Supreme Court of Ireland Decisions

THE SUPREME COURT

195/02

Keane C.J.

Denham J.

Murray J.

BETWEEN

RYANAIR LIMITED

APPLICANT/APPELLANT

AND AER RIANTA CPT

RESPONDENT/RESPONDENTS

JUDGMENT of the Court delivered the 13th day of March 2003, by Keane C.J.

1.      This is an appeal from a judgment and order of the High Court (Butler J.) refusing to grant the applicant certain reliefs by way of judicial review against the respondents.

2.      The background to the proceedings is as follows. The applicant is an airline which operates commercial flights into and out of Dublin Airport. It rents facilities at the airport including its head office, a hanger and (when these proceedings were commenced) fourteen check-in desks.

3.      The respondent is a public limited company incorporated pursuant to the provisions of the Companies Consolidation Acts, 1908 – 1924. The shares in the respondent are held by or on behalf of the Minister for Finance. It is vested with certain functions by the Air Navigation and Transport (Amendment) Act 1998 (hereafter "the 1998 Act") which also vested the ownership of Dublin, Cork and Shannon Airports in the respondent.

4.      These proceedings challenged the validity of certain charges which the respondent sought to recover from the applicant in respect of their operations at Dublin Airport and of "Rules of Conduct" introduced by the respondent in relation to operations carried out by the applicant, and other companies, at Dublin Airport. In a reserved judgment delivered on the 20^th February 2002, Butler J., rejected each of the claims of the applicant. While a number of issues were raised in the High Court relating to the validity of the charges in question and of the Rules of Conduct and were also the subject of the notice of appeal and, to a lesser extent, the written submissions lodged on behalf of the applicant, in the oral arguments before this court three matters only arising out of the High Court were the subject of challenge. They were the findings by the trial judge that

(a) The respondent was entitled to impose what was described as an "administration charge" on the applicant;

(b) The respondent was entitled to recover a rent from the applicant in respect of their exclusive use of check-in desks in the terminal building at Dublin Airport without first obtaining the approval of the Minister for Public Enterprise (hereafter "the Minister");

(c) The "Rules of Conduct" already referred to had been validly adopted by the respondent.

5.      It is necessary at the outset to refer in more detail to the nature of the operation carried on by the applicant at Dublin Airport. The applicant is what is called a "self handler" i.e., it provides its own ground handling services in respect of the flights operated by it in and out of Dublin Airport. (Some airline operators do not supply their own ground handling services and are provided with them by suppliers of such services.) As part of the process of introducing a common air transport policy with the aim of completing the internal market in the European Union, the Council of the Union issued Directive 96/67/EC of 15^th October 1996 on "Access to the Ground Handling Market at Community Airports" (hereafter "the Directive"). This was designed inter alia to open up access to the ground handling market so as to help reduce the operating costs of airline companies and improve the quality of service provided to users of airports. The Directive was implemented in Ireland by the European Communities (Access to the Ground Handling Market at Community Airports) Regulations 1998 (hereafter "the Regulations"). The Directive and the Regulations will be referred to in more detail at a later point in this judgment.
6.      The second of the two issues which were the subject of argument in this court will be dealt with last.
7.      The first of the three issues which was the subject of the appeal was the imposition by the respondent of what was described as an "administration charge". This charge of IR£2000 in the then currency was, according to the affidavit of Ms. Margaret Sweeney in the High Court proceedings, intended to defray the costs incurred by the respondent following the deregulation of the market in ground handling services, in supervising such matters as insurance cover, experience, equipment, staffing, maintenance and operating procedures of the handlers and policing compliance by them with the technical, safety, and environmental standards operated at the airport.

8.      Mr. Gerard Hogan SC on behalf of the applicant submitted that a body such as the respondent which was established by statute, and on which specific statutory functions and powers were conferred, could only impose such charges as were expressly authorised by legislation. He cited in support of that submission Attorney General v. Wilts United Dairies Limited [1921] TLR 884 and McCarthy and Stone v. Richmond Upon Thames LBC [1991] 4 All ER 897. On behalf of the respondent, Mr. Paul Screenan SC submitted that the respondent was not simply a body established by statute to carry out certain functions: it was expressly created by the legislature as a trading company, incorporated under the Companies Acts, which was required by the legislation to pay its way and, like every such trading body was entitled to make charges for services it provided.

9.      Section 16(2) of the 1998 Act requires the respondent to ensure the provision of

"Such services and facilities as are, in the opinion of the company, necessary for the operation, maintenance and development of a State airport, including … electric lines…. apparatus, equipment, buildings and accommodation of whatever kind."

10.      Section 23(1) provides that the principal objects of the respondent are to be stated in its Memorandum of Association. Subsection (3) provides that

"[the respondent] shall have power to do anything which appears to it to be requisite, advantageous or incidental to, or which appears to it to facilitate, either directly or indirectly, the performance by it of its functions as specified in this Act or in its Memorandum of Association and is not inconsistent with any enactment for the time being in force."

11.      Section 24(1) provides that

"it shall be the general duty of [the respondent] –

(a) to conduct its affairs so as to ensure that the revenues of the company are not less than sufficient taking one year with another to

(i) meet all charges which are properly chargeable to its revenue account

(ii) generate a reasonable proportion of the capital it requires, and

(iii) remunerate its capital and pay interest on and repay its borrowings,

(b) To take such steps either alone or in conjunction with other persons as are necessary for the efficient operation, safety, management and development of its airports,

(c) to conduct its business at all times in a cost effective manner, and

(d) to regulate operations within its airports."

12.      In Attorney General v. Wilts United Dairies Limited, the Court of Appeal held that a food controller which had power under certain legislation to regulate the production, distribution and sale of milk and milk products, was not entitled to make a charge in respect of the grant of licences of the purchase of milk. The court was of the view that this was effectively the making of a charge upon the subject which could only be authorised by parliament.
13.      The court is satisfied that this decision is of no assistance to the applicant. The controller in that case was not in the position of the respondent which was created by the legislature as a trading company required, in broad terms, to act in accordance with normal commercial procedures.
14.      Similarly, in McCarthy & Stone v. Richmond Upon Thames LBC, the House of Lords held that a local authority could not lawfully impose a charge for pre-application planning consultations, since they were not expressly empowered to make such a charge and it could not be regarded as conducive or incidental to the carrying out of the local authority's functions within the meaning of the relevant legislation. Again, the considerations applicable to a trading company were clearly not relevant in that case.
15.      The evidence in this case, which is not disputed, established that the respondent imposed the charge in question in order to recoup as far as possible the additional expenses it was involved in as a result of the de-regulation of the marketing ground handling services following the 1998 Regulations. That was a perfectly normal response by a trading company to particular commercial constraints and the court is satisfied that it was in no sense the unauthorised exaction by them of a charge for the performance of their statutory functions.
16.      The next issue relates to the adoption of the "Rules of Conduct" by the respondent. The adoption of such rules was authorised by Article 13(1) of the Regulations which provides that

"The managing body of an airport may establish Rules of Conduct to ensure the proper functioning of the airport which –

(a) must be applied in a non discriminatory manner to the various suppliers and self handlers, and

(b) may not, in practice, reduce market access or the freedom to self handle to a level below that provided for in these regulations."

17.      While a number of objections had been raised by the applicant in respect of the Rules of Conduct adopted by the respondent pursuant to that article in the High Court, the only ground of challenge pursued in this court was that the rules had been implemented without any proper consultation with the users of the airport affected by them, including the applicant, in breach, as it was said, of the fair procedures which should have been observed.
18.      It appears from the affidavits filed respectively by Mr. Charlie Clifton on behalf of the applicant and Mrs. Sweeney on behalf of the respondent that the first draft of the rules was in fact circulated as part of a proposed contract on 1^st November 2000 and those recipients were invited to respond. It also appears that, while comments were received from various operators, there were none from the applicant. While Mr. Clifton treats this as not being a "meaningful" consultation, it is clear that the trial judge was entitled to find as a fact, as he did, that it was not correct to say that the rules had been introduced without consultation with those affected. However, altogether apart from that consideration, it is quite clear that these rules were essentially the equivalent of bye-laws promulgated by other statutory undertakings. The court is satisfied that, as a matter of law, there is no obligation on a body charged with the introduction of bye-laws or regulations of this nature to consult with those affected in advance, although that will obviously be in at least some circumstances a prudent precaution. The court is accordingly satisfied that this ground of appeal also fails.
19.      There remains the issue as to the making of a rental charge in respect of the check-in desks. The rental charged by the respondent in respect of the applicant's check-in desks was, in the former currency, IR£12,000 per annum.
20.      Whether the respondent was entitled to require the applicant to pay a rental in respect of its occupation of the check-in desks depends on the proper construction of the 1998 Regulations, and in particular, Regulation 14, which provides as follows:

" (1) Subject to the provisions of Regulation 7, 8, 9, 10 and 12, suppliers and self handlers shall have access to airport installations to the extent necessary for them to carry out their activities. If the managing body of an airport places conditions upon such access, those conditions shall be relevant, objective, transparent and non discriminatory. The Minister shall be informed in writing of these conditions prior to their imposition.

(2) The space available for ground handling at an airport shall be allocated by the managing body of the airport among the various suppliers and self handlers, including new entrants in the field, to the extent necessary for the exercise of their rights and to allow effective and fair competition, on the basis of relevant, objective, transparent and non-discriminatory rules and criteria.

(3) Where access to airport installations gives rise to the collection of a fee, the latter shall be determined by the managing body of the airport and approved by the Minister in advance in accordance with relevant, objective, transparent and non-discriminatory criteria."

21.      The argument on behalf of the applicant is that the rental charged for the occupation by them of the check-in desks is a "fee" in respect of "access to airport installations" within the meaning of Regulation 14(3) which required the prior approval of the Minister which, as is accepted by the respondent, was not obtained. It was argued on behalf of the respondent that the provisions of Regulation 14(1) and (3) are not applicable to the allocation by the respondent of check-in counters in the terminal at a rental, that this is dealt with in Regulation 14(2) and that, while the allocation must be in accordance with relevant, objective, transparent and non-discriminatory rules and criteria, the fixing of the rental does not require prior approval by the Minister.
22.      It was submitted on behalf of the applicant that, if, contrary to its submissions, the court were to accept the construction urged by the respondent, the court should refer the question as to whether that construction is correct to the Court of Justice of the European Communities for a preliminary ruling pursuant to Article 234 of the Treaty of Rome.
23.      As already noted, the regulations give effect in Irish law to the Directive. The relevant Article of the Directive is Article 16 which is as follows:

"Access to Installations

1. Member States shall take the necessary measures to ensure that suppliers of ground handling services and airport users wishing to self handle have access to airport installations to the extent necessary for them to carry out their activities. If the managing body of the airport or, where appropriate, the public authority or any other body which controls it places condition upon such access, those conditions must be relevant, objective, transparent and non-discriminatory.

2. The space available for ground handling at an airport must be divided among the various suppliers of ground handling services and self handling airport users, including new entrants in the field, to the extent necessary for the exercise of their rights and to allow effective and fair competition, on the basis of relevant, objective, transparent and non-discriminatory rules and criteria.

3. Where access to airport installations gives rise to the collection of a fee, the latter shall be determined according to relevant, objective, transparent and non discriminatory criteria."

24.      No question arises in this case as to the transposition of the Directive into national law. It is accepted that this transposition was properly effected. Since, however, the regulation gives effect to the Directive in Irish law, it must be construed in the light of community law.
25.      The court notes that Article 16 of the Directive, unlike Regulation 14 of the Regulations does not require that the "fee" for "access to airport installations" is to receive the prior approval of a State agency, such as the Minister. Since the only issue arising in this context is as to whether the prior approval of the Minister was required to the determination by the respondent of the rental charges, it would seem that any question of community law arising will be of significance only in those member states, which, like Ireland, have included such a provision in their implementing measures.
26.      However, the court is not satisfied that, applying the criteria laid down by the Court of Justice in CILFIT and Anor v.Ministry of Health [1982] ECR 3415, the correct application of community law is so obvious in this case as to leave no scope for any reasonable doubt as to the correct construction of Regulation 14. It will accordingly request the Court of Justice to make a preliminary ruling pursuant to Article 234 of the Treaty of Rome as to the correct construction of that regulation. The parties must submit an agreed draft of the question to be referred to the Court of Justice for approval by this court before transmission to the Court of Justice.

27.      In order to enable this to be done, the further hearing of the appeal will be adjourned. The court will hear counsel as to the length of the adjournment.