequacy of its response and on the 25 September 1993, Mr O'Keeffe wrote to Mr Madden stating that

"As part of its general statutory function of ensuring the compliance of contractors with the requirements of (the 1988 Act) and in order to confirm the due performance of the obligations in question, the Commission has decided to carry out an inspection of the books, accounts, records and other documents of (the Applicant) under Clause 5.18.

"The Commission has nominated Mr Billy O'Riordain of Deloitte and Touche, Chartered Accountants, to carry out the inspection. He may be assisted by other members of the staff of Deloitte and Touche.

"It is proposed that the inspection will commence at 10 am on Thursday 28 September 1995. With your co-operation, it is hoped that the inspection can be carried out with the minimum of disruption to the routine of your staff. It will, of course, be carried out on the basis of affording strict confidentiality to the information in question."

There followed a list of specific documents which the Applicant was requested to have available to Mr O'Riordain when he carried out his inspection. Mr Madden protested that the notice given of this inspection was unreasonably short and that relevant members of the staff of the Applicant, including himself, would not be available at the proposed time. Mr O'Riordain arrived at the Applicant's offices on 28 September but was informed that there were no senior management present that could provide the necessary facilities for inspection.

Further correspondence followed in the course of which Mr Madden questioned the legality of the proposed inspection. The Commission thereupon served notice of suspension of the contract upon the Applicant and, following further correspondence, the inspection eventually took place on 6 November. Following the inspection, Mr O'Riordain wrote to Mr Madden raising a number of matters in respect of which he required further information. On the 16 November Mr Madden wrote to Mr O'Keeffe stating that, in his view, Mr O'Riordain's inspection had been completed.

Mr O'Riordain said in his affidavit said that when he arrived at the Applicant's premises on 7 November 1995 he was accompanied by a colleague, Mr Liam Nolan. He said that after a delay of twenty minutes, Mr Madden appeared and told him (Mr O'Riordain) in "strong terms" that he objected to Mr Nolan being in attendance and refused him access to the premises. Mr O'Riordain also said that he was then subjected to what he described as "a tirade of abuse" from Mr Madden who also accused him of improper and unprofessional conduct. He said that after he left the premises he went with Mr Nolan to a local pub to have a sandwich and during the course of the lunch was approached by two people, previously unknown to him, who introduced themselves as Mr Tom Nolan and Ms Carmel Burke of the Applicant. He said that Mr Nolan apologised to himself and Mr Liam Nolan for the manner in which they had been treated by Mr Madden and proceeded to pay for the lunch.

No notice to cross-examine Mr O'Riordain was served on behalf of the Applicant. Mr Tom Nolan, who was cross-examined, agreed that he had a conversation with Mr O'Riordain and Mr Liam Nolan in the pub on the day in question, but did not accept that what he said amounted to the offer of an apology to them.

Mr Madden denied that he had refused to co-operate with the inspection. He said that he had objected to the fact that Mr O'Riordain had removed (and later returned) certain "key books and documents" from the premises without notice to the Applicant and that he had a colleague in attendance whose presence had not been notified to the Applicant in advance. It was pointed out, however, on behalf of the Commission that the letter of 25 September had expressly stated that Mr O'Riordain might be assisted in the inspection by other members of the staff of Deloitte and Touche.

As already noted, these and other alleged breaches by the Applicant of its statutory and contractual obligations were given as the reason for the service of the Notice of Termination. As to the allegation of bias, Mr O'Keeffe said that Ms Brophy absented herself from the meeting at which the termination of the contract was considered and decided upon and that she also absented herself from two meetings in March and May 1995 where the Applicant's conduct in deleting the report filed by her for the IRN news bulletin was under consideration. He also said that Ms Brophy had not, directly or indirectly, urged the termination of the Applicant's contract. He said that, while she had been present at meetings where matters relating to the Applicant were discussed, she had taken no part in any of the discussions.

No evidence was given by Ms Brophy, on affidavit or otherwise, in the course of the proceedings.

The High Court Judgment

In his judgment, Smyth J first rejected the submission on behalf of the Applicant that, to enable the Commission to terminate the broadcasting contract, there had to be "repeated serious breaches" of the Radio and Television Act 1988 or the contract. He said that, in his judgment, the use of the disjunctive "or" between the words serious" and "repeated" in s 14(a)(iii) of the Act made it clear that that was not the proper construction of the relevant provision.

Smyth J was also of the view that there was "an abundance of evidence" which entitled the Commission to exercise their discretion as to whether or not to terminate the Applicant's contract in the manner in which they did. He also held that the Commission's decision was not based on irrelevant legal considerations and/or errors of law, as urged on behalf of the Applicant and, that the decision to terminate the contract was not disproportionate to the gravity of the breaches involved, adding that in many instances the Applicant had adopted "a cavalier or laissez faire attitude" to its contractual obligations.

As to the allegation of bias, Smyth J, having referred to the fact that almost immediately after the "blacking" incident involving Ms Brophy, what he described as the "active and vigorous campaign to prosecute the failures of the Applicant" moved apace, went on:-

"One is left with a disquieting frame of mind but no evidence to prove bias.

"It is singularly unfortunate that the Applicant was contractually bound to accept a news package in toto from an Agency whose composition included some item or items from a journalist with whom the Applicant had serious differences. It is doubly unfortunate that the same journalist was a member of the Commission albeit not participating or in instances attending the decision making meetings which decided to terminate the contract of her former employer.

"I do not accept the (Commission) Counsel's submission in argument that the pool of fit and proper persons suitably qualified to serve on the Commission is so small that circumstances such as occurred in this case are inevitable. The evidence however does not sustain the challenge of bias."

He accordingly dismissed the Application.

Submissions of the Parties

In their submissions to this court, Counsel on behalf of the Applicant conceded that some of the breaches of the Radio and Television Act 1988 or the contract alleged against the Applicant were, of their nature, "serious". It was also submitted, however, that since the evidence established that the Commission took all seventeen of the alleged breaches into consideration when terminating the contract, it followed that they must have taken into account breaches which were neither "serious" nor "repeated" and that, accordingly, on this ground alone their decision could not stand.

It was secondly submitted on behalf of the Applicant that the Commission erred in law in treating the outside broadcasts from th eshops in Limerick as "advertising" within the meaning of s 10(3) of the Radio and Television Act 1988. It was urged that the mere promotion of a particular store or service without any direct payment being made to the broadcaster could not constitute "advertising": if that were so, it was said, publicity given to books or films, which was a commonplace feature of broadcasting today, would constitute "advertising", which, it was urged, would be absurd. It was also pointed out that the affidavit of Mr O'Connor expressing his view, as someone experienced in this area, that these activities did not constitute "advertising" had not been contradicted and should have been accepted by the learned High Court judge. It was also no answer for the Commission to say that their interpretation of the word was a reasonable one. Since, at best from the Commission's point of view, the expression "advertisements" was uncertain in its extent, it was for the courts and not for the Commission to determine its correct meaning. They relied in this context on the decision of Barr J in Shannon Regional Fisheries Board v An Bord Pleanala, [1994] 3 IR 449.

It was thirdly submitted on behalf of the Applicant that the termination by the Commission of the Applicant's contract in respect inter alia of breaches which were conceded to be minor or already remedied was a sanction which was disproportionate in its severity to the gravity of the alleged breaches. It was said that the principle of proportionality had been firmly established in Irish law by the decision of the High Court in Hand v Dublin Corporation, [1989] IR 26 and of this court in Cox v Ireland, [1992] 2IR 503 and In re: Article 26 of the Constitution and the Matrimonial Homes Bill 1993, [1994] 1 IR 305. It had been further elaborated by Costello J, as he then was, in Heaney v Ireland, [1994] 2ILRM 420. The decision of Murphy J in Bosphorus Hava Yollari Turizm Ve Tickaret Anomim Sirketi v Minister for Transport and Others, [1994] 2 ILRM 551 demonstrated, it was said, that the principle was not confined in its operation to determining the constitutionality of statutes, but also could be invoked to set aside administrative decisions such as that arrived at by the Commission in the present case.

It was finally submitted on behalf of the Applicant that the learned trial judge was wrong in law in declining to set aside the decision of the Commission on the ground of bias, notwithstanding the reservations he had expressed in his judgment on this aspect of the case. While it was conceded in the submissions in the High Court, and again in this court that, in the light of the unchallenged evidence that Ms Brophy had not been present at any of the meetings when the termination of the Applicant's licence was under consideration, an allegation of what was described as "subjective bias" against the Commission could not be sustained, it was urged that the decision was still vitiated since it had not been arrived at by a body which a reasonable person would regard as impartial or detached. It was said that the fact that Ms Brophy had been directly involved in the "blacking" which Mr O'Keeffe had said in evidence was one of the most serious matters leading to the termination meant that their decision could not be regarded as having been arrived at by a body which was disinterested in the outcome.

It was further submitted that the decision could not survive the application of the criterion that justice must not only be done, but be seen to be done. Even allowing for the absence of actual bias in the decision as taken, the fact remained, it was urged, that Mr Madden had reasonable grounds for a fear that he would not get an independent hearing, applying the test invoked by Finlay CJ, speaking for this court, in O'Neill v Beaumont Hospital Board, [1990] ILRM 419. They also relied on the well known statement of the law by Lord Hewart CJ in R v Sussex Justices, ex parte McCarthy J [1924] 1 KB 256, and the decisions of the High Court in O'Donoghue v Veterinary Council, [1975] IR 398 and Dublin and County Broadcasting Limited v The Commission, (Unreported, High Court May 12 1989) and of this court in Dublin Well Woman Centre Limited v Ireland, [1995] 1 ILRM 408.

On behalf of the Commission, it was submitted that the learned High Court judge was correct in his construction of s 14(4)(a) of the Radio and Television Act 1988. It followed that the Commission were entitled to terminate the Applicant's contract for breaches which were either "serious" or "repeated" or both. "Repeated" breaches, it was said, connoted either a repetition of the same breach over a period of time or a series of different breaches. It was also submitted that, in the light of the proper construction of the statutory provisions in question, the Commission was entitled to take into account each and every breach by a sound broadcaster of its contract or of the Radio and Television Act 1988 and that they could take account of breaches which were isolated, "once off", de minimis or rectified. It was submitted that there was ample evidence to justify the Commission in terminating the contract on the ground that either serious or repeated breaches or both had taken place over a period of time.

It was secondly submitted on behalf of the Commission that, provided their interpretation of "advertising" was a reasonable one and at least capable of being correct in law, it was immune from review by the High Court: if an error was made as to the interpretation of "advertising", it was submitted that the Commission erred within jurisdiction. Even if this was wrong, it was said, an incorrect interpretation of "advertising" by the Commission was not an irrelevant consideration of so fundamental a nature as to vitiate the Commission's entire decision, since the breach of the advertising requirements comprised only two of the seventeen breaches relied upon. For an irrelevant consideration to vitiate a decision, it was said, it must be a primary and dominant, and not merely a contributory factor, to that decision. They cited in support of this proposition the decision of this court in Cassidy v Minister for Industry and Commerce, [1978] IR 297. It was in any event submitted that there was abundant evidence from which the Commission could conclude that the Applicant was in breach of the statutory limits in respect of advertising.

As to the Applicant's submissions on proportionality, it was submitted on behalf of the Commission that such a principle applied only to legislative enactments and delegated legislation and, in particular, to the restriction by such legislation of a constitutionally protected right. They submitted that the decisions relied on by the Applicant, already referred to, were cases dealing with the constitutionality of statutory or delegated legislation or (in the Bosphorus case) the proper construction of European Union regulations. The right to conduct an independent broadcasting business, it was said, was a privilege granted by statute and its removal, provided fair procedures were applied, was not an interference with a constitutionally protected right.

As to the allegation of bias, it was submitted on behalf of the Commission that, once the allegation of subjective bias had been withdrawn, the legal basis for this part of the Applicant's claim disappeared, since there was no evidence of objective bias. No authority had been cited for the proposition that a decision by a body such as the Commission could be set aside on the ground of bias where the person against whom the allegation of bias was made had admittedly not participated in any way in the challenged decision. It was urged that, as pointed out by Finlay CJ in O'Neill v Beaumont Hospital, in a case such as the present where the decision making body has taken every step open to it to ensure that no person against whom an accusation of bias could be made participated in the decision, the setting aside of the decision would mean that the body was effectively incapable of carrying out its statutory duties.

It was also submitted that, in the majority of cases, a less stringent rule is applied to bodies other than courts where, having regard to the nature and functions of the body concerned, the body cannot be seen in all circumstances to be impartial. They cited in support of this submission the decision of the former Supreme Court in re: Solicitors Act 1954, [1960] IR 239 and of this court in McGrath and O'Ruairc v Trustees of Maynooth College, [1979] ILRM 166. It was further submitted that the Applicant, although well aware that Ms Brophy was a member of the Commission, raised no objection to the Commission's decision on that ground and did not seek to rely on it until the present proceedings were instituted.

The Applicable Law

(a) Statutory and contractual provisions

Section 14(1) of the Radio and Television Act 1988 provides that:

"Every sound broadcasting contract may contain such terms and conditions as the Commission thinks appropriate and specifies in the contract."

Subsection (4) provides that:

"Every sound broadcasting contract shall

(a) provide that the Commission may, at its discretion suspend or terminate the contract . . .

(i) if the sound broadcasting contractor has, in the opinion of the Commission, committed serious or repeated breaches of his obligations under the sound broadcasting contract or under this Act;

(b) provide that a sound broadcasting contractor shall pay to the Commission the fees, shares of profits or royalties specified therein;

(c) provide that the sound broadcasting contractor shall provide such information (including copies of his accounts) which the Commission considers it requires in order to enable it to carry out its functions under this Act."

Section 10 of the Radio and Television Act 1988 provides that:

"(1) Programmes broadcast in a sound broadcasting service provided pursuant to any sound broadcasting contract may include advertisements inserted therein . . .

(4) The total daily times for broadcasting advertisements in a sound broadcasting service provided pursuant to a sound broadcasting contract shall not exceed the maximum of 15% of the total daily broadcasting time and a maximum time to be given to advertisements in any hour shall not exceed a maximum of 10 minutes.

(5) In this section, references to advertisements shall be construed as including references to advertising matter contained in sponsored programmes, that is to say, in programmes supplied for advertisement purposes by or on behalf of an advertiser.

(6) It shall be the duty of the Commission to ensure that sound broadcasting contractors comply with the requirements of subsections (2), (3) and (4)."

Section 13 of the Radio and Television Act 1988 provides that:

"The Commission may, for any of the reasons in subsection 2(2), conduct an investigation into the operational, programming, financial, technical or other affairs of a sound broadcasting contractor and the sound broadcasting contractor concerned shall co-operate in any such investigation.

(2) The Commission may conduct, or appoint any other person to conduct, an investigation under this section --

(a) If it has reasonable grounds for believing that the sound broadcasting contractor is not providing a sound broadcasting service in accordance with the terms of his contract . . ."

Section 4(8) of the 1988 Act provides that:

"The Commission shall have . . . the power . . . to direct a contractor to record any or all of the programmes broadcast by him in the case of a sound broadcasting contract or provided by him in the case of a television programme service contract and to retain such recordings for a period of thirty days after the recording is made and to submit the recordings to the Commission, if the Commission so requires."

Clause 3.5 of the contract provides:

"The arrangements made by the (Applicant) for the preparation, editing and presentation of news and current affairs shall be subject to the prior written approval of the Commission, and without prejudice to the generality of the foregoing words, the contractor shall obtain the prior written approval of the Commission of any arrangements made to obtain news or news programmes from another sound broadcasting contractor or other third party. Having obtained such approval, the contractor shall conform to such arrangements and not vary them materially without the prior written consent of the Commission."

Clause 3.12 provides that:

"The (Applicant) shall make recordings of a quality satisfactory to the Commission of all programmes broadcast by the Applicant under this contract and shall retain such recordings for at least 30 days thereafter (or for longer periods as so required by the Commission) in respect of particular programmes as may be defined from time to time by the Commission and make available without charge such recordings or copies thereof for use by the Commission in accordance with the terms of Section 4(8) of (the 1988 Act) as and when requested so to do by the Commission."

Clause 3.15 provides that:

"The (Applicant) may to the extent permitted by the Act:-

(a) include advertisements in any programmes broadcast by it under this contract, and

(b) broadcast programmes supplied for advertisement purposes by or on behalf of an advertiser (hereinafter called sponsored programmes) and references to advertisements hereunder shall, save where the context otherwise admits, refer to the generality of the foregoing words and be construed accordingly."

Clause 5.13 provides that:

"Pursuant to Section 14(4)(c) of the 1988 Act, the Applicant shall promptly furnish to the Commission such declarations, returns, documents and other information as the Commission may, by written notice to the contractor, require for the purpose of the discharge of the Commission's functions under the Act and this contract."

Clause 5.18 provides that:

"The Applicant shall at any time and from time to time as so required by the Commission give to the Commission for the purpose of the discharge of the Commission's functions under the (1988 Act) reasonable facilities for inspecting the books, accounts, records and other documents kept by the (Applicant) for the purpose of any business carried on by the (Applicant) including without prejudice to the generality of the foregoing) any documents relating to the financial position, operations, income, expenditure, costs and other matters and information referred to in clauses 5.13 to 5.15 inclusive and for taking copies of or of any part of any such books, accounts, records and documents. The (Applicant) shall also permit any accountant or other person nominated by the Commission to inspect and take copies as aforesaid."

Clause 6.8 provides that:

"If . . .

(v) The (Applicant) in the opinion of the Commission, has committed either repeated breaches or a serious breach (including a failure to make the payments as provided in the First Schedule hereto) or is continuing to commit a serious breach of his obligations under this contract or the (1988 Act) . . .

The Commission may by notice in writing to the (Applicant) specifying the event or events which it believes to have occurred as from such date (not being less than 14 days after the date of such notice) terminate or suspend for such period as may be specified in the notice or until a further notice is given the contract (without prejudice to the (Applicant's) obligations to provide a local sound broadcasting service under this contract up to the date when the notice takes effect . . ."

The provisions of the Schedule to the Radio and Television Act 1988 dealing with the membership of the Commission should also be noted. Clause 1 provides that:

"(i) The members of the commission shall be appointed by the Government and shall be not less than seven or more than ten in number . . .

(iv) A member of the Commission may resign his membership by letter sent to the Government and the resignation shall take effect on and from the date of receipt of the letter.

(v) A person shall not be appointed to be a member of the Commission unless he has had experience of, or shown capacity in, media or commercial affairs, radio communications engineering, trade union affairs, administration or social, cultural, educational or community activities."

Clause 3 provides that:

"A member of the Commission may be removed from office by the Government for stated reasons if, but only if, resolutions are passed by both Houses of the Oireachtas calling for his removal."

Clause 5 provides that:

"A member of the Commission who has --

(a) Any interest in any company or concern with which the Commission proposes to make any contract, or

(b) Any interest in any contract which the Commission proposes to make,

shall disclose to the Commission the fact of the interest and the nature thereof and shall take no part in any deliberations or decision of the Commission relating to the contract, and the disclosure shall be recorded in the minutes of the Commission."

(b) Grounds for interfering with the Commission's decision

The grounds on which the High Court can set aside a decision of a body such as the Commission established by the Oireachtas with specified functions and powers have been made clear in a number of decisions and need be referred to only briefly. The locus classicus is the frequently cited passage from the judgment of Lord Greene, MR in Associated Provincial Picture Houses Limited v Wednesbury Corporation, [1948] 1 KB 222, viz:-

"The court is entitled to investigate the actions of the . . . authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or, conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the . . . authority, it may be still possible to say that, although the . . . authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the . . . authority, but as a judicial authority which is concerned, and concerned only, to see whether the authority have contravened the law by acting in excess of the powers which Parliament has confided in them."

This passage was adopted by this court in the State (Keegan) v Stardust Victims Compensation Tribunal, [1986] IR 642 where Henchy J defined the test of unreasonableness as:

"Whether the impugned decision plainly and unambiguously flies in the face of fundamental reason and common sense."

In that case, Griffin J, cited with approval the dictum of Lord Brightman in Chief Constable of the North Wales Police v Evans, [1982] 1 WLR 1155:-

"Judicial review is concerned, not with the decision, but with the decision making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power . . . Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made."

Apart from those considerations, it also would seem self-evident that, if the exercise of the statutory discretion is grounded on an erroneous view of the law, it should not normally be allowed to stand. Thus, in the present case, if the only ground on which the Commission terminated the Applicant's contract was the carrying of the outside broadcasts and they were wrong in law in treating, as they did, those broadcasts as advertisements within the meaning of the Act, it is difficult to see how their decision could be described as "reasonable" either in the Wednesbury sense or on the application of the criteria proposed by Henchy J in Keegan.

(c) Proportionality

In a number of recent decisions in the High Court, and in this court, what has come to be known as the test of "proportionality" has been applied in determining whether particular legislative provisions are unconstitutional. In the present case, there is no challenge to the constitutionality of the relevant legislation: it is, however, contended on behalf of the Applicant that the use of the sanction of termination of the contract by the Commission was disproportionate having regard to the nature of the breaches alleged against the Applicant.

No Irish authority was cited for the proposition that the principle of proportionality could legitimately be invoked to test the validity of an administrative act, as opposed to the constitutionality of legislation, primary or delegated. In Hand v Dublin Corporation, Barron J referred to the possibility of such a principle being adopted in this jurisdiction in relation to the exercise of administrative powers, but, in the context of that case, did not have to decide whether it should be so adopted. In Bosphorus, Murphy J concluded that, in determining whether a particular regulation of the European Union was to be interpreted as imposing a particular degree of hardship on an innocent party, the court should consider whether it was indeed the purpose of the regulation to impose a disproportionate penalty on such an innocent party. That again is not authority for the wider proposition contended for on behalf of the Applicant in the present case, ie that the principle of proportionality can be invoked in determining the validity of administrative decisions of bodies such as the Commission.

In England, an approach based on proportionality has been adopted by the courts in a number of cases: thus, in R v Barnsley MBC Ex Parte Hook, [1976] 1 WLR 1052, a local authority's suspension of a stallholder's licence on the ground that he had been guilty of misconduct when he urinated in the street and used offensive language was set aside in the Court of Appeal on the ground inter alia that the punishment was out of proportion to the offence. Other instances are cited in an interesting article to which we were referred. "Proportionality: Neither Novel nor Dangerous" by Professor Jeffrey Jowell and Lord Lester of Herne Hill (New Directions in Judicial Review, [1988] Ed Jowell and Oliver pp 51-72). The learned authors argue persuasively that the recognition of proportionality as a doctrine in administrative law would not permit intervention in the merits of the decisions of public officials to an extent greater than the Wednesbury test already allows. They urge, on the contrary, that its adoption, where appropriate, would be of assistance in eliminating the somewhat vaguer standards which would otherwise prevail in this area of the law.

Whatever view may be taken as to the desirability of that approach, it can be said with confidence that, in some cases at least, the disproportion between the gravity or otherwise of a breach of a condition attached to a statutory privilege and the permanent withdrawal of the privilege could be so gross as to render the revocation unreasonable within the Wednesbury or Keegan formulation. Thus, in the present case, if the amount of advertising in the Applicant's programmes had on two widely separated occasions exceeded the permitted statutory limit by a few seconds, the permanent revocation of the licence, with all that was entailed for the livelihood of those involved, would clearly be a reaction so disproportionate as to justify the court in setting it aside on the ground of manifest unreasonableness. It is unnecessary to emphasize how remote that example is from what admittedly occurred in the present case.

(d) Bias

It has been repeatedly recognised in Ireland, as in other jurisdictions, that the adjudication of disputes by a tribunal which is not only impartial but seen to be impartial is an essential feature of the administration of justice. Speaking for this court in Dublin Well Woman Centre Limited v Ireland, Denham J said:

"There are two fundamental streams of thought within this wider concept. First, that there should be no actual bias, ie a subjective test. And secondly, that there should be no reasonable apprehension that there is bias, ie the objective test. Both of these streams of thought are equally important in the broad river of justice."

As was there pointed out, this distinction also underlies Lord Hewart's often cited dictum in R v Sussex Justices, Ex Parte McCarthy, that

"It is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done."

Whether the bias alleged is subjective or objective, it may take a variety of forms. The decision maker may have a financial or proprietary interest in the outcome of the litigation. He or she may be related by family, social or business ties to one of the parties. He or she may have on some other occasion so prejudged the matters in dispute as to be incapable of reaching a detached decision or, at all events a decision which reasonable people would regard as free from even the suspicion of bias.

It has been held in England that in cases where the tribunal has a pecuniary or proprietary interest in the subject matter of the proceedings, the law will assume bias on the part of the tribunal: see R v Gough, [1993] AC 646. In all other cases, the test is whether a reasonable person would have apprehended that the decision would not be free from bias.

Some of the instances of bias given above are simply illustrations of another celebrated legal maxim, nemo judex in sua causa. However, it has also been recognised that the application of that fundamental principle of natural justice may differ, depending on whether the body concerned is a court engaged in the administration of justice under the Constitution or an administrative body, not so engaged, but exercising powers which can be regarded as quasi-judicial in nature. Even in the case of courts, its strict application may on occasions be impossible, as witness the necessity for the judicial determination by the High Court and this court of the constitutionality of provisions affecting the remuneration of judges: O'Byrne v Minister for Finance, [1959] IR 1 and McMenamin v Minister for Finance, [Unreported]; Supreme Court judgments delivered December 19, 1996.) A fortiorari, there are bound to be instances in which an administrative tribunal charged with quasi-judicial duties may lack the appearance of strict impartiality expected from a court administering justice. As Kingsmill Moore J, speaking for the former Supreme Court in In re Solicitors Act 1954, remarked in reference to the composition of a disciplinary committee required to decide whether a solicitor should be struck off:

"Although the character and standing of the members is such that they can be expected to resist and rise superior to any influences which might affect their impartiality, and it is not suggested that they do not do so, the tribunal is not constituted in a manner best calculated to provide the security against bias and impartiality which a court of justice affords. In the opinion of the court these considerations, though advanced by the appellants, are not in point. If the committee are not administering justice, the Constitution imposes no restriction on the composition of that body."

In the present case, the statutory provisions already referred to clearly envisage that the membership of the Commission may consist, in part at least, of persons engaged in the media who may be assumed to have a special knowledge of the matters with which the Commission has to deal. The fact that its membership is so composed may mean that, in specific instances, when it comes to deal with matters as crucial as the entering into of a contract or its suspension or termination, its decisions, although undoubtedly quasi-judicial in nature and necessitating the observance of natural justice and fair procedures, may also not have the appearance of impartiality which would be required of a court of justice. That, of itself, would not vitiate its conclusions, provided it reached them in good faith and having given the persons affected the protection of natural justice and fair procedures.

There is a further consideration applicable to bodies of this nature which is relevant to the present case. Because of the factors to which I have already referred, a body such as the Commission may not, in given circumstances, present the appearance of strict impartiality required of a court administering justice. That, however, does not relieve the Commission of the obligation to take every step reasonably open to it to ensure that its conclusions are reached in a manner, not merely free from bias, but also of the apprehension of bias in the minds of reasonable people. But where, as here, a body is obliged to carry out certain statutory functions and no issue arises as to the constitutionality of the relevant provisions, a court cannot by the strict application of the legal principles already referred to prevent the body from exercising those functions, where all practical steps have been taken by it to free itself, not merely from actual bias but the apprehension of bias in the minds of reasonable people: see the decision of this court in O'Neill v Beaumont Hospital.

Conclusions

There is not the slightest doubt in this case that there was evidence on which the Commission were entitled to form the opinion that the Applicant had committed "serious or repeated breaches" of its obligations under the contract and the Radio and Television Act 1988. While it was urged at one stage that the contract could be terminated only where the breaches were not merely serious but repeated or continuing, I am satisfied, as was the learned High Court judge, that such a construction of the relevant provisions is wholly unsustainable. If that were the intention of the Oireachtas, the draftsman would have used the conjunctive "and" rather than the disjunctive "or".

I am also satisfied that the submission on behalf of the Applicant that the Commission was not entitled to take into account breaches of the contract which were not serious in nature or which had been rectified is not well founded. Doubtless if these were the only breaches alleged against the Applicant, a question might arise as to whether the Commission was justified in law in terminating the contract by reason solely of such breaches or whether some less severe sanction would have been appropriate. That does not arise in this case, where some of the breaches were of an unarguably serious nature and in at least one case -- the attitude to the inspection by the Commission -- were continuing at the date of the termination of the contract.

As to the submission that the Commission's decision was vitiated by an erroneous view as to what constituted "advertisements" within the meaning of s 10 of the Radio and Television Act 1988, I am satisfied that this submission is also unsustainable.

In determining what is meant by "advertisements" in those provisions, it is relevant, in my view, to have regard to the policy of the 1988 Act. Under the existing legislation, all broadcasting services in this country, whether provided by RTE or independent operators, derive their revenue in whole or in part from advertising. While advertising, of its nature, doubtless has beneficial aspects from the consumer's point of view, as well as providing an essential source of revenue for the operator, the policy of the legislation is clearly to ensure that, in the interests of listeners and viewers, a reasonable balance is struck between such advertising and the provision of news, entertainment and other programmes. If the word "advertisements" were to be given the narrow interpretation suggested on behalf of the Applicant, which would exclude the outside broadcasts to which reference was made, an operator could with impunity wholly distort the balance mandated by the legislation between advertising material on the one hand and news, entertainment and other programmes on the other hand.

It was noteworthy that, not merely did the outside broadcast take the form of programmes containing details of the products and prices of the businesses concerned: those businesses were selected by the Applicant on the basis of the extent to which they had contributed to the station's advertising revenues over a given period. Any person using their common sense would consider such material as advertising and that, in my opinion, is the test which should be applied, having regard to the clear policy of the 1988 Act and the importance of ensuring that it is not circumvented. The analogy drawn on behalf of the Applicant with the promotion of books or films is wholly unconvincing: again, applying ordinary common sense, such programmes would be treated by the average listener or viewer as informative and entertaining and, only as a by-product, as constituting advertising.

I am satisfied that not merely were the Commission entitled to adopt that interpretation of the word "advertisements": any other construction of the relevant provisions would seriously frustrate the policy of the legislature. It follows that the decision of the Commission was not vitiated by any error in law which would have entitled the High Court to set it aside.

As to the question of proportionality, I have already indicated that circumstances could arise in which the invocation of the drastic power of terminating a sound broadcasting contract could be regarded as a grossly disproportionate and hence unreasonable exercise of the powers vested in the Commission. In the present case, there was, in my view, abundant evidence to justify the conclusion drawn in the High Court that the invocation by the Commission of this sanction was not disproportionate to the gravity of the breaches involved. In particular, the repeated failure of the Applicant to supply adequate programme tapes to the Commission so as to enable the latter to perform their important statutory function of ensuring that the operator concerned was complying with his statutory and contractual obligations was of a patently serious character. Similarly, the uncontradicted evidence on affidavit of Mr O'Riordain as to what transpired in relation to the legitimate exercise by the Commission of their powers of inspecting the Applicant's operation was not merely a breach of a singularly serious nature, but one which the Applicant had made no attempt to remedy at the stage when the Commission decided to terminate its contract: on the contrary, the Applicant appears to have adopted the attitude that the Commission were abusing their statutory and contractual powers, a view which was without foundation. Finally, the carrying by the Applicant of the outside broadcasts after they had been warned by the Commission that they were in breach of the Radio and Television Act 1988 was clearly a serious matter.

As has already been pointed out, and as was correctly held by the High Court judge, it is not the function of the courts to review the merits of the decision by the Commission. The High Court was solely concerned, as was this Court, with the manner in which the decision was reached. For the reasons already given, I am satisfied that the decision of the Commission was not vitiated by considerations founded on an erroneous view of the law or extraneous or irrelevant in their nature. Nor did it exhibit such a degree of irrationality that could justify the High Court, or this court on appeal, in setting it aside.

There remains the question of bias. The allegation of subjective bias having been withdrawn, the High Court was solely concerned with whether the proved or admitted facts should give rise to an inference of objective bias, ie that the decision had been taken by the Commission in circumstances where the Applicant or any reasonable person might reasonably have feared that it would not be free from bias against the Applicant.

It would unquestionably have been difficult for such an inference not to have been drawn had Ms Brophy participated in the discussions concerning the 'blacking' of the news item supplied by her or even if she had attended the relevant meeting at which it was discussed. It would have been irresistible if she had participated in, or even perhaps attended at, the meeting at which the decision to terminate the contract was taken. The unchallenged evidence before the High Court was that she had absented herself from the two meetings when the 'blacking' of her report was discussed and from the meeting at which the decision was taken to terminate the Applicant's contract and that, while she had been present at meetings when matters affecting the Applicant were discussed, she had taken no part in the discussion. In these circumstances, unless one can identify some other step which it was open to the Commission to take with a view further to guaranteeing the impartial consideration by the Commission of the matter, it would follow inevitably that the Applicant's claim that the Commission's decision should be set aside on the ground of objective bias would mean that the Commission were effectively precluded from discharging their statutory function of considering the breaches of contract alleged against the Applicant and determining what action should be taken in the light of such of them as were established.

Counsel on behalf of the Applicant was unable to point to any such steps that could have been taken by the Commission. As is made clear by the statutory provisions already referred to, the Commission had no power to bring Ms Brophy's membership to an end, either temporarily or permanently. It follows inevitably that, in the light of the legal principles to which I have referred, the High Court judge was correct in the conclusion he had arrived at that the allegation of objective bias had not been established.

It was emphasized in argument that Ms Brophy had not sworn any affidavit in these proceedings. However, since the evidence of Mr O'Keeffe that she had absented herself from the relevant meetings, had never discussed any matters affecting the Applicant at the meetings she did attend and had not, directly or indirectly, urged the termination of the Applicant's contract was not challenged at the hearing in the High Court, it is difficult to see what evidence she could usefully have given.

It was also said that the statement of the High Court judge that he was left with "a disquieting frame of mind" as to the possibility of bias was inconsistent with his finding that bias had not been established. If the observations in question were intended to indicate that a person in the position of the Applicant might reasonably have feared that the Commission's determination could be vitiated by bias, they were not merely inconsistent with his finding that no case of bias had been established, but would also, in the light of the proved or admitted facts and the principles of law to which I have already referred, be clearly, with respect, wrong in law. However, I think that the context in which those remarks were made are more consistent with the High Court judge being of the view that an unfortunate sequence of events had occurred which rendered it understandable that such a case should have been made. That is a far cry from saying, however, that it was his view that the case had not merely been made but established on the evidence.

I would dismiss the appeal.