Ryanair Holdings Plc v Irish Financial Services Regulatory Authority

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Kelly delivered
Judgment Date10 July 2008
Neutral Citation[2008] IEHC 231
Date10 July 2008

[2008] IEHC 231

THE HIGH COURT

COMMERCIAL

[No. 49 J.R./2008]
Ryanair Holdings Plc v Irish Financial Services Regulatory Authority

BETWEEN

RYANAIR HOLDINGS PLC
APPLICANT

AND

IRISH FINANCIAL SERVICES REGULATORY AUTHORITY
RESPONDENT

AND

BY ORDER OF THE COURT AER LINGUS PLC
NOTICE PARTY

FINANCIAL REGULATOR MARKET ABUSE RULES 2006

CENTRAL BANK ACT 1942 S33C

CENTRAL BANK ACT 1942 S33C(3)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 3

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 10

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 PART IV

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 28

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 29

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 30

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 31

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 PART V

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 35(1)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 35(10)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 40(2)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 41(a)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 41(b)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 41(c)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 41(d)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 41(e)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 41(f)

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 45

MARKET ABUSE (DIRECTIVE 2003/6/EC) REGS 2005 SI 342/2005 ART 35

FOWLEY v CONROY 2005 3 IR 480

R v CHIEF CONSTABLE OF SUSSEX EX PARTE INTERNATIONAL TRADER'S FERRY LTD 1999 2 AC 418

HARRIS v SHEFFIELD UNITED FOOTBALL CLUB LTD 1988 QB 77

MCCORMACK, STATE v CURRAN 1987 ILRM 225

H v DPP 1994 2 IR 589

EEC DIR 2003/6 RECITAL 12

INVESTMENT FUNDS, COMPANIES & MISCELLANEOUS PROVISIONS ACT 2005

JUDICIAL REVIEW

Mandamus

Market abuse - Alleged breaches - Discretionary investigatory process - Statutory regime of Financial Regulator - Obligations on foot of Regulations - Application to compel Financial Regulator to investigate complaint - Trial on preliminary issue of law - Whether respondent under legal duty to investigate, to make public any findings of investigation, or give reasons for decision not to investigate - Whether complaints enforceable by way of mandamus - Whether facts disclosed breach of market abuse law - Exceptional circumstances that court will intervene by way of judicial review into discretionary investigatory process - Whether refusal to investigate reviewable - Jurisdiction of court to intervene - Whether facts disclosed breach of Regulations or Act - Threshold of proof - Fowley v Conroy [2005] IEHC 269 [2005] 3 IR 480, State (McCormack) v Curran [1987] ILRM 225 and H v DPP [1994] 2 IR 589 applied - Directive 2003/2006/EC - Market Abuse (Directive 2003/6/EC) Regulations 2005 (SI 342/2005) - Investment Funds, Companies and Miscellaneous Provisions Act 2005 (No 12) - Application for judicial review dismissed (2008/49JR - Kelly J- 10/7/2008) [2008] IEHC 231

Ryanair v Irish Financial Services Regulator

1

Mr. Justice Kelly delivered the 10th day of July, 2008

Introduction
2

The applicant (Ryanair) is seeking an order of mandamus to compel the respondent to investigate a complaint made to it by Ryanair on the 21 stAugust, 2007. It also seeks to compel the making public of the findings of that investigation. Alternatively, mandamus is sought to compel the respondent to decide whether it is going to investigate the matter or not and to give reasons for its decision.

3

This is my judgment on certain preliminary issues of law which Ryanair accepts, if answered in a manner adverse to it, must result in these proceedings being dismissed in limine.

Background
4

Ryanair is the largest shareholder in the notice party (Aer Lingus). It holds approximately 29% of the issued share capital of Aer Lingus. The Minister for Transport on behalf of the Irish Government holds 25% of the issued share capital in Aer Lingus. The Minister is the second largest shareholder.

5

On the 7 th August, 2007 Aer Lingus announced that it was setting up a new base at Belfast International Airport and that it would begin services between that airport and London Heathrow. In order to operate that new route, Aer Lingus announced its decision to transfer its Heathrow slots from Shannon to Belfast, thereby closing the Shannon-Heathrow route.

6

That decision gave rise to a good deal of controversy. One of the issues in that controversy concerned the date when the government first became aware that the slots were going to be transferred from Shannon.

7

Ryanair contends that in an interview which was given by the Chief Executive of Aer Lingus to RTE on the 12 th August, 2007 he said that the Minister had been informed of the Aer Lingus decision to close its Shannon Heathrow route on the 3 rd August, 2007.

8

Ryanair takes the view that if Aer Lingus informed one large shareholder of such a matter ahead of other shareholders and indeed the public, it did so in breach of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (the Regulations) and the Market Abuse Rules (the Rules).

9

On the 21 st August, 2007 Ryanair (through its solicitors) wrote to the respondent calling on it to conduct an investigation into the matter.

10

After that initial letter was written Ryanair says that it became aware that Aer Lingus had in fact informed the Minister of its decision as far back as the 13 th June, 2007. Thus, it wrote again to the respondent on the 19 thOctober, 2007 calling upon it to investigate the matter.

11

On the 22 nd October, 2007 the respondent replied in the following terms:-

"The Financial Regulator investigates possible breaches of Market Abuse law uncovered by us or brought to our attention, subject only to the efficient and effective use of our resources. In the event that a company investigated is found by an Administrative Sanctions Inquiry to have committed a breach of a regulatory requirement a public statement is made of the outcome of the process. You should note, however, that it is not our policy to brief those who bring matters to our attention of the outcome of investigations directly. Notwithstanding that, I would like to thank you for drawing these matters to our attention and for the supporting documentation, which you have forwarded to us."

12

On the 30 th October, 2007, Ryanair's solicitors replied to the respondent's letter and asked for confirmation that it was conducting an investigation into the complaint.

13

Ryanair's solicitors wrote a further letter on the 8 th November, 2007 which again asked the respondent to make a decision as to whether it was going to investigate Ryanair's complaint.

14

This was responded to on the 9 th November, 2007 when the respondent indicated that its position was as stated in its letter of the 22 nd October, 2007.

15

On the 13 th November, 2007 the respondent again wrote to Ryanair's solicitors. That letter reiterated the contents of the two previous letters of the 22 nd October and 9 th November, 2007 respectively. The letter went on:-

"For the avoidance of doubt and as previously indicated to you, the Financial Regulator is statutorily prohibited from disclosing confidential information to you or your client pursuant to Section 33AK of the Central Bank Act 1942 (other than provided for in part 5 of the Market Abuse Regulations 2005). Breach of the Financial Regulator's obligations in this regard would constitute a criminal offence.

Should your client choose to initiate legal proceedings against the Financial Regulator, the Financial Regulator shall draw the courts attention to this correspondence and to previous correspondence in relation to the issue of costs."

16

On the 21 st November, 2007, Ryanair's solicitors wrote to the respondent pointing out that it had not asked it to disclose confidential information. Rather, it had asked the respondent to make a decision on whether or not to investigate the complaint and to communicate the basis for such decision to Ryanair. This letter threatened judicial review proceedings without further notice.

17

The following day the respondent replied reiterating its position as set out in its letters of the 13 th November, 2007 and its two previous letters of the 9 th November, 2007 and 22 nd October, 2007.

18

A further letter was sent by the respondent reiterating its earlier stance but indicating that if there was a desire to discuss the matter, personnel of the respondent would be happy to do so. In the event no such meeting took place.

19

On the 21 st January, 2008, Peart J. granted leave ex parte to Ryanair to judicially review the respondent.

The Reliefs Claimed
20

The following are the reliefs in respect of which Peart J. gave leave to apply:-

21

2 "1. An order of mandamus requiring the respondent to investigate the complaint made by Ryanair initially on the 21 st August, 2007.

22

2. An order of mandamus requiring the respondent to make public the findings of its investigation.

23

3. Further and in the alternative an order of mandamus requiring the respondent to make a decision as to whether it is going to investigate the complaint made by Ryanair on 21 August, 2007.

24

4. Further and in the alternative an order of mandamus requiring the respondent to give reasons for its decision not to investigate the complaint made by Ryanair on 21 August, 2007.

25

5. A declaration that the respondent is in breach of its obligations under section 10(1) of the Market Abuse (Directive 2003/06/EC) Regulations.

26

6. Further or other reliefs"

Procedural...

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