Manorcastle Ltd v Commission for Aviation Regulation

• Jurisdiction: Ireland
• Judge: Mr. Justice Charleton
• Judgment Date: 28 November 2008
• Neutral Citation: [2008] IEHC 386
• Court: High Court
• Docket Number: [2008] No. 1049 Sp]
• Date: 28 November 2008

Manorcastle Ltd v Commission for Aviation Regulation

BETWEEN:

MANORCASTLE LIMITED

APPLICANT

-AND-

COMMISSION FOR AVIATION REGULATION

RESPONDENT

[2008] IEHC 386

Record No. 1049 SP/2008

THE HIGH COURT

AVIATION

Regulation

Tour operator - Licence - Appeal - Renewal refused - Concerns as to solvency - Appropriate nature of review by way of appeal - Appropriate date for consideration of decision of respondent - Whether judicial review or de novo appeal appropriate - Whether appropriate to take into account matters which had come to light since date of refusal to renew licence - Orange Communications v Director of Telecommunications [2000] 4 IR 159 applied; Glencar Exploration v Mayo County Council [2002] 1 IR 84, Murray v Pensions Ombudsman [2007] IEHC 27 (Unrep, Kelly J, 25/1/2007), International Fishing Vessels v Minister for Marine [1989] IR 149 and Glancré Teo v Cafferkey [2004] 3 IR 401 considered; Balkan Tours v Minister for Communication [1988] ILRM 101 distinguished - Transport (Tour Operators and Travel Agents) Act 1982 (No 3), ss 4, 5, 6, 7, 8, 9, 13 and 15 - Appeal refused (2008/1049SP - Charleton J - 28/11/2008) [2008] IEHC 386

Manorcastle Ltd v Commission for Aviation Regulation

Facts: section 6 of the Transport (Tour Operators and Travel Agents) Act 1982 provides that the respondent shall refuse to grant a licence to a person to operate as a tour operator if he is not satisfied that the financial resources of such person are adequate for discharging his actual and potential obligations in respect of his activities. Section 9 of the Act provides, inter alia, that "whenever the [respondent] refuses to grant a licence...the applicant may appeal to the High Court against such refusal...On the hearing of [the] appeal...the High Court may either confirm the refusal or may allow the appeal...A decision of the High Court on an appeal under this section shall be final save that, by leave of that Court, an appeal from the decision shall be to the Supreme Court on a specified question of law." The respondent refused to grant a licence to the appellant to carry on business as a tour operator based upon its belief that it did not have the necessary financial resources to do so. The appellant appealed that decision to the High Court under section 9 of the Act of 1982.

Held by Mr Justice Charleton in affirming the respondent's decision, 1, that, in light of the fact that if the High Court considered that the appeal should be allowed, the respondent was automatically obliged to grant a licence, the High Court had to be satisfied that it was not allowing a financially unviable tour operator to carry on business to the risk of holiday makers and that post revocation developments in that respect would only be relevant in assessing what, if any, conditions needed to be imposed in order to correct a decision which was wrong, the correct date on which to analyse the case was the date of the decision itself.

2. That there could not be a uniform mechanism set down in isolation to be applied in all statutory appeals and the Court's function would depend upon the particular legislation at issue, considered in the context of the Act as a whole, following which a number of considerations had to be addressed:

(a) the nature of the jurisdiction conferred: whether the Court was exercising power in relation to an issue with which it had experience such as planning or whether it was dealing with an arcane discipline which was devoted solely to an administrative tribunal having that experience;

(b) whether the Court was empowered to impose conditions;

(c) whether the body whose decision was being appealed was a specialist body;

(d) the Court had to establish the intention of the legislature in creating the appeals mechanism, in particular the intended relevance of the original decision to the appeal proceedings and whether the original decision be considered in detail or whether the process operated akin to a de novo appeal;

(e) any powers which the Court had to gather information or the absence of such powers;

(f) the effect of the original decision;

(g) whether the statutory scheme allowed the decision making body to meet with the appellant and therefore make a judgment as to credibility or reliability;

Adopting that approach, the test of serious and significant error was to be applied to the decision in question, which required an assessment of whether the decision was unreasonable or whether there was a mistake of fact which went to the foundation of the decision.

Adopting that test, the respondent had not acted unreasonably in remaining concerned as to the appellant's financial stability and in holding the view that it did not meet the criteria set down in the Act of 1982, the primary purpose of which was to protect holiday makers.

Reporter: P.C.

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S4

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S5

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S6

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S13

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S15

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S6(3)(B)

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S7

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S8

TRANSPORT (TOUR OPERATORS & TRAVEL AGENTS) ACT 1982 S9

GLENCAR EXPLORATION PLC & ANOR v MAYO CO COUNCIL 2002 1 ILRM 481

BALKAN TOURS LTD v MIN FOR COMMUNICATIONS 1988 ILRM 101

GLANCRE TEORANTA v CAFFERKEY & ORS 2004 3 IR 401

MURRAY v TRUSTEES & ADMINISTRATORS OF IRISH AIRLINES (GENERAL EMPLOYEES) SUPERANNUATION SCHEME & PENSIONS OMBUDSMAN UNREP KELLY 25.1.2007 2007/43/9011

DUNNE & ORS v MIN FOR FISHERIES 1984 IR 230

INTERNATIONAL FISHING VESSELS LTD v MIN FOR MARINE 1989 IR 149

ORANGE COMMUNICATIONS v DIRECTOR OF TELECOMMUNICATIONS REGULATION & METEOR MOBILE COMMUNICATIONS LTD (NO 2) 2000 4 IR 159

M & J GLEESON & CO & ORS v COMPETITION AUTHORITY & ORS 1999 1 ILRM 401

1 Judgment of Mr. Justice Charleton, delivered ex tempore on the 28th day of November, 2008

2 This is an appeal pursuant to statute against the decision of the respondent to refuse to renew the applicant's licence to act as a tour operator, which decision was made on the 24 ^th of October 2008 and in effect caused the termination of the existing licence on the 31 ^st of October 2008, which was the last day of its operation. However, under the Transport (Tour Operators and Travel Agents) Act 1982 ('the 1982 Act'), once an appeal against such a decision is taken the applicant is entitled to continue trading pending the determination of that appeal.

3 The history of the matter requires me to consider a number of facts. The appropriate method of examining those facts shall be determined after I recite them, as one of the crucial questions in this case is: what is the nature of the review that I am conducting? Is it a judicial review, a complete rehearing, or some combination of the tests laid down by the courts in the various cases involving such licensing decisions?

Factual Background

4 For a number of years, the applicant has carried on business both as a tour operator and as a travel agent. As I understand it, in 2008 it decided not to continue acting as a travel agent but wished to continue acting in the ordinary way as a tour operator. The first relevant date for present purposes is the 31 ^st of July 2008, when the applicant was contacted by the respondent and questioned in relation to certain accounts, specifically its annual accounts up to the 31 ^st of December 2007. Apparently, there had been an error in submitting these accounts and they arrived late as a result. That would not have been a serious issue, as far as the respondent was concerned, but for what emerged on the examination of those accounts.

5 I understand that the auditors employed on behalf of the applicant were L'Estrange & Company. They advised the respondent on the 25 ^th of July 2008 that the applicant's licensable turnover during the period from the 1 ^st of November 2007 to the 30 ^th of April 2008 amounted to €1,293,699. The accounts which arrived with the respondent, which has a statutory entitlement to them, indicated a number of matters which the respondent regarded later as being disquieting. In the notes to the accounts which arrived in August or September, there is heading indicating a fundamental uncertainty in relation to the calculations. This reads:

"The financial statements have been prepared on an ongoing basis. For the reasons outlined in Note 17, this basis may not be appropriate. Because of the potential impact of this uncertainty, we are unable to form an opinion as to whether the financial statements give a true and fair view of the state of the company's affairs, as of 31 ^st December 2007. In all other respects, in our opinion, the financial statements have been properly prepared in accordance with the Companies Acts 1963 to 2006".

6 In the accounts, the note indicating a concern (note 17) made reference to a number of matters. These merit quotation. Under the heading "Going Concern" it says:

"The financial statements have been prepared on the "going concern" basis which assumes that the company will continue in operational existence for the foreseeable future. During the year the company incurred a loss after depreciation of €630,105. The directors put €624,000 of their own funds into the company, some of which went in before and some after the year end. A number of factors would affect the company's ability to continue to trade for the foreseeable future:"

(1) The company will require the continued support of its bankers who provide overdraft and credit card facilities;

(2) The company will have to cut its wages and overhead expenditure significantly to avoid a repeat...