Ireland: High Court Clips Wings Of Licensing Bodies

On 14 August, 2014, the High Court delivered a judgment which will be of significant interest to applicants for licences and licensing bodies alike.  The judgment provides guidance on the proper, contextual, interpretation of such bodies' discretionary information-gathering powers, and on the limitations that can emerge as a result.  The judgment also holds that it may be unreasonable and unlawful to refuse a licence, even where validly-sought information is not provided by an applicant, if there is a disproportion between (i) the information not provided, and (ii) the consequences for the applicant of being refused a licence. 

Background

In this case, the applicant applied to the Revenue for particular types of fuel-traders' licences. 

The statutory licensing provision indicated that the applicant needed to provide information to enable the Revenue:

  1. to specify the licensed activities and conditions regarding suitability of premises, and so on; and
  2. to establish whether the applicant had been convicted of certain offences; whether it had a current tax clearance certificate; and whether it was able to satisfy the Revenue that it, or the premises, could fulfil whatever conditions the Revenue might impose.  

Nevertheless, the Revenue additionally sought information and records relating to matters that were the subject of separate statutory powers to investigate tax evasion and separate requirements on a licensed applicant to retain certain records.  In doing this, they relied on a power in the licensing provision to seek "...such information as they [might] reasonably require..."

The Revenue considered that an applicant was obliged to provide any information that they might reasonably require for the purpose of discharging their statutory remit generally.  They warned the applicant that failure to provide any of the additional information might result in a refusal of the traders' licences, without which, the Court subsequently noted, the applicant's business would be extinguished. 

The Revenue went on to refuse the licences in light of the non-provision by the applicant of the 'additional' information. 

Judicial Review

The applicant applied for judicial review to quash the refusal.  Amongst other things, it claimed:

  1. that the additional information-requirements imposed by the Revenue were beyond its powers; and
  2. that in any event, refusal of the licences was disproportionate to the non-provision of information concerned, and therefore unreasonable and beyond the Revenue's powers

The Court quashed the Revenue's refusal on both of these grounds. 

Contextualising of the Power

Citing the Supreme Court decision in Fuller v Minister for Agriculture [2005] 1 IR, 529, it applied a contextual approach to statutory interpretation which served to group and 'compartmentalise' different statutory powers and functions, and thus to confine them to their proper contexts and limits, thereby also avoiding the blurring, conflating and inflating of the provisions that resulted from the Revenue's approach. 

Proportionality of Refusal

In also quashing the refusal on the alternative ground of unreasonableness by reason of disproportionality, the Court adverted to the decisions of the Supreme Court inMeadows v Minister for Justice [2010] 2 IR 701, and of the High Court in Radio Limerick One v IRTC [1997] 2 IR 291 and Heaney v Ireland [1994] 3 IR 593.  Noting that the applicant's business would be extinguished without the licences concerned, and that the Revenue had refused to grant the licences on the ground that the applicant had failed to provide certain records which separate Regulations required it to maintain in any event (and on pain of criminal sanction), the Court held that this was so disproportionate as to be unreasonable, and therefore legally invalid.  This was so, even if one assumed for this purpose that the Revenue's information-requirements were intra vires (which the Court had earlier held they were not).

Relevance of Availability of Appeal

The Court further declined to refuse relief on the basis that a statutory appeal was available to the applicant, noting that the applicant had not availed of the appeal, and more fundamentally, that the applicant was entitled to a properly-made decision in the first instance, before it invoked any appeal.

To read the full judgment, click here: McPartland Oils Ltd -v- The Revenue Commissioners

Comment

This decision represents yet another Superior Court lesson in the dangers of over-reaching by licensing and other bodies.  It shows how they can fall into the general trap of reading apparently broad discretionary information-gathering powers as being wider than they are.  It also shows how they can err in thinking that such powers must implicitly empower them to seek information or documentation relevant to their other powers, functions or duties.  This even extends to ones they might exercise in relation to the particular licence-applicant, once licensed, or ones they might be in the course of exercising in relation to an existing licensee which is seeking a fresh licence. 

It highlights the importance of the proper and rigorous interpretation and application by licensing and other bodies of information-gathering powers.  Where this is of assistance, this should be done by reference to the statutory context and any discernible statutory 'compartments' in which the powers are found, and against which different powers may be distinguished. 

The decision also advances the line of authority being developed by the Courts whereby decisions of public bodies may be quashed on the ground of disproportionality.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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