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[2012] JMSC Civ. 91
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CLAIM NO. 2012 HCV 03318
BETWEEN DIGICEL (JAMAICA) LIMITED APPLICANT
AND THE OFFICE OF UTILITIES RESPONDENT
REGULATION
Mr. Michael Hylton Q.C., Mrs. Symone Mayhew and Mr. Kevin Powell, instructed by Michael Hylton and Associates for the Applicant.
Mr. Allan Wood Q.C. and Mrs. Daniella Gentles-Silvera, instructed by Livingston Alexander & Levy for the Respondent.
Mr. Ransford Braham Q.C., Mrs. Denise Kitson and Mrs. Suzanne Risden-Foster instructed by Grant Stewart Phillips & Co. for the interested party Cable and Wireless Jamaica Limited “Lime”.
Heard: 15th^ , 21st^ , 25th^ , 29th^ June and 4th^ , 5th^ and 12th^ July 2012
APPLICATION FOR LEAVE TO APPLY FOR JUDICIAL REVIEW – THRESHOLD TEST – ARGUABLE GROUNDS WITH REALISTIC PROSPECT OF SUCCESS – FLEXIBILITY OF TEST – DIFFERENCES BETWEEN STAY AND INTERIM INJUNCTION
MANGATAL J
[1] This is an application by Digicel (Jamaica) Limited “ Digicel” pursuant to Part 56 of the Civil Procedure Rules 2002 “the CPR”, seeking leave to apply for judicial review and seeking that the grant of leave operate as a stay.
[2] Digicel is a limited liability company and is a provider of telecommunication services. It is the holder of licenses issued under the Telecommunications Act, 2000 (as amended) (“the Telecoms Act”) and is subject to regulation by the Office of Utilities
Regulation “the OUR”.
[3] The OUR is a body corporate established under section 3 of the Office of Utilities Regulation Act, “the OUR Act” and is the Respondent to this application. The OUR is empowered to regulate the telecommunications sector pursuant to powers under section 4 of the OUR Act and section 4 of the Telecoms Act.
[4] Cable and Wireless Jamaica Limited t/a Lime, “Lime”, is a limited liability company and is a telecommunications provider licensed pursuant to the Telecoms Act, and is also subject to regulation by the OUR. Lime is one of two mobile carriers in the telecommunications market in Jamaica, the other carrier being the applicant, Digicel.
[5] On the 15th^ of June 2012 Digicel’s application for leave to apply for judicial review was set before me for hearing ex parte. On that date, after I had had some time to reflect upon the issues involved, I directed the applicant Digicel to give notice of the hearing to the OUR and to the Attorney General pursuant to Rule 56.4(4) of the Civil Procedure Rules 2002 ”the CPR”. The application was then fixed for the 21 st^ of June
[6] On the 21 st^ of June 2012 Attorneys-at-Law representing the OUR attended the hearing and so too did Attorneys-at-Law for Lime. Lime had just prior to the hearing filed an application seeking leave to intervene and be added as a party, or in the alternative that it be heard on the application for leave and for stay. Lime’s application was heard on the 25 th^ of June 2012. At this juncture, Queen’s Counsel Mr. Braham, who appeared on behalf of Lime, indicated that Lime had decided not to pursue at this time the application to be added as a party, and was seeking only to be heard upon Digicel’s application. Mr. Michael Hylton Q.C., lead Counsel for Digicel, stated that Digicel would not oppose Lime’s application to be heard on the question of whether leave should operate as a stay, but indicated its opposition to Lime being heard on the question of leave.
c. One of the amendments to the Act created a new section 37A which provides that the OUR may set interim connection charges and an interim price cap for retail rates for telecommunications services. d. The Act does not specifically provide for the circumstances in which the Office may exercise its powers under section 37A of the Act. Furthermore, the full magnitude of the proposed amendments was not announced in the Government’s own ICT Policy which was finalized in March 2011, and that policy has not been updated in any way. e. The Applicant launched its mobile telecommunications service in Jamaica in 2001 based on: i. interconnection rates (a) with the incumbent fixed network operator that were determined by the OUR further to a consultation process and/or agreed with the fixed network operator and(b) agreed with other mobile telecommunications network operators, all of which have been charged and paid (with some adjustments) by the various operators since then; ii. the right to set its own retail rates (including the retail rates from the incumbent Lime’s fixed network to the Applicant’s mobile network); and iii. the legitimate expectation that the OUR would always abide by the rules and procedures under the Act and the rules of natural justice. f. It could not have been intended that in exercising any powers under section 37A of the Act the OUR could overrule the established rates described in paragraph e. above without first consulting the Applicant or giving the Applicant an opportunity to be heard. g. Section 4(2) of the Act provides that in making a decision in the exercise of its functions under the Act the OUR shall observe reasonable standards of procedural fairness, act in a timely fashion and observe the rules of natural justice. h. The new section 37A provides that in exercising its powers under that section, the OUR is not subject to section 4(2) of the Act. i. Interim interconnection charges could have serious effects and consequences on all affected licensees under the Act, including the Applicant, and it could
not have been intended that in exercising any powers under section 37A of the Act, the OUR would not be bound to observe and follow the rules of natural justice as guaranteed by the Constitution of Jamaica and the common law. j. On May 8, 2012 the Applicant’s attorneys wrote to the OUR informing them of the Applicant’s interpretation of the application of the new section 37A including that any decision that the OUR intends to make under that section would be subject to the rules of natural justice and that the section should not apply where permanent rates are already in place. k. On May 15, 2012 the OUR responded indicating, among other things, that it does not agree with the Applicant’s interpretation of the application of section 37A. l. On June 4, 2012 the OUR issued the Determination without following the standards of procedural fairness or observing the rules of natural justice. m. The Determination was made in breach of the legitimate expectation of the Applicant that the Applicant would be consulted and/or given an opportunity to be heard before any decision or determination is made by the OUR affecting the Applicant or the Applicant’s licence. n. The OUR erred in law and/or acted irrationally by: i. Making the determination in circumstances where long standing permanent rates are in place, having been made with the consultation and approval of the OUR and an interim interconnection rate is not necessary or justified. ii. Making the Determination in circumstances where there is an ongoing process to reviewing mobile termination rates in Jamaica and it is scheduled to be concluded in September 2012. iii. Failing to consider that lower mobile termination rates may also lead to higher retail costs. iv. Using inaccurate and incomplete data to calculate a Herfindahl Hirshman index to determine the competitiveness of the mobile market; v. Failing to consider that the other existing telecommunications licensees
filed, one on the 21st^ of June,^ and two on the 25 th^ of June 2012 respectively.
[15] In order to properly appreciate the statutory framework within which the OUR has been established to operate, it is necessary to have regard to the objects of the Telecoms Act and the functions, mandate, powers and duties of the OUR.
[16] Amongst the objects of the Telecoms Act (section 3) are to promote and protect the interest of the public, by promoting fair and open competition in the provision of specified services and telecoms equipment, providing for the protection of customers, and promoting universal access to telecommunications services for all persons in Jamaica, to the extent that such access is reasonably practicable. The OUR is required to facilitate the achievement of these objects in a manner consistent with Jamaica’s international commitments in relation to the liberalization of telecommunications. Additionally, the OUR must promote the telecommunications industry in Jamaica by encouraging economically efficient investment in, and use of, infrastructure to provide specified services. By virtue of section 4(1) of the Telecoms Act, the OUR is required to, amongst other things, regulate specified services, promote the interest of customers, while having due regard to the interests of carriers and service providers, and promote competition among carriers and service providers.
[17] Sub-section 4(2) of the Telecoms Act, states as follows: 4(2) In making a decision in the exercise of its functions under this Act the Office shall observe reasonable standards of procedural fairness, and observe the rules of natural justice, and, without prejudice to the generality of the foregoing, the Office shall- (a) consult in good faith with persons who are or are likely to be affected by the decision; (b) give to such persons an opportunity to make submissions to and to be heard by the Office; (c) have regard to the evidence adduced at any such hearing and to the matters contained in any such submissions;
(d) give reasons in writing for each decision; (e) give notice of each decision in the prescribed manner.
[18] Section 37 A reads as follows: 37A-(1) Subject to subsection (2), the Office may set interim interconnection charges and an interim price cap for retail rates for telecommunications services. (2) Interim interconnection charges and interim price caps for retail rates set pursuant to subsection (1) shall – (a) be applicable for a defined period, being a period not exceeding twelve months; (b) be established, pending the completion of the process to determine interconnection charges or to make price cap rules, as the case may be, in accordance with sections 4(2), 33 and 46. (3) When setting an interim interconnection charge or an interim price cap for retail rates, the Office shall have regard to reciprocity, local or international benchmarks or such other relevant data or information as may be available to the Office, from time to time. (4) In the event that the Office is unable to determine interconnection charges or make price cap rules for retail rates before the expiration of the defined period, the Minister may extend the application of the interim rates or interim price caps for retail rates for a further period, being a period not exceeding six months. (5) If after the further period, the interconnection charges or price cap rules for retail rates are still not determined by the Office, the mid-point between the interconnection charges or retail rates that were applicable before and after the setting of the interim interconnection charges or interim price cap rules for retail rates shall apply until such determination is made by the Office, but shall not have retroactive effect. (6) The power of the Office to set interim interconnection charges or interim price cap for retail rates under this section shall not be subject to the provisions of section 4(2), 33, 46, 60 or 62.
terms, just as judicial vigilance is underpinned by the rule of law, so judicial restraint is underpinned by the separation of powers”. It is part of the Court’s function when it dons its “review hat” to be astute to avoid applications being made by busybodies with hopeless, weak, misguided or trivial complaints. Public authorities need protection from unwarranted interference and plainly, the business of government could grind to a halt and good administration be adversely affected if the Courts do not perform this sifting role efficiently and with care. It must for example, in the field of commercial endeavour, ensure that its processes are not used or misused as a mere ploy in competition battles, or take-over or acquisition strategies, or used for ulterior motives such as obstructing or delaying a public authority from carrying out its statutory duties with a view to maximizing profit. Nor should it allow its process to be used to put a competitor out of business- in relation to this latter see The Business of Judging, Selected Essays and Speeches by Senior Law Lord Tom Bingham, cited by OUR’s Attorneys. Thus the Court has to balance these types of considerations with the citizen’s right to seek redress and protection against abuse of public power. It has to decide whether to give the green light for an applicant to proceed with a claim for judicial review.
THRESHOLD TEST [22] Whilst Rule 56.3(1) of the CPR states that in order to claim judicial review, leave must first be obtained, the Rules are silent as to the threshold that must be crossed in order to obtain the leave. It has been accepted in a number of unreported local decisions, namely Rv. IDT ex parte Wray and Nephew Ltd. 2009 HCV 04798, a decision of Sykes J. delivered 23 October 2009, Coke v. Minister of Justice et al 2010 HCV 02529, a decision of McCalla C.J., delivered 9 June 2010, and my own decision in Tyndall et al v. Carey 2010 HCV 00474, delivered 12 February 2010, that the test as explained by the Judicial Committee of the Privy Council in Sharma v. Brown-Antoine [2007] 1 WLR 780, is the applicable test.
[23] In Sharma , it was held that there must be an arguable ground with a realistic prospect of success. At page 787, (4) of the joint opinion of Lord Bingham and Lord Walker, it is stated as follows:
(4) The ordinary rule now is that the court will refuse leave to claim judicial review unless satisfied that there is an arguable ground for judicial review having a realistic prospect of success and not subject to a discretionary bar such as delay or an alternative remedy; see R v. Legal Aid Board, ex p Hughes (1992) 5 Admin LR 623, 628 and Fordham, Judicial Review Handbook 4th ed. (2004), p.426. But arguability cannot be judged without reference to the nature and gravity of the issue to be argued. It is a test which is flexible in its application. As the English Court of Appeal recently said with reference to the civil standard of proof in R (N) v. Mental Health Review Tribunal (Northern Region([2006] QB 468, paragraph 62, in a passage applicable mutatis mutandis, to arguability: “ the more serious the allegation or the more serious the consequences if the allegation is proved, the stronger must be the evidence before a court will find the allegation proved on the balance of probabilities. Thus the flexibility of the standard lies not in any adjustment to the degree of probability required for an allegation to be proved (such that a more serious allegation has to be proved to a higher degree of probability), but in the strength or quality of the evidence that will in practice be required for an allegation to be proved on the balance of probabilities. ” It is not enough that a case is potentially arguable: an applicant cannot plead potential arguability to “justify the grant of leave to issue proceedings upon a speculative basis which it is hoped the interlocutory processes of the court may strengthen”: Matatulu v. Director of Public Prosecutions [2003] 4 LRC 712,733. (My emphasis)
[24] Then at page 789(6) it is stated: (6) Where leave to move for judicial review has been granted, the court’s power to set aside the grant of leave will be exercised very sparingly: R. v. Secretary of State for the Home Department, Ex p Chinoy (1991) 4 Admin LR 457, at 462. But it will do so on inter partes argument that the leave is one that plainly should not have been granted: ibid. These passages were cited by Simon Brown J in R v. Secretary of State for the Home Department, ex p Sholola [1992] Imm AR 135
with a realistic prospect of success. These expressions are really conclusions.
[27] In the instant application, whilst Digicel, the OUR and Lime all agree that the applicable test is that set out in Sharma , there are differences as to just how varied or flexible the test is, especially as to whether there are differences when the application is being considered ex parte or is the subject of inter partes hearing.
[28] It was Queen’s Counsel Mr. Hylton’s submission that the flexibility of the test is based on the arguability of the claim sought to be made and this must be considered in the context of the nature and gravity of the issue to be argued. It was further submitted that the test would be equally applicable whether the application is heard ex parte or at an inter partes hearing. I think that the test is in truth equally applicable whether the application is made ex parte or is the subject of an inter partes hearing. However, it is clear that where it is felt by the Court that, because of the serious nature and gravity of the issues to be argued, or the seriousness of the consequences if the allegation is proved, or the urgency of its resolution, that the application for leave ought to be determined at an inter partes hearing, the judge does have to look at all of the evidence and submissions relevant to the question of arguability, including that put forward by the respondent. Whilst it is not for the respondent to deploy his whole case that would be considered on a substantive hearing, the judge cannot assume that the facts or allegations put forward by the applicant are true, in order to decide whether there are arguable grounds with a realistic prospect of success. Further, it could hardly be appropriate that the judge, having sought to have the respondent present at the hearing, would ignore the basis upon which the respondent argues that there is no arguable ground with the requisite prospects of success. Whilst the Court must not engage in a full-scale delving into the issues such as would be appropriate after leave were granted, it follows, and I therefore agree with Queen’s Counsel Mr. Wood, that in those circumstances a more rigorous examination of the evidence or arguments may be employed. In the present case, I have had the benefit of very detailed submissions and the hearing has taken place over a number of days. It is relevant that in judicial review proceedings, although the power exists to order cross-examination, it is rarely
exercised. This is because the court in judicial review proceedings is not generally concerned with resolving factual disputes. Therefore, at this stage, since the judge cannot assume that the facts or allegations put forward by the applicant are true, one would have to look at the evidence on paper and decide, where there are any conflicts of evidence, why what one party says is more persuasive than the other, and to see whether, having regard to all the relevant material, there are sufficient grounds raised requiring the matter to proceed for further investigation. At paragraph 21.1.2(C) of the Fordham, it is suggested that the Court’s task in deciding whether to grant leave and whether a case meets the threshold is essentially the same whether the papers are few or voluminous, or whether the putative issues are simple or complex. Further, that there should be no greater tendency to grant leave in a complex than in a simple case. I think that the Sharma test described by the Privy Council as “flexible in its application” supports that reasoning.
[29] I also agree with Mr. Wood that on points of law, such as statutory construction, it cannot be ignored that the judge at the leave stage who has had the benefit of an inter partes hearing may well be in no less a position to construe the point of law than the judge at the substantive hearing. The well-known decision of the Judicial Committee of the Privy Council, emanating from the Jamaican Courts, in N.C.B. v. Olint [2009] UKPC, 16 in relation to interlocutory injunctions, was cited by learned Queen’s Counsel Mr. Hylton in relation to the question of the principles applicable if the stay amounts to an injunction. In that case the Privy Council took a very robust approach to examining questions of law. Indeed, to my mind the Board appeared to encourage such an examination, when at an interlocutory or early stage a Court is being asked to examine whether, in relation to points of law, there are serious issues to be tried. This search for “whether there are serious issues to be tried”- referred to by Lord Diplock in the oft-cited passage of American Cynamid [1975] A.C. 396, at page 407, was also interchangeably referred to by the learned Law Lord, at page 408A, as an examination of the material available to the court, to see whether it discloses that the claimant has “real prospects of succeeding” in his claim for the permanent injunction at trial. This arguably suggests that there is not a great deal of difference between the criteria and
21. The OUR considers these to be valid reasons for exercising its powers under section 37A and in keeping with its obligation under section 4(1) of the Telecoms Act to promote the interests of customers, while having due regard to the interests of carriers and service providers and to promote competition among carriers and service providers.
[31] Digicel’s application seeks to obtain leave to apply for certiorari to quash the Determination Notice setting the interim MTR, which rate the OUR as regulator decided was needed in the relevant sector. At paragraph 2.1 of the Determination Notice it is stated that having an MTR that is significantly above cost could distort the proper functioning of the markets and retard the level of competition. To my mind there can be no question but that this challenge has the potential of having very serious implications and a significant impact on a wide cross-section of the Jamaican public.
[32] It is Digicel’s position that, (see paragraph 20 of its written submissions dated 21 st^ June 2012), that even in the absence of section 4(2), the OUR would be bound to observe the rules of natural justice, including giving Digicel a right to be heard before making a decision which will affect it. It was submitted that in the absence of clear words in the statute indicating an intention to overrule the common law rules, section 37A(6) should not be interpreted as doing so. However, according to the OUR’s written submissions dated 28 th^ June 2012, (see paragraph 14), it was in the factual/historical context that the OUR had not been able to fix interconnection charges for dominant carriers for eight years, due to the stalling of the process, amongst other reasons, that Parliament by section 37A enacted that the power conferred on the OUR to set an interim interconnection charge would not be subject to the provisions of section 4(2) of the Act and nor would it be subject to any appeal under section 62. Further, in Lime’s written submissions dated 4 th^ July 2012, at paragraph 29 , Lime stated that sections 60 and 62, which have been excluded from operation by section 37A(6), deal with the grant of stays by the OUR and the Appeals Tribunal. It was further submitted that by excluding the application of sections 60 and 62 Parliament is demonstrating a clear intention that stays ought not to be granted when the OUR acts under section 37A.
[33] In my view, the relevance of these points to the manner in which the flexible test for granting leave should be applied, is that if leave is granted, then one of the very things which according to the OUR and Lime, if they are correct, Parliament intended to prevent, i.e. further delays and protracted, drawn-out proceedings, may well result. The OUR presently anticipates that the consultative process on the final MTR will be completed by September 2012. It is very unlikely that if leave is granted a hearing of the substantial judicial review could take place before the end of September. In my judgment, Mr. Hylton is correct that in the present case the Court is not dealing with allegations of the same level or order of gravity as those involved in the Sharma case. However, having regard to the uncontested aspects of the preceding historical context of the telecoms industry, and the potential consequences of this application, the situation can be described as being potentially at somewhat of a “cross-roads”. Due to the very serious nature of the issues and potential consequences, in my judgment these are grave and serious allegations that require their arguability to be demonstrated with considerable strength or quality in order to meet the required threshold. Whilst I bear in mind that a ground with a realistic prospect of success is not the same thing as a ground with a real likelihood of success, the point however is that the prospect of success has to be realistically and amply demonstrated.
SUFFICIENT INTEREST [34] I am satisfied that the criteria of sufficient interest has been met. The OUR’s decision fixes interim mobile termination rates. Digicel is a provider of mobile services and is directly regulated by the OUR. It plainly has a sufficient interest in the matter- Rule 56.3(h).
PROMPTNESS OF THE APPLICATION [35] I am satisfied that this application fulfills the requirements of Rule 56.6(1) of the CPR, that is, that it was made promptly, and in any event , within three months of the date when grounds for the application first arose. The Determination was dated June 4 2012, and made public on June 5 2012. The application was filed on June 13 2012.
[38] Mr. Wood Q.C. referred me to a number of authorities, including Bennion on Statutory Interpretation, 5th^ Edition, pages 585-589, and Halsbury’s Laws of England, 4th Ed. Vol. 44(1) at paragraphs 1414, and 1415, as to the informed interpretation rule. It was submitted that as with any other legal instrument, the construction of an enactment of Parliament must be informed by the relevant context of that enactment, including all matters that might illumine the text. This is to be distinguished from the situation where ministerial papers and statements recorded in Hansard may in exceptional circumstances be admitted to resolve an ambiguity.
[39] In its submissions on this point, the OUR submitted initially that the factual/historical context to the enactment of section 37A was that the fixing of the interconnection charges for dominant carriers pursuant to section 33 of the Act had been stalled and delayed for eight years and continued to be frustrated by continuing flagrant breach by Digicel of its statutory obligation to provide the requisite information so that the process could be completed. It was submitted that it was in this context that the power conferred on the OUR, would not be subject to the provisions of s 4(2) of the Act which required the OUR, to comply with the rules of natural justice, and nor would it be subject to any right of appeal. Ample opportunity had already been given, it was argued, for consultation and for the application of the rules of natural justice and the legislature was now clearly requiring the OUR to act by conferring the power to fix an interim rate. Further, that the exercise of the power should not be subject to being further delayed or frustrated by reference to rules of natural justice and consultation and then appeals.
[40] Mr. Hylton Q.C. did not dispute that the construction of the relevant provision in the Act must be informed by the relevant facts. However, Digicel claimed that the OUR’s submissions refer to a factual background which is disputed by Digicel, and on which the evidence is contradictory. It was Digicel’s posture that it did not attempt to, or deliberately delay the process as alleged by the OUR. Indeed, Digicel alleges that at certain points, it was the OUR that was itself guilty of delay. Further, Mr. Hylton Q.C. referred to the Memorandum of Objects and Reasons For the Act, and submitted that
this document does not suggest in any way that the Act was a response to Digicel or anyone else delaying the OUR in setting mobile termination rates. It was argued that this is also in line with the fact that section 37A is a general power to set interim connection charges and retail caps and is not focused on the mobile termination rates alone.
[41] In response, Mr. Wood Q.C. modified his original submission and said that we need not get into any issue as to who was responsible for the delay. This, he submitted, is because it is an objective fact that the matter of mobile termination rates should have been regulated from 2004 and that for eight years this has not occurred. Mr. Wood disagreed that the Memorandum of Objects and Reasons did not suggest that there was any urgency to the situation. On the contrary, he said that even if it was not spelt out, the language was “pregnant” with the needs, speaking as it does to the inadequacy of the current legislation to meet a liberalized and converged ICI environment. He also indicated that this memorandum should be read with Prime Minister Golding’s Statement to Parliament in August 2011, exhibited to Miss Cameron’s Second Affidavit. Mr. Golding, who was the Minister of Telecommunications at the time of Digicel’s acquisition of Claro, spoke about the fact that one of the issues that arose for consideration was the impact that the acquisition would have on the level of competition within the mobile telecommunications market and in that regard, concern was expressed about the wide disparity that exists in relation to termination rates among carriers. He also spoke of the urgent need for amendments to the legislation and how the issue had brought into sharp focus the need to strengthen the legal and regulatory framework for the telecommunications industry, to bring it in line with contemporary best practices and ensure that the interest of the consumer is paramount.
[42] In my view, on the objective facts to be gleaned from the evidence presented, it seems clear that the context in which the amendment came into being, specifically section 37A, was one where, separate and apart from whether any one player or party was to blame, there had been an over eight year lapse in the determination of mobile interconnection rates. Deadlines for consultation had passed without information
