TV3 Television Company Ltd v Independent and Radio Television Commission

JurisdictionIreland
Judgment Date01 January 1994
Date01 January 1994
Docket Number[1991 No. 249 J.R.]
CourtSupreme Court
TV3 v. Independent and Radio Television Commission
TV3 Television Company Ltd., Windmill Lane Pictures
Ltd. (under the protection of the court)
Paul
McGuinness, John Kelleher, and Osmond Kilkenny
Applicants
and
Independent and Radio Television
Commission
Respondent
[1991 No. 249 J.R.]

High Court

Supreme Court

Judicial review - Natural justice - Constitutional justice - Fair procedures - Respondent awarding contract to applicants for provision of national television service subject to negotiation of contractual terms - Negotiation concerning terms of contract- Respondent requesting details as to investors in proposed television service - Applicants undertaking to provide details by requisite date - Failure to provide details - Applicants notifying respondent of reason for failure to provide the required information - Respondent withdrawing award of contract - Whether decision taken in breach of natural or constitutional justice - Whether duty on respondent to notify applicants of intention to withdraw award.

Judicial review - Administrative function - Fair procedures - Statute providing for establishment of respondent body - Duty on respondent to enter into contract with a person or persons for provision of national television service contract - Act providing that respondent was to make determination as to suitable applicant and enter contract with that applicant - Whether awarding of contract subject to negotiation of contractual terms entitled applicants to a right to negotiate - Whether decision to withdraw award constituting breach of natural and constitutional justice - Radio and Television Act, 1988 (No. 20), ss. 3, 4, 6 and 17 - Broadcasting Act, 1990 (No. 24), section 3.

Pursuant to s. 3 of the Radio and Television Act, 1988, the Minister for Communications established the Independent Radio and Television Commission (the respondent).

Section 4, sub-s. 2 (b) of the Act of 1988 provided that it was the duty of the respondent to enter into a television programme service contract with some person or persons for the establishment of a national television programme service.

Section 6, sub-s. 1 of the Act of 1988 required the respondent to consider every application "for the purpose of determining the most suitable applicant to be awarded the contract". Section 6, sub-s. 2 of the Act set out a detailed list of matters which the respondent was to take into consideration in determining who was the most suitable applicant. Section 14, sub-s. 4, para. (a) (1) of the Act entitled the respondent, at its discretion, to terminate the contract if any false or misleading information was given to the respondent by or on behalf of any applicant prior to the making of such contract.

Pursuant to his powers under s. 17 of the Act of 1988, the Minister directed the respondent to invite applications for a contract for the establishment of a third national television station. The applicants, members of a consortium, submitted an application in January, 1989. It was intended that the first applicant would hold the licence for the service. A detailed business plan was supplied with the application.

On the 12th April, 1989, the respondent issued a press release in which it was stated that "the Independent Radio and Television Commission has decided to award the national television franchise to the Windmill consortium - TV 3. The Commission's decision in principle is subject, inter alia, to the negotiation of a satisfactory broadcasting contract between the Commission and TV 3."

The minutes of a meeting of the respondent held on the same date recorded that the defendant had "agreed that, subject to suitable contracts being negotiated, the franchise to operate the independent national television service channel should be awarded to the Windmill consortium."

Subsequently, problems arose in the negotiations of the contract. The applicants discovered that the type of equipment to be used for the transmission of programmes specified by the Act of 1988, together with the existence of advertising rights held by another television service, Radio Telefís Éireann éireann (R.T.E.), would make it difficult to compete with R.T.E. As a result difficulties were experienced in securing investors.

In July, 1990, the Broadcasting Act, 1990, was enacted. Section 3 of the Act of 1990 imposed advertising restrictions on R.T.E. and s. 6, sub-s. 1 entitled the applicants to use a different type of equipment for the transmission of the service than had been specified in the Act of 1988.

As a result of these changes the applicants revised their business plan. Over the following months there were negotiations between the applicants and the respondent. Following a meeting between the parties held on the 13th June, 1991, the respondent issued a press release in which it stated that, subject to its being satisfied as to the identities of the proposed investors and the amounts to be invested, it approved the revised business plan. The applicants undertook to provide the relevant information by the 31st August, 1991. The respondent did not state that a failure on the part of the applicants to supply the requisite information by that date would result in the withdrawal by the respondent from the negotiations for a contract.

The applicants did not supply the requisite information. In a letter written to the respondent on the 30th August, 1991, the applicants stated that they were experiencing difficulties in obtaining a commitment from investors to its business plan as the Minister for Communications had announced in July, 1991, that he intended to review the Act of 1990, with a view to removing the advertising restrictions on R.T.E. The letter went on to state that pending the outcome of the legislative review the applicants would not be able to supply details as to their investors.

Subsequent to this a meeting was arranged between the Minister for Communications, the chairman of the applicants' consortium, and the chief executive of the respondent. It was agreed that no decision would be taken with respect to the provision of a third television service until the 1st November, 1991, by which date (the Minister had stated) the review of the legislation would be complete and proposals made in that regard. The chief executive circulated a note to the members of the respondent to that effect and proposed a press release in similar terms. However the members told him it was inappropriate for him to make such a note and instructed him to withdraw it.

During the month of October the respondent met on three occasions and sought legal advice as to whether it was entitled to withdraw the award of the contract from the applicants. On the 29th October, 1991, it wrote to the applicants and informed them that"the conditional grant of the franchise . . . is withdrawn" on the grounds that: "(a) . . . the consortium essentially no longer exists and (b) . . . the promoters failed to meet the deadline for furnishing the required information as to the investors and their investments."

At the time of writing, the respondent was aware that the applicants had already invested £3,000,000 in the project. The applicants issued proceedings seeking an order of certiorari quashing the decision of the respondent.

Held by Blayney J., in granting the relief sought, 1, that having regard to the provisions of the Act of 1988, once the respondent had made a determination as to the suitability of an applicant it was obliged to enter into a contract with such applicant on completion of contractual negotiations.

2. That the decision of the respondent to award a contract to the applicants amounted to a "determination" within the meaning of s. 6 of the Act of 1988, the effect of which fell short of establishing contractual relations between the parties; it constituted a promise on the part of the respondent to enter into a contract with the applicants subject to negotiation of terms.

3. That the mere existence of a deadline for the provision of information as to the applicants' investors did not constitute notice of an intention to withdraw the award of the contract in default of the provision of such information as the respondent had never indicated that the failure to provide that information by the due date would result in the award of the contract being withdrawn.

4. That the respondent, in making its decision to withdraw the award, was exercising an administrative function pursuant to statute and accordingly was obliged to act in accordance with principles of constitutional justice.

East Donegal Co-operative Livestock Mart Ltd v. The Attorney General [1970] I.R 317 and O'Brien v. Bord na Mona[1983] I.R. 255 followed.

5. That the respondent, in failing to notify the applicants of its intention to withdraw the award of the contract, provide reasons for so withdrawing the award or afford an opportunity to the applicants to make representations had failed to comply with the requirements of constitutional justice.

East Donegal Co-operative Livestock Mart Ltd v. The Attorney General [1970] I.R. 317, and O'Brien v. Bord na Mona[1983] I.R. 255 applied.

On appeal by the respondent from the judgment and order of the High Court it was

Held by the Supreme Court (O'Flaherty, Egan and Denham JJ.), in dismissing the appeal, 1, that determination by the respondent acting pursuant to statute to award the contract to the applicants conferred upon the applicants a statutory entitlement to negotiate the terms of the contract with the respondent.

2. That the respondent, being an administrative body created by statute, was obliged to act in accordance with the requirements of natural justice and constitutional justice.

3. That the respondent had acted in breach of natural and constitutional justice as it had failed to notify the applicants that failure to provide required information prior to a specified date would result in the withdrawal of the award of the contract.

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