Supreme Court of Ireland Decisions

“The applicant asserts that the respondent had made its mind up effectively from the beginning to award a license to Dublin Rock because they were associated with Phantom FM. In this context it is instructive to consider, in part, the minutes of the initial meeting of the respondent on 6th September, 2004, when they were considering the five applicants for the contract. In relation to Zed FM (the applicant) this, in part, is what the minutes record:-
‘In general terms, the contents of the executive evaluation were endorsed. Zed FM was considered to have a credible and relevant mix in the ownership and control structures of the company. Specifically, the mix included well established and leading rock and radio industry figures in the Dublin market. In addition to contributing funds, the shareholders could also significantly contribute to the programme content.
The aim of the station to target a community of interest of alternative rock listeners, beyond the narrow focus of other applicant groups also appeals to a number of the members, including the proposal to target women. While some of the members welcomed the wider target group identified for this service, others said it was unclear as to how this might be achieved. This would require further clarification with the group.
The station’s proposed low cost base was considered prudent, in view of the niche nature of the audience to be served and the need to establish a revenue base for this type of service. However, some members were concerned that this might impact on the quality of the service proposed and were of the view that this would require some further clarification with the group in the context of an oral hearing.
The applicant group’s research proposals were considered to be well presented with an adequate sample size. In general terms, the applicant group’s programming proposals were considered to be satisfactory and reflected the knowledge and commitment of members of the applicant group to serving the target audience. Some questions were raised regarding the staffing levels for the service and whether or not the service could be successfully operated on the levels proposed. This would require further consideration…the proposed management team for the service was considered to be appropriate and very experienced…in summary, this application was considered to be of a high standard and the programming ethos of the proposed service was considered to be relevant and appropriate to the Dublin market and the target audience in particular.’

The applicant, as already stated, was short listed. At the final meeting on 8th November, 2004, the following appears in the minutes:-
‘Zed FM’s ownership and control proposals were considered in general terms to be satisfactory by the Commission. The company was considered to have a good mix of radio and music industry experience, as well as financial and business backing… the track record of individuals involved was also considered to be satisfactory.
The company’s management structure was considered to be adequate for a niche service. Aspects of the station’s staffing proposals were considered satisfactory. However, members were not convinced that the group could deliver the proposed service with the staffing levels outlined. The members also questioned the adequacy of the resources being committed to staff training.
In respect of the applicant group’s programming proposals, the members considered that the station’s music offering was not as focussed in respect of alternative Rock as that of Phantom FM…the Commission was not convinced about the ability of the station to attract the wider audience being targeted.
The company structure included good financial backing. However, the company’s revenue and cost projections were not considered to be as realistic as those of the Phantom FM group.’

So far from indicating a prejudgment or bias, let alone mala fides, on behalf of the respondent these excerpts in my view demonstrate an objective, impartial and indeed appreciative recognition of the merit of the applicant’s bid together with a careful and balanced appraisal of its relative strengths and weaknesses when compared with that of Phantom FM. At its strongest the applicant’s allegation in this regard amounts to no more than the construction of a series of questions indicating a suspicion of the respondent’s attitude but they do not come anywhere near establishing the level of coherent evidence required to make out an allegation of a fraudulent nature such as bias. When placed against the extracts, which I have cited at some length, from the minutes of the two relevant decision making meetings of the respondent these questions in my opinion are met with a complete and satisfactory answer and as soon as these documents were made available to the applicant in my view that should have been an end of this particular allegation.
At a more technical level the applicant has not been able to identify a factor external to the process itself by reference to which the Commission could be said to have been guilty of bias as is required under the more recent jurisprudence in relation to bias.”

“Have regard to the overall quality of the performance of the applicant with respect to the provision by him of a sound broadcasting service under any sound broadcasting contract held by him at, or before, the date of the making of the application.”

“This ground of challenge was not pressed by the applicant. A defence, as indicated above, was advanced on behalf of the respondent and whilst it can be said on the one hand that the awarding of the two temporary contracts in effect to the same group of individuals was contrary to the spirit of the Act (and the respondent has since made arrangements to avoid its repetition), on the other hand it appears to me to be in accordance with the principle of the Act of 2001 that the provision of services under those two temporary contracts once it had occurred should have been considered as was done in the instant case. In the result I am not satisfied that this ground of challenge has been made out by the applicant”.

corporate, the character of the body and its directors, manager, secretary, or similar officer and its members, and the persons entitled to the beneficial ownership of its shares.”

“The adequacy of the expertise and experience of the financial resources that will be available to each applicant and the extent to which the applicant accords with good economic principles.”

“It is well established that it is a matter for the [respondent] and not for the courts as to what weight they would attach to this element in their consideration of the character of that particular bidder. It is not for me or, with respect, for the applicant in these proceedings, to assert what weight should have been assigned to this element of the evidence before the respondent or what should have been the out come of their deliberation, once it is clear, as it is, that the several elements that comprise “character” were considered by the respondent.”

Section 6(1) of the Radio and Television Act, 1998, requires the Broadcasting Commission to consider every application for a sound broadcasting contract for the purposes of “determining the most suitable applicant” to be awarded a contract. Section 6(2) sets out a series of ten criteria to which the Commission shall have regard in considering applications. The Act envisages that equal weight be given to each of the ten criteria: indeed, section 5(6) precludes the Commission from placing greater emphasis on any of the criteria in the absence of prior notice to the parties, which notice was not given in this case.

The criteria relevant to these proceedings are contained at s.6(2)(a) of the 1998 Act, which refers to:

“The character of the applicant, or, if the applicant is a body corporate, the character of the body and its directors, manager, secretary, or other similar officer and its members, and the persons entitled to the beneficial ownership of its shares”.

“The adequacy of the expertise and experience and of the financial resources that will be available to each applicant and the extent to which the applicant accords with good economic principles”.

“In considering the suitability of an applicant for the award of a sound broadcasting contract, the Commission shall have regard to the overall quality of the performance of the applicant with respect to the provision by him of a sound broadcasting service under any sound broadcasting contract held by him at, or before, the date of the making of the application.”

The essential issue in this case is to determine whether or not the Broadcasting Commission gave appropriate consideration to the term “character” when deciding to award a sound broadcasting contract for the operation of an alternative rock music sound broadcasting service on the FM band in Dublin City and County to Dublin Rock Radio Ltd, trading as “Phantom FM”.

The applicant contends that the decision of the Commission is flawed on a number of grounds, which primarily relate to the illegal broadcasting operations carried out over a 5 year period up to 2003 by various members of the Dublin Rock Consortium under the name “Phantom FM”. The applicant contends that the Commission failed to give proper consideration to the “character” of the members of the Dublin Rock Consortium under s.6 of the 1988 Act, that it erred in conferring a benefit on Dublin Rock as a result of illegal broadcasting by a former pirate radio station “Phantom FM”, that it pre-judged the issue of the award of the sound broadcasting contract in favour of the Dublin Rock Consortium and that it erred in having regard to the previous operations of two distinct entities, Wireless Media Ltd. and Coxstone Ltd., both of whom provided services under temporary sound broadcasting contracts under the name “Phantom FM”. While these issues are, to some degree, interrelated, it seems to me that the central part of this case relates to the first two issues to which I have referred.

There is a measure of agreement about the background history. From 1998 onwards, some members of the Dublin Rock Consortium operated an illegal “pirate” radio station under the name “Phantom FM”. In 1999 and again in 2001, Phantom FM went off-air in order to apply for sound broadcasting contracts. On each occasion, the application was unsuccessful and Phantom FM immediately recommenced illegal broadcasting. On the 21st May, 2003, against a background of a more rigorous enforcement regime, Phantom FM decided to cease broadcasting. Subsequent to the cessation of illegal broadcasting by Phantom FM, the Commission granted temporary contracts, firstly, in October, 2003, to Wireless Media Ltd., trading as Phantom FM, to operate an alternative rock radio service for 30 days between October, 2003, and January, 2004. A further temporary contract was granted to Coxstone Ltd., also trading as Phantom FM on the 22nd March, 2004.

On the 4th July, 2003, the Commission sought expressions of interest in relation to new sound recording contracts in Dublin, which led eventually to the award of a contract, which is the subject of these proceedings. An announcement was made on the 8th March, 2004, that an advertisement would be published in relation to the order for contract, and such an advertisement was published on the 5th May, 2004, seeking applications for an alternative rock music sound broadcasting service, with a closing date for applications on the 9th July, 2004.

Both the applicant and Dublin Rock applied for the licence and were the only parties who were eventually short-listed by the Commission at a meeting on the 8th September, 2004. Public hearings were heard on the 11th October, 2004, following which a meeting of the Commission held on the 8th November, 2004, decided to award the contract to Dublin Rock. This decision was communicated to the applicant on the 16th November, 2004. The Commission also provided the applicant with the feedback report on its application on the 29th November, 2004. In the months that followed, the applicants made it clear to the Commission that they had “difficulties” with the decision of the Commission to award the contract to Dublin Rock, particularly having regard to the “character” of the Dublin Rock Consortium. Eventually, a decision was made by the applicant to institute proceedings which commenced on the 14th March, 2005. In a reserved judgment delivered on the 1st November, 2005, the High Court (O’Sullivan J.) rejected the applicant’s challenge in these judicial review proceedings.

Submissions of the Parties

The applicant submits that the term “character” contained in s.6 of the Act, should be given a common sense interpretation and that, in the context of an application for a radio licence, should be viewed as an applicant’s “moral nature” or the qualities which make that person different. Reliance was placed on that definition of the noun “character” given in the concise Oxford English dictionary, which defines the term as:

“The mental and moral qualities distinctive to an individual; strength and originality in a person’s nature; a person’s good reputation.”

“The truth is that the word ‘character’ is often used, and quite properly used, in the same sense as the word ‘reputation’ thus when I say of a man that ‘he has always borne a good character,’ I mean that he has always been thought well of by others. And when I want to know what his ‘character’ is, I write, not to him, but to others who know something about him. In short, his ‘character’ is the esteem in which he is held by others who know him and are in a position to judge his worth.”

However, it was submitted that there was no affidavit filed by the respondent which demonstrated that any true consideration had been given to the illegal broadcasting history of Phantom FM. The matter was not raised in oral submissions by the Commission. Nor was there any reference to the issue in the feedback report given to the applicant. The furthest Mr. O’Keefe could put the matter was to assert that members of the Commission “would have been aware” of the illegal broadcasting history, though the Commission was primarily concerned with the manner in which the applicant performed during the currency of the two temporary licence contracts when making its assessment.

Mr. Gordon further submitted that the policy of the Commission, whereby it accepts application for sound broadcasting contracts from pirates provided they go off-air, was a policy which had no basis whatsoever in the 1988 Act. In fact, such a policy ran directly contrary to the express terms of the Act. Alternatively, if the Commission were disposed in 1988 to encourage former pirates to embrace the statutory regime, such a policy could not inure indefinitely, or operate in such a way in 2004 as to disadvantage a rival applicant who had no similar history of illegal broadcasting.

In response, Mr Cush, senior counsel on behalf of the respondent, submitted that the issue of character had been adequately addressed by the Commission and that by bringing judicial review proceedings the applicant effectively was attacking the weight attached by the Commission to the history of pirate broadcasting where the applicant was concerned. He submitted that it was for the Commission to determine what weight should be given to this consideration. It was a consideration to which the Commission had had regard by reference to a number of factors. Firstly, only 25% of the constituent members of the consortium had ever been involved in illegal broadcasting. Secondly, those involved in pirate broadcasting had ceased their activities for a period of 18 months prior to the decision to award the contract. Thirdly, the applicants had operated two temporary licences in a proper manner and the Commission were entitled to attach weight to that fact. Finally, the entire background history of pirate broadcasting was known to the Commission and there had been a discussion of this issue at the meeting which short-listed the final applicants for the contract. It was further pointed out that the learned High Court judge had found as a fact that the Broadcasting Commission did not afford any benefit to the successful applicant by reference to any history of illegal operations. This Court, he submitted, should not interfere with findings of fact made in the court below and he relied on the decision of this court to that effect in Hay v O’Grady [1992] 1 I.R. 210.

It was further submitted that there was no onus on the Commission to break down the historical piracy into component segments, such as was now argued for by the applicant. That history was at most an element of weight of character to be considered by the Commission, and the court should not in consequence interfere with the exercise by such an expert body of the exercise of its reasonable discretion in reaching the final decision made in this case.

The High Court Judgment

In the course of his judgment, O’Sullivan J. found that the word “character” meant more than moral fibre. At p.4 of his judgment he stated;-

“In my opinion if ‘character’ were to be confined to ‘moral fibre’, as distinct from including it, the Act would have defined the word to make this clear. By leaving it undefined the word retains its ordinary meaning which certainly includes moral fibre but also elements such as ‘distinctive mark’, ‘collective peculiarities’ and ‘distinction, individuality’. One thinks of phrases such as ‘the character of a team’, ‘a bit of a character’, ‘a woman of character’, as well as ‘a reformed character’ in reaching a conclusion that the word includes more than moral fibre”.

“The evidence is that, in the evaluation of Phantom’s bid by the executive there was merely a reference that the larger shareholder in Dublin Rock (Wireless Media Ltd.) comprises ‘nine individuals who had a strong involvement and practical experience operating the radio station Phantom FM. Phantom FM operated as a pirate station and more recently under two temporary licences pursuant to s.8 of the Radio and Television Act, 1988’.

Whilst this material was before the respondent there is nothing in any minute to indicate they considered the matter further.”

“This issue must, I think, be seen against the background that it is the established policy of the respondent to encourage illegal broadcasters by accepting applications from them provided they have ceased illegal broadcasting prior to the application being made. The evidence is that this policy was authorised by the distinguished first Chairman of the respondent and in my opinion it is entirely consistent with the objectives of the Act which include this arranging of contracts for illegal broadcasting. The involvement of some individuals with Dublin Rock who had been involved in illegal broadcasting was known to the Commission. It is well established that it is a matter for the Commission and not for the courts as to what weight they would attach to this element in their consideration of the character of that particular bidder. It is not for me, or, with respect, for the applicant in these proceedings, to assert what weight should have been assigned to this element of the evidence before the respondent or what should have been the outcome of their deliberation, once it is clear, as it is, that the several elements that comprise ‘character’ were considered by the respondent.

It seems to me that this challenge was based, at least in part, on an interpretation of ‘character’ which in my opinion is too narrow. There is no allegation of irrationality in the sense the it is not alleged that the outcome of the respondent’s consideration of the character of Dublin Rock is so utterly irrational as to be beyond the contemplation of their statutory function: absent such a challenge, once it is clear that the topic of character (including the relevant history of illegal broadcasting) was before the Commission, then in my view of the law, that is the end of the matter.

Accordingly this challenge must fail.”

Meaning of Character