|Island Ferries Teoranta -v- Minister for Communications, Marine and Natural Resources & ors|
| IESC 95|
Supreme Court Record Number:
|25/2012, 391/2012, 180/2014, 181/2014|
High Court Record Number:
|2005 3195 P|
Date of Delivery:
Composition of Court:
|Denham C.J., O'Donnell Donal J., McKechnie J., Dunne J., Charleton J.|
Link to Judgment
Denham C.J., O'Donnell Donal J., McKechnie J., Dunne J.
An Chúirt Uachtarach
The Supreme Court
Record number: 2005/3195P
Appeal numbers: 25 and 391/2012
Island Ferries Teoranta
The Minister for Communications, Marine and Natural Resources, Ireland and the Attorney General, and the Minister for Agriculture, Fisheries and Food
Record number: 2012/47JR
Appeal numbers: 180 and 181/2014
Island Ferries Teoranta
Galway County Council
Judgment of Mr Justice Charleton delivered on Tuesday 15th of December 2015
1. This judgment in these two cases concerns the legitimacy of public charges for the use of two harbours by ferry boats. One case was taken because of an increase in such charges; 25 and 391 of 2012, that in which there are State respondents. The other arose because of the imposition of harbour charges for the first time; 180 and 181 of 2014, that in which Galway County Council is the respondent. Both sets of cases concern a journey between Ireland, or Éire, and one of her offshore islands, namely Inis Mór. This is the largest of the Aran Islands, lying to the west of Ireland in County Galway. Precisely engaged are the two harbours from which Island Ferries run a passenger service. The harbour on the mainland is located at Ros a’ Mhíl on the west coast of Galway and is the responsibility of the State, through the appellant Minister. That on Inis Mór is at Cill Rónáin, the largest town on the Aran Islands, a harbour from which many boats travel on to the other Aran Islands, and is the responsibility of Galway County Council. In 2009, the designated responsibility for Ros a’ Mhíl changed from the Minister for Communications, Marine and Natural Resources to the Minister for Agriculture, Fisheries and Food. References herein in respect of Ros a’ Mhíl are to the designated Minister as of the appropriate time. These appeals arise from three judgments of Cooke J and the appeals therefrom were heard together: Island Ferries Teoranta v The Minister for Communications, Marine and Natural Resources, Ireland and the Attorney General  IEHC 388, as to issues concerning charges for using the harbour at Ros a’ Mhíl in County Galway;  IEHC 256, as to damages in respect of the same case; and Island Ferries Teoranta v Galway County Council  IEHC 587, as to charges for using the harbour at Cill Rónáin on Inis Mór. Effectively, therefore, there are two sets of appeals; one as to the charges on the mainland of Ireland and the other as to the charges on Inis Mór. This Court, in a determination issued on 22nd January 2015, in the Galway County Council case, invoked Article 64.3.3º of the Constitution to cancel, insofar as this appeal is concerned, the Direction given by the Chief Justice under Article 64.3.1 specifying appeals which were to be heard in the Court of Appeal;  IESCDET 1. In consequence, the other related appeal where the Minister is the respondent was heard with that case on appeal rather than going separately to the Court of Appeal.
2. These appeals raise similar questions as to the proper exercise of jurisdiction where the Oireachtas grants powers to make subordinate legislation to the executive: a Minister, in the Ros a’ Mhíl case and, in the Cill Rónáin case, a county council. Even though the legislation in both cases is different, the same points of principle and interpretation arise. Points of competition law also arise. Ports from which passenger ferries can operate to the Aran Islands are few. Doolin in County Clare, is near to Inis Oírr and there is a limited ferry service from there. In terms of convenience, however, Galway City and Ros a’ Mhíl are closer to large centres of population and have other practical advantages from the point of view of tourists. Doolin has other attractions, of course. Many visitors, it appears more than 200,000 per year, although the numbers fluctuate, wish to experience the unique linguistic, cultural and archaeological heritage of the islands. In the provision of harbours for ferries operating to the Aran Islands, for the purposes of competition law, it is conceded that Galway County Council and the Minister are in a position of dominance in the relevant market and for these purposes the respondents are treated as an undertaking. Essentially, it is claimed by Island Ferries that by the Minister increasing charges for the use of the harbour at Ros a’ Mhíl and by Galway County Council initiating the levying of charges for harbour services at Cill Rónáin, each were acting outside the proper boundaries of what was possible under the applicable legislative power as devolved to each respectively. In other words, it is claimed that there was an abuse of the delegated power to make legislation in each case. Island Ferries also claim that the increase in charges amount to the abuse of his dominant position by the Minister in respect of Ros a’ Mhíl and the abuse by Galway County Council in respect of Cill Rónáin of that local authority’s dominant position.
3. Both the Minister and Galway County Council argue that the fees, as fixed by them for the use of the two harbours, were inside the wide range of appreciation which the Oireachtas must be taken to have contemplated in giving each charge of these maritime facilities and in allowing the fixing of fees. Both respondents also deny that there has been any abuse of a dominant position by them in the relevant market. In Island Ferries Teoranta v The Minister for Communications, Marine and Natural Resources, Ireland and the Attorney General  IEHC 388, Cooke J held that the Minister had acted in excess of his statutory authority to make delegated legislation in fixing the charges for use by passenger ferries at Ros a’ Mhíl and further held that the Minister had thereby abused a dominant position in the market. Cooke J in his judgment at  IEHC 256 fixed damages in respect thereof. The Minister has appealed those findings. Both parties have also disputed the damages award as to principle and as to amount. In Island Ferries Teoranta v Galway County Council  587, Cooke J held that Galway County Council was within the terms of its authority to make delegated legislation fixing the charges for use by passenger ferries at Cill Rónáin and he further held that there was no abuse by the council of a dominant position. Clearly, those findings meant no damages were awarded in that case. Island Ferries have appealed those findings. A claim as to the constitutional validity of the relevant legislation in the Cill Rónáin case was also made on the pleadings by Island Ferries. No constitutional issue, however, was argued on this appeal.
Background and charges: Ros a’ Mhíl
4. Since the earlier decision of Cooke J is in respect of the harbour in Ireland at Ros a’ Mhíl, the background to that decision should now be recounted. The O’Brien family of county Galway have been involved in services by sea to the Aran Islands since the beginning of the 20th century. As the evidence of Susan O’Brien before the High Court recounted, her grandfather was the first of the O’Brien family involved in transporting cargoes, including turf and livestock, using Galway hookers. Her father Patrick began a passenger service from Ros a’ Mhíl using a relatively small vessel. With the increase in numbers wishing to visit the islands, this service prospered. While she spent some time working abroad, she returned to manage the service and as of 2003, the company was operating 6 passenger vessels. Two of these were up for sale as of the end of 2011 when Cooke J delivered his judgment. What is relevant is that from 2004 to the date of hearing this appeal, Island Ferries operated two large passenger vessels, Ceol na Farraige and Draoícht na Farraige, and that each of these had an approved compliment of 294 passengers, or 588 altogether. There are also two other smaller vessels, Banríon na Farraige and Glór na Farraige, and these are used as standby, but their compliment of passengers is 188 and 244 respectively. Thus, were full capacity to be used, Island Ferries could by using all its major vessels set off from Ros a’ Mhíl to Inis Mór and the other two islands with up to 1,020 passengers. While most tourists are interested in visiting Inis Mór, there are also sailings on to Inis Meain and to Inis Oírr, which lie southerly. In terms of numbers, the figures given on the appeal indicate that another ferry company operates out of the docks at Galway City and another from Doolin pier in Clare, carrying between all of them the approximately 200,000 people mentioned earlier in this judgment. Most of the business goes to Island Ferries. Ros a’ Mhíl is predominantly a fishing port and fisherfolk based on the islands will land their catch on Ireland and not on the islands. This is because of the availability of a market and the large population centres and motorway nearby. They will then take the ferry home to the islands. Island Ferries also have a Government contract to operate a year-round service. They carry 150,000 passengers or more on the round trip annually and of these about 36,000 are islanders commuting for one reason or another. Island Ferries is now the only ferry company operating from Ros a’ Mhíl. There was at least one other competitor, but that operator has ceased trading. No case was made that the reason for discontinuing trading was the charges at issue in this case.
5. Ros a Mhíl is one of 5 designated fisheries harbours in the State. The others are Killybegs in County Donegal, Castletownbere in County Cork, Howth in County Dublin and Dunmore East in County Waterford. In reality, of these, Ros a’ Mhíl is the only harbour used for any substantial number of passengers. There are some trips from Howth to Ireland’s Eye but since that island is tiny and uninhabited, journeys can apparently be numbered in only hundreds. Ros a Mhíl is essentially set up as a harbour for fisheries. With the growth of tourism to the Aran Islands, more use has come to be made of it for ferrying passengers. Island Ferries has an office at that harbour and a sales booth on the quayside and, in addition, has offices in Galway City. According to evidence before Cooke J, the ferry operation use 13.7% of the berthing space and 4% of the pier space. Vessels had to be double docked at one stage, requiring passengers to traverse one ferry to reach the other but the harbour authorities have recently installed pontoon berthing space enabling direct access in a way familiar from marina facilities elsewhere in the country. A carpark is also provided, as are basic refreshment facilities. Water and fuel is available for all vessels and human waste and rubbish disposal facilities are provided at that harbour.
6. Before turning to the issue of the jurisdiction and statutory basis upon which a very large cost increase was imposed on Island Ferries, an analysis of the relevant figures is appropriate. The Fishery Harbour Centres (Rates and Charges) Order 1990, SI 239/1990, set the standard operating costs for Ros a’ Mhíl until replaced by the Fishery Harbour Centres (Rates and Charges) Order 2003, SI 439/2003, and this came into force in time for the summer season by commencing on the 1st of May 2004. Under the 1990 set of charges the use of the harbour by passenger boats was at the choice of the owner who could choose a flat rate per year or, instead, pay by departure. These charges were in Irish pounds. Later charges as challenged on this appeal are in Euro. To avoid confusion, 1 Euro = .787564 Irish pounds: 1 Punt = 1.27 Euros. Under these 1990 charges, where a vessel carried under 50 passengers, the owner could choose to pay either £1000 for the entire year or to pay £10 for each occasion when the boat entered the harbour. It clearly made sense to pay £1,000 for the year since some vessels would do up to 6 roundtrips to the islands during the busy season. This also meant that costs were fixed and were reckonable in advance with precision. Where a vessel carried between 50 and 100 passengers charge per entry into the harbour went up to £25 or, at the option of the ferry operator, £2,500 could be paid for the entire year. The category most relevant to Island Ferries is vessels with the permitted compliment of over 100 passengers. Here, the ferry operator could pay £4,000 to operate that vessel in and out of the harbour for the entire year or could choose to pay £40 for each entry. Thus, with 4 vessels with a complement of over 100 passengers, the fixed costs of using the harbour would be £16,000 annually. May 1st was always the date for the payment of annual fees.
7. As and from the 1st of May 2004, no annual fee was possible for boats carrying 100 passengers are more, but instead a per passenger rate was introduced. Where the size of the boats allowed a complement of less than 100 passengers, an annual charge still operated. This increased. Thus, where the vessel had a complement of 13 to 99 passengers, the owner could pay €4,000 for the year or could choose instead to pay €40 for each entry into the harbour. Smaller vessels which carried between 7 and 12 passengers could pay €1,000 for yearly use of the harbour, or could pay €15 per entry. Vessels licensed to carry up to 6 passengers could use the harbour for an annual fee of €500 or could choose to pay €10 for each entry. Illustrative figures as to the change are possible.
8. Up to May 2004, Island Ferries operating its 4 passenger vessels, each carrying more than 100 passengers, paid a flat rate for use of the harbour at Ros a’ Mhíl of €20,315.80 or IR £16,000. In addition there was also a small annual licensing charge for each vessel. As and from May 2004, since each of the vessels owned by Island Ferries carried a complement of more than 100 passengers, for each passenger carried a flat rate fee of €1.20 had to be paid. One return sailing per day of each vessel with a full compliment of 1080 passengers would run up a charge to Island Ferries of €1,224. Two return sailings per day would cost €2,448. After 10 days, the cost of the annual flat rate prior to May 2004 would be well exceeded. In 2002, according to the facts as found by Cooke J, Island Ferries paid the harbour €22,475 for use over the year. After that date, the first full season gave rise to a charge of €163,724; about 7 times the prior annual charge. The evidence before Cooke J was that the charges were insupportable. A return ticket was sold at €25, but tour operators demanded much tighter pricing, according to counsel on this appeal dipping as low, it was claimed, as €8. This figure, however, was not accepted as part of the primary findings of fact by Cooke J. In addition, while it was claimed in argument on this appeal by Island Ferries that, in effect, the market would not bear a single extra cent, it was later urged that Island Ferries did not object to paying a reasonable fee for use. As to what that was or how it might be calculated at a particular figure was not touched on during the appeal. While there was evidence before Cooke J as to the tight operating margins of Island Ferries and of the level of employment that they sustained and of the now around 70% dependence of the Aran Islands on tourism as a source of livelihood, no findings of fact in regard to sustainable or reasonable cost were made by Cooke J. It is not, however, the function of any court in considering the correct use by a subordinate legislating authority in setting a charge to stand in its shoes and make suggestions as to amount, much less to fix charges judicially. All that can be decided is whether subsidiary legislation is consistent with the principles by which authority to make binding rules is enabled.
9. On the new charges coming into force, Island Ferries refused to pay, but continued paying at the old rate and if the new charges are valid, several hundred thousand euro are now owed to the Minister. Up to date figures are not now available.
Background and charges: Cill Rónáin
10. On arriving at Inis Mór, the harbour, prior to its redevelopment in 2011 emerges from the judgment of Cooke J as being an occasion of multiple accidents waiting to happen. Following on representations from the islanders through their lobbying body for these purposes, Coiste Calafort, or harbour committee in translation, Galway County Council commissioned a report as to what needed to be done. The prior landing consisted of a single pier in increasingly poor repair and with jarveys, minibuses, livestock and other cargo jostling for position. Weathering, resulting from the habitual winter storms in the Atlantic, reduced the safety of the pier year by year. As earlier indicated, as fishing families purchased larger boats, these could not be moored on the island but, instead, Ros a’ Mhíl was used. Only small local fish landings were made for the restaurant trade. A further report involving two departments of Government led to the harbour construction work over the years 2008 to 2011. A projected cost of €35 million was exceeded and came in closer to €50 million. The result as and from the completion of the new harbour was, according to the trial judge, an enhanced facility for the ferry companies with considerably better and safer facilities for visitors and for the island community. As Cooke J put the matter at paragraph 57:
11. For the first time, a charge was to be made for the use of the new harbour. This charge was to assist in the upkeep of the harbour and the supervision of it by Galway County Council staff. It was not sought to recover the capital cost of the harbour. This was a provision by central Government to the islanders and was paid for out of general taxation in the State. Cooke J also found as a fact that the improvements to the harbour had been of considerable benefit to Island Ferries. At paragraph 73, the trial judge stated:
… it is clear that major works have been carried out. A large area of the foreshore has been reclaimed for the purpose of creating car parking and traffic marshalling facilities which are used by minibuses and jarveys meeting arriving passengers. The existing pier has been widened providing additional berthage. A 550m breakwater has been built and extensive dredging of the harbour and entrance channel has improved access. A new cargo berthing area has been constructed with the result that there is now a separation of foot passenger traffic from vehicular traffic and the loading and unloading movements at the cargo berth. In the result, safety conditions for all harbour users have been significantly improved and the photographic evidence pre and post the redevelopment clearly shows that the harbour has now a general appearance of orderliness and efficiency previously absent.
12. It is unnecessary to describe the manner in which the by-laws imposing charges were adopted. This is, in any event, fully set out in the judgment of Cooke J. It is clear that there were several points of view as to the original charges proposed. As originally suggested by Kevin Finn and Evan Molloy, respectively occupying the positions of executive engineer and senior engineer with the local authority, a likelihood of annual running costs of close to €200,000 was suggested as likely. It was not sought to recoup all of this from the users of the service. Instead, Galway County Council agreed to a proposal in pursuit of social purposes that they subvent the costs to the tune of €70,000 every year. Initially, sums of €1.20 per passenger, €1.00 per tonne of cargo or tonne of fish landed had been proposed. These was consideration as to whether €0.40 per local passenger return trip, €0.80 per tourist return trip and €0.50 for every tonne of cargo or tonne of fish landed might be possible. As noted, fish are not landed in industrial quantities.
Furthermore and in any event, it is unrealistic for the applicant’s witnesses to suggest that the passenger ferry business has no interest in and derives no benefit from the general improvement in the conditions and facilities at [Cill Rónáin] Harbour as a result of the redevelopment. As the applicant’s witnesses repeatedly emphasised, the mainstay of their business is that of tourist passengers visiting the islands over the summer months. Most of those passengers are making a one day trip to the island and returning in the evening. It is clear from the evidence and from the company’s own publicity that the business is very much dependent upon promoting the trip to the island and the day spent there as an attractive and novel cultural and tourist experience. It is not unreasonable to suggest, therefore, that everything that contributes to the ease of making that trip and the enjoyment of the occasion is to the benefit of the applicant’s business. It is clear, as already mentioned, from the photographs taken of the harbour before and after the redevelopment, that [Cill Rónáin] Harbour is, from the point of view of foot passengers disembarking on arrival on the island for the first time now a safer, more orderly and generally more attractive place. Thus, apart from the benefits to the vessels from the breakwater, the dredging and improved navigational aids, the passengers receive the practical benefits of the improved quay side, the newly built shelter and the pubic toilets and those general benefits accrue to the applicant company as enhancing the marketability of its primary destination.
13. After debate, the charges arrived by vote at a meeting of Galway County Council were set at €0.80 per passenger for each entry but passengers with multiple journeys, purchasing 5 return journeys or more, reckonable to islanders or people having recurring business on the islands, were charged €5.00 per passenger annually. There is no charge for landing fish or for landing cargo. These are islands, after all. Fishing vessels have an annual entry charge of €3.00 per gross tonne and merchant vessels, including passenger vessels, tugs and barges, pay a composite harbour entry charge of €3.00 per gross tonne annually or €0.30 on the same weight basis per entry. For other purposes, Island Ferries are obliged to keep note of passenger numbers. To pay these charges, passenger numbers must also be kept. Part of the argument raised on behalf of the company on this appeal was that only about 4% of the upkeep of the harbour was being born by other users. This, however, ignores the annual subvention of Galway County Council. The annual cost, based upon the passenger numbers for 2011 was claimed by Island Ferries to be €100,000. There is nothing in the judgment of the trial judge, however, to suggest that what he characterised as a “modest charge” could not be passed on to passengers. Nor is it correct to argue that the collection of a fee for entry based on passenger numbers places a disproportionate administrative burden on Island Ferries. In fact, the trial judge found that it did not. It might also be commented that the levying of a fee based on passenger numbers is not characteristic of a tax: it is a standard method of charging for use.
Jurisdiction to legitimately charge: subordinate legislation
14. Article 15.2.1º of Bunreacht na hÉireann provides for the “sole and exclusive power of making laws for the State” to be vested in the Oireachtas, “no other legislative authority” having such power. Reference is not made in the Constitution to subsidiary legislation. The provision made by Article 15.2.2º for “subordinate legislatures” references bodies which have not either been created or recognised since 1937. It has never been challenged either in this appeal or, is seems, any other, that inherent in the exclusive legislative power of the Oireachtas is the entitlement of the legislature to set up statutory schemes whereby there may be limited delegation of legislative powers to the executive; Maher v Minister for Agriculture  2 IR 139 at 245. While this is a matter of practicality, it being impossible in primary legislation to fill in every aspect of such administrative roles as are fulfilled through subordinate legislation, the central requirement of the Constitution is that the power of citizens as exercised through their legislature, the Oireachtas, is not to be diluted or usurped; see generally Dodd, Statutory Interpretation in Ireland (Dublin, 2008) at 13.15-13.50. As Fennelly J remarked in Kennedy v Law Society of Ireland  2 IR 458 at 486:
15. Central to maintaining the exclusivity of the Oireachtas to make laws while, at the same time, enabling subordinate legislation are two principles. Firstly, delegated legislation is properly enabled where what is involved in the subordinate legislation is “a mere giving effect to principles and policies which are contained in the statute itself”. Legislation of a subordinate kind remains “within the permitted limits – if the law is laid down in the statute and details only are filled in completed by the designated Minister or subordinate body – there is no unauthorised delegation of legislative power.” See Cityview Press Ltd v An Chomhairle Oiliúna  IR 381, 398-399 per O’Higgins CJ. Secondly, what is or is not permitted as a legitimate exercise of delegated legislative power is to be found within the terms of the statute itself. The limits are to be found in the enabling statute. It is a matter of the construction as to whether any exercise of the power to make subordinate legislation delegated by the Oireachtas is within the scope of what was contemplated in the text of legislation in the conferring of that power on a Minister, a local authority or some branch of the Executive. Hence, what may be a reasonable charge within the context of one set of primary legislative provisions, as delegated through particular words within a statute, can differ where other legislation carries a different purpose and is ostensibly delegated through the use of some other statutory formula. In consequence, there were different results in the High Court to the challenge to the charges at Ros a’ Mhíl those for the use of Cill Rónáin harbour. The former succeeded and the latter failed. As will be seen later, the primary statutory foundation for the delegation of legislation to the Minister in the case of Ros a Mhíl and to Galway County Council in the case of Cill Rónáin is entirely different. This is, as Butler J stated in Minister for Industry and Commerce v Hales  IR 50 at 83, essentially a matter of statutory interpretation as to the purpose and scope of the delegation of legislative powers:
The delegatees of statutory power cannot be allowed to exceed the limits of the statute or, as here, the secondary legislation conferring the power. The rationale for this is simple and clear. The Oireachtas may, by law, while respecting the constitutional limits, delegate power to be exercised for stated purposes. Any excessive exercise of the delegated discretion will defeat the legislative intent and may tend to undermine the democratic principle and ultimately the rule of law itself. Secondly, the courts have the function of review of the exercise of powers. They are bound to ensure respect for the laws passed by the Oireachtas. A delegatee of power which pursues, though in good faith, a purpose not permitted by the legislation by, for example, combining it with other permitted purposes is enlarging by stealth the range of its own powers.
16. As O’Higgins CJ put the matter in Cassidy v Minister for Industry  IR 297 at 305, the duty of the courts when faced with a claim that a statutory instrument is invalid is to “enquire whether such instrument has been made under powers conferred, and for purposes authorised, by the Oireachtas.” He continued:
Considerations of constitutionality apart, the judicial control of subordinate legislation operates only through the doctrine of ultra vires and the function of the courts can only be fulfilled by enquiry as to whether the statutory rule or order falls within the scope of the enactment from which it purports to derive its authority. This is the check placed upon arbitrary government by the executive. In consideration of any given power, the court must not only interpret the terms in which the statutory power is expressed to see that it is not given any wider power than is necessary, but must also see that the power does not exceed or interfere with or negative the provisions and intention of the enactment as a whole.
17. In Hogan and Morgan, Administrative Law in Ireland, 4th edition (Dublin, 2010), the authors at page 37 usefully state a number of presumptions which they consider are employed by the courts to determine if subsidiary legislation remains within the scope of what was the expressed purpose and delegated powers of the primary legislation. These are, footnotes omitted, that the Oireachtas is “presumed not to have delegated the power to raise taxes; or to oust the jurisdiction of the courts; or to encroach upon the liberty of the citizen; or to give retrospective effect to delegated legislation; or to effect a substantial alteration in the general law; or to infringe the provisions of the Constitution.” Each such statement may require examination in an appropriate case. One of the claims on this appeal made by counsel for Island Ferries, however, is that the charges on use of the harbours on both sides of the journey amount to a tax. A charge for the use of a specific service by a specific person is not a tax. The levying of money for the use of the English king was outlawed by the Bill of Rights of 1688 “without [g]rant of Parl[i]ament”. Under Article 17 of the Constitution, the exclusive power to raise taxation is vested in the Oireachtas. The provisions of Articles 21 and 22 as to the initiation of, amendment of, and passing of Money Bills tend to place that responsibility upon Dáil Éireann with a limited advisory role for Seanad Éireann. Further, Article 22.1.2º recognises as an exception to the taxation authority of Dáil Éireann that “any taxation, money or loan” may be raised “by local authorities or bodies for local purposes”. While there may be areas of uncertainty which could require specific decision in the future, such as sums charged to workers on a type of national health insurance scheme that may be argued to be akin to private insurance, it may be generally stated that a tax exacts money from the population in respect of what, by now, are recognised categories such as income or on making a purchase or from an estate on death or on profits by a corporation. All of these are characterised not by the use of a specific service by a commercial entity or a person but, instead, by their universal character and by the general use, or in some cases promises of a specific use, to which the money levied is to be applied out of general State funds for the public benefit or for the promised benefit of a defined section of the population. You do not have to use a service to have a tax levied on you. You merely have to work, gain an inheritance, buy something or make a profit on a transaction or through a corporate vehicle. Where you decide to use a service and have to pay a fee that is not a tax but a charge.
If the powers conferred by the Oireachtas on the Minister do not cover what was purported to be done then, clearly, the instrument is ultra vires and of no effect. Equally, if the rule-making power given to the Minister has been exercised in such a manner as to bring about a result not contemplated by the Oireachtas, the courts have the duty to interfere. Not to do so in such circumstances would be to tolerate the unconstitutional assumption of powers by great departments of State to the possible prejudice of ordinary citizens. If what the Minister seeks to do was not contemplated by the Oireachtas then, clearly, it could not have been authorised.
18. In each case, the limits of delegated power it is a matter of the construction of the particular statute. The purposes and scope of the relevant primary statutory provisions vary from case to case; as they do here in relation to the Cill Rónáin challenge and to the Ros a’ Mhíl charges. Thus in Incorporated Law Society of Ireland v Minister for Justice  ILRM 112, where delegated legislation purporting to permit the Minister for Justice to restrict access by certain solicitors to prisoners in jails because of apparent fears as to State security, this was in excess of jurisdiction since the parent statute did not enable subsidiary rules for such purpose. Similarly, restricted articles under the Health Act 1947 could be applied to medical preparations and not to non-medical products such as tobacco; United States Tobacco International Inc. v Attorney General  1 IR 394. In the same way in the Hales decision, a divisional court of the High Court held that where the relevant Minister had purported to extend the protection of legislation in respect of holiday entitlements to self-employed insurance agents, apparently being enabled to apply the legislation to any “class or description of person”, on statutory analysis that power was limited to those who could be deemed to be workers. Application to those working for themselves was therefore not contemplated in the parent statute.
19. While the leading case of Cassidy v Minister for Industry and Commerce  IR 297 is often used in a general way in judicial review claims against administrative action to plead that a particular decision is unreasonable, in the sense that in accordance with the decision in State (Keegan) v Stardust Compensation Tribunal  IR 642 it flies in the face of fundamental reason and common sense, at issue in delegated legislation is whether the National Parliament could have contemplated the impugned result in the context of the primary legislation. These are different tests. The case of Cassidy concerned the application by the relevant Minister to a defined geographic urban area of a price limiting measure on the sale of alcoholic drink in all licensed drinking establishments. A feature of the particular Statutory Instrument was that the restriction applied to such establishments in the precisely defined Dundalk urban area while those just outside the boundaries were free of it. Another aspect was that the price of this drink remained the same whether sold in a pub of the traditional type, one imagines a bar with stools on a hard floor, or served in a lounge area, comparatively luxurious by the standards of the time and involving carpets and easy chairs. Since the latter was much more expensive to equip than the former, a larger margin of profit on each drink sold was needed to support the establishment, but no account had been taken of this. Henchy J formulated a test which clearly indicates that what is at issues as to the vires of subsidiary legislation remains the issue of being within the purpose and powers of the statute from which it is drawn. At pages 310-311, he stated:
20. See also Kruse v Johnson  2 QB 91 at 99 per Lord Russell LCJ. On the particular facts of this particular case, there is nothing to suggest that Cooke J in either of the decisions as to the validity of delegated legislation made by the Minister or by Galway County Council applied an incorrect test. At issue, therefore, on the appeal, is the application of the test. Also at issue is the degree to which consequential purposes to a main delegated purpose may bring a decision outside the scope of what was contemplated by the Oireachtas. The principle in that regard is also set out in the Cassidy case. There a subsidiary purpose in passing the relevant price control order was to return publicans to a form of voluntary regulation of prices from which those in or around Dundalk had apparently rebelled. If the issue as to jurisdiction included the purpose for which the delegation of legislative authority was made then, as a matter of law, the issue should be approached on the basis of discovering the primary purpose of the subsidiary legislation and then asking whether any consequential purpose was inconsistent with that allowable purpose. Henchy J at pages 308-309 of the report put the matter thus:
The general rule of law is that where Parliament has by statute delegated power of subordinate legislation, the power must be exercised within the limitations of that power as they are expressed or necessarily implied in the statutory delegation. Otherwise it will be held to have been invalidly exercised for being ultra vires. And it is necessary implication in such a statutory delegation that the power to issue subordinate legislation should be exercised reasonably. Diplock LJ has stated in Mixnam’s Properties Ltd v Chertsey Urban District Council  1 QB 214 at p. 237 of the report:-
“Thus, the kind of unreasonableness which invalidates a by-law [or, I would add, any other form of subordinate legislation] is not the antonym of ‘reasonableness’ in the sense of which that expression is used in the common law, but such manifest arbitrariness, injustice or partiality that a court would say: ‘Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires.’”
21. In so far as any discretion is permitted as to the measures to be taken by subsidiary legislation, such decisions are for those to whom that power is delegated by the primary enactment. Provided what is involved fits within the purposes and boundaries of proper delegation, it is not the function of any court on judicial review to substitute a different view. As Lord Russell LCJ said in Kruse v Johnson at page 100, where a local authority’s members are chosen by the people as “those whom they think best fitted to represent them in their local government bodies, such representatives may be trusted to understand their own requirements better than judges.” There is, however, a limit. What is manifestly an injustice imposed by a majority on a minority, or where the choice made as between competing burdens is manifestly partial, or where a result is so unsupported by objective factors as to be clearly arbitrary, the Oireachtas as representative of the Irish people cannot be held to have delegated sanction for such a result. Those kinds of decisions are not part of the measure of appreciation that must be allowed on the delegation of subordinate legislative power. Thus it is not an answer to manifest unfairness, partiality or arbitrariness, to assert that this is what the majority want if the result is utter injustice to the minority. That said, it is not for judges to adopt the role of local legislators and to strike down subsidiary legislation just because they might have done something different. Nor, contrary to the submissions made by counsel for Galway County Council, does the democratic process of itself save subsidiary legislation which infringes the fundamental principles as to the limits of delegated legislation. The fact of a democratic process should, however, caution against the substitution of judicial analysis as to the desirable result of policy for the legitimate exercise of local political power.
The evidence forces me to the conclusion that the primary and dominant purpose of the Minister in making these orders was to eliminate unwarranted price increases and that, while he also had as his aim the return of the publicans to the voluntary practice of not making price increases without giving him prior notice, that aim was merely subsidiary and consequential to the dominant and permitted aim. I would hold that the Minister did not act ultra vires in this respect. Where a power to legislate for a particular purpose is delegated and the power is exercised bona fide and primarily for that purpose, I consider that the exercise of the power is not vitiated if it is aimed also at the attainment of a subsidiary or consequential purpose which is not inconsistent with the permitted purpose. If the law were otherwise, many delegated powers would be unexercisable, for the permitted purpose frequently encompasses of necessity the attainment of other purposes.
Legislation and jurisdiction: Ros a’ Mhíl
22. The authority of the Minister to make regulations charging for the use of the harbour at Cill Rónáin derives from the Fishery Harbour Centres Act, 1968 (the Act of 1968). Much of this legislation is concerned with the setting up of centres suitable for use by fishing boats; the purchase or compulsory purchase of land; the engagement of employees; and the provision of other harbour facilities. It is clear also that the legislation contemplates that the facilities available in such harbours will extend to commercial and pleasure craft. Under section 5 of the Act, as originally promulgated, the Minister was empowered to use the property vested in him for “the improvement and development of the fish industry and … services ancillary to or connected with” same. Section 6 of the Fisheries and Foreshore (Amendment) Act 1998 extended those purposes. Section 6 of the Act of 1968 empowered the Minister to carry out “maintenance, repair, improvement, extension and modification” to “any harbour, part of the harbour, building or installation situate in fishery harbour centre or any road or access vested in the Minister”. Section 8 of the Act requires financial accounts to be kept. This is not simply due to ordinary prudence but because section 9 requires the Minister to “establish, maintain and manage … a fund”. Payments into that fund include “all moneys received by or on behalf of the Minister in respect of rates, tolls or other charges” and such money as might be generated from commercial activity engaged in by the Minister under section 5. Payments out of the fund are to include “all outlay and expenditure incurred by the Minister … in the exercise of a power, function or duty” under the Act. In addition, the Minister is authorised to make or sell investments in respect of such funds as are “not immediately required for the making of payments”. The powers of the Minister are set out in section 4. These include provision to “provide, improve and develop or arrange for the provision, improvement and development of, such facilities and installations as [the Minister] considers desirable or necessary” as a centre; section 4(2)(e). Under the next subsection, the Minister may also develop services “connected with the fish industry”. Under section 4(2)(a) the Minister is empowered to “make such bye-laws as he deems necessary or desirable for the purposes of the management, control, operation and development” of such a harbour centre. In that regard the Minister may, under section 4(2(b):
23. All of this is subject to the overriding purpose set out in section 4(1) of the Act of 1968 which is thus stated:
by order, fix rates, tolls and other charges for the use of facilities (including the harbour) and services in the centre and provide for their payment and collection and for penalties and remedies for their non-payment (including distress and sale of ships, boats and goods in respect of which any rates, tolls or charges are payable).
Thus, the power to make delegated legislation providing for charges for the use of the harbour are wider than the emphasis placed on same in submissions by counsel for Island Ferries. Money may be raised in order not only to manage, to control or to operate the harbour centre but may also be charged appropriately where there is a purpose of development either immediately into the future. It is to be noted from the cost of developing the harbour at Cill Rónáin how expensive such a project may prove. A fund may be maintained under the legislation for such purposes or may be built up over time in order to aid development into the future. It is clear that the legislative intent is that harbours should be made available for fishing and for other craft and that such facilities suitable to the use of the harbours should be provided and that these should be paid for or exempted from payment as the Minister sees fit. But, in accordance with the principles applicable to delegated legislation set out above, that must be done justly and not partially or arbitrarily. Provisions are also contained within that legislation for notice as to the making of a proposed regulation and for the setting of these before the Houses of the Oireachtas, but these were not the subject of any issue.
The Minister shall manage, control, operation and (to such extent as he thinks proper) develop each fishery harbour centre and shall have all such powers as are necessary for those purposes.
24. During this appeal, there was considerable argument addressed by counsel on both sides as to whether the legislation contemplated a charge based upon the value of the harbour to the user. In addition, there were contending submissions by reference to expert evidence at the trial in the High Court as to whether there was a principle that to make a charge some form of exact calculation had to be made as to how much wear was inflicted on concrete etc as passengers moved to and from the ferry boats and as to precisely how much use was made of the facilities by them. There is, however, a reality to this situation which should be focused on. The harbour at Ros a’ Mhíl is there because the Minister exercises the powers in the Act of 1968 to establish it as it is with such relevant facilities as an appropriate location to take vessels of particular sizes notwithstanding tidal fluctuations and stormy weather, the availability of berthing spaces, the provision of onshore facilities, the use of safe means of accessing and tying up vessels and, more recently, the establishment of pontoon facilities for those travelling to the islands so that they can embark and disembark safely. It would make no commercial sense to establish a harbour that carried a vast capital cost and charge small sums of money merely for the purpose of maintaining it against ordinary wear and tear. The harbour, as such, under the legislation is a facility provided by the State for the maintenance and development of the fishing industry and for the use of commercial and pleasure craft.
25. A fair charge is arrived at not by a precise reckoning of the degradation of facilities that might be caused by the use of passengers, but by a general overview as to the degree of usage and what is fair in the overall context of the availability of the facilities to expect by way of payment. Any number of experts could look at this situation and come up with radically different theories as to how to charge and radically different arguments as to the factors to be taken into account. That is what experts tend to do in court cases anyway. There is no hint in the legislation that the Minister has any obligation to engage in any unreal or cerebral exercise in the setting of charges. Furthermore, the express use within section 4 of varying words to describe those fees payable, “rates, tolls and other charges” is indicative of an approach that is not necessarily tied to exact economies. Even were that to be the case, there is the reality of what actually happens in this harbour. Indeed, it is possible that an argument can be made that more fishermen are actually using the facilities and ferry boat operators, and this argument was advanced by Island Ferries. Certainly, on the facts it would appear that the harbour was primarily set up for and continues to be used by fishing vessels. That argument can also be turned on its head by reference to the tens of thousands of passengers whose number far exceeds other users coming in and out of this harbour. Thus what is required in setting charges is an approach which reasonably values the use of the facility, and not the unrealistic approach of demanding that a charge be set on the cost of each passenger to the harbour by their individual use through wear and tear, car parking, purchase of tickets from a booth, or recourse to toilets. Any such analysis would lack any foundation in ordinary sense. Value matters to the setting of a toll, a rate, or a charge for use as well as degree of use. As the trial judge correctly stated at paragraph 48 of his judgment:
26. Nor is it wrong to charge on a per passenger basis provided the approach is within the substantial degree of appreciation inherent in the delegation by the Oireachtas of the authority to charge to the Minister. Charges, however, must be set in accordance with the purpose of the legislation and in a manner which is not manifestly unjust, partial or arbitrary.
However, even if the use made by ferry passengers can be described as brief and incidental, namely, walking the length of the quay when embarking or disembarking, it is nevertheless a use by them of the facilities in question. Indeed the would not appear to be any reason to construe the sub-section so as to confine chargeable uses to those directly connected with any type of vessel entering or leaving the harbour. In principle, the plain wording of the sub-section would be sufficient to enable a charge to be imposed for purely recreational use of the peer such as fishing from the end of the pier, swimming from it in the sea or even sunbathing on the harbour wall.
27. On the appeal, the Court is bound by the findings of fact made by the trial judge. There has been no argument advanced whereby these might be overturned. All such findings, in any event, were made after hearing and considering the relevant evidence and for each such finding there was a sufficient basis in fact. There are two bases set out in the judgment of Cooke J which are soundly underpin the facts of his decision. He held that the purpose in setting the rate was not within the power delegated by the parent legislation, firstly, and the actual amount of the charge, secondly, was manifestly unfair. As to the first point, the memorandum to Government of 15th April 2003 for the meeting whereby the rate was eventually set as and from January 2004 should first be quoted in the tabulated and linear form therein set out:
28. The issue as to whether or not a rate could be set by reference to the income from all 5 fishery harbour centres in order to maintain the fund under section 9 of the Act of 1968 has not been argued on this appeal. One notes that previous Statutory Instruments reference charges in relation to individual harbours and this, as a matter of law, may be the better approach. In any event, on the facts, only one of the harbours, that at Ros a’ Mhíl was likely to yield any revenue from ferry passengers. The problem here is that the purpose for which the charges were set was, on the primary facts as found by the trial judge, mistakenly outside the purposes for which the delegation of legislative power had occurred. At paragraphs 58 and 59 of his judgment, Cooke J makes the following findings of fact:
The 2002 outrun (provisionally) for the fund is as follows:
Electricity, Telephone etc
Operating deficit €555,000
The implementation of the proposed increase for say 6 months of 2003 (taking account of various staffing requirements) are estimates to show on outrun as follows:
Operating Profit €301
Electricity, Telephone etc.
While the implementation of the proposed increases for a 12 month period is estimated to provide an annual income of €3.012 million, it is important that costs will continue to increase and should the new charges not be introduced the operating deficit is likely to increase to €660,000 per annum within a year. It should also be pointed out that as things stand not all costs are charged to the fund eg. engineering time, accounts etc. Many maintenance items are also treated as capital expenditure, at present.
Given this finding of fact, the purpose for which there was a delegation of legislative power to the Minister was to fix charges based upon a reasonable value arising out of the use of the facilities at Ros a’ Mhíl and not to simply target passenger numbers as a basis upon which an overall deficit in the cost of operating all 5 harbour centres might be made up. Hence, the trial judge was correct. It might be commented, however, that there would be nothing wrong in the Minister fixing a charge that would be reasonably based upon the value of the facility to passengers in the particular circumstances of having available to ferry companies facility whereby they could travel to the Aran Islands.
… the power conferred upon the Minister by s. 4(2) is a power to make orders “in relation to each fishery harbour centre” so that it is obviously envisaged that individual orders could be made fixing rates, tolls and charges taking into account the particular facilities in each harbour and the cost to the harbour of providing them; and the actual uses made by operators and particularly non-fishing operators in each case… [This] was effectively the approach that had been taken by the orders made prior to 2003. Regard was had to the particular differences between the activities carried out in particular harbours … That approach has been abandoned in the 2003 Order and the schedule is effectively set out on the basis that the charges apply to all designated fishing harbour centres. Thus, while s. 4(2) is clearly enacted on the basis that the Minister is entitled to have regard to the distinct facilities and uses of each of the harbours in question, it is clear to the Court from the evidence given … that the primary consideration in adopting the new approach was to find and generate sources of revenue sufficient to enable the operation of all of the harbour centres taken together to break even or produce a surplus. By fixing a per capita fee for the use of the harbour by passenger ferries with a complement of 100 or more, the Minister was not in the judgment of the Court, fixing a fair or reasonable commercial price for that use. Rather, he had as his objective the raising of extra revenue by the exploitation of the only source of passenger traffic in the fishery harbour centres to which the charge applied … in order to permit the Fund to break even or achieve a surplus.
29. As to the second point regarding the overall fairness of the approach of the Minister, one further factor needs to be added to the equation. Since 1995, Island Ferries had been operating a series of public service contracts with the State. An annual subvention was made in return for a minimum service of 2 daily sailings throughout the entire year to each of the 3 Aran Islands. The purpose is to keep the islanders in touch with the wider community. With the introduction, as and from the 1st of January 2004, of the new charges, there was a subsisting contract that had been concluded in November 2002 up to November 2005. The passenger fees were already fixed by each public service contract and could not be increased save with the consent of the relevant Minister. The maximum fare chargeable to those living on the islands was €12 for an adult and €10 for a student or senior citizen, with children charged at the rate of €6. People of appropriate age who had a free travel pass, or who had free travel due to disablement, whether living on the islands are not, were required to be carried free of charge. There was no exemption in the per capita charge of €1.20 a passenger in respect of these categories. Nor was there any distinction made in respect of the much lower fee for carrying islanders, whereas the adult return journey for a non-resident was €25.
30. This situation required the Minister to consider with some sense of balance the interrelationship between the public service contracts and subvention and the price charged per passenger. If that had been done and any reasonably fair result arrived at, the fixing of the charge would be within the range of appreciation contemplated by the legislation. In terms of primary fact, however, the judgment of Cooke J is clearly against any such conclusion. On behalf of the Minister, it was argued that all that needed to be done was to approach the relevant Minister in respect of the subvention and seek an adjustment. That may be part of the answer. But it is only part and does not excuse bypassing this factor through taking no reasonable account of existing obligations. One possible approach consistent with a fair appraisal of charges would be for the Minister to take into account the effect of the existing burden of the public service contract and to reduce the overall charge by an approximately equivalent sum. That was not done, however. At paragraph 57, the trial judge held as follows:
31. It must, however, also be remarked that charges held static from 1990 through to 2004 can be expected to increase markedly given the level of inflation between those years. It would therefore not necessarily be unexpected that an increase in charges introduced after a period in excess of a decade might have the effect of imposing increased operating costs. Of itself, therefore, the statement at paragraph 56 of the judgment of Cooke J is insufficient to condemn the regulations:
Secondly, although the charge (so far as it was a charge for vessels with a permitted complement of 100 or more,) was formulated as a form of individual departure fee for embarking passengers so that it might, in theory, have been passed on to passengers in increased ticket prices, it was known from at least the letter of 4th June 2003 from Ms O’Brien, that this would be impossible for the plaintiff company because of the constraints which the company had agreed with another department of State under the public service contracts referred to above for the provision of the year round service to the islands upon terms which could not be altered. It is notable that the Department was alive to the far reaching impact of this change at [the harbour at Ros a’ Mhíl] because although the other charges imposed in the 2003 Order came into effect on 1st October 2003, a decision was taken, as explained by Mr Ward, to postpone the passenger charge until 1st May 2004 “to take specific account of the fact that ferry operators had advertised their rates for the current season and it was to facilitate (them) giving advance notice to their passengers and agents for the following season”. Thus it was envisaged by the Minister that the charge would be passed on to the passengers rather than borne by the ferry operators but no consideration appears to have been given to the fact that in the plaintiff’s case, its prices had in fact been fixed under contract with the State for a period beyond 1st May 2004.
32. Other figures, however, found as primary fact by the trial judge, indicated a level of arbitrariness and disproportion whereby it was expected that ferry operators in, say, the year 2000 should pay approximately one quarter of the revenue raised at the harbour while in 2007, under the new charges, that would have risen to around five sixths. This, Cooke J held to be “a manifestly unreasonable exercise of the power to impose such charges.” As he put the matter at paragraph 61 thus:
First and most obviously, as indicated in the figures given above, the coming into operation of the Order on 1st May, 2004 had the effect of imposing an immediate and dramatically increased operating cost upon the plaintiff’s business. For the plaintiff company the total costs of using the harbour and its facilities rose from €26,965 in 2003 to €163,724 in 2004 and further to €258,774 in 2005 the first full year of operation of the new charge.
33. In addition, the setting of an arbitrary limit as between vessels carrying less than 99 passengers and those carrying 100 or more resulted in peculiar and unjustifiable disparities which were highlighted by Cooke J at paragraph 64 of his judgment:
That this is so can be seen from the effect the charge brought about in the finances at [the harbour at Ros a’ Mhíl] – or would have brought about had the plaintiff actually paid the charge. According to the evidence given based upon the financial statements for the operations at [Ros a’ Mhíl harbour], in 2000 the dues paid by the ferry operators accounted for 28% of all income generated by users of the harbour and its facilities. In the first full year of the new charge this rose to 62% and by 2007 to 86%. The total income attributable to activities and use by operators on the fishing side fell from over 55% in 2002 and 2003 to 13% in 2007. Harbour operations in the each of the years 2000 to 2003 incurred a deficit but the introduction of the new passenger charge generated a surplus of €118,037 in 2004. Dues from use by the ferry operators represented 12% of the operating costs of the harbour in 2000 but by 2007 were equivalent to 86% of the costs. Having regard to the clearly greater use of the harbour facilities including the time and attention of the harbour personnel by the fishing users, this was in the judgment of the Court a radical and disproportionate shift of liability for the operating costs of the harbour from the fishing operators to the ferry operators
34. It must be recognised, however, that as between one category of vessel and another, as between one category of user and another, and one category of charge and another, there may be an element of ostensible illogic. A line must be drawn somewhere and putting one situation on one side and another outside it does not mean that an irrational choice has been made. Certainly a choice has to be made between boats with different capacities but whatever the choice is must not be allowed to be so extreme as that, looked out in the round, it is demonstrably unfair. There should not be a huge disparity simply because a boat carries fewer than a particular number of passengers as compared to a vessel which carries a few more. Perhaps a fair approach would be either an overall charge based on tonnage and capacity or applying the per passenger rate across the board irrespective of the size of the vessel. In addition, it could hardly be unfair in applying a per passenger rate to also apply an annual use or mooring fee in relation to the harbour. Simply approaching the setting of a rate on the basis that there was a deficit in the operation of all 5 fishery Harbour Centres which it was desirable to reduce or eliminate and to suddenly, as opposed to gradually and proportionately, increase the level of fee payable by ferry owners was, as the trial judge found, manifestly unfair. The findings of fact and law made by Cook J in this regard should be upheld.
This however underlines the distorting and potentially discriminatory basis upon which Charge No. 10 has been formulated. When the plaintiff’s vessel departs empty it pays no “entry charge” but a vessel with a complement of 99 coming within sub-head (b) pays €40 although (vessel sizes apart,) the facility use made by the vessel in entering and leaving the harbour is effectively identical.
Damages: Ros a’ Mhíl
35. Island Ferries, having succeeded in obtaining an order that the imposition of charges under the Fishery Harbour Centres (Rates and Charges) Order 2003, SI 439/2003, was not authorised by the terms of the parent statute, the trial judge proceeded to assess and award damages. It has been clear since Glencar Explorations Limited v Mayo County Council (No 2)  1 IR 84 that following the judgment in Pine Valley Developments v. The Minister for Environment  I.R. 23, simply because the decision of an administrative authority is beyond its jurisdiction does not mean that there is an entitlement to damages in favour of a party claiming to be wronged thereby. Causation of damage, in this context, is insufficient. For the abuse of power, the appropriate tort is misfeasance in public office. On the facts found by Cooke J, it is impossible to hold that any of the officials of the respondent Minister acted maliciously or for an improper purpose. At paragraph 20 of the judgment, there is a specific finding that officials within the Department were “acting an obvious good faith in pursuing recovery of the amount [due by Island Ferries] by having recourse to the relevant powers of recovery available to the Minister under the pre-existing regulations and bye-laws.” At paragraph 47 of the judgment, the trial judge declined to make any award of exemplary damages on the basis that this would not be either “justified or appropriate.” Instead, the solution to the problem of the non-payment of the new charges to the Minister was found by Cooke J to have been “formulated, adopted and subsequently enforced in good faith.”
36. What occurred in this case, however, was that for 47 days from 18th August 2005, the motor vessel Ceol na Farraige was detained by the harbour master at Ros a’ Mhíl pursuant to section 4(2)(b) of the Act of 1968 and under bye-law 85 of the Bye-Laws made in 1979. In consequence, Draoícht na Farraige was not returned there but was instead moored in Galway harbour and operated from there. Another vessel was brought into Ros a’ Mhíl to service that harbour since the licence from the Department to operate the other two vessels had been withdrawn from 16th August, 2 days previously. Clearly, this caused disruption. The trial judge analysed the issue not on the basis of seeking to bypass the cardinal principles of State liability in respect of the mistaken use of power but on the basis, stated by Cooke J at paragraph 18, that the detention of the passenger vessel was an actionable trespass. On this appeal, it has been sought to be argued on behalf of the Minister that this finding was incorrect. In some way, it was inventively claimed that the bye-laws in relation to detention remains valid and that in consequence it was possible for the Minister to cause the passenger vessels to be seized and held. As is clear, however, from the analysis conducted by the trial judge, any such detention is only possible where there is a failure to pay or some other conduct which, under the terms of the regulations, enables the power. There was no such other conduct apart from non payment of the new charges. The argument advanced on behalf of the Minister was correctly characterised by counsel for Island Ferries as one whereby an advantage was sought on the basis of a wrongful action. Without the charges being valid, no monies could be levied from Island Ferries and, further, no powers of detention could be exercised in that regard.
37. It must be remembered that in the Pine Valley Developments case Finlay CJ had stated the principle as to the liability of public bodies acting in good faith thus, at page 38:
In the same case, Henchy J at page 40 had stated:
I am satisfied that it would be reasonable to regard as a requirement of the common good an immunity to persons in whom are vested statutory powers of decision from claims for compensation where they act bona fide and without negligence. Such an immunity would contribute to the efficient and decisive exercise of such statutory powers and would, it seems to me, tend to avoid indecisiveness and delay, which might otherwise be involved.
38. Hence, Cooke J applied the Pine Valley case and in particular the following summary contained in H.W.R. Wade, Administrative Law, 5th edition (at page 678), which was adopted by Finlay C.J. at page. 36:
Breach of statutory duty may occur in a variety of circumstances and with a variety of legal consequences. Here we are concerned only with a breach of statutory duty in the making of a decision which has been committed by statute to the decision-maker. The weight of judicial opinion as stated in the decided cases suggests that the law as to a right to damages in such a case is as follows. Where there has been a delegation by statute to a designated person of a power to make decisions affecting others, unless the statute provides otherwise, an action for damages at the instance of a person adversely affected by an ultra vires decision does not lie against the decision-maker unless he acted negligently, or with malice (n the sense of spite, ill-will or suchlike improper motive), or in the knowledge that the decision would be in excess of the authorised power: see, for example, Dunlop v. Woollahra Municipal Council  A.C. 158; Bourgoin S.A. v. Ministry of Agriculture  3 All E.R. 585. While the law as I have stated it may be lacking in comprehensiveness I believe it reflects, in accordance with the requirements of public policy, the limits of personal liability within which persons or bodies to whom the performance of such decisional functions are delegated are to carry out their duties.
39. The decision of Cooke J was that a recognised tort had been perpetrated; that of the detention of the motor vessel and, in that regard, his reasoning is unimpeachable. Trespass to goods encompasses seizing and detaining what is not yours. Legal justification for such actions excuse, but there is none here. The vessel was released when a bond, carrying a commission of 2% per annum, was substituted for the detention of the motor vessel. In the High Court it was accepted that a sum of €24,333 was recoverable under this heading as a direct and necessary consequence to Island Ferries arising out of the detention of the vessel. In that regard, the company in substituting the bond was properly attempting to mitigate its loss. The approach of the trial judge, correctly, was to place Island Ferries “is nearly as may reasonably be done in the position it would have been in had the wrong not been committed.” The learned trial judge also considered the loss of profit due to the non-operation of the 2 vessels over 47 days. He considered the impact on competitors and decided that it had “not been established on the balance of probabilities that the passengers carried by the competitor in the relevant period of 2005” would not otherwise have been carried or, at least, as to a large proportion of them. The claim was also made in respect of the costs of diversion in staff and this was particularised. Taking into account, however, the fixed costs, the trial judge found that there was an absence of evidence that the company incurred any resulting losses. Therefore the trial judge, under the heading of special damages, calculated the cost of the bond at €28,000, the damages resulting from the non-operation of the 2 motor vessels over 47 days at €24,370, the cost of substituting Draoícht na Farraige on the Galway route at €3005 and the lost fixed costs in respect of Ceol na Farraige at €11,868. This made a total of €67,243.
The present position seems to be that administrative action which is ultra vires but not actionable merely as a breach of duty will found an action for damages in any of the following situations:
1. If it involves the commission of a recognised tort, such as trespass, false imprisonment or negligence.
2. If it is actuated by malice, e.g. a personal spite or a desire to injure for improper reasons.
3. If the authority knows that it does not possess the power which it purports to exercise.
40. The careful and considered approach to strongly conflicting evidence from multiple expert witnesses adopted by the trial judge cannot be faulted. Cooke J refused to award aggravated damages on the basis that was nothing in the conduct of the officials of the Minister which shocked the plaintiff, in the legal sense; and refused exemplary damages on the basis that the was nothing in the conduct of the officials of the Minister which shocked the jury. There was, of course, no jury. The principles as stated from the decided cases were applied by Cooke J. These were that, firstly, the plaintiff cannot recover exemplary damages unless he is the victim of the punishable behaviour, secondly, that the power to award exemplary damages had to be used with restraint as to the amount thereof because it could be used both in defence of liberty and against liberty and, thirdly, that the means of the parties were material in the assessment of exemplary damages because everything which aggravated or mitigated the behaviour of the defendant was relevant.
41. While disallowing several heads of special damages, the trial judge held that there was no doubt that the detention of the vessel and disruption of the plaintiff’s operation “caused [Island Ferries] day to day business considerable disruption and a loss which is not easily quantifiable under a specific head of special damages.” The learned trial judge took into account the diversion of the directors and employees, the need to take legal advice and the commercial and reputational embarrassment caused with tour operators. An award of €25,000 in general damages was added to that for special damages. While this award is very high, it is not so far beyond the range of potential range of damages as to be appealable. No basis upon which this award could be disallowed or interfered with has been successfully argued on this appeal. Consequently, any point of competition law does not require consideration in the light of the findings of Cook J being upheld on this appeal.
Legislation and jurisdiction: Cill Rónáin
42. It was following on the success of the case in the Ros a’ Mhíl case that the imposition of charges for the use of the harbour at the Cill Rónáin was initiated by Island Ferries against Galway County Council. That challenge by Island Ferries failed in the High Court. This, despite the fact that these are two parts of the same journey: Ireland to the Aran Islands. There are, however, serious differences between the two cases that have been heard together on this appeal. Firstly, whereas charges were increased at Ros a’ Mhíl in order to make up a deficit in funding, the necessity to charge for the first time arose in Cill Rónáin because a new harbour had been constructed and thus required funding for its operation. Secondly, charges at Cill Rónáin apply to all passengers no matter what the size, tonnage or nature is of the vessel in which they arrive. The manner of proceeding in Ros a’ Mhíl threw up startling economic disparities that are not reproduced in the approach to charges at Cill Rónáin. Thirdly, while a misuse of delegated power can occur where local democracy is fully engaged, the Ros a’ Mhíl charges were imposed by administrative fiat while Galway County Council set the charges for Cill Rónáin through a process of debate and analysis within the scope of their delegated governmental function. Unlike at Ros a’ Mhíl, the range of appreciation in decision making applicable to the delegated powers was not exceeded by Galway County Council. Finally, more than ample authority can be found in several legislative sources for the imposition of charges by Galway County Council for the use of its services. In themselves, the charges for the use of the harbour at Cill Rónáin took, on the face of them, an apparently reasoned approach. That was not the case in the particular approach taken to the setting of charges at Ros a’ Mhíl and in the structure upon which such charging was to be based. What might be regarded as apparently lacking, when considering the parent statutes from which the authority of Galway County Council to make delegated legislation, is any clear statement of purpose equivalent to section 4 of the Fishery Harbour Centres Act 1968. Yet, in the plethora of primary legislation related to the powers of local government, such a statement of purpose does in fact emerge. Again, the question of procedure in making bye-laws was not put at issue in this case and is, in any event, amply provided for in the relevant legislation. The relevant bye-laws were made by Galway County Council on 24th October, 2011 and were expressed to commence on January 1st 2012. Section 1.1 thereof declares that the bye-laws were made in exercise of powers conferred by: firstly, Part 19 of the Local Government Act 2001; secondly, Part 2 of the Maritime Safety Act 2005; thirdly, sections 13, 89; and, fourthly, also the Sixth Schedule of the Harbours Act 1996 as amended (the Act of 1996). Since Part 2 of the Act of 2005 is concerned with recreational craft, it does not arise in this context.
43. Section 37(1) of the Local Government Act 1994 (the Act of 1994) empowers a local authority to “make a bye-law for or in relation to the use, operation, protection, regulation or management of any land, services, or any other thing whatsoever provided by or under the control or management of the local authority or in relation to any matter connected therewith.”. Subsection (4) enables “provisions as the local authority considers appropriate for the effective application, operation and enforcement and generally to achieve the purposes for which” the bye-law is made, including at (h) “the payment of a fee charge at a specified time by any person in respect of the specified matter” and at (i) “specification of a fine being less than £1,000 for a contravention”. Notice of the proposed subsidiary legislation was posted in local newspapers and submissions were received under section 38 of the Act of 1994. Section 13(1) of the Harbours Act 1996 enables companies set up under that legislation by local authorities to “impose charges … at such rates as are from time to time determined … on … the owner or master of a ship which … enters within its harbour”. That power is shared by the local authority under section 89(3) of the Act of 1996, as amended by section 209(2) of the Local Government Act 2001 (the Act of 2001). Section 13(2)(b) of the Act of 1996 requires that “where passengers are to be carried … within a harbour the master of the ship … shall furnish the company concerned a statement of the number of those passengers”. That also applies to the local authority in this case. More general powers are now contained in Part 19 of the Act of 2001. These enable local authorities to “make a bye-law for our in relation to the use, operation, protection, regulation or management of any land, services, or any other matter provided by or under the control or management of the local authority, whether within or without its functional area or in relation to any connected matter.” A wide discretion is set out in section 199(3) which provides that such delegated legislation “may include such provisions as the local authority considers appropriate for its effective application, operation and enforcement and generally to achieve the purposes for which it is made”. These include at (h) “the payment of a fee or charge at a specified time by any person in respect of any specified matter governed by a bye-law”. As in the Act of 1994, fines are provided for non-payment and, in addition, there is a specification for a fixed payment as an alternative to prosecution. The provisions as to notice in the taking of submissions are also similar to those in the Act of 1994.
44. As to legislative purpose and the nature of the decision making power delegated, there are relevant principles set out in the primary legislation. Section 68 of the Act of 2001 requires a local authority to “take such steps as it considers appropriate to encourage the use of the Irish language”. Clearly, if the island communities cannot be sustained because access becomes difficult or impossible, this will not help the linguistic and cultural heritage of the islanders. Fostering proportionate connection to the wider community is therefore a legitimate aim. Section 69 of the Act of 2001 provides that “a local authority, in performing the functions conferred on it by or under this or any other enactment, shall have regard” to a number of factors. These include at (a) “the resources, wherever originating, that are available or likely to be available to it for the purpose of such performance and the need to secure the most beneficial, effective and efficient use of such resources”; at (b) “the need to maintain adequately those services provided by it which it considers to be essential and, in so far as practicable, to ensure that a reasonable balance is achieved, taking account of all relevant factors, between its functional programmes”; at (c) “the need for co-operation with, and the co-ordination of its activities with those of other local authorities, public authorities and bodies whose money is provided (directly or indirectly) either wholly or partly by a Minister of the Government the performance of whose functions affect or may affect the performance of those of the authority so as to ensure efficiency and economy in the performance of its functions”; at (d) “the need for consultation with other local authorities, public authorities and bodies”; at (e) the “policies and objectives of the Government or any Minister of the Government in so far as they may affect or relate to its functions; at (f) “the need for a high standard of environmental and heritage protection and the need to promote sustainable development”; and, finally, at (g) “the need to promote social inclusion.” It is also to be noted that while section 199 of the Act of 2001 enables, at subsection (1), the making of bye-laws, subsection (7) precludes the making of bye-laws where an appropriate Minister declares matters which are not to be subject to such a local and subsidiary legislation, and that subsection (2) enables the making of bye-laws “where… it is desirable in the interests of the common good of the local community”. Consequently, this wide and inclusive range of legislative purposes must encompass a wide range of social measures and of the need to balance regulations and charges in pursuit of good governance in accordance therewith. Cooke J correctly dealt with the purpose of the primary legislation at paragraph 71 of his judgment where he stated:
45. Correctly, the trial judge was not drawn into an analysis of various competing economic theories from the experts giving evidence in the High Court. The setting of a balance as between various factors is not one for the competing and often impenetrable theorising that can be based upon the analysis of numbers and human economic behaviour. Rather, since what is concerned here is the proper regulation of local government, a fair and even handed approach is demonstrably correct. While apparently ignoring the €70,000 subvention provided by Galway County Council to the administration of the harbour at Cill Rónáin, Island Ferries in their argument on this appeal and before the High Court were most concerned that cargo charges had been removed and that the landing of fish, characterised by the trial judge as largely irrelevant, did not draw charges as it did for fish where actually landed in large numbers at the other side of the journey, namely Ros a’ Mhíl. The primary findings of the trial judge included that which follows from paragraph 69 of his judgment:
Quite apart from its normal functions in respect of roads, planning, water, environment, libraries and so forth, and as its own Development Plan illustrates, Galway County Council has, for example, extensive duties and obligations not only in promoting tourism and other employments and safeguarding community affairs throughout its administrative area, it has special responsibilities to have regard to the sustainability of the Aran Island communities and their linguistic and cultural heritage. Under s.69 of the Local Government Act 2001 the respondent in performing all of its functions is required to have regard to a series of factors or considerations. These include the policies and objectives of Government or of any Government Minister which affects or relates to its functions; the needs for high standards of environmental and heritage protection and the promotion of sustainable development; and the need to promote “social inclusion”.
46. As the trial judge stated as to these factors: “It could not be said that these were not relevant and valid concerns which it was legitimate for the local legislators to take into account in assessing what the appropriate terms of the bye-law should be.” Further, while the identification of the precise legislative authority is as difficult in this labyrinthine field of local government as it may typically be in others, no convincing argument was put forward in pursuit of the proposition that any mistake of law was made by Cooke J. Plainly, on the findings of the trial judge, an enhanced facility has been provided for the use of the islanders and for those who make a living out of the tourist industry. It also benefits visitors. On the primary facts, this is of benefit to Island Ferries and is also of benefit to those small businesses making a living out of a very limited tourist season. Precise calculation as to the amount of footfall on particular piers or degree of protection from the elements or availability of facilities is not necessary in setting a charge. The value of the service is clearly within the range of contemplated possibilities in the primary legislation. On the facts as found by Cooke J, that value is considerable, involves no serious additional burden in terms of the counting of numbers to Island Ferries, is a reasonable means of charging and, as the trial judge stated at paragraph 74 of his judgment is no more than the fixing of “a very modest per capita fee of €0.80 on individual passengers arriving most of whom will make the trip only once.” The use of multiple tickets, and a reasonable charge in that regard, protects the interests of islanders who, given their isolation from many other State services are entitled to some compensatory benefit. Island men, women and children are also clearly entitled to be kept within whatever possible degree of social cohesion might be practicably achieved in the setting of such charges. That is not so simply as a matter of fairness in the context of isolated communities but because the legislation demands that this factor be taken into account. Were that imperative absent, a different argument might be made.
It is also clear from the description of the debate and the consultations and negotiations which preceded the adoption of the bye-laws that the councillors, as legislators, were particularly concerned to avoid imposing additional financial burdens on residents and businesses on the island. This was obviously the basis upon which the decisions were taken not to include a charge for the loading and unloading of cargos from the merchant vessel and to confine the contribution towards operating costs from that vessel to the annual gross tonnage charge. As was explained by the witnesses on behalf of the respondent, it was recognised that most of such cargos consisted of fuels, foodstuffs, equipment and materials brought in for households and the small businesses dependent upon the tourist trade. It was feared that any such charges based upon the volume of cargo landed would be passed on to those households and businesses and thereby affect the sustainability of the island community. Similarly, there was concern about the original proposal to include a charge per tonne for landings of fish. Given the manner in which that activity had almost disappeared from the island and that trawlers were based at [Ros a’ Mhíl] as a designated fisheries harbour, the revenue from such a charge would have been miniscule and would only have served to act as a deterrent to any resumption of that trade.
47. As to the question of manifest unfairness, arbitrariness or imbalance, the situation in terms of fact is very different to that found by the trial judge as applying to Ros a’ Mhíl. Having heard all of the evidence and having considered the competing economic theories, which, not surprisingly, he characterised as “largely irrelevant”, at paragraph 72 Cooke J held:
48. There has been nothing urged on this appeal to demonstrate that this analysis is not in accordance with the applicable principles on the limits of the jurisdiction of delegated legislation. The findings of Cook J should therefore be upheld.
While the particular charge under examination here is one imposed in respect of the use of a particular harbour by passenger vessels, it is, in the view of the Court, perfectly legitimate (and perhaps mandatory) for the Council as legislator to approach the decision to be made and the balancing of interests to be struck, by taking into consideration its other statutory interests and responsibilities. In that regard it is entitled to appraise the benefits to be gained by investing in such works as the … redevelopment [of the harbour at Cill Rónáin] by reference to the cumulative interests of all such objectives and responsibilities. It is pursuing and is entitled in law to pursue, a wide range of objectives arising from such statutory responsibilities and it is entitled to assess the value benefits which accrue by reference to the overall results. It is not constrained to abide by a strictly utilitarian evaluation of the fee imposed and the cost of providing the service used by the operator charged. In the case of the operation of [the harbour at Cill Rónáin] it is entitled to take into consideration not only the economic value of the facilities to those making the immediate use of them but also the more remote or indirect but real communal benefits that can be expected to flow to the island community, its households, businesses and their general sustainability. Contrary to the argument made on behalf of the applicant, the Council as legislator is not confined to achieving any particular equation between the charges being imposed and the value or cost of services being provided to individual users as such, provided that the actual amount of a specific charge is not so manifestly disproportionate or excessive as to render it objectively oppressive or economically irrational. Viewed, as it must in the judgment of the Court be viewed, as an €0.80 fee asked of individual visitors which the applicant is not obliged to bear in full or at all, it cannot be considered to be beyond the scope and intention of the respondent’s delegated bye-law power.
Abuse of market dominance: Cill Rónáin
49. While it may be difficult to contend that any undertaking abused a dominant position in the market in setting, what the trial judge characterised as, “a very modest per capita fee of €0.80 on individual passengers”, nonetheless it was urged on behalf of Island Ferries that this was so. In this context, arguments as to social utility in pricing have not been brought into focus by either side should unfair pricing be found for competition law purposes. Thus the nature of the price for a product or service and its justification is the primary issue on the appeal. In broad terms, the function of competition law is to enable choice by consumers that is free of constraints, unrelated to the usefulness and value of the product or service, enabling them to fairly balance the market through that choice so that products and services which offer better value will be purchased. Hence, forms of artificial pricing or market manipulation which force or constrain consumers into purchases of products or services that would not otherwise have been chosen in a balanced market are the object of legal restraint. One aspect of competition distortion may come from holding a position in a market which is so strong as to enable the actor to behave to a large extent independently of ordinary economic constraints over an appreciable time; a dominant position. An actionable wrong occurs if that is abused with the likely consequences that the market is manipulated in favour of the holder of that dominant market share. Both forms of market distortion operate to the detriment of consumers overturning the natural balance of a free market in favour of products and services which offer quality and value. Here the allegation by Island Ferries is that the exclusive control by Galway County Council over the only available harbour on Inis Mór enabled them to fix an unfair price for the category of consumers who bring visitors to the islands.
50. Section 5 of the Competition Act 2002 (the Act of 2002) follows the wording of Article 102 of the Treaty for the Formation of the European Union. This is a domestic case, however, since, unlike in Article 102, neither a “dominant position within the internal market or in a substantial part of it” is pleaded and since nor is it claimed that there is any effect on “trade between Member States.” Unlike the Treaty, further, there is no section in the Act of 2002 equivalent to Article 106 enabling “special or exclusive rights” to be granted to public undertakings “entrusted with the operation of services of general economic interest”. This is broadly referable to such services as defence, health and social provision. Were that provision to be reproduced in the Act of 2002, any argument by Galway County Council that its pricing took into account the social utility of keeping viable transport connections between Ireland and her offshore islands might assume significance. Even such undertakings as offer services of general economic interest, however, under the Treaty must not affect the “development of trade” to “such and extent as would be contrary to the interests of the Union.” Section 5(1) of the Act of 2002, however, mirrors the particular exemplars of what may consist of an abuse of a dominant position in the Treaty. The Act provides that any “abuse … of a dominant position in trade for any … services is prohibited.” Subsection (2) sets out examples:
Subsection 3 deals with mergers and acquisitions and has nothing to do with this case. Argument was addressed on the appeal by Island Ferries to the alleged unfairness of the charge. As stated above, it was accepted by Galway County Council that, for the purposes of competition law, firstly, it was an undertaking and, secondly, that as regards the provision of harbour services on the Aran Islands it was in a dominant position in that market.
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions,
(b) limiting production, markets or technical development to the prejudice of consumers,
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage,
(d) making the conclusion of contracts subject to the acceptance by other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts.
51. On behalf of Island Ferries it was, firstly, argued that there was an excessive difference between the material costs actually incurred by Galway County Council for allowing use of the harbour and the price actually charged for the landing of each passenger at Cill Rónáin. The charges were, secondly, argued to be unfair in themselves by reference to competing services or facilities. Here, the submission was primarily constructed in relation to competing tourist attractions to which consumers might be diverted. These were said to include the Cliffs of Moher in County Clare, among others; the idea being that even a slight addition, by the imposition of the charge, to the cost of a return journey of €25 to the Aran Islands, an increase of 3.2% on the non-discounted tourist price, which is what the charge amounts to, would divert tour companies, in the habit of negotiating much tougher rates, towards those other attractions. Island Ferries urged that Galway County Council had used its position as a dominant undertaking for the purpose of extracting an additional gain or collateral advantage which was made possible only because of its ability to ignore the likely reaction of ferry companies. According to Island Ferries, the county council could conduct itself in this way because ferry companies would have no option but to continue to deal with it. That, it was urged, was an aspect of the dominance conceded by Galway County Council, since there was not other effective way of landing passengers on Inis Mór other than through Cill Rónáin harbour. Hence, Island Ferries claimed that Galway County Council could charge prices beyond what the usefulness of the service and its value to consumers would justify. The use of excessive or unfair prices which have no objective justification, Island Ferries contended, was applied to extract revenues in order to cross-subsidise a wholly unrelated activity. This charge was imposed, according to the ferry company, in order to exploit the passenger traffic as a new source of income and to cross-subsidise the provision of services and facilities to other users of the harbour and, more generally, other persons and businesses on the island. Hence, the charges were characterised on this argument as lacking any objective justification.
52. On behalf of Galway County Council it was argued that, firstly, the charges levied did not amount to the full operating costs of the harbour, which continued to be markedly subsidised as to its operations by the local authority. A price so heavily subsidised, Galway County Council argued, secondly, could not be abusive of a position of dominance. Such subsidisation, it was also urged on behalf of the local authority, had the direct result of decreasing the charges payable by the different users, including the passengers of Island Ferries. In this instance, the subsidy paid annually by the local authority resulted in a reduction from an initially proposed charge of €1.20 per passenger using the harbour to €0.80, with islanders purchasing multiple journey tickets having a reduced rate from that where they made multiple journeys beyond 5 in any year. Galway County Council pointed out, thirdly, that Island Ferries was, on the evidence before the High Court, the main user of the harbour; involving the carrying of approximately 280,000 passengers in 2012, the use of 31.6% of overall berthage spaces, and 55% of the berths that can be allocated to ferries, together with overnight mooring were cited. No profit was sought by Galway County Council and the reality was, the local authority urged, that the harbour operated at a loss. It was contended, fourthly, on behalf of the local authority that the charges at issue could be objectively justified on the basis that the users of the harbour should contribute towards the cost of maintaining it; the charge being proportionate and the money used only in respect of maintaining or running the harbour. There was a lack of evidence, Galway County Council contended, fifthly, of any abusive practice, such as impermissible cross subsidisation. Further, the charges were claimed not to have a severely adverse impact on the capacity of Island Ferries to provide ferry services. Even if that were so, finally, the local authority claimed that there was no obligation on their part to continue a blanket subsidisation of services to commercial entities and that there had been ample notice of the intended imposition of the charges to allow for a reorganisation of commercial activities by ferry companies.
53. The trial judge at paragraph 79 found as a fact, having heard extensive evidence from Galway County Council, that:
54. Again characterising, at paragraph 80, the €0.80 fee as “modest”, Cooke J held that it was not “imposed as an operating cost on the ferry businesses except to the extent that the latter chooses to treat it as such.” The functions and responsibilities of Galway County Council objectively justified the introduction of the charge, the trial judge held, it being required to cover part of the substantial costs of running the harbour. It might here be commented that the statutory context in which the charge was set, requiring, as it did, that a range of interests be taken into account, would not necessarily justify unequal pricing by an undertaking in a dominant position outside the confines of Article 106 of the Treaty. Of keener relevance to the issue of the alleged abuse of dominance was the finding by Cook J that the pricing was not applied in any discriminatory manner. Cooke J held that the same price per passenger was “charged to passengers arriving on all ferries including passengers visiting the islands when a cruise ship calls.” Any new services, such as seaplane connections, would also attract that charge on the passengers entering the harbour, the trial judge found. Cooke J disposed of the argument as to differential treatment thus:
the fundamental object and effect of adopting the charge has not been the achievement on the part of the respondent of any particular commercial advantage involving a distortion of the competition in a particular market or the use of the respondents dominant power in one area in order to extract some commercial advantage in an adjacent area or market on which it operates. Although the County Council is technically an “undertaking” in these circumstances and is providing a range of services in return for payment of fees and such services are capable of being provided by private sector, commercial harbour companies, Galway County Council is here providing them in discharge of the wide range of public- interest functions and responsibilities it has as a local authority towards the communities and businesses within its administrative area and those of the islands in particular.
55. Apart from any issue of social justification, however, the pricing of a service on the basis of repetition can be an aspect of free market behaviour. Cook J’s observations, on the ability of the local authority to behave independently of the market continue to be relevant. The county council, he held at paragraph 81 would be “constrained not to impose charges at excessively high levels” because of the impact of the “considerable fluctuation” in tourist numbers and high pricing would “in turn impact upon the revenues of the harbour.” Part of the reason for Galway County Council subsidising the harbour to the extent of €70,000 was to avoid the “full impact of raising the total amount of revenue needed to cover likely operating costs”. Hence, on the primary facts as found in the High Court, the price for using the harbour has been depressed in order to maintain revenue in the context of price non-elasticity and not for any predatory or unfair purpose.
It is true that there is differential treatment amongst classes of passengers to the extent that resident islanders and others having business which requires them to visit the island regularly can avail of the “multiple journey ticket” option. Again, having regard to the obligation of the respondent to take account of the need to safeguard sustainable community life and livelihoods on the island, it could not be said that such a differentiation was unreasonable and without objective justification.
56. Merely holding a dominant position in a market does not, of itself, establish a breach of the 2002 Act. What is key is whether this pricing is abusive. Certainly, the subparagraphs of section 5(2) of the Act of 2002 are only exemplars, as they are in Article 102 of the Treaty. As established in European law, it is the effect of the conduct alleged to constitute abuse on the market that indicates whether such abuse has taken place and not whether such conduct ostensibly fits within any stated example; Case C-6/72 Europemballage Corporation and Continental Can Co Inc v Commission  ECR 215 at paragraphs 25-26. The question of whether there is or is not an abuse of a dominant position is highly fact sensitive and depends upon an evaluation of all the relevant factors; see Belamy and Child, European Competition Law, 6th edition (London, 2008) paragraphs 10.058. A useful test for finding an abuse of a dominant position is that set out by the Court of Justice of the European Union in Case C-27/76 United Brands Company and United Brands Continental BV v Commission  ECR 20. Paragraph 248 thereof makes clear that the imposition by an undertaking in a dominant market position of “unfair purchase or selling prices” may be such an abuse. At paragraph 249 the question is asked as to what use has been made by the dominant undertaking to “reap trading benefits which it would otherwise have not have reaped if there had been normal and sufficiently effective competition”. In this instance, Galway County Council set charges at a lower rate through applying a subsidy. That is not an abuse. Galway County Council is not gaining any trading benefit. The nature of the subsidy is that a lower price is charged to Island Ferries passangers for the use of the harbour than would be the case had there been no subsidy. As exemplified at paragraph 253 of the United Brands case, other ways may be devised “of selecting the rules for determining whether the price of a product is unfair”. In terms of a working overall test, however, that set out at paragraph 252 has been generally applied:
57. In considering any question as to abuse by a dominant player in the market, a primary step is to determine the market. What, therefore, is the market? It is only in the context of the definition of the circumstances in which consumers may be attracted to a product or service that abuse of a dominant position may be found. The submissions made on behalf of Island Ferries as to what that market was do not convince. A market may be as small as cremation services for the dead in Dublin or in Florence or it may be as extensive as coco supply or banana sales throughout the entire European continent. Any such market must, however, be realistically defined. A market may be delineated in its parameters as to the product offered to consumers, firstly. Selling kiwis may in some circumstances be distinguished from selling bananas as the fruits have different qualities even though both may be sold through fruit merchants. Clearly different from the point of view of consumers and as to the trading suppliers would be markets in fresh fruit and canned fruit. Secondly, there is the place in which the product or service is sold. Books may be sold second hand in a local shop or over the internet. The latter choice increases the marketplace. Fact dependency may reduce that market where postage and packaging is expensive. A person who can only access a service by travelling to a particular place is likely to have a limited choice; for instance a person on holidays looking for a day’s diversion will likely limit their choice to what can readily be accessed at a reasonable cost. Lastly, the time of offering the service may also be important, as offering fresh fruit imported out of season differs from the market for seasonal products. This case is about using a harbour on a particular island which serves as the main port of call there and for two nearby islands. Whereas eloquent attempts were made in argument by counsel for Island Ferries to widen out the market to ostensibly embrace tourism products on the western seaboard of Ireland, that is not the market. Tourists want to visit the Aran Islands because of what that journey is expected to offer. Like any attraction, tourists will work out the price, the difficulties in travel, what may hopefully be experienced at the destination and, one supposes, whether what is involved is what people call ‘the trip of a lifetime’, or lesser variants. It lacks reality to compare cliffs in Clare or abbeys in Mayo and to include them in the relevant market for competition law purposes. These are different journeys because the attractions are different. The market overall may be tourism products but that can embrace Dublin attractions or Shannon river cruises. This market therefore concerns people who want to bring tourists to the Aran Islands and thus have to access a harbour facility there. On no realistic model can that service be regarded as without value or capable of being accessed for no charge.
The questions therefore to be determined are whether the difference between the costs actually incurred and the price actually charged is excessive, and, if the answer to this question is in the affirmative, whether a price has been imposed which is either unfair in itself or when compared to competing products.
58. Having so defined the market, the next issue is the abuse alleged in terms of the charge. What is particularly relevant here is, firstly, that the price charged for the use of the harbour is precisely the same whether it is charged to Island Ferries or to any rival ferry company or to flying boats or to large visiting cruise ships. It has been correctly argued that the local authority, as the sole operator of a large harbour on the Aran Islands, has an especial responsibility to behave so as to maintain competitive equilibrium in the relevant market:. It must be remembered, however, that “a finding that an undertaking has a dominant position is not itself a recrimination but simply means that, irrespective of the reasons for which it has such a dominant position, the undertaking concerned has a special responsibility not to allow its conduct to impair genuine undistorted competition on the common market”; Case C-322/81 Michelin v Commission  ECR 3461 at paragraph 57. Here, even ignoring the reasonable level of the cost, that especial responsibility is fulfilled by the application of a subsidy for the use of the harbour by Galway County Council that cannot be justified on economic grounds but which reduces the costs for all consumers. The nature of dominance can be such that the very presence of the undertaking in the market weakens the degree of competition, with the consequent effect of hindering entry, the development of products and alternative products; Case C-85/76 Hoffmann-La Roche & Co AG v Commission  ECR 461. This cannot be the case here. Without the provision free of charge of the harbour by the State to the islands, Galway County Council would not be in a position to manage the harbour at all.
59. As part of the analysis as to whether there has been distortion of competition through abusing a dominant position, the position of other economic operators who might potentially enter the market should also be considered. As the European Court stated in Case C-322/81 Nederlandsche Banden-Industrie Michelin NV v Commission  ECR 3461 at 37: “the competitive conditions and the structure of supply and demand must also be taken into consideration.” It stretches credibility to imagine, on the supply side, that some other economic operator might either build such a harbour for profit, by charging for use, or might, as to services, proffer any viable proposition to take over its management on a commercial basis. Nor would any economic operator on the supply side choose to pursue such an aim as the supply of harbour services on the Aran Islands on the basis of loss year after year. In reality, that would be the effect should Galway County Council withdraw its subsidy. One may also usefully look to the only other realistic alternative, which is that the harbour should be left unregulated. This would be a bizarre alternative in the context of a quarter of a million passenger movements. From the point of view of the potential profitability of the market, tourists would not be likely attracted to chaos or to the consequences of a bad name developing for this tourism product on social media sites. Thus, it is relevant both that the economic operator accused of the abuse of dominance, actually operates for social reasons at a loss and that no other undertaking would assume the trade in question in this market for that very reason. Inhibitions to entry and expansion in the market on the demand side are nothing to do with the modest charge for use by ferry boats of the harbour. It is logical to infer that new entrants into the market for ferry services are in no way inhibited by a charge of €0.80 per passenger but, rather, are more likely to hesitate in consequence of the economies of scale needed to source ferry boats and maintain offices and trained staff.
60. The summit of the argument on behalf of Island Ferries resolves to one of exclusionary pricing. Monopolies can certainly operate so as to shut out others through the lowering of prices, or through tying products to the acquisition of other services, or through exclusionary excessive pricing. These are merely examples abuse within the context of the classic test of a dominant undertaking behaving to an appreciable extent independently of the market. While Galway County Council has an effective monopoly, it is not to be condemned for that provided its position is not an abuse of the market; in other words the setting up of a situation that harms consumers. Rather, on these set of facts, it is the opposite. No competition is foreclosed or even warned off here. Competition between ferry operators is enhanced through a low individual rate of charge for accessing a modern harbour. The market is made certain as to costs and all consumers of harbour services for ferrying tourists are treated equally. In Dunleavy, Competition Law: A Practitioner’s Guide (Dublin, 2010) a useful summary of how exclusionary abuses can operate is set out at page 256 thus:
61. Throughout the argument in relation to the two sets of appeals in relation to both harbour charges for Ros a’ Mhíl and for Cill Rónáin, it has been continually asserted that price is the sole determinant in relation to competition law. That submission, however, while attractive is not supported by the relevant authorities. In every economic analysis, the value of the product to the consumer as well as the cost of producing it is relevant to pricing and in particular as to whether a price charged is fair, exploitative or inhibitive. Further, any submission based on the supposed unavailability of value as a relevant factor is not grounded in authority. In Scandilines Sverige AB v Port of Helsingborg  CMLR 1224 the Commission, in a decision signed by Commissioner Monti, analysed the tests set out above from the United Brands case in the context of differing charges for the use of the same port by ferry services and cargo shipping. Of themselves, different rates of charge are not necessarily abusive. At paragraph H7, the decision states:
Exclusionary abuses include predatory pricing, exclusive purchasing obligations, fidelity rebates, tying and bundling, refusal to supply and margin squeeze. A common feature of exclusionary conduct, although not a necessary requirement for a finding of abuse, involves the dominant undertaking reserving to itself an activity or market that is ancillary to that in which it holds a dominant position, thereby foreclosing competition in the ancillary market.
One of the best comparisons may be with substitutable products in the same market. Price, of itself, is not determinative. Where, as here, there are no substitutable products, the price charged for the goods or services in other markets may be compared. Lastly, value to consumers by reference to price may be of assistance. Here, however, the reality is inescapable that without the free provision of a harbour by the Government, there would be no safe means for ferry boats to access Cill Rónáin for the mass tourism market. While that is irrelevant, since Galway County Council obtained that harbour outside the parameters of the economic analysis applicable here, without a considerable annual subsidy, the price for use of the harbour would be considerably higher. Hence, it cannot be said that the local authority is in any way abusing its dominant position in controlling the harbour on Inis Mór.
It was important to note that the decisive test in United Brands focused on the price charged, and its relation to the economic value of the product. While a comparison of prices and costs, which revealed the profit margin, of a particular company might serve as a first step in the analysis (if at all possible to calculate), this in itself could not be conclusive as regards the existence of an abuse under [Article 102].
61. From 2004, the harbour charges at Ros a’ Mhíl increased markedly for the use of ferry services to the Aran Islands. Charges had, however, not increased for over 10 years. The Minister was entitled to increase charges provided that this was done in a manner which was fair, proportionate and avoided any arbitrary imposition. That is what the Act of the Oireachtas under which he had power to set charges required. As found by the High Court, on the particular facts of this case, the charges imposed were selected for the reason that a financial deficit in the finances of the 5 fishery harbours in Ireland had to be made up. Charges in Ros a’ Mhíl were thus made in order to eliminate a deficit. The selection of these charges was not fair because the purpose for which they were imposed was not in the legislation from which the Minister derived his power. In addition, as the High Court found, the social responsibilities pursuant to Government contract of Island Ferries in maintaining communications with the Aran Islands had not been taken into account in the pricing. Other factors found by the High Court as undermining the validity of the charges were soundly based on evidence. What happened, however, was a mistake in the setting of the charges and not any malicious decision. Hence, there was no misfeasance in public office. One of Island Ferries’ boats was seized under the relevant bye-laws because the new charges had not been paid. Given that the charges were invalid, that seizure was also wrong. It was an actionable trespass. In consequence, the reasoning of the High Court upheld on this appeal and there is no basis upon which this Court could interfere with the judgment of Cooke J. Damages as set were calculated in accordance with legal principle and are not to be disturbed.
62. From 2012, everyone ferrying passengers into Cill Rónáin on Inis Mór has been subject to a charge of €0.80 per individual. Previously, there had not been a charge for landing passengers there but the previous harbour had not been fit for purpose. The State constructed a new harbour, finishing work in 2011, for the use of all visitors to the Aran Islands. This work was undertaken to secure social inclusion. In no way has any State authority sought to recover through passenger charges the sum involved, which was close to €50 million. Instead, the authority responsible, which is Galway County Council, after intense debate, decided to impose a passenger use charge as a way of partially funding the year to year running costs of this new facility. These costs are an essential expenditure to ensure the harbour is run and maintained properly. Not all that expense is recovered from users. Galway County Council subsidises the harbour running costs to the tune of €70,000 per year. On the facts as found by the High Court, the charges on visitors using the harbour are both modest and reasonable. Galway County Council had ample statutory basis for imposing the charge. Any difference between the charge to visitors using the harbour and that of fishermen and cargo deliveries occurs within a particular factual matrix which is within the statutory powers of the local authority to take into account. There are differences in the two cases that have been heard together on this appeal, although what was challenged was harbour charges at two ends of the same journey. Firstly, charges were wrongly increased at Ros a’ Mhíl in order to make up a deficit in funding, but the necessity to charge for the first time in Cill Rónáin arose because a new harbour had been constructed and thus required income for its operation. Secondly, charges on landing at Cill Rónáin apply on a per passenger basis while those at Ros a’ Mhíl are structured differently. Thirdly, the Ros a’ Mhíl charges were imposed on an arbitrary basis, while Galway County Council set the charges for Cill Rónáin through a process of debate and analysis within the scope of their function. Fourthly, there is no question of Galway County Council making up a deficit through unfair charging; the substantial local authority subsidy has reduced the charges for all users, passengers, freight carriers and fisherfolk. Finally, ample authority exists for the imposition of the particular charges by Galway County Council for the use of its harbour at Cill Rónáin, unlike the way charges were set for Ros a’ Mhíl.
63. It was accepted on this appeal that Galway County Council was an undertaking exercising a dominant position in the supply of harbour services on the Aran Islands. It is not wrong in law to exercise a dominant position under the Competition Act 2002. What is forbidden is the exploitation of consumers through monopoly, or other unfair forms of, pricing. Such misuse of a dominant position can involve the artificial suppression of competition through abusive practices. On the facts as found by the High Court, there was no abuse of any dominant position by Galway County Council. Instead, the subsidy of the harbour service means that no other supplier would be likely to take over the running of the harbour if, as is even more unlikely, that extremely valuable asset were to be given to a potential competitor free of charge. There is thus no abuse by the local authority of its dominant position.
64. There is no basis, therefore, upon which any of these appeals can succeed. The order of the High Court in both sets of cases should thus be affirmed.