IpsofactoJ.com: International Cases [2007] Part 5 Case 11 [SCIre]


SUPREME COURT OF IRELAND

Coram

Scrollside Ltd

(trading as “Zed FM”)

- vs -

Broadcasting Commission of Ireland

DENHAM J

KEARNS J

McCRACKEN J

6 APRIL 2006


Judgment

Denham J

1.

  1. In this appeal Scrollside Ltd, trading as “Zed FM”, the applicant/appellant, hereinafter referred to as “the applicant”, seeks an order determining that the High Court erred in refusing to quash the decision of the Broadcasting Commission of Ireland, the respondent, hereinafter referred to as “the respondent”, granting a sound broadcasting contract for the operation of an alternative rock music broadcasting service, on the FM band in Dublin, to Dublin Rock Radio Ltd trading as “Phantom Rock”, and referred to hereinafter as “Dublin Rock”.

    2.

  2. The applicant submits that the decision of the respondent is flawed on a number of grounds, especially in relation to the illegal broadcasting operations carried out by various members of the Dublin Rock consortium under the name “Phantom Rock”. The applicant submits that the respondent failed to give proper consideration to the character of the members of the Dublin Rock Consortium as required by s.6 of the Radio and Television Act, 1988. The applicant submits that the decision was unreasonable in that the respondent failed to give proper consideration to the character of Dublin Rock, in that it erred in conferring a benefit on Dublin Rock as a result of the illegal broadcasting. Further, that the respondent erred in conferring a benefit on Dublin Rock as a result of illegal broadcasting by a former pirate radio station “Phantom FM”, that it prejudged 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 provision and operation by two distinct entities, Wireless Media Ltd and Coxstone Ltd, of services under temporary sound broadcasting contracts under the name “Phantom FM”. It is obvious that these issues are all interrelated and that in essence they refer to previous pirate operations.

    3.

  3. The respondent, on the other hand, submits that the applicant has entirely failed to show that the decision of the respondent is null and void or vitiated by bias, as alleged, or at all.

    4.

  4. On the 1st November, 2005, the High Court (O’Sullivan J.) gave a reserved judgment in this matter and ordered that the applicant’s application be refused.

  5. The applicant had sought:

    (i)

    an order of certiorari by way of an application for judicial review to quash the respondent’s decision of the 8th November, 2004, 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 Country to Dublin Rock Radio Ltd trading as “Phantom FM”; and,

    (ii)

    a declaration that the said decision was ultra vires and void.

  6. The decision of the respondent was challenged by the applicant on four grounds, namely:

    1. that the respondent failed to consider the ‘character’ of Dublin Rock as required to do so by statute;

    2. that the respondent erred in law in conferring a benefit on Dublin Rock as a result of the illegal broadcasting by a number of individuals who formed part of the consortium comprising Dublin Rock;

    3. that the respondent prejudged the issue of the award of the contract and at all times intended to grant the contract to any applicant including “Phantom FM”; and,

    4. that the respondent had regard to broadcasting services under the name of “Phantom FM” provided by two distinct entities.

  7. The High Court found against the applicant on each of the grounds advanced.

    5.

    BACKGROUND

  8. The learned trial judge pointed out that underlying the four grounds, advanced on behalf of the applicant, was the applicant’s disquiet at the fact that 25% (or more) of the membership comprising Dublin Rock had been engaged in pirate broadcasting for a number of years up to eighteen months prior to the award of the contract and that the respondents had given credit for the experience and expertise gained during the illegal broadcasting, and erroneously took into account their track record under two separate temporary broadcasting contracts.

  9. The respondent was established under the Radio and Television Act, 1988 to, amongst other activities, enter into contracts with providers of sound broadcasting services. The procedure is that the respondent first invites expressions of interest in the proposed contract, and in this case it received five, which were summarised by the executive of the respondent, and considered by it at a meeting where two of the bidders were short listed. Then these two were invited to an oral hearing at which each of them made a twenty minute submission followed by a twenty five minute question and answer session. After that questionnaires were sent out and the answers and all the material were considered at a final meeting where the decision was made. Subsequently the unsuccessful bidders were given feed-back reports explaining the decision.

    6.

    HIGH COURT JUDGMENT

  10. These judicial review proceedings were grounded on affidavits, principally the affidavit of Dermot O’Hanrahan for the applicant and Michael O’Keeffe on behalf of the respondent. Michael O’Keeffe was cross-examined at length.

  11. The High Court held:

    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.

  12. The learned trial judge referred to the fact that the respondent permitted Dublin Rock to mend its hand by reference to its advertising agency - which was contrary to the arrangements that the application could not be changed, and without reference to the applicant. He held that this was a valid point against the respondent, but not in the context of an allegation of bias. However, he held that this was a departure from the highest standards of procedural fairness and the learned trial judge hoped it would not occur again. He held that in the overall context it was not of such significance nor of such a departure from the proper standards as would justify intervention by the courts other than to make the observations he had made.

  13. I agree with this approach on this issue. It was not best practice to enable Dublin Rock alter its application as it did, however I would affirm the decision that in the context it was not such an action as to warrant an intervention by this Court in the case. It is an approach which I expect will not be repeated.

  14. As to the two temporary contracts - the High Court pointed out that in the statement grounding the application for judicial review it was stated that the respondent was not entitled to have regard to the cumulative experience gained by Phantom FM through the operation of two temporary contracts. Counsel for the respondent had pointed out to the High Court that technically there was no breach of the Act because the two contracts were in fact held by two different companies but this, clearly, was against the background already indicated that the respondent considered that the holding by the same people of two temporary contracts within a single twelve month period was contrary to the spirit of the Act and as a result the respondent changed their guidelines notwithstanding the fact that they felt obliged to grant the contracts in the present case because the applications were technically correct and complied with the then existing guidelines. Counsel also pointed out that there were in fact different directors of the two companies.

  15. Reference was also made to s. 6 of the Act and that the Commission was obliged to:-

    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.

  16. Counsel submitted that this authorised the Commission to consider Dublin Rock’s performance under any contract and to the extent that 25% of Dublin Rock was owned by Wireless Media Ltd, the holder of one of the temporary contracts whose landlord was, in fact, the holder of the other temporary contract, and both traded as Phantom FM, there was an obligation under s. 6 to consider the sound broadcasting service provided by Phantom FM under both contracts, and this the respondent did.

  17. The High Court held:

    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.

    7.

  18. The applicant filed the following grounds of appeal to this Court:-

    1. That the learned High Court judge erred in law and in fact in refusing the reliefs sought by the applicant;

    2. That the learned High Court judge erred in law and in fact in finding that the respondent properly considered the character of Dublin Rock Radio Ltd, trading as Phantom FM in accordance with Section 6 of the Radio and Television Act, 1988, as amended;

    3. That the learned High Court judge erred in law and in fact in finding that the applicant had not established that the respondent gave an advantage to Dublin Rock Radio Ltd, trading as Phantom FM arising out of its illegal broadcasting experience;

    4. That the learned High Court judge erred in law and in fact in finding that the respondent did not prejudge the issue of the award of the contract the subject of this application and/or that the respondent did not at all times intend to grant the contract to an applicant involving “Phantom FM”;

    5. That the learned High Court judge erred in law and in fact in holding that the applicant was required to identify a factor external to the process of the award of the contract in order to show bias or prejudgement on the part of the respondent;

    6. That the learned High Court judge erred in law and in fact in finding that the fact that the respondent permitted Dublin Rock Radio Ltd, trading as Phantom FM, to alter its advertising sales representative, at a time when applicants for the contract had been informed that no alterations to their applications would be permitted, was one which did not justify any kind of intervention by the Court and/or the granting of the reliefs sought by the applicant;

    7. That the learned High Court judge erred in law and in fact in finding that the respondent did not erroneously have regard to the broadcasting services under the name of “Phantom FM” provided by two distinct entities.

    8.

    LAW

  19. This is an application by way of judicial review requesting the courts to intervene in the decision making process of the respondent, essentially on the ground that it considered matters which it should not (the experience obtained by way of pirate radio), that it was unreasonable to have considered this illegal activity, that it did not properly consider the character of Dublin Rock pursuant to s.6 of the Radio and Television Act, 1988, as amended, that in essence it gave an advantage to Dublin Rock for illegal broadcasting.

  20. To succeed on such an application the applicant has to achieve a high bar, meet a significant burden of proof, to show that the decision of the specialist decision maker, in this case the respondent, should be declared void by the courts.

  21. The courts approach with caution the review of a specialist body. Such a body has particular expertise to apply to decision-making in their arena. That specialist knowledge is not held by the courts. The process of review by way of judicial review is not a full appeal, but rather a review of the process and fair procedures. In this case it is in essence a review of the inclusion in a decision by the respondent of the factor that members of Dublin Rock had gained experience and expertise in pirate radio.

    9.

    CHARACTER

  22. The respondent is required to consider all applications for a sound broadcasting contact, to determine the most suitable applicant. The Radio and Television Act,1988 sets out the criteria for such consideration. In s. 6(2)(a) provision is made for consideration of:

    The character of the applicant, or, if the applicant is a body 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.

    Also relevant is s. 6(2)(b), which states:

    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.

    In this case the issue of character is at the core of the case, and whether the respondent acted appropriately.

  23. The learned High Court judge referred to the established policy of the respondent to encourage cessation of illegal broadcasting by accepting applications from them, provided they have ceased illegal broadcasting prior to the application being made. This policy was authorised by the distinguished first Chairman of the respondent and the High Court found, and I would endorse, that it is entirely consistent with the objectives of the Act. There is no doubt that some individuals of Dublin Rock were involved previously with illegal broadcasting and this was known to the respondent. The High Court held:

    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.

    The learned High Court judge found that the issue of ‘character’ having been before the respondent, and the decision not being utterly irrational, the challenge fell.

  24. In assessing the word ‘character’ the High Court took a broad approach and did not confine itself to a narrow approach, to ‘moral fibre’. In this I consider the learned High Court judge was correct.

  25. I would distinguish the decision in Spin Communications Ltd v IRTC [2001] 4 IR 411. First, I have no doubt that the attitude of a member of a body applying for a radio licence to issues of drug abuse is relevant to ‘character’. However, they are of a different order to the policy adopted by the respondent to bringing into the legal fold those who have previously been broadcasting illegally. Whereas such a policy would have more impact when the respondent first commenced, I am satisfied that it remains a policy which is not irrational.

    10.

    POLICY ON PIRATE RADIO BROADCASTING IN RELATION TO FUNCTIONS OF THE RESPONDENT

  26. There is no doubt that the factor of pirate radio exists in the broadcasting arena. The Act of 1988 could have stated that no licences could be granted to former pirates, but the Oireachtas chose not to. It has been a policy of the respondent to bring pirate radios into the legal fold. The respondent’s policy in relation to piracy dates back to 1988, when the first board of the respondent adopted the policy of accepting applications for sound broadcasting contracts from pirates, provided they went off the air. The respondent’s policy in relation to piracy is generally known in the industry and is communicated to any person who telephones in connection with any round of licensing. The rationale behind this policy is to encourage the cessation of illegal activity and to encourage such persons into the statutory regime through the licensing of services. The respondent submits that this rationale is entirely consistent with the policy of the Act of 1988 and with the functions of the respondent.

  27. The factor of piracy was considered by the respondent - this is not in issue. Each party submits that a different approach should be taken to the factor. This means that what is at issue is the weight to be applied to that factor. It appears to me that that is quintessentially a matter for the specialist body, in this case the respondent. Consequently, the applicant seeks to quash a decision of a specialist body essentially on the issue of the weight to be applied to a factor in the decision making process. It hardly needs to be pointed out that this is a heavy burden for the applicant.

    11.

    FACT OF ILLEGAL BROADCASTING

  28. The fact of illegal broadcasting was considered by the respondent, as it was a policy of the respondent to permit and to consider applications from persons who had broadcast illegally previously. This policy is not irrational, it is a type of decision that a specialist body might arrive at in light of all the circumstances in the industry. Indeed, a policy of enticing persons who have been acting outside the law into legal processes is not unknown in other aspects of Irish life.

  29. There is no evidence of a favouring of Dublin Rock. On this matter Michael O’Keeffe, chief executive of the Broadcasting Commission of Ireland, in his affidavit dated 28th day of April, 2005, deposed:

    I beg to refer to paragraph 24 of Mr. Hanrahan’s Affidavit and in particular the allegation that the advantages of Dublin Rock in receiving the licence arose from the “fruits” of the experience which it received as an illegal broadcaster. As appears from the foregoing and in particular the minutes of the Commission’s decision to award the licence set out at paragraph 8 above, this is patently incorrect. In passing, I note that one prominent member of the Applicant consortium was, in fact, involved in another licensing bid in conjunction with a former pirate operator.

    I beg to refer to paragraph 25 of Mr. Hanrahan’s Affidavit. The Commission did take into account and consider the character of each of the final two applicants in this process as required by law. However, as Mr.. Hanrahan and the Applicant group are well aware, the Commission’s policy in relation to pirates was to permit applications for radio licences from companies or individuals who were previously involved in pirate broadcasting. As indicated above, this policy was well known and was reaffirmed in February 2004. Mr. Hanrahan was also aware that the Commission’s policy required that any existing pirate operator wishing to apply for a radio licence should cease operations from the time an advertisement for the service was placed. The fact that Wireless Media Ltd t/a Phantom FM had operated a pirate station was known to the Commission and was drawn to its attention in the course of the licensing process. In this respect, Phantom FM had publicly announced that it would cease broadcasting in May 2003 and had remained off the air from the time of that announcement up to and throughout the licensing process. Therefore, at the time of the decision, the subject matter of these proceedings, Phantom FM had ceased illegal broadcasting for in excess of eighteen months.

  30. Then, on cross-examination, Mr. O’Keefe stated:

    Q

    But I am asking you a more general question. I do not want to trap you or trick you in any way. The Commissions did not take into account the history of unlawful broadcasting that the group had. This is what you said. What I am asking you is is that true of the entirety of the approach of the Commission on every aspect of the licence?

    A

    No, it is not

    [Transcript, 11th October, 2005, Question 34]

  31. And the matter was also the subject of Question 35:

    Q

    So it did, in fact, take it into account for one purpose but not for another?

    A

    As I say there was a consideration, the Commission considered the application. The Commission was aware of the fact and in considering the application the make-up of the Applicant included persons who were involved in the operation of an illegal service. So it was aware of that fact and took that into account.

    Q

    But not to the benefit of Phantom FM?

    A

    Absolutely not.

  32. Consequently, I am satisfied that the learned trial judge was entitled to find, as he did, that the applicant had not established that the respondent gave an advantage to Dublin Rock arising out of its illegal broadcasting experience.

    12.

    POLICY RE COMREG

  33. The policy of the respondent as to broadcasting piracy was not to support such activity. Of course the duty of terminating illegal broadcasts lies not with the respondent but with ComReg. Mr. O’Keeffe, on behalf of the respondent, stated in a letter dated 17th October, 2003,

    We have continually urged ComReg and it’s predecessors to initiate actions to close unauthorised studios and transmitters of illegal broadcasters. We have also provided information on ‘pirate’ activities in different parts of the country to ComReg officials. Please be assured that the [respondent] will continue with this policy into the future.

  34. I see no inconsistency with a policy to support ComReg in its regulation of broadcasts and at the same time having a policy to enable illegal broadcasters, who have ceased the illegal activity, into the legal fold.

    13.

    PREJUDGMENT

  35. On the prejudgment issue, the High Court referred to the minutes of the meetings of the respondent on the 6th September, 2004, and the 8th November, 2004, which has been set out previously. On that evidence the learned High Court judge stated that it demonstrated an objective and impartial approach with recognition of the merit of the applicant’s bid. Further, that there then was a balanced appraisal of the bids.

  36. I am satisfied that there was credible evidence upon which the learned High Court judge could arrive at this view. Bearing in mind the jurisprudence of this Court, as stated by McCarthy J. in Hay v O’Grady [1992] 1 I.R. 210, I would not intervene in the decision. There is no necessity to analyse this ground further as the determination on the facts was the basis for the decision. I am satisfied that the statement by the learned trial judge as to the lack of the identification of a factor external to the process was not the essence of his decision, rather it was an afterthought. I would simply uphold the decision as made on the facts proved before the High Court.

    14.

  37. As to the ground of appeal relating to the alteration of the advertising sales representative, for the reasons stated in paragraph 6.2 above I would not allow this ground of appeal.

    15.

  38. As to the ground of appeal submitting that the High Court erred in finding that the respondent erroneously had regard to the broadcasting services provided by the two distinct entities: I would affirm the judgment of the High Court. This is referred to in paragraph 6.3 above and I am satisfied that it was a well reasoned judgment with which I would not interfere.

    16.

    CONCLUSION

  39. For the reasons given I would dismiss all grounds of appeal and affirm the order of the High Court.

    Justice Kearns

  40. 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.

  41. 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.

  42. That this means something other than expertise, experience or resources is apparent from s.6(2)(b) which includes the distinct criteria to which the Commission is to have regard as including:

    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.

  43. S.60 of the Broadcasting Act, 2001 amended s.6 of the 1988 Act by inserting the following sub-section 4:-

    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.

  44. 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”.

  45. 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.

  46. 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.

  47. 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.

  48. 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

  49. 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.

  50. Mr. Gordon, senior counsel for the applicant, referred to the dicta of Lord Denning made in relation to ‘character’ in Spiedel v Plato Films Ltd [1961] A.C. 1090, 1138 when he considered whether there was any distinction between the terms “character” and “reputation”, and where he stated (at p.1138):

    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.

  51. Mr. Gordon submitted that in the course of the hearing before the learned High Court judge, Mr. O’Keefe, the Chief Executive of the Commission, had equated the term “character” on a number of occasions with the manner, in the sense of efficiency, in which a party operated a radio licence. Such an interpretation, it was submitted, was at odds both with a common sense definition of the term and also with the legislative regime set out in s.6. Having regard to the fact that a party’s expertise, experience, financial resources, economic principles, quality, range and type of programming are all considered under distinct heads, along with the quality of performance under a previous broadcasting contract, it is clear that how a party will operate a licence is a matter which is considered under distinct sub-sections of s.6. A party, Mr. Gordon argued, might well be able to run a radio station very professionally, notwithstanding his involvement in illegal or other inappropriate activity. In requiring an evaluation of a parties “character” the Oireachtas intended that such a party’s moral nature be one of the factors which the Commission consider in deciding to whom an important public broadcasting licence should be awarded.

  52. 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.

  53. 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.

  54. 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.

  55. 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

  56. 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.

  57. Noting that Counsel for the applicant had submitted that no consideration had been given to background history which included information that Phantom had twice suspended illegal broadcasts, applied for a licence and reverted to illegal broadcasting when its application proved unsuccessful, the learned trial judge stated (at p.5):-

    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.

  58. In reaching his conclusion in the matter, however, O’Sullivan J. stated as follows (at p.6):-

    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

  59. While both sides to this appeal agree that there is no Irish case law directly on point, some assistance as to the meaning of the word “character” is to be found in the comments of this Court in Spin Communications Ltd v IRTC [2001] 4 IR 411. In that case, concerning the question of bias, the question arose as to whether the conduct of a member of the Commission, who had carried out enquiries as to the attitude of a member of a consortium to drug use in a night club with which he was associated, was appropriate. Delivering the sole judgment of this Court, Murray J. (as he then was) stated:-

    It is incontestable that the policy or attitude of a member of a body applying for a radio licence to issues of drug abuse may be a relevant consideration for the respondent and its members both with regard to the question of the character of an applicant and generally.

  60. Having considered the evidence and the applicable law, Murray J. concluded:-

    I am of the view that the evidence before the High Court disclosed no more than that he had legitimate grounds for making enquiries concerning the so called ‘drugs issue’ with particular regard to the applicant’s application. His conduct was consistent with making enquiries on a matter which properly fell to be considered in the decision making process.

  61. I think these comments, along with those of Lord Denning in Spiedel v Plato Phones Ltd [1961] A.C. 1090 at p.1138 (to which reference has already been made), helpfully point out that the issue of “character”, must involve an enquiry into a person’s moral qualities, in the sense of possible involvement in any illegality. It cannot, by reference to the other criteria contained in s.6, mean only an enquiry related to the efficient operation of a contract or licence, any technical expertise, or the adequacy of resources available to an applicant.

  62. Furthermore, it seems to me that consideration of character necessarily involves making a realistic and fairly detailed enquiry into the history and background of an applicant’s commercial activities in an exercise which, having regard to the statutory framework, must necessarily encompass any history of illegal broadcasting on the part of such applicant.

  63. Insofar as it is maintained that the Commission has or had a policy of encouraging pirate broadcasters to comply with the objectives of the Act, this seems to me to be a perfectly reasonable policy to adopt at the outset of efforts to regulate this whole area of activity. However, it becomes increasingly less appropriate with the passage of time and was certainly, in my view, inappropriate in 2004, particularly having regard to the fact that there is no express provision in the Act which would enable the Commission to maintain such a policy on an indefinite basis.

  64. In a completely unregulated context, a policy of encouraging compliance with the statute makes sense. It might also make sense where the Commission sought to bring an individual pirate broadcaster within the statutory regime. It is singularly inappropriate, however, where rival applicants are competing for the same licence in a competitive market where some have a history of illegal broadcasting and some do not. It would in my view be a manifest breach of natural justice if applicants with such dissimilar history were to be regarded as being in precisely the same situation when having their applications considered by the respondent. Even more offensive to natural justice would be a scenario whereby the illegal broadcaster actually enjoys an advantage arising out of past illegality. Furthermore, the fact that an applicant promises good behaviour in the future or has the financial or other capacity to run a station efficiently in the future can not, in my opinion, be considered as a hallmark of character.

  65. Having thus indicated my view as to what the word “character” must be taken to mean, it is now appropriate to consider whether or not the Commission gave due regard to this consideration, or whether, as suggested by the applicant, the Commission altogether failed to do so.

    CONSIDERATION GIVEN TO CHARACTER BY THE RESPONDENT

  66. On the 8th October, 2003, Mr. Eamonn Buttle, Chairman of the Independent Broadcasters of Ireland, wrote to Mr. Michael O’Keefe, Chief Executive of the Broadcasting Commission, protesting the grant of a temporary licence to Phantom FM. The significance of this letter is that it protested in the strongest possible terms about the history of illegality associated with Phantom FM. Mr. Buttle wrote:-

    While recognising the right of the BCI to issue temporary licences, it should not escape the Commission’s attention that Phantom has very publicly, deliberately and consistently flouted the law and undermined the authority of the Commission. By granting the licence to an organisation with this track record, the BCI is sending a very dangerous signal to the broadcasting sector, that, as the regulator, it will tolerate blatant and repeated breaches of the broadcasting legislation by unlicensed pirates while being prepared to punish minor transgressions by fully licensed and legal operators. The contrast between the treatment of three of my members who recently lost their licences and this pirate operator is stark to say the least.

  67. A response to this letter was written by Mr. O’Keefe on the 17th October, 2003, in which he stated:-

    The BCI has been quite consistent in approach to the question of pirate broadcasting over the years. We have continually urged ComReg and its predecessors to initiate actions to close unauthorised studios and transmitters of illegal broadcasters. We have also provided information on pirate activities in different parts of the country to ComReg officials. Please be assured that the Commission will continue with this policy into the future.

    Coupled with this approach, we have also made it clear in all licensing rounds that we will consider applications from illegal operators, provided that they cease such activities. Our policy is to encourage such groups to move away from the illegal route and become legitimate. I am sure that many of your members would be familiar with this approach over the years, in particular those who themselves started out as illegal broadcasters.

  68. Perhaps significantly, this letter made no reference to the repeated offences on the part of Phantom whereby, on each occasion when it was refused licences in the past, it had immediately resumed illegal broadcasting.

  69. The letter, however, notes that the Board of the Commission met in October, 2003, and that Mr. Buttle’s letter had been referred to that meeting.

  70. It seems to be common case, however, that membership of the Board had changed by 2004 and there were entirely new members on the Board at the time of the application in this case.

  71. The Executive of the BCI compiled an Executive Evaluation in respect of the application of Phantom FM. This Executive Evaluation made no reference to the five year history of illegal broadcasting by Phantom FM.

  72. The Broadcasting Commission met on the 6th September, 2004, to consider the respective merits of the applications submitted by the various applicants. Again the minutes of this meeting do not indicate that any consideration was given to the previous history of illegal broadcasting by Phantom FM.

  73. At the meeting of the Commission which took place on the 8th November, 2004, the Commission decided to award the licence to Phantom FM on a unanimous basis. Again, the minutes of the meeting do not indicate that any particular consideration was given to the applicant’s history of illegal broadcasting, notably the lapses back into illegal broadcasting following unsuccessful licensing applications.

  74. Furthermore, it seems clear from Mr. O’Keefe’s affidavit filed in the judicial review proceedings that the history of repeated offending by Phantom FM was not specifically considered by the Commission when awarding the contract. At par.35 of his affidavit, Mr. O’Keefe states:-

    The Commission did take into account and consider the character of each of the final two applicants in this process as required by law. However, as Mr. Hanrahan and the applicant group are well aware, the Commission’s policy in relation to pirates was to permit applications for radio licences from companies or individuals who were previously involved in pirate broadcasting. As indicated above, this policy was well known and was reaffirmed in February, 2004. Mr. Hanrahan was also aware that the Commission’s policy required that any existing pirate operator wishing to apply for a radio licence should cease operation from the time an advertisement for the service was placed. The fact that Wireless Media Ltd T/A Phantom FM had operated a pirate station was known to the Commission and was drawn to its attention in the course of the licensing process. In this respect, Phantom FM had publicly announced it would cease broadcasting in May, 2003, and had remained off the air from the time of that announcement up to and throughout the licensing process. Therefore, at the time of the decision, the subject matter of these proceedings, Phantom FM had ceased illegal broadcasting for in excess of 18 months.

  75. This paragraph does not suggest to me that any particular weight or weighting process was engaged in by the Commission in respect of the five year history of illegal broadcasting, or in respect of the lapses back into illegal broadcasting when prior licensing applications proved unsuccessful.

  76. Cross-examined at the hearing in relation to “character”, Mr. O’Keefe stated:-

    .... character is looking at how you operate a licence. That is what character is about.

  77. In response to further questioning as to where in the licensing process the issue of character was actually considered by the Commission, Mr. O’Keefe stated:-

    It is considered in the context of how an applicant group will operate a sound broadcasting service or have operated a sound broadcasting service.

  78. Mr. O’Keefe was later asked what the Commission thought that “character” meant. He responded:-

    I think it means that it must comply with the appropriate terms. What the Commission is looking at is the manner in which a group will operate the licence. Are they going to operate a particular licence in the proper manner. They have got to look at the composition of the group and what type of people they are and are they satisfied that they will operate the licence in accordance with the various rules and regulations that exist. So they do look at character.

  79. On day two of the hearing on the 11th October, 2005, Mr. O’Keefe was asked the following specific question:-

    Q

    At the tour de table did anyone consider the illegal broadcasting history of Phantom?

    A

    No, no.

    Q

    It wasn’t mentioned at all?

    A

    What was mentioned in relation to Phantom FM was the fact that they had embraced the legitimate licence regime through the operation of the two section 8 licences.

  80. On day three, the following sequence of questions to and answers by Mr. O’Keefe took place:-

    Q

    Now, this was I think the first temporary licence to be granted to a former pirate station, isn’t that right?

    A

    That is correct, yes.

    Q

    And the Commission has had the experience of seeing Phantom FM twice cease to broadcast, twice applied for licences under section 6, and twice, when it didn’t get that licence, recommence unlawful broadcasting; Isn’t that so?

    A

    That’s correct.

    Q

    And that must have annoyed and piqued the Commission considerably, mustn’t it?

    A

    The Commission didn’t take a view on that. I mean, that wasn’t a factor that the Commission took into account at any stage.

    Q

    I see. At no stage at any of the things we are discussing today did the Commission take a view about the fact that Phantom ceased to broadcast, applied for a licence and then when it was disappointed decided to break the law again?

    A

    As I said in my evidence the other day, the Commission was aware of the pirate broadcasting of Phantom, that that was brought to its attention during the licensing process, and it considered that at the time, and that is as far as it went.

    Q

    Sure. And I just want to make sure that I understood you on that Mr. O’Keefe. Leaving aside the general history of pirate broadcasting, here are two particular occasions in which, well, really, Phantom have made a fool of the Commission; it had ceased to broadcast illegally, it had applied for a licence in accordance with the provisions set down by the Commission, that it would take applications from people who had ceased to broadcast illegally, and then, when it was disappointed, it then just goes back on air, not once but twice, and that aspect of things wasn’t taken into account by the Commission at any stage, is that right?

    A

    Well, what I can say to you, as I indicated again the other day; I brought the letter that I had written to IBI in October. I brought that to the attention of the Commission for information, so they were clearly aware at that point of the fact that Phantom had ceased broadcasting in May of that year and that the Executive of the Commission had granted a section 8 licence.

    Q

    We are not talking about the ceasing of broadcasting in May of 2003, and you know that well, Mr. O’Keefe, so lets talk about what we are actually discussing.

    A

    Okay

    Q

    The two cessations, the two temporary armistices that Phantom entered into and then took up their arms again as soon as they didn’t get what they wanted, was that considered by the Commission at any stage during the application for the alternative rock licence?

    A

    That particular fact was not considered.

    Q

    No.

    A

    What was considered was the fact that they had been a pirate and they had ceased to broadcast as a pirate.

  81. These necessarily lengthy quotations from cross-examination are set out in some detail because they, in addition to the affidavits and exhibits, provided the factual material before the learned High Court judge.

  82. I am of the view that the issue of assessment of character by the Commission was not, in fact, addressed by the Commission at all. It seems to me that the Commission limited its consideration to the behaviour of Phantom FM during the currency of the two temporary licences and had no regard to previous illegal broadcasting, other than to note that it had, in a general way, taken place over the preceding years. In no way could it be said that the Broadcasting Commission took specific note in any shape or form of the particularly grave conduct of Phantom in reverting immediately to illegal broadcasting on two separate occasions when refused licences.

  83. The failure to consider this relevant consideration as to character is such, in my view, as to render the decision of the Broadcasting Commission to grant the licence to Phantom both unreasonable and irrational.

  84. The quashing of decisions on this basis is well established in law. Wade & Forsyth (Administrative Law) (9th Ed. at p.380) explains the basis as follows:-

    There are many cases in which a public authority has been held to have acted from improper motives or upon irrelevant considerations, or to have failed to take account of relevant considerations, so that its actions are ultra vires and void. It is impossible to separate these cleanly from other cases of unreasonableness and abuse of powers, since the court may use a variety of interchangeable explanations. Regarded collectively, these cases show the great importance of strictly correct motives and purposes.

  85. In White v Dublin City Council [2004] 1 IR 545, this Court quashed a decision of a planning authority in circumstances where there was an apparent failure on the part of a planning inspector to give proper consideration to the likelihood that parties might wish to object to altered plans for a development. Fennelly J., delivering the sole judgment of the court on this issue, stated:-

    I do not say that the first respondent’s decision is irrational in the broad sense. Mr. Rose’s (i.e. the planning inspector) planning expertise is undoubted. I consider rather that Mr. Rose, on behalf of the first respondent, excluded from his consideration the likelihood that the applicants would want to object, and that, if they did, the first respondent would have had to consider the objection. This was, no doubt, an understandable oversight on the part of a person exercising an expert planning function. Nonetheless, I am satisfied, given the very particular circumstances of this case, that he did not give proper consideration to the radical effect of the required modifications. In that sense it was unreasonable and irrational.

  86. In Secretary of State for Education and Science v Tameside M.B.C. [1977] A.C. 1014 Lord Diplock, in considering the exercise of statutory powers by a Minister, expressed the test as follows:-

    It is for a court of law to determine whether it has been established that in reaching his decision .... he had directed himself properly in law and had in consequence taken into consideration the matters upon which the true construction of the Act he ought to have considered.

  87. Although it was noted by the Commission that Phantom FM had embraced legitimate broadcasting, that in my view could never amount to an adequate assessment of the character of the applicant, particularly when it did not advert to the previous history and behaviour of that applicant in a specific manner. Character assessment, as already noted, is almost, if not entirely, a retrospective exercise from which a person’s likely future behaviour may be assessed and predicted. Such an exercise simply did not take place in this case and I do not consider there was an evidential basis for the finding to the contrary by the learned High Court judge.

  88. I would also be of the view that Phantom FM in fact obtained a benefit as a consequence of its own illegality in securing a licence having broadcast illegally for 5 years and in reverting to illegality when applications for licenses were unsuccessful. As a matter of public policy, such an outcome should not occur when such an applicant is in competition with another otherwise competent and well-resourced applicant who has not been guilty of any such illegality.

  89. Some further support for the conclusions I have arrived at is to be found in the material contained in Phantom’s own application filed on the 9th July, 2004. This material indicates clearly how reliance was placed by Phantom on its own past illegal activities.

  90. At p.17 of the submission the following reference to Phantom FM appears:-

    The Phantom FM team has been actively promoting Irish alternative rock music interests for over seven years and this applicant consortium sees the formation of a new entity comprising of the Phantom FM ethos and broadcasting experience combined with various aspects of direct local music industry involvement, including management of concerts and venues, management and provision of recording facilities, music industry promotion, and music artist management.

    At p.41 (Programming Strategies) the following statement appears:-

    Phantom FM has over seven years of audience feedback to draw on and has spent that time crafting a sound that appeals to the widest possible audience in a niche.

    Finally, at p.45 (Music Policy) the following statement appears:-

    Phantom FM’s proposed Music Policy has been tried and tested over the course of two temporary broadcast licences and seven years of operation. The data for the breakdown of percentages and the definitions that follow are based on statistical analysis of the play-sheets and logs of the entire broadcast duration.

    [emphasis added]

  91. Of the three extracts cited above, the last is perhaps the most damning from Phantom’s point of view because it unequivocally demonstrates the degree to which Phantom relied on its past illegal activities to secure the award of the contract. It is impossible to believe that material of this sort did not motivate the respondent to a greater or lesser degree in awarding the contract. I would allow the appeal on this ground also.

  92. In those circumstances, it is not necessary for me to consider the remaining grounds of prejudgment or bias, or the issue of delay.


Cases

Spin Communications Ltd v IRTC [2001] 4 IR 411

Hay v O’Grady [1992] 1 I.R. 210

Spiedel v Plato Films Ltd [1961] A.C. 1090

White v Dublin City Council [2004] 1 IR 545

Secretary of State for Education and Science v Tameside M.B.C. [1977] A.C. 1014

Legislations

Radio and Television Act 1988: s.6

Broadcasting Act 2001: s.60

Authors and other references

Wade & Forsyth, Administrative Law (9th Ed.)


all rights reserved