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Ref. Ares(2022)8842896 - 20/12/2022
THE HIGH COURT 
 
[2001 No. 707 J.R.] 
BETWEEN 
AER RIANTA CPT 
APPLICANT 
AND 
THE COMMISSIONER FOR AVIATION REGULATION  
RESPONDENT 
AND  
BY ORDER OF THE HIGH COURT 
AER LINGUS LIMITED AND RYANAIR LIMITED  
NOTICE PARTIES 
JUDGMENT of O’Sullivan J. delivered the 3rd of April, 2003. 
 
 
INTRODUCTION 
The applicant (“Aer Rianta”) is the operator of three international airports at 
Dublin, Cork and Shannon, and the respondent (“the Commissioner”) is the sole 
member of the Commission for Aviation Regulation established by s.5 of the Aviation 
Regulation Act, 2001, with the function, inter alia, of specifying maximum levels of 
airport charges that may be levied at the above airports by the applicant.   
Such charges were ultimately determined by the respondent in a “varied 
determination” dated the 9th February, 2002, and took the form, where relevant to these 
proceedings, of setting a maximum charge or cap per passenger chargeable by the 
applicant to the users of the airports which include the notice parties. 
 

 

 
This varied determination is subject to a wide ranging judicial review challenge 
in these proceedings.  I will refer to the specific challenges being dealt with in this 
judgment at a later point. 
 
Following an initial application I delivered judgment on 16th January, 2003, in 
which I excluded a number of the challenges sought to be made by the applicant based 
on error allegedly made by the respondent in his calculation of the maximum charge. 
 
Subsequently, having held a formal case conference, I made a further ruling 
directing certain issues to be tried at this stage of the proceedings and postponing other 
issues, designated “process” issues, relating to alleged want of fair procedures, to a 
later stage.   
 
In this judgment, accordingly, I now deal with a number of substantial issues 
which are largely, but not exclusively, directed to questions of statutory interpretation 
and application.   
 
 
THE STATUTORY CONTEXT 
 
Because of the nature of the issues now being dealt with it is necessary to set out 
in some detail the relevant statutory provisions.    
 
 
The Air Navigation and Transport (Amendment) Act, 1998 
 
The applicant was established in 1937 as a holding company for the first notice 
party and to promote aviation generally.  For the first three years flights were from 
Baldonnell Co. Dublin until Collinstown Airport, as it was then called, commenced 
operations in 1940.  In 1950 the applicant was given statutory responsibility to manage 
this airport as agent for the relevant government minister and 19 years later took over 
the same responsibility in relation to Shannon and Cork airports.  Ownership of these 
 

 

airports was vested in the relevant minister until 1998.  Accordingly in the years prior to 
that date the airports were owned by the relevant minister and managed for him as his 
agent by the applicant.   
 
The purpose of the Act of 1998 was to bring about a fundamental change by 
vesting ownership of the airports in the applicant and reorganising its powers and 
duties.  Under the Act of 1998 the Minster for Finance is the holder of the share capital 
of the applicant. 
 
 Section 2 of the Act of 1998 provides the following definitions: 
“The word “aerodrome” means any definite and limited area (including water) 
intended to be used, either wholly or in part, for or in connection with the 
landing or departure of aircraft; 
 (imported from s.2 of the Air Navigation and Transport Act, 1936).   
…  
“airport” means the aggregate of the lands comprised within an aerodrome and 
all land owned or occupied by an airport authority, including aircraft hangars, 
roads and car parks, used or intended to be used in whole or in part for the 
purposes of or in connection with the operation of aerodrome; 
“airport authority” means the person owning, whether in whole or in part, or 
managing, either alone or jointly with another person, an airport; 
 
“airport charges” means – 
(a) charges levied in respect of the landing, parking or taking off of aircraft 
at an aerodrome including charges for air-bridge usage but excluding 
charges in respect of air navigation and aeronautical communications 
services levied under section 43 of the Act of 1993,  
 

 

(b) charges levied in respect of the arrival at or departure from an airport by 
air of passengers, or 
(c) charges levied in respect of the transportation by air of cargo, to or from 
an airport,  
as may be appropriate; 
… 
“the Authority” means the Irish Aviation Authority;… 
“the company” means Aer Rianta, cuideachta phoiblí theoranta;… 
 “the Minister” means the Minister for Public Enterprise.” 
The following sections of the Act of 1998 provide: 
“10. – (1) The Minister shall by order appoint a day to be the vesting day for the 
purposes of this Act as soon as practicable following the commencement of 
this Act. 
…  
 14. – (1)  On the vesting day, all lands, which immediately before that day    
were– 
(a) vested in the Minister or used or intended to be used in connection 
with- 
(i) a function of the Minister corresponding to a function conferred 
on the company by section 16, or 
 
(ii) the provision of terminal services at an airport,  
or  
(b) held by the company in trust for the Minster,  
 
 

 

(which lands comprised the airports known as Dublin Airport, Cork and 
Shannon Airport) and all rights, powers and privileges relating to or 
connected with such lands shall, without any conveyance or assignment and, 
subject to subsection (2), stand vested in the company for all the estate or 
interest therein which immediately before the vesting day was vested in the 
Minister but subject to all trusts and equities affecting the lands subsisting and 
capable of being preformed. 
…  
 
    (5)  On the vesting day the company shall, in respect of the lands and other 
property vested in the company under this section, pay to the Minister for 
Finance such amount as the Minister for Finance, with the consent of the 
Minister, may determine. 
 
  …   
16. – (1) The company shall manage and develop the airports vested in it by 
section 14 and any other airport that may from time to time be 
established or owned by the company pursuant to subsection (3).   
 
(2) The company shall ensure the provision of such services and 
facilities as are, in the opinion of the company, necessary for the 
operation, maintenance and development of a State airport, including 
roads, bridges, tunnels, approaches, water supply works and water 
mains, gas works and gas pipelines, sewers and sewage disposal works, 
electric lines, telecommunications facilities, lights and signs, apparatus, 
equipment, building and accommodation of whatever kind. 
 
(3) The company may, with the consent of the Minister given an after 
consultation with the Minister for Finance and subject to such 
 

 

conditions as the Minister may determine, establish a new airport or 
become the owner in whole or in part or manager of an existing airport. 
… 
17. – (1) The company may acquire by agreement or, in accordance with the 
Second Schedule, compulsorily, any land, easement, interest in or other 
right over land, or any water right, for any one or more of the purposes 
described in section 18. 
… 
18. – (1) The purposes for which land may be acquired under section 17 are as 
follows: 
(a) to extend or develop an airport belonging to the company or 
establish and airport; 
…  
 
 
   (d) to develop civil aviation at a State airport; 
 
 
   (e) to carry out the principal objects of the company. 
 
    … 
 22. – (1) The company and its subsidiaries shall take such steps as may be 
necessary under the Companies Acts to alter their memoranda and 
articles of association for the purpose of making them consistent with 
this Act. 
 
… 
23. – (1) The principal objects of the company shall be, and shall be stated in 
its memorandum of association to be – 
(a) to own, either in whole or in part, or manage, alone or jointly with 
another person, airports whether within the State or not,  
 

 

(b) to take all proper measures for the safety, security, management, 
control, regulation, operation, marketing and development of its 
airports,  
(c) to provide such facilities, services, accommodation and lands at 
airports owned or managed by the company for aircraft, passengers, 
cargo and mail as it considers necessary, 
 
 
(d) to promote investment at its airports, 
(e) to engage in any business activity, either alone or in conjunction with 
other persons and either within or outside the State, that it considers to 
be advantageous to the development of the company, and  
(f) to utilise, manage and develop the human and material resources 
available to it in a manner consistent with the objects aforesaid.   
… 
24. – (1) It shall be the general duty of the company – 
  (a) to conduct its affairs so as to ensure that the revenues of the    
company are not less than sufficient taking one year with another to – 
(i) meet all charges which are properly chargeable to its revenue 
account, 
(ii) generate a reasonable proportion of the capital it requires, 
and 
(iii) remunerate its capital and pay interest on and repay its 
borrowings, 
(b)  to take such steps either alone or in conjunction with other 
persons as are necessary for the efficient operation, safety, 
management and development of its airports,  
 

 

(c) to conduct its business at all times in a cost-effective manner, and 
(d)  to regulate operations within its airports. 
 
(2) Nothing in section 23, this section or the memorandum of 
association of the company shall be construed as imposing on the 
company, either directly or indirectly, any form of duty or liability 
enforceable by proceedings before any court to which it would not 
otherwise be subject.   
 
(3)  In carrying out its functions, the company shall have regard to – 
(a) the development of air transport,  
(b)  any policy, financial or other guidelines given by the Minister to 
the company, in relation to the functions conferred on the company by 
or under this Act, and 
(c)  the safety standards in relation to the operation of aircraft and air 
navigation applied and in force by the Authority. 
… 
38. – (1) The Minister may give a direction in writing to the company 
requiring it - 
(a)  to comply with policy decisions of a general kind made by the 
Minister in relation to the functions assigned to the company by or 
under this Act, or 
(b) to do or refrain from doing anything to which a function of the 
company relates, the doing, or refraining from doing of which is, in 
the opinion of the Minister, necessary or expedient in the national 
interest.   
 

 

 
 
(2) If the company considers that compliance by it with a direction under 
subsection (1) would adversely affect the safety of aircraft it shall so inform 
the Minister and the Authority 
 
    (3) The Minister shall, in amending or revoking a direction under this 
section, have regard to any information received by him or her under 
subsection (2). 
 
   
(4)  The company shall comply with a direction under this section. 
39. – (1)  The company may require the payment to it of airport charges, in 
respect of the use of a State airport, at such rates as it may, from time to time, 
with the approval of the Minister, determine. 
 
 
(2)  Liability for the payment of any charge payable by virtue of 
subsection (1), together with interest on such charges in respect of any period 
during which the charges were due but not paid, may be imposed upon the 
operator or registered owner of an aircraft, whether such aircraft is registered 
in the State or is not so registered, or upon both those persons. 
 
…   
42. - (1) The company may make bye-laws in relation to a State airport. 
… 
 
(3) Bye-laws under this section may be made for any one or more of the 
following purposes, that is to say – 
… 
(f) the proper management, operation, safety, security and supervision 
of an airport or part thereof. 
… 
 

 
10 
47. – (1) It shall not be lawful for a person to interfere in any way with 
anything provided for the purposes of the operation, management or 
safety of an airport. 
 
 
(2) A person who contravenes subsection (1) shall be guilty of an 
offence.” 
 
 
Aviation Regulation Act, 2001 
 
This act became law on 21st February, 2001 and on the 27th February, 2001, the 
respondent was appointed the sole member of the Commission established by section 5.   
 
“Airport”, “airport authority” and “airport charges” all have the meanings 
assigned to them by the Act of 1998.   
 
“Minister” means Minster for Public Enterprise. 
“5. – (1) There shall stand established on the establishment day a body to be 
known as the Commission for Aviation Regulation or, in the Irish 
language, An Coimisiún um Rialáil Eitlíochta to perform the functions 
assigned to it under this Act.   
… 
 
(4)  In carrying out its functions, the Commission shall ensure that all 
determinations, conditions attaching thereto, amendments thereof and 
requests shall be objectively justified and shall be non-discriminatory, 
proportionate and transparent.  
 6. –  Subject to this Act, the Commission shall be independent in the exercise 
of its functions. 
 

 
11 
 7. – The principal function of the Commission shall be to regulate airport 
charges and aviation terminal services charges.   
… 
 10. – (1) The Minister may give such general policy directions (including 
directions in respect of the contribution of airports to the regions in 
which they are located) to the Commission as he or she considers 
appropriate to be followed by the Commission in the exercise of its 
functions. 
 (2)  The Commission shall comply with any direction given under 
subsection (1)
… 
32. – (1)  In this section and section 33, “determination” means a 
determination under subsection (2). 
 
(2)  Not more then 6 months after the establishment day and at the end of each 
succeeding period of 5 years, the Commission shall make a determination 
specifying the maximum levels of airport charges that may be levied by an 
airport authority.   
 
(3)  In a determination the Commission may provide for a different maximum 
level of airport charges at different airports.   
 
(4)  Where it appears to the Commission that two or more airports are either– 
 
   
(a) managed by the same airport authority, or 
(b) that they are owned by the same person and operate as a group of 
airports whose activities are coordinated by that person, any determination in 
relation to any one of those airports may be made by reference to the 
 

 
12 
aggregate of amounts levied by way of airports charges at that airport and 
amounts so levied at the other airports.  
 
(5)  A determination shall – 
(a) be in force for a period of 5 years, and  
(b) come into operation not later than 30 days after the making of such 
determination.   
 
(6)  A determination may – 
 
 
(a)  provide – 
 
 
 
(i) for an overall limit on the level of airport charges, 
 
 
 
(ii)  for limits to apply particular categories of such charges, or 
 
 
 
(iii)  for a combination of any such limits,  
(b)  operate or restrict increases in any such charges, or to require 
reductions in them, whether by reference to any formula or otherwise, or 
(c)  provide for different limits to apply in relation to different periods of 
time falling within the period to which the determination relates.   
(7)  Prior to making a determination the Commission shall – 
  (a) give notice to any person concerned stating that it proposes to make a 
determination, 
 (b) publish such notice in a daily newspaper published and circulating 
in the State, and   
(c) specify the period (being not less then one month from the 
publication of the notice) within which representations with respect to the 
proposed determination may be made by interested parties or the public.   
 
(8) The Commission – 
 

 
13 
 
 
 (a)  shall consider any representations which are made under subsection 
(7) and not withdrawn, and  
 
 
    (b) may either accept or reject any representations made under 
subsection (7).   
 
(9)  On making a determination the Commission shall make a report on the 
determination giving an account of its reasons for making that determination 
together with its reasons for accepting or rejecting any representations made 
under subsection (7)
 
 
(10)  A report under subsection (9) shall be sent by the Commission to the 
Minister and to the airport authority concerned.  
(11)  The Commission shall as soon as may be – 
 
 
 
(a) give notice that it has made a report under subsection (9) 
and 
 
 
(b) make the report available on request to interested parties or to the 
public.   
 
 
(12)  A notice under subsection (11) shall be given by publishing the notice in 
a daily newspaper published and circulating in the State and by such other 
means as the Commission may determine.   
 
 
(13)  For the purposes of this section, the Commission may request an airport 
authority in writing to provide information (including accounts, estimates, 
returns, projections or any other records) to it which is in the possession of or 
which can be obtained by the airport authority. 
 
 
(14) (a) The Commission may on or after the expiration of a period of 2 years 
after the making of a determination – 
 
(i) at its own initiative, or 
 

 
14 
(ii) at the request of an airport authority or user concerned in respect of 
the determination, 
   if it considers that there are substantial grounds for so doing, review the 
determination and, if it sees fit, amend the determination. 
        (b) An amendment made under paragraph (a) shall be in force for the 
remainder of the period of the determination referred to in subsection (5) (a).  
       (c) Subsection 5 (b) and subsections (7) to (13) shall apply to an 
amendment made under paragraph (a).  
 
(15) Any airport charges imposed by an airport authority, which are in force 
immediately before the establishment day, shall continue in force until any 
determination has been made.   
 33. –  In making a determination the Commission shall aim to facilitate the 
development and operation of cost-effective airports which meet the 
requirements of users and shall have due regard to – 
 
(a) the level of investment in airport facilities at an airport to which the 
determination relates, in line with safety requirements and commercial 
operations in order to meet current and prospective needs of those on whom 
the airport charges may be levied 
 
(b) a reasonable rate of return on capital employed in that investment, in 
the context of the sustainable and profitable operation of the airport, 
 
(c) the efficient and effective use of all resources by the airport 
authority, 
 
(d) the contribution of the airport to the region in which it is located,  
 

 
15 
 
(e) the level of income of the airport authority from airport charges at the 
airport and other revenue earned by the authority at the regulated airports or 
elsewhere, 
 
(f) operating and other costs incurred by the airport authority at the 
airport, 
 
(g) the level and quality of services offered at the airport by the airport 
authority and the reasonable interests of the users of these services,  
 
(h) the costs competitiveness and operational efficiency of airport 
services at the airport within respect to international practice, 
 
(i) imposing the minimum restrictions on the airport authority consistent 
with the functions of the Commission, and  
 
(j) such national and international obligations as are relevant to its 
functions. 
34. –  Section 39 (1) of the Act of 1998 is amended by the substitution of 
“subject to section 32 of the Aviation Regulation Act, 2001” for “with 
the approval of the Minister”.    
… 
 
 
38. – (1) A person shall not question the validity of a determination, a review 
of a determination or a request of the Commission under this Part otherwise 
than by way of an application for leave to apply for judicial review under 
Order 84 of the Rules of the Superior Courts (S.I. No. 15 of 1986) (hereafter in 
this section referred to as “the Order”).”  
 
This section goes on to specify that the judicial review shall be made within a period of 
two months from the date of the determination, shall beyond notice to specify parties, 
 

 
16 
not be granted unless the High Court is satisfied that there are substantial grounds and 
restrict the right of appeal from the High Court decision  cases involving points of law 
of exceptional public importance or the Constitutionality of any law. 
 
“40.—(1) This section applies to— 
     (a) an airport authority to whom a determination under section 32(2) 
applies, 
     (b) the Irish Aviation Authority in respect of a determination under section 
35(2), and 
    (c) an airport user, being any person responsible for the carriage of 
passengers, mail or freight by air to or from an airport, in respect of a 
determination under section 32(2) or 35(2)
(2) The Minister shall, upon a request in writing from a person to whom this 
section applies who is aggrieved by a determination under section 32(2) or 
35(2), establish a panel ("appeal panel") to consider an appeal by that person 
against the determination. 
(3) An appeal panel shall consist of at least 3 but not more than 5 persons 
appointed by the Minister, one of whom shall be designated by the Minister to 
be the chairperson of the appeal panel. 
(4) An appeal panel shall determine its own procedure. 
(5) An appeal panel shall consider the determination and, not later than 2 
months from the date of its establishment, may confirm the determination or, 
if it considers that in relation to the provisions of section 33 or 36, there are 
 

 
17 
sufficient grounds for doing so, refer the decision in relation to the 
determination back to the Commission for review. 
(6) An appeal panel shall notify the person who made the request under 
subsection (2) of its decision under subsection (5)
(7) An appeal panel, having considered a determination under section 32(2) or 
35(2) and made a decision in respect of it under subsection (5) and having 
notified under subsection (6) the person who made the request under 
subsection (2) of its decision, shall stand dissolved. 
(8) The Commission, where it has received a referral under subsection (5) 
from an appeal panel, shall, within one month of receipt of the referral, either 
affirm or vary its original determination and notify the person who made the 
request under subsection (2) of the reasons for its decision. 
(9) A notice of a decision made under subsection (8) shall be given by 
publishing the notice in a daily newspaper published and circulating in the 
State and by such other means as the Commission may determine. 
 
 
   
Air Navigation and Transport Act 1936 
2. – (1) The expression “the Minister” means the Minister for Industry and 
Commerce; 
… 
37.—The Minister may and any local authority may, with the consent of the 
Minister given after consultation with the Minister for Local Government and 
Public Health and subject to such conditions as he may impose, establish and 
 

 
18 
maintain aerodromes and provide and maintain in connection therewith roads, 
bridges, approaches, apparatus, equipment, and buildings and other 
accommodation. 
 
68.—As soon as may be after the passing of this Act the Minister for Finance 
shall, after consultation with the Minister, take all such steps as appear to him 
to be necessary or desirable to procure that a limited company (in this Act 
referred to as the Company) conforming to the conditions laid down in the 
Second Schedule to this Act shall be formed and registered in Saorstát 
Eireann under the Companies Acts, 1908 to 1924. 
The second schedule made it clear that one of the principal objects of the company was 
the holding of shares in Aer Lingus Teoranta.   
 
THE ISSUES TO BE DEALT WITH 
 
  By order of 10th December, 2001, Kelly J. granted the applicant leave to bring 
judicial review proceedings challenging the determination of the respondent (as it then 
was) on several grounds which included; (a) challenging for error, which I have already 
ruled cannot be done, (b) challenging the respondent’s interpretation and application of 
the relevant Acts, which I am dealing with now, and (c) challenging on the grounds of 
alleged want of fair procedures which issues have been postponed. 
 
  By a subsequent order McKechnie J. on 4th February, 2002, the notice parties 
were joined and by order of Murphy J. on 22nd April, 2002, the applicant was given 
leave to challenge the varied determination of 9th February, 2002, on substantially the 
same grounds as before. 
 

 
19 
 
  As already indicated following my judgment of 16th January, 2003, a formal 
case management conference was held at which the principal parties expressed 
differing views as to what issues should next be dealt with.  I determined that in the 
main the proposals identified by the applicant in relation to these issues together with 
the relevant materials should be adhered to with the exception of the challenges relating 
to alleged want of fair procedures, which should be deferred. 
 
  In this judgment, accordingly, I am dealing with twelve issues. The first two of 
these relate to the applicant’s allegation that the respondent has no power to review its 
capital expenditure programme proposed for the future including the five years affected 
by the respondent’s award (issue 1) or in relation to its capital expenditure programme 
which was completed, contracted for, or commenced prior to coming into force of the 
Act or the appointment of the respondent (issue 2).  Between them these two issues took 
up most of the time devoted to this section of the case and before identifying the 
specific questions which were formulated in a number of different versions and in a 
number if different ways it would be useful if I gave a short background introduction as 
follows. 
 
  The method by which the respondent arrived at a maximum revenue per 
passenger chargeable by the applicant, the cap was, broadly speaking, to calculate the 
asset base of the applicant at the date of the determination, to adjust that figure for 
depreciation, to deduct items not allowable in the Commissioner’s view from that asset 
base and to add a figure for allowable capital expenditure for the period of the 
determination (the “CAPEX”). The figure thus produced was the regulated asset base 
(the “RAB”) of the applicant.  The next step was to determine a percentage return 
(called the weighted average cost of capital, or “WACC”) on the RAB so as to produce 
a figure for an annual return.   To this was added a further depreciation figure to 
 

 
20 
represent a return to investors and an addition for regular operation expenditure, with a 
further addition for regulatory fees and estimated taxation expense so as to arrive at an 
assessed total annual expenditure which would have to be paid for out of revenue 
resources available to the applicant including the cap.   
 
  This total figure was reduced by the respondent’s estimate of the applicant’s 
revenue from its commercial operations and once that overall maximum allowable 
revenue figure was established it was divided by the number of passengers (also 
estimated) to produce the cap chargeable by the applicant in the first year to which 
determination applied being a maximum average revenue per passenger for that year.  
Projections forward were made for the balance of the five year period of the 
determination which included a deduction calculated by reference to the consumer 
price index and by reference to an established formula for airport regulation known as 
“the X factor”, which calculation included a reduction in the cap which would 
otherwise be chargeable in view of the respondent’s judgment that the applicant could 
attain greater efficiencies in Dublin and Shannon airports over the period.  Multiple 
calculations and assumptions were involved in producing each and every one of the 
estimated figures referred to and in several of them there were many sub calculations 
and computations before the end figure was computed.  This process involved, 
furthermore, contributions from several parties each with their own agenda and several 
contending for different outcomes.  In fact two such caps were fixed by the 
determination: a single overall CAP for all passengers passing through the three 
imports and a separate “sub-cap” for passengers passing through Dublin alone.  The 
figure for the Dublin sub-cap was appreciably lower than the overall cap for the three 
airports. These caps were €6.34 and €5.38 respectively. 
 

 
21 
 
  As stated, part of the exercise carried out by the respondent was to calculate the 
asset base of the applicant at the date of the determination and also to calculate a figure 
for allowable capital expenditure for the period going forward.  As will be seen 
hereafter the respondent received information from the applicant in relation to both of 
the categories of capital expenditure comprising, inter alia, a list of projects some of 
which had been completed (such as Pier C in Dublin airport) some of which had been 
contracted for and others of which were simply planned either for the immediate or the 
medium or long term.  Some of these projects had already been approved by the 
Minister for Public Enterprise either prior to the coming into force of the Act of 2001 or 
prior to the appointment of the respondent.  Apart from itemising and describing these 
projects the applicant also submitted its estimates of costs and it is the total of these 
costs which is referred to as the CAPEX (namely capital expenditure).   
 
  As part of the process engaged in by the respondent prior to determining the 
cap, submissions were also received from other parties including airlines such as the 
two notice parties and many others in the wider community such as tourist interests.   
 
Clearly the interests of airlines, for example, could in many cases be opposed to 
those of the applicant.  The respondent did not automatically accept either the items or 
the costings in whole or in part presented to him by the applicant as its CAPEX but 
rather reviewed it and in many cases, as will be seen in more detail later, either rejected 
it or reduced the amount available or excluded it from his calculations as being 
premature.  In many instances he expressed the view that the applicant had not justified 
the inclusion of a particular project in its programme or the costs claimed for it in 
others. He disallowed some of these projects referring to the fact that the airport users 
and, in particular, airlines were strongly opposed to them and claimed that they had not 
been properly consulted.  The respondent employed his own independent consultants, 
 

 
22 
Infrastructure Management Group Inc. (IMG), to prepare a CAPEX for the applicant 
which, in their opinion would be allowable. This he adopted for his calculation of the 
cap.   
 
  At this point I am merely concerned with giving an introduction to the first two 
questions. In general the first question involves a challenge by the applicant to the 
effect that the Commissioner had no jurisdiction to interfere with the applicant’s 
CAPEX at all and was obliged to accept it both as to the projects included and the costs 
claimed for the purpose of calculating the cap.  The second issue concerns the 
applicant’s challenge that even if the Commissioner does have such a power in relation 
to the applicant’s CAPEX going forward into the future, he does not have a power to 
disallow any element of the applicant’s capital expenditure which has already been 
spent, is the subject of a contractual commitment or has been approved by the relevant 
Minister, either before the introduction of the Act of 2001 or his appointment.  A third 
issue relates to the applicant’s assertion that if the respondent has such powers he is not 
at large but stands in the position of a court reviewing decisions for irrationality in 
respect of the applicant’s decisions in relation to their own CAPEX.  Alternatively, he 
must allow a margin of appreciation and show “due regard” for these decisions which 
he has, allegedly, failed to do.  The remaining issues being dealt with in the judgment 
are set out in their turn below and need no further introduction at this point. 
   
 
FORMULATION OF THESE ISSUES 
 
  As already indicated the specific grounds of challenge now being dealt with 
have been differently formulated by the applicant and are expressed differently 
depending on whether one consults the order giving leave to bring the judicial review 
 

 
23 
proceedings, the applicant’s revised list of core issues (following my judgment of 16th 
January, 2003) dated 20th January, 2003, the outline written submissions prepared by 
the applicant for this section of the case or the written submissions in reply dated 5th 
March, 2003.  This comment is not intended as a criticism: rather the reverse because 
the issues became to some extent simplified and clarified as the proceedings progressed 
and it is possible, I think, to identify a dozen questions which, if answered, will respond 
to all aspects of the applicant’s challenge.   I propose now to set out these questions as 
follows: 
1. & 2. Does the respondent have power to review the applicant’s CAPEX being 
both 
(a)  The current and future CAPEX and 
(b)   The “past” CAPEX?   
3.  If so, is such power of review subject to restrictions such that the CAPEX 
can only be reviewed for irrationality? Alternatively, must the respondent 
allow a margin of appreciation to the applicant’s CAPEX, or must he have 
“due regard” for it in some other way and if any of these restrictions apply, 
did the respondent operate the appropriate standard in carrying out his 
review? 
4.  Did the respondent in fact and in practice “disallow” elements of the 
applicant’s CAPEX either in whole or in part by discounting these from his 
calculations thereby, in effect, subverting the applicant management’s 
decision-making jurisdiction? 
5.  Even if the respondent has a general power to conduct such a review, does 
he have power to analyse and eliminate, item by item, the elements in the 
 

 
24 
applicant’s CAPEX: in other words to “micro-manage” this aspect of the 
applicant’s business? 
6.  Does the respondent have power to take into consideration matters other 
than those specifically identified in s. 33 of the Act of 2001?   
7.  Specifically, does the respondent have power to insist that the applicant 
justifies each element and the costs of each element of its CAPEX so that, if 
they fail to do this in the respondent’s judgment, that element will be 
excluded for calculation purposes? 
8.  Does the respondent have power to exclude elements from the applicant’s 
CAPEX for alleged lack of consultation with airport users and in particular 
airlines including the two notice parties who expressed strong opposition to 
such excluded elements?   
9.  Does the respondent have power to substitute a CAPEX of his own devised 
in place of the applicant’s CAPEX and in particular one prepared for him by 
independent consultants IMG? 
10. Was the respondent obliged to include some facility by way of formula or 
otherwise in his calculation to reimburse the applicant for what are 
described as exogenous unforeseen costs which will in all probability arise 
during the period covered by the determination although not, obviously, 
identifiable at the time?   
11. Did the respondent comply with a ministerial directive requiring him to 
reflect government policy in relation to regional development in his 
determination? 
 

 
25 
12. And, finally, was the respondent correct to exclude an up to date passenger 
forecast from his varied determination of 9th February, 2002, on the basis 
that he had no statutory power to include it? 
 
I propose to take the first two and last three of these questions seriatim and outline the 
arguments made by the parties in relation to each one and then to reach my conclusion 
before proceeding to the next group of questions. I will deal with questions four to nine 
inclusive as a unit.  
 
1. DOES THE RESPONDENT HAVE POWER TO REVIEW THE 
APPLICANT’S CAPEX? 
This question identifies the issue in principle and leaves aside specifically the 
sub-issue relating to “past CAPEX” and also leaves aside (at least as a matter of 
primary emphasis) the related questions as to whether the respondent has power to 
micro-manage (or I think the respondent would say micro-analyse) the applicant’s 
CAPEX.   
 
 Applicant’s Submissions 
The lynchpin of the applicant’s argument is grounded in s. 16 of the Act of 
1998.  This has been quoted in extenso at the beginning of this judgment but I will 
repeat the material portions as follows: 
16.—(1) The company shall manage and develop the airports vested in it by 
section 14 and any other airport that may …be established or owned by the 
company … 
 

 
26 
    (2) The company shall ensure the provision of such services and facilities as 
are, in the opinion of the company, necessary for the operation, maintenance 
and development of a State airport, including roads, bridges, tunnels, 
approaches …apparatus, equipment, buildings and accommodation of 
whatever kind. 
     (3) The company may, with the consent of the …establish a new airport 
…” 
 
The applicant submits that once it has formed the opinion under subsection (2) 
that any service or facility is necessary, it has a positive, unqualified, absolute duty to 
ensure the provision of same. This duty is subject to no outside control and in particular 
is not subject to any control by the respondent.  Section 16 has not been amended 
explicitly or by implication by the Act of 2001 and indeed in performing his duties 
thereunder the respondent must (under s. 33) aim to facilitate the development and 
operation of cost effective airports which meet the requirements of users - effectively 
the same objective which has been imposed upon the company under s. 24 of the Act of 
1998 which provides, where relevant, that it must take such steps as are necessary for 
the efficient operation, safety, management and development of its airports and conduct 
its business at all times in a cost effective manner. 
 
  The applicant submits that it and it alone has this positive duty and that the Act 
of 2001 has not attempted to amend or in any way interfere with s. 16 or with s. 24 and 
that it is clear that, under s. 33, the respondent must facilitate the discharge by the 
applicant of this duty and the only way he can do this is to accept, without any 
reduction, the CAPEX and costing presented to him by the applicant.   
 
  Clearly the applicant will not be able to discharge that duty unless it has the 
appropriate funds.  In determining the cap the regulator opted for what was called the 
 

 
27 
“single till” approach.  This is to be distinguished from the dual till approach.  The 
single till approach means that in calculating the cap the respondent included all the 
revenue available to the applicant (in a “single till”) including revenue from its 
commercial operations as being revenue which is available to provide funding 
generally for the on-going cost of the applicant’s allowable CAPEX.  This latter was 
calculated only after such commercial revenue had been taken into account so that the 
resulting cap was much less than if this revenue had not been so calculated.  In other 
words, there was only one till into which all of the revenue was calculated and, by 
reference to which, only the shortfall after counting in the available commercial 
revenue was required to be made up by the cap.  The alternative approach - the dual till 
approach – would have excluded the commercial revenue with the result that the 
amount required to be funded by the cap would have been significantly greater and as a 
result the cap itself would have been much greater.  The applicant makes the point that 
by opting for the single till approach with the consequent reduction in the cap, the 
respondent’s determination has put the applicant in the position that it has no funds out 
of which to fund its CAPEX other than the cap.  Therefore, by removing elements from 
the applicant’s CAPEX and thereby declining to provide for the funding thereof, the 
respondent has in effect and in reality put the applicant in a position where it is 
incapable of carrying out its clear, unqualified, strict statutory duty to ensure the 
provision of those very items which it considers necessary under s. 16 of the Act of 
1998.  This is something he has done without any statutory warrant and he cannot – as 
he has tried to do in argument – avoid the inevitable logic of his determination by 
simply suggesting that the applicant has other revenue streams out of which 
“disallowed” elements of the applicant’s CAPEX can be funded.    
 

 
28 
 
  The result of this is that there is a lacuna in the way the respondent has operated 
the Act of 2001.  The applicant has a clear statutory objective to manage and develop 
airports and to ensure the provisions of services and facilities under s. 16 of the Act of 
1998: the respondent in no way accepts that he is obliged to ensure their provisions and 
yet he effectively deprives the applicant of the wherewithal to carry out its statutory 
duty.  This means that the intention of the legislature that these services and facilities be 
provided is, thereby, frustrated.  This cannot be a true application of the Act of 2001 and 
need not be the case if the acts are correctly construed.  Clearly the respondent, in 
making his calculation, must make provision for the applicant’s CAPEX and its 
funding, and there is nothing in the Act of 2001 which precludes this and indeed 
everything in that act to support this interpretation.   
 
  The board of directors of the applicant are obliged to ensure that its capital is 
remunerated.  There is no way that they could, as the respondent suggests, decide to 
invest in capital projects which have been excluded by the respondent even if they 
could persuade some investor to provide the funding, because there is no way that they 
could guarantee that the investment would be remunerated by inclusion in a subsequent 
determination or that the respondent would change his mind at a later date.  Effectively, 
by depriving the applicant of the money to carry out its statutory duty, the respondent 
has frustrated the applicant’s discharge of same and this cannot have been the intention 
of the Act of 2001.   
 
  When one looks at s. 33 of the Act of 2001 in greater detail, there is nothing 
there which runs counter to this submission.  It is clear that the respondent must “aim to 
facilitate the development and operation of cost effective airports” (a duty which it 
shares with the applicant) and, in doing this, must have regard to the level of investment 
in airport facilities at the relevant airport in line, not only with safety requirements, but 
 

 
29 
also, with commercial operations albeit in order to meet the current and prospective 
needs of the airlines (upon whom the charges may be levied).  He must also have regard 
to a reasonable rate of return on the capital employed in that investment; to the efficient 
and effective use of all resources; the operating costs of the airport authority and also he 
must have due regard to imposing minimum restrictions on the airport authority and to 
such national and international obligation as are relevant to its functions.  In the latter 
context it is clear that the national obligation imposed on the applicant under s. 16 of the 
Act of 1998 is a clear unqualified absolute obligation on it to ensure the delivery of the 
services and facilities contained in its CAPEX.   
 
  Whilst there is, of course, material in s. 33 which obliges the respondent to have 
regard also to cost competitiveness and the needs of the users, these cannot – in the 
absence of clear explicit statutory language which does not exist – override the stark 
unqualified statutory obligation imposed on the applicant under s. 16 of the Act of 
1998.  To achieve such an amendment of this clear statutory duty would require explicit 
and specific language which is simply not present in the Act of 2001.    
 
  The suggestion made by the respondent that the cap relates only to a fraction of 
the applicant’s income (some 24%) is misleading: the rest of the income is not available 
for funding any excluded elements of the CAPEX precisely because the respondent has 
opted for the single till approach which means that the cap itself is calculated only to 
make up the difference for funding those elements of the CAPEX which the respondent 
allowed after these other revenue streams have been taken into account.  They are, 
therefore, not available to fund disallowed elements of the CAPEX because they are 
already, according to his single till calculation, deployed in funding the permitted 
CAPEX.   
 

 
30 
 
  In this connection also, the suggestion that more funds will be available to the 
applicant if passenger numbers increase or it achieves even greater efficiencies than 
those targeted in the respondent’s calculations or through other commercial activities, 
are greatly exaggerated because the passenger numbers are already calculated on a 
realistic basis; the built in efficiencies are challenging and the other commercial 
streams are quite optimistic.  The reality is – and this cannot be avoided – that in all 
probability the money will not be available to the applicant over the five year period to 
fund excluded elements of its CAPEX.  Furthermore, the suggestion by the respondent 
that this will reduce him to a rubber stamp is exaggerated: there are many elements of 
regulation still available to him if the applicant’s CAPEX is effectively “off limits”.   
 
  For example, with reference to the formula referred to in the earlier part of this 
judgment the respondent has power to assess and review every element going into this 
formula with the exception of the applicant’s CAPEX (and in principle also the 
applicant’s operating costs (its OPEX).  The regulator still has functions in relation to 
assessing passenger numbers, the amount of return on capital, the method of calculating 
the depreciation of the asset base of the applicant and other relevant elements such as 
likely taxation and efficiency.  He will require all the statutory aids such as staff and 
independent consultants to assist him in carrying out this work even if he must accept 
the applicant’s CAPEX.  The applicant is not making the same point in relation to its 
OPEX in these proceedings simply because the respondent accepted the applicant’s 
OPEX for the purpose of his first determination.  Nonetheless in principle the OPEX is 
just as much off limits to the respondent as is the applicant’s CAPEX because both are 
subject to its positive statutory duty under s. 16 of the Act of 1998.   
 
  The respondent has attempted to justify his approach to calculating the cap by 
reference to his expert evidence that this is a normal way to carry out a regulatory 
 

 
31 
function.  It may well be that certain theories or practices of regulation, and in particular 
incentive based regulation, do include a power in the regulator to review and exclude 
portions of the regulatee’s CAPEX.   But this is no argument for the true interpretation 
of the statute.  One cannot simply argue that because this particular theory of regulation 
requires a particular power, it must be in the act.  This is to put the cart before the horse. 
Clearly it is not in the act, as a perusal of s. 16 of the Act of 1998 which has been left 
untouched and unamended, demonstrates.  To read such a power into the Act of 2001 
simply because it is desirable by reference to one particular theory of regulation is 
entirely inappropriate.   
 
  Equally wide of the mark is the submission that the ambit of s. 16 (2) is narrow 
and does not include runways, terminals and major development projects such as are 
included in the applicant’s CAPEX.  This argument is based on the inclusion of in s. 16 
(2) of the words “…including roads, bridges, tunnels, approaches…sewers and sewage 
disposal works… buildings and accommodation of whatever kind.” 
 
  If this argument were correct it would produce the absurdity that there was 
statutory power and indeed a duty cast by the Act on the applicant to provide these 
ancillary services but no duty to provide runways, terminals and other central 
aerodrome facilities.  Quite apart from this, this argument ignores the earlier words in 
the subsection which impose on the company an obligation to provide “…such services 
and facilities as are, in the opinion of the company, necessary for the operation, 
maintenance and development of a State airport.”  These words are clearly wide 
enough to capture runways and terminals and the list of other relatively minor items are 
included to ensure that there could be no argument that they were excluded.   
 
  The respondent has argued, further, that s. 37 of the Act of 1936 is the 
antecedent of s. 16 (2).  Section 37 of the earlier Act is clearly concerned only with 
 

 
32 
minor matters and indeed with matters which may involve cooperation with a local 
authority and therefore which are not completely within the jurisdiction of the 
applicant.  
 
  The applicant argues that in fact the true successors of s. 37 are subs. (1) which 
deals with management and development of an airport authority and subs. (3) which 
deals with the establishment of a new airport.  Certainly it is not overwhelmingly 
apparent that the only successor of s. 37 is subsection (2).  
 
  The respondent has argued that the applicant’s duty under s. 16 was never 
absolute because its power to determine airport charges was itself always subject to the 
approval of the minister. It follows, the respondent has argued, that the duty cast upon 
the applicant under s. 16 must always have been read as contingent upon the availability 
of ministerially approved charges being available to pay for the provision of these 
services and facilities.  The duty was always qualified and under the Act of 2001 the 
respondent has argued that the determination of these charges is now subject to the 
imposition by the regulator of the cap under s. 32 of the Act of 2001 which itself must 
be calculated by reference to the list of matters to which the respondent has to have due 
regard set out in s. 33.   
 
  The applicant in response to this argument (which I will elaborate in more detail 
when I come to set out the respondent’s submissions) submits that it is based on a 
fundamentally flawed understanding of the relationship between the two statutes.  It is 
true that under the Act of 1998 the Minister had power to approve (or otherwise) the 
charges determined by the applicant.  He also had power under s. 38 to give directions 
of a general kind in relation to the applicant’s functions and of a specific kind in relation 
to matters necessary or expedient in the national interest.  The Minister, under the Act 
of 1998 therefore, had two quite distinct species of function namely a function in 
 

 
33 
relation to charges which has been now assigned to the respondent under the Act of 
2001 and a function in relation to general regulation of the applicant’s other duties 
which remains with the Minister and has not been assigned to the respondent.   
 
  The respondent therefore has a jurisdiction in relation to charges and charges 
only which he has inherited from the Minister but he has not inherited the Minister’s 
other regulatory functions under s. 38 of the Act of 1998 and he cannot enlarge his 
charging responsibilities to encroach upon the latter.  It is therefore false for the 
respondent to argue that just because he has a power in relation to the applicant’s 
charges he can by reference to the matters to be considered as set out in s. 33 operate 
this power in a way which effectively carries out regulation, not of charges, but of the 
airport itself (which is a function which the minister retains insofar as it is vested in any 
body other than the applicant itself).  Comparisons with other Irish regulators offer the 
respondent no comfort because these regulators have much wider powers than are given 
to the present regulator whose power relates to charges and charges only. 
 
  The regulator has argued that ten words in the Act of 2001 actually show the 
intention of the Oireachtas that the regulator should have the last word in the matter of 
charges.  The first of these words is “regulate” in s.7 which specifies the regulating of 
airport charges as his principal function.  The word is not defined further and therefore 
includes what is covered by the ordinary meaning of the word. The second word is the 
word “reject” in s. 32 (8) of the Act of 2001 which gives the respondent power, having 
considered any representation made by the applicant in the context of his determination 
process, to “accept or reject any representation” (emphasis added).  It is argued that this 
means that if the applicant makes a representation specifying its CAPEX and the 
costings, by the inclusion of this word the legislature intended to confer upon the 
respondent a power to reject that CAPEX.  The final words are contained in s. 34 of the 
 

 
34 
Act of 2001 which provides that the words “subject to section 32 of the Aviation 
Regulations Act, 2001” be substituted for the words “with the approval of the minister”  
in s. 39 (1) of the Act of 1998 so that the latter now reads   
“The company may require the payment to it of airport charges, in respect of the 
use of a State airport, at such rates as it may, from time to time, subject to 
section 32 of the Aviation Regulation Act, 2001, determine.”   
 
  The respondent has sought to argue that the effect of the words is to clearly 
establish that the respondent has full unqualified jurisdiction to review and disallow any 
or all of the applicant’s CAPEX.   
 
  In response the applicant submits that this construction would involve the 
amendment sub silentio of s. 16 (1), s. 16 (2), s.  23 and s. 24 of the 1998 Act, none of 
which provisions have in fact been amended by the Act of 2001.   
 
  Secondly it is submitted that one would expect a very explicit and clear section 
in the Act of 2001 if a radical shift of power such as is now being contended for on 
behalf of the respondent was, in fact, intended.  
 
  The argument that the respondent’s power derives from his ability to reject any 
submission from the applicant founders on the basic principle that a statutory power 
cannot be dependent upon whether or not the applicant makes a submission.  Nor does 
reliance on the word “regulate” assist the respondent in importing into the Act 
something which is not there and which runs counter to an explicit provision (s. 16 of 
the Act of 1998) which is.  The subjection of the applicant’s power to determine 
charges to the respondent’s functions under s. 32 means just that, namely that the 
respondent can regulate the charges but this cannot be expanded to confer upon him an 
ability to regulate the airport which remains with the Minister.  Section 33 is clearly 
ancillary to s. 32 in that it provides guidance to the respondent as to how he is to carry 
 

 
35 
out his function under that section.  It cannot therefore be used as itself an origin and 
source of further jurisdiction to regulate airports as distinct from charges.  This is true 
not just as a matter of form but as a matter of substance.  What the regulator has done 
has been, as a matter of substance, to deprive the applicant of the capacity to exercise  
its clear statutory duty as set out in s. 16 of the Act of 1998.  This cannot have been the 
intention of the legislature.  So far, incidentally, from having paid due regard to the 
level of investment in airport facilities as required by s. 33 (a), by depriving the 
applicant of the only possible source of funding for its CAPEX, it has paid no regard to 
this matter.   
 
 
  Respondent’s Submissions 
 
  The respondent began by identifying the foregoing submission as an absolutist 
position, to be distinguished from a secondary or alternative submission of the 
applicant, to the effect that even if the respondent had jurisdiction to review the 
applicant’s CAPEX this could only be done in a broad brush way and not by way of 
analysing item by item the elements in the CAPEX in a way described by the applicant 
as “micro-management”.  By reference to this latter argument the respondent has no 
jurisdiction to exclude any element of the CAPEX which must be treated with due 
regard to the applicant’s statutory duties and expertise and can only be reviewed 
therefore either generally or on an itemised basis by reference to Wednesbury principles 
of unreasonableness. 
 
  I should make it clear that, in the foregoing, I have attempted to summarise the 
applicant’s submission only in relation to what the respondent has described as the 
absolutist submission and in what immediately follows I will be dealing only with the 
respondent’s reply thereto.   
 

 
36 
 
  The respondent accepts that his regulation of airport charges will impact on the 
applicant’s plans and makes the point that the applicant’s case, that it has thereby taken 
over the management by the applicant of the airports, clearly means that this has been 
done de facto rather then de jure.  De Jure the respondent has clearly done no more then 
he is required to do under the Act of 2001. 
 
  The respondent relies on the applicant’s own description of the function of a 
regulator set out as part of the statutory process leading up to the determination of the 
cap.  The applicant submitted  
“Aer Rianta sees the dominant role of economic regulation as maximising the 
welfare of customers and business by balancing overall needs and objectives.  
In maximising welfare, regulators act as market surrogate where there is no 
effective competition.  As market surrogate, the regulator attempts to drive the 
economic efficiency that would be delivered if effective competition were 
possible.  Aer Rianta believes that the best approach to adopt in fulfilling these 
aims is incentive based regulation.”   
 
  The respondent points out that the latter is something clearly more than simple 
price capping.  It contemplates a regime which incentifies the regulatee to adopt certain 
courses of action and to eschew others.  The expert evidence shows that reviewing 
CAPEX is normal practice for a regulator, including the reassessment of the value of 
previous investments and this includes the placing of reliance by a regulator on an 
alternative set of investment calculations to those presented by the regulatee. 
 
  The applicant’s contention therefore involves the removal of one familiar tool 
from the regulator under the Act of 2001.  This is not only surprising but wrong in that 
it ignores the existence and rationale of the Act of 2001, the structure and content of that 
Act, the precise terms of the Act and in particular s. 33 and finally the explicit amending 
 

 
37 
provisions of section 34.  The applicant’s submission also implies that the Act of 1998 
overrides the provisions of the Act of 2001.  This ignores the history of the Act of 1998, 
imposes an unjustifiable interpretation on s. 16 (2) and wholly ignores the ministerial 
veto in s.39 of the Act of 1998 which has now been replaced by the regulator’s function 
under s. 32 of the Act of 2001.  Moreover, the applicant has exaggerated the impact of 
the respondent’s determination on its management capacities as it has also exaggerated 
its own duties under s. 16 (2) of the earlier Act. 
 
  It is accepted that the regulator’s determination was intended to and does have 
an impact on the applicant’s business: nevertheless, all the respondent does is to fix a 
maximum charge.  He cannot require (by court injunction for example) that the 
applicant carry out any particular project in its CAPEX or refrain from carrying out 
another.  The regulator’s cap applies only to about a quarter of the applicant’s income.  
Moreover, if the applicant becomes more efficient or improves its profits or if 
passenger numbers increase above those predicted, it will retain these revenues.  
 
  The applicant never enjoyed an untrammelled right even to decide its own 
CAPEX.  Prior to the Act of 2001, the applicant’s charges were subject to ministerial 
approval.  The Minister’s function in this regard was not qualified or restricted in any 
respect.  This has now been replaced with a sophisticated and carefully engineered 
method of reviewing the applicant’s charges.  But these were never at the absolute say 
so of the applicant.  Prior to 1998, the applicant had no power to fix charges: between 
1998 and the coming into force of the Act of 2001 it had power to fix charges with the 
approval of the Minister.  In fact, despite an extensive CAPEX programme in these 
years, those charges were not increased so that in practice the applicant’s CAPEX for 
those years was not funded from an increase in charges.   
 

 
38 
 
  The Act of 2001 does not take away or cut down an existing function of the 
applicant for the simple reason that the applicant never had that function.  Its ability to 
determine charges was always subject to ministerial approval and is now subject to the 
respondent.  Nothing has been taken away: simply the identity of the approving person 
has been replaced and, indeed, by way of a carefully constructed mechanism rather than 
a crude and somewhat unpredictable system so far as the earlier statute went.   
 
  The elaborate machinery set out in the Act of 2001 would not be necessary if the 
respondent’s power was as limited as the applicant now contends.  If it was intended to 
exclude the CAPEX from the respondent’s control all that was needed was the deletion 
of CAPEX from s. 39 (1) of the Act of 1998 but this was not done.  The Act of 2001 sets 
up a sophisticated machinery, equips the respondent with staff and independent 
advisors, and provides for an elaborate process involving appeal, judicial review, 
submissions from interested parties including the applicant and the possibility of an 
amended determination.   
 
  Crucially s. 32 (8) confers upon the respondent the power to reject 
representations with respect to a proposed determination including representations 
from the applicant.  This power does not depend on the making of these representations: 
it is merely reflective of what is entailed in the power to regulate charges and in 
particular to do so with reference to the requirements of section 33.  If the applicant’s 
contentions were correct there could not possibly be a power to reject the applicant’s 
representations with regard to a proposed determination insofar as they included a list 
of proposed projects in the applicant’s CAPEX and intended costs.  This is, in fact, 
what the applicant did in this particular instance and the power of the respondent to deal 
with it as he has done is clearly conferred in the statutory provision entitling him to 
accept or reject these determinations. 
 

 
39 
 
  Furthermore, s. 33 clearly means that in carrying out his function under s. 32 the 
respondent must critically evaluate the investment plans of the applicant.  It is difficult 
to see what the words “shall aim to facilitate the development and operation of cost 
effective airports which meet the requirements of users” and the words “shall have 
regard to – 
 
(a) 
the level of investment in airport facilities at an airport to which the 
determination relates…” 
mean unless they mean that he must have regard to the investment plans of the applicant 
so that he can aim to facilitate a cost effective airport and have regard to that level of 
investment.  He cannot have regard to that level of investment without considering the 
elements of the CAPEX. 
 
  If the only function that the respondent could carry out in relation to CAPEX 
was to fix prices then the Act achieved this in s. 32 and there was no need for section 33.  
The introduction of the latter section means, however, that the regulator must have 
regard, inter alia, to the investment plans of the applicant because if he does not do this 
he cannot have regard to the matters referred to in s. 33 and in particular subs. (a). 
 
  The effect of s. 34 is crucial in the context of the present submission.  It makes 
the company’s capacity to determine charges “subject to section 32 of the Aviation 
Regulation Act, 2001” - that is subject to a section which explicitly entitles the 
respondent to reject anything which the applicant might submit to the respondent in 
relation to its CAPEX.  This clearly establishes the hierarchy between the respondent 
and the applicant: the last word rests with the respondent because he can reject anything 
the applicant submits to him in relation to CAPEX.   
 
  The applicant’s submission on this point simply ignores this plain amendment 
of the Act of 1998.  Not only did the applicant never have an untrammelled power to 
 

 
40 
determine its own charges but now that power is subject to an explicit unqualified 
power vested in the respondent to reject the applicant’s proposals in this regard.   
 
  The history of investment between 1998 and 2001, during which time the 
applicant spent some £139 million of capital expenditure without having any increase 
in its charges, runs contrary to its submission.  These were not funded out of  increased 
airport charges yet in the applicant’s submission it had a statutory duty not only to 
ensure the provision of these facilities but also to ensure that they were funded. 
 
  The applicant places heavy reliance on s. 16 (2) of the Act of 1998.  It is 
misplaced.  There is no such absolute duty as is contended for which would in any event 
be unique.  This Act is similar to other roughly contemporaneous Acts involving the 
privatisation of commercial activities hitherto carried on by departments of State.   
 
  Sections 23 and 24 which impose general duties are remarkable for the fact that 
it is explicitly provided in s. 24 (2) that nothing in s. 23 or s. 24 is to be construed as 
imposing on the company either directly or indirectly any form of duty or liability 
enforceable by proceedings before any court to which it would not otherwise be subject.  
The sections are aspirational only and clearly not intended to impose the type of 
unqualified duty now contended for by the applicant as being contained in section 16.  
This section is not even located beside the other two.   
 
  Section 39 of the Act of 1998 which gave the Minister a power of veto over the 
applicant’s charges is fatal to its present submission: it never had the absolute power or 
duty now contended for.  Moreover, this veto is expressed in absolute terms: no reasons 
need be given, there are no guidelines, no time scale and it is not subject to an appeal or 
review.  Even if s. 16 (2) is given the strong interpretation now contended for by the 
applicant it must be qualified by reference to s. 39 and indeed by reference to s. 38 
which confers on the Minister a power of direction. 
 

 
41 
 
  With regard to s. 16 itself, it is noteworthy that it is not located in the part of the 
Act dealing primarily with the statutory duties of the applicant.  Section 16 (1) imposes 
a general duty to manage and develop airports and s. 16 (3) a permissive power to 
establish a new one.  This is the context in which s. 16 (2) must be read.  When one 
turns to subs. (2) it is noteworthy that there is no reference to runways or terminal 
buildings.  The reference to buildings and accommodation at the end of the subsection 
is clearly to be interpreted ejusdem generis with what has gone before, namely the list 
of relatively incidental and ancillary infrastructure facilities such as roads, bridges, 
tunnels, approaches and sewers referred to in the subsection.  Furthermore the 
predecessor of this section is s. 37 of the Air Navigation and Transport (Amendment) 
Act, 1936, which is the first Act dealing with the organisation of airports. This section 
(which has already been cited above in this judgment) is clearly concerned with 
ancillary facilities which require particular treatment in that they may involve 
cooperation with a local authority and this in turn explains why the phrase “shall ensure 
the provision of…” appears in this subsection and not in subsection (1).  The business 
of managing and developing airports is clearly within the control of the company 
whereas the provision of these ancillary services may require cooperation with a third 
party.  The difference in phraseology is instructive in this context.  The introduction of 
the phrase “in the opinion of the company” is intended to confer a broad discretion on 
the company in relation to these matters rather than to create an absolute strict statutory 
duty as now contended for by the applicant.  Its obligation under subs. (2) is no greater 
or more mandatory than its duty under subsection (1).   
 
  In regard to the latter, however, it is not contended that the applicant has an 
untrammelled power or that its management or development of airports cannot be 
restricted by economic reality, availability of funds or the amount of finance lenders are 
 

 
42 
willing to pay in advance.  The burden of interpretation sought to be imposed by the 
applicant on s. 16 (2) is exaggerated and excessive.   
 
  The applicant has sought to suggest that the Minister is and continues to be a 
regulator of the airport whereas his erstwhile function as regulator of charges is the only 
function which has been devolved to the respondent.  This is wide of the mark because 
the Minister is not a regulator of the airport; he has been given no specific management 
function but only a power to make policy decisions of a general kind and specific 
decisions only in relation to what is necessary or expedient in the national interest.  He 
is not a general regulator.   
 
It is clear that the respondent has power to do more than simply impose a simple 
cap on the applicant’s charges.  Section 33 provides a list of matters to which he must 
pay due regard and which clearly mean that the regulator himself must have regard to 
the manner in which the airport charges may be spent.  He must aim to facilitate the 
development and operation of cost effective airports which meet the requirement of 
users but he must also have due regard to the level of investment in order to meet the 
current and prospective needs of (effectively) the airlines.  It is clear that he has power 
to incentivise the applicant to achieve these objectives by his determination and clearly 
if he is to do this he must have regard to the applicant’s CAPEX and its cost with power 
to review it if appropriate.   
 
 
  Aer Lingus’ Submissions   
 
  Insofar as directed to this issue Aer Lingus points out that it pays some 45% of 
the charges levied by the applicant comprising an average of £27 million per year in the 
period 1997 to 2001.  It emphasises the role of users as being central to the statutory 
scheme set out in ss. 32 and 33 of the Act of 2001. It is submitted that the respondent in 
 

 
43 
having due regard to the matters set out in s. 33 must do this through the lens of the 
introductory paragraph because he must aim to facilitate the development and operation 
of cost effective airports which meet the requirements of users.  It is submitted that 
possibly users mean only the airlines and certainly includes them.  Airlines as users 
have a privileged place in the Act of 2001 as being persons whose needs must be 
considered in this context but also specifically it is the current and prospective needs of 
airlines that shall be the object of consideration under subss.(a) and (g) of s. 33 and it is 
noteworthy that airport users appear to be defined as airlines (see section 40 (1) (C)).  If 
the applicant’s CAPEX is off limits it is difficult to see how the respondent can consider 
the interest of users as identified in the Act of 2001 in a way which satisfies his statutory 
duty.  This notice party also made further submissions which are in line with those of 
the respondent. 
 
 
Ryanair’s Submissions 
 
The second notice party, Ryanair Limited, made submissions which were 
directed primarily to other arguments which will be dealt with later in this judgment.  It 
emphasised, however, that there was no restriction on the consideration of the 
requirements of users to which the respondent is obliged to have regard under s. 33 in 
determining the cap and also that the purposive interpretation of the Act of 2001 means 
that the respondent should have a completely independent control of the applicant’s 
charges.  It was submitted that the applicant is not a user and therefore the respondent, 
when considering the needs of the users, is not considering the needs of the applicant.  
The airlines are users and arguably the only users by reference to section 40 (1) (C).  
Even if they are not the only users under the Act, they are clearly in a central position in 
the context of the respondent’s functions and it is their needs and not the needs of Aer 
 

 
44 
Rianta (which is not a user) which must be considered and which have, therefore, been 
elevated to a position of paramount importance so far as the considerations of the 
respondent are concerned when making a determination.     
 
  The two Acts can be read harmoniously together: the duty which the applicant 
asserts is cast upon it by s. 16 (2) of the Act of 1998 is a duty which was never absolute 
and must be read as modified initially by reference to the ministerial power to approve 
its charges and subsequently to the respondent’s jurisdiction to set a maximum cap on 
these charges having considered the matters set out in section 33.  Any reading of s. 31 
(2) as is now contended for by the applicant results, therefore, in a distorted reading of 
s. 32 (8) and s. 33 of the Act of 2001.    
 
 
Conclusion 
 
If the respondent has the power to review the applicant’s CAPEX one would 
expect to find this in the Act of 2001.  Therefore my first port of call in deciding this 
issue is to examine that Act.  Having done this I will consider the Act of 1998 to see 
whether my primary conclusion should be altered in anyway. 
 
As has been made clear the principal function of the respondent is to regulate 
airport charges including those of the applicant.  The word “regulate” is not defined and 
therefore should carry its ordinary meaning.  According to the Concise Oxford 
Dictionary the word means “control by rule” or “subject to restriction”.  There seems to 
be nothing in the Act of 2001 to suggest that the word carries a special meaning and in 
particular it is not defined.  Accordingly the principal function of the respondent is to 
control airport charges by rule or subject them to restrictions.   
 
The respondent carries out this function under the provisions of s. 32 of the Act 
of 2001.  By subs.(2) it is provided that he shall make a determination “specifying the 
maximum levels of airport charges that may be levied by an airport authority”.  
 

 
45 
Accordingly the regulation for control or restriction is done by way of specifying 
maximum levels of airport charges.   
 
Section 33 of the Act of 2001 provides that, in making a determination, the 
respondent “shall aim to facilitate the development and operation of cost effective 
airports which meet the requirements of users.”  This is the overall objective imposed 
on the respondent. So far as it goes, it seems to me to authorise a consideration and 
review by the respondent of the proposed and existing CAPEX of a subject airport 
operator because the respondent has to aim to facilitate the development of a cost 
effective airport as specified.  It is clearly within the contemplation of this provision 
that the respondent would consider the capital expenditure both past, present and future 
in order to see whether it does in fact facilitate that objective.  In principle this 
overriding objective imposes upon the respondent, in my opinion, a clear duty to aim to 
facilitate the development and operation of cost effective airports and this duty is 
sufficiently wide to authorise him to discharge it by a consideration of the CAPEX of 
the subject airport both past, present and future.   
 
This initial impression is fortified, in my view, by the provisions of s. 33 (a) 
which require him in carrying out the foregoing function to have due regard to the level 
of investment in airport facilities at the subject airport.  The general impression derived 
from the introductory overriding duty is given more specific focus by these words.  In 
my view they make it quite clear that it is the duty of the respondent in making a 
determination to have regard to the level of investment in airport facilities (being 
investment in the past, present or future) and once again an obvious way in which he 
can do this in my view is to review the relevant CAPEX.   
 
This conclusion is not altered, I think, by the particular phraseology of the 
subsection or by the standard or criterion by reference to which the respondent is to 
 

 
46 
have due regard being a level of investment “in line with safety requirements and 
commercial operations in order to meet current and prospective needs of those on 
whom the airport charges may be levied”.  It is conceivable that there are methods by 
which a respondent could aim to facilitate the development of cost effective airports 
and have due regard to the level of investment therein other than by reference to the 
relevant operator’s CAPEX, but a simple and obvious way of achieving this is the way 
actually selected by the respondent in the present case, namely, by subjecting the 
applicant’s CAPEX to review.  In my opinion the cited provisions of s. 33 clearly 
authorise him to do this.   
 
This conclusion is fortified by the provisions of s. 32 (8) which specifically give 
the respondent power to “accept or reject” any representation made by any party in 
response to his statutory notice indicating his proposal to make a determination and 
inviting such representation.  If, as in the present case, the subject airport operator 
makes a representation indicating its CAPEX and costings, then clearly under these 
provisions the respondent had jurisdiction to reject it.  This includes, clearly, a 
jurisdiction to review the CAPEX, make an assessment and reject it either in whole or 
in part which is in fact what the respondent did in the present case.   
 
Equally clearly the respondent’s jurisdiction to review the applicant’s CAPEX 
does not depend on the applicant making any particular representation.  Rather his 
jurisdiction to reject a CAPEX representation is consistent with, and fortifies, his 
jurisdiction which originates in s. 7 and which is qualified and articulated in section 33.  
In the event, for example, that no CAPEX representation is made by the subject airport 
operator this does not, in my opinion, either deprive the respondent of jurisdiction to 
review the relevant CAPEX or exonerate him from his obligation to do so.  That 
obligation is to be found generally in s. 7 but specifically in s. 32 and in s. 33 (a) as I 
 

 
47 
have indicated.  Accordingly, in the unlikely event that a determination is made without 
a submission from the subject airport operator, the respondent has, nonetheless, a 
specific duty to aim to facilitate the development and operation of a cost effective 
airport and in doing so he must have due regard to the level of investment in facilities at 
the airport as specified in subparagraph (a).  It may be that he can do this otherwise than 
by reference to a particular programme of capital expenditure but in any event these 
provisions make it quite clear that in carrying out his positive duty he has power to 
review the relevant CAPEX. 
 
I must next consider, however, whether, in having “due regard” to the level of 
investment, he is obliged to accept that level of investment at the indication of the 
applicant both with reference to the past, present and future because of the applicant’s 
specific duties under s. 16 of the Act of 1998. 
 
It has been suggested that the clear provisions of s.16 (if such they be) are 
somehow diminished because this section is separated from ss. 23 and 24 which deal 
with the general duties of the applicant company.  Furthermore, it is suggested that the 
duties imposed in s. 24 are themselves diminished by reason of subs. (2) which 
specifies that nothing in the section shall be construed as imposing any additional duty 
or liability on the company which would be enforceable by proceedings in court.  I am 
not greatly impressed by this submission.  Sections 23 and 24 are to be found in Part IV 
of the Act of 1998 dealing with administration of the company whereas s.16 is to be 
found in Part III which is dealing with the transfer of property and carrying out of works 
by the company.  Moreover it has been submitted on behalf of the applicant that s.16 is 
unique in the sense that there is no section similar to it in other Acts which could be 
compared with the Act of 1998 and which do contain provisions similar to ss. 23 and 
24. 
 

 
48 
 
In any event if the words in s.16 are clear then by the primary rule of 
construction the intended meaning of the section is to be interpreted in accordance with 
such clear meaning. 
 
The clear meaning of subs. (1) in my opinion is that there is a positive duty cast 
upon the applicant, albeit in general terms, to manage and develop airports vested in it.  
This would clearly in a general sense include a duty to propose and articulate a capital 
expenditure programme under the general heading of developing the airport.   
 
Subsection (2) again clearly, in my opinion, imposes a positive duty (as distinct 
from a power) upon the applicant to ensure the provision of services and facilities 
specified in this subsection.  An issue has arisen between the parties as to whether these 
services and facilities are the relatively subsidiary items such as roads bridges tunnels 
and so forth or whether they are the major elements of development in an airport such 
as runways and terminals.  The applicant submits that the section imposes a duty upon 
the applicant to ensure the provision of such services and facilities as are necessary for 
the operation, maintenance and development of a State airport including some specified 
items.  It is clearly necessary, the applicant submits, for the operation, maintenance and 
development of a State airport that there be runways and terminals and the reference to 
the subsidiary items is merely to ensure that they would not be excluded by being 
overlooked.  The contrary argument by the respondent is that the list of ancillary and 
subsidiary matters is clearly what is intended as the scope of subs. (2) and that the 
specific power to provide buildings and accommodation of whatever kind must be read 
ejusdem generis with the subsidiary list which proceeds these words.  Furthermore, the 
antecedent of this section (s. 37 of the Act of 1936) is clearly concerned with matters 
which require co-operation between an airport authority and a local authority and this 
indicates the scope of the intended subsection as dealing with relatively minor matters.  
 

 
49 
The applicant, in response, points to other portions of s. 37 which deals with major 
matters. 
 
In my view by imposing on the applicant in subs. (2) a duty to ensure the 
provision of such services and facilities as are (in its opinion) necessary for the 
operation, maintenance and development of a State airport, the Oireachtas intended to 
impose upon it a duty to provide all such necessary services and facilities, including 
runways and terminals, but also including the list of relatively minor matters which 
were specified.  Subsection (2) seems to me to put flesh, so to speak, on the general 
obligation contained in subs. (1) in the context of the provision of services and facilities 
which are necessary in pursing the overall objective of managing and developing the 
airport identified in subsection (1).  The arguments in relation to s. 37 of the Act of 1936 
seem to me to be evenly balanced and do not really advance the matter.   
 
I agree, therefore, with the applicant’s contention that s. 16 (2) imposes on the 
applicant a duty to ensure the provision of a wide range of services and facilities 
including runways and terminals which are, in its opinion, necessary for the operation, 
maintenance and development of a State airport.   
Clearly the funding for these services and facilities will, or at least may, come, 
in whole or in part, from the payment to the applicant of airport charges which it has 
power to determine by s. 39 (1) of the Act of 1998.  This is not an absolute power: it is 
a power to determine these charges “with the approval of the Minister”.  The role of the 
Minister in approving these charges is not qualified or limited in any way.  Clearly if the 
Minister did not approve of the proposed charges but reduced them this would impact 
on the ability of the applicant to deliver the services and facilities.  Is it to be said that 
the Minister’s unqualified power of approval is somehow to be curtailed or subjected to 
the opinion of the applicant which it must form under section 16 (2)?  Such an 
 

 
50 
interpretation would be an impermissible attenuation of the Minister’s power of 
approval which clearly includes a power of disapproval in my opinion.  Insofar as the 
discharge of the applicant’s duties under s. 16 (2) depends upon its determination of 
charges then such duty (and its discharge) is in turn contingent upon the approval of the 
Minister.  This seems to me to be the sensible way to read the two provisions of the Act 
of 1998 so as to produce a harmonious result.  There is no sense in giving the Minister a 
power of approval of charges if all he can be in respect of all or some of them is a rubber 
stamp. 
 
The function of controlling the applicant’s airport charges has now been 
transferred to the respondent by the Act of 2001.  His principal function is to regulate 
those charges.  It is, in principle, inimical to the concept of regulation that the CAPEX 
which is an element going to make up the charges should be beyond the control of a 
regulator in a way analogous the repugnancy of the notion that a Minister with power of 
approving charges should somehow end up only as a rubber stamp.  It is not surprising, 
therefore, to find in the Act of 2001 an explicit amendment of the Act of 1998 which 
provides that the power of the applicant to determine charges is to be subject to s. 32 of 
the Act of 2001.  The role of the Minister who had power to approve (and therefore 
disapprove) the charges is now replaced by s. 32 of the Act of 2001.  Section 32 sets out 
the entire mechanism and jurisdiction to be exercised by the respondent in performing 
his principal function of regulation.  It includes power to specifically reject (or accept) 
any representation made by an interested party pursuant to a statutory consultation 
process and thereby in explicit terms subjects any determination of charges by the 
applicant for the purpose of enabling it to discharge its duty under s. 16 (2) to the 
possibility of outright rejection by the respondent. 
 

 
51 
 
The effect of the relevant statutory provisions, therefore, appears to be that the 
respondent, in carrying out his duty of regulating airport charges, has a positive duty to 
aim to facilitate the development of cost effective airports and while so doing must have 
due regard to the level of investment in the subject airport and is specifically equipped 
with a power to reject any proposals in relation, inter alia, to CAPEX that may be 
submitted to him by the operators of that airport.  Moreover there is nothing in the 
provisions of the Act of 1998 which would upset or overturn this conclusion: rather the 
contrary, because the statutory duties to ensure the provision of services cast upon the 
applicant in s. 16 (2) and its power under s. 39 to determine charges is specifically made 
subject to those general and specific powers of the respondent which include the power 
to reject their proposals on CAPEX.   
 
My conclusion on the first question which deals only with the principle as to 
whether the respondent has jurisdiction to review the applicant’s CAPEX, therefore is 
that he has such a power. 
 
In my opinion the relevant statutory provisions can be read together 
harmoniously without straining the language or deviating from the primary rule of 
interpretation that the intention of the legislature is to be divined from the words used in 
the relevant sections when given their ordinary meaning.  There is no need therefore to 
refer, or pray in aid, any of the special rules or principles of interpretation which have 
been referred to in argument and which are intended to deal with situations where such 
a construction may not be immediately apparent. 
 
2. DOES THE RESPONDENT HAVE POWER TO APPLY THE 2001 ACT 
RETROSPECTIVELY AND IF HE DOES, DID HE? 
 

 
52 
 
Prior to the coming into effect of the Act of 2001  (on the 1st of February, 2002) 
the applicant had completed or committed itself to a number of projects in its CAPEX.  
These can be briefly described as the Shannon Terminal, Pier C, some associated 
aircraft stands and a large amount of the CAPEX incurred during the first nine  months 
of 2001.  These have been referred to as “stranded assets” in the submissions.   
 
Some of them were commenced before the vesting day, that is, at a time when 
the ownership thereof was vested in the Minister.  It will be recalled that after the 
vesting day the Minister retained some control (and still does) in that he can give broad 
directions as to policy and specific directions in a limited area relating to national 
security.  These functions were not transferred to the respondent.   
 
Decisions to go ahead with and fund the stranded assets were, accordingly, 
taken by the Minister and prior to the coming into existence of the regime operated by 
the respondent.   
  
Applicant’s Submissions 
The applicant submits that even if (contrary to its primary submissions) the 
respondent has a power in general to review its CAPEX and, even if (again contrary to 
its further submission) the respondent can do more than simply review the applicant’s 
CAPEX decisions for unreasonableness, he has no power to disallow the stranded 
assets which have been approved, contractually committed to, commenced or 
completed prior to the commencement of the Act of 2001. 
 
This Act is clearly intended to be prospective only and applies to subsequent 
airport charges but it is also future looking in that the respondent must aim to facilitate 
the development of cost effective airports rather than impugn or disallow it.  The rule 
against retrospection is a rule of construction comprising a presumption that a statute is 
intended to operate prospectively unless otherwise clearly stated.  The retrospective 
 

 
53 
operation of an Act has been defined in the words of Craies in Craies on Statute Law 
(7th ed., p.387) and adopted by Chief Justice O’Higgins in Hamilton v. Hamilton [1982] 
I.R. 466 at 474 when it 
“takes away or impairs any vested right acquired under existing laws, or creates 
a new obligation, or imposes a new duty, or attaches a new disability in respect 
of transactions or considerations already past.”   
 
The applicant submits that to construe the Act of 2001 as permitting the 
respondent effectively to disregard the stranded assets (for the purpose of calculating 
airport charges) is plainly to give that Act retrospective effect.  (Pier C and Shannon 
Terminal were contracted for and commenced at a time when the applicant was merely 
an agent for the Minister who was therefore the undertaker in relation to them).  The 
applicant continues to have a duty to ensure that its revenue is sufficient to remunerate 
this capital outlay.  They thus have a reasonable expectation that they will continue to 
obtain remuneration for these completed projects which they cannot do if the 
respondent disallows them as he has done.  By so doing he has clearly impaired a vested 
right of the applicant and accordingly the Act of 2001 has been made to operate 
retrospectively.   
 
The Minister had exercised a function authorising the stranded assets and now 
under the Act of 2001 the respondent purports to take a different view to that of  the 
Minister, thereby depriving the applicant of its vested right to remuneration.  This 
clearly imposes a new duty or attaches a new disability in respect of these past 
transactions.  This could only be done if the jurisdiction so to do was expressed in the 
clearest language.  In the absence of this language the presumption (which is a strong 
one) is that it should not be done and accordingly the disallowance of the stranded 
 

 
54 
assets is ultra vires.  It is the clearest example of the application of the provisions of the 
Act of 2001, with operative effect, to past transactions.   
 
The Oireachtas cannot have contemplated, in the Act of 2001, giving the 
respondent a power retrospectively to disallow capital projects which have been, as 
contemplated by them, specifically allowed by the Minister under the Act of 1998 (and 
indeed prior thereto in his further capacity as owner thereof).  It is of course the case 
that the charges determined by the respondent are prospective: the key point is that the 
methodology by which those charges were set by him involved the respondent in 
claiming an exercise of power to disallow for the purpose of calculating them past 
expenditure which had been occurred under an earlier regime.  By doing so he 
retrospectively attached to those capital expenditures a disability by stranding the 
relevant assets and thereby excluding the possibility of their generating a return on 
capital (contrary to a specific duty imposed on the applicant in the Act of 1998).  The 
new law of 2001 was therefore clearly applied to past events and this means the Act has 
been applied retrospectively as identified in the following observation of Barron J. in 
O’H v. O’H [1991] I.L.R.M. 108  
“In considering whether a statute should be construed retrospectively a 
distinction is drawn between applying the new law to past events and taking 
past events into account.  To do the latter is not to apply the Act 
retrospectively.”   
To disallow past CAPEX is to apply the new law to past investments: to 
recognise the relevant quantum for calculation purposes would be to take them into 
account.  To do the former is to apply the Act retrospectively and is ultra vires in the 
absence of clear statutory authorisation.  To deprive the airport operator for any period 
of time of an opportunity of generating return on the capital expended on the stranded 
 

 
55 
assets is to apply the Act of 2001 with a new standard and a new determination as to 
their allowance or disallowance with retrospective effect.  For the regulator 
subsequently to apply a new obligation by reference to a new standard and thereby 
deprive the applicant of its vested right to be remunerated in respect of this expenditure 
is to fundamentally alter the character and consequences of these past capital 
investments and is a clear application of the Act of 2001 with retrospective effect.    
The principle would be the same if instead of the regulator it had been the 
Minister who did this thereby reversing the earlier decision.  That would be a clear 
example of retrospective operation. 
 
Furthermore both distinguished regulatory experts have, in their affidavits, 
unhesitatingly described the treatment of stranded assets as the “retrospective 
disallowance of properly approved investment”: this is one of the few things these 
experts agreed on. 
 
The argument by the respondent that there was no retrospective or retroactive 
disallowance of the permission for the construction of the stranded assets misses the 
point.  The complaint was not that there was a disallowance of permission but rather a 
determination that past capital expenditure ought not to have been occurred by reason 
whereof the applicant was to be penalised in being deprived of a return on this capital 
outlay.  This is a clear example of an unfair retrospective application of the later Act.   
 
Respondent’s Submissions 
 
The respondent submitted that the applicant’s submissions involved a confusion 
between disallowance of a project in the sense of refusing permission to construct it and 
disallowance of charges calculated by reference to it.  The respondent’s determination 
did not retrospectively disallow permission for these projects but only determined 
 

 
56 
whether future charges should be adjusted or increased to pay for them.  The problem 
therefore did not arise at all.   
 
Furthermore as a matter of fact there had been no increase of the applicant’s 
charges between 1998 and 2001 and therefore the respondent did not, by his 
determination, take away anything from them because there was nothing to take away.   
 
Furthermore the rule against retrospective application is a presumption against 
the retrospective operation of a statute in the absence of clear language to the contrary.  
Clearly it is not contrary to this principle if the respondent looks back at the past capital 
expenditure of the applicant in order to assess future charges.  This is all he did.  The 
classic example of a retrospective operation is the making criminal of an act which was 
not a breach of the criminal law when it was perpetrated (or indeed increasing the 
penalty subsequently).  Since the respondent did not disallow any element of the 
CAPEX there was no question of a retrospective disallowance.  In fact what Aer Rianta 
had after the regulator’s determination was what they had before, namely an asset and 
the knowledge that its capacity to generate a return was dependent on factors over 
which the applicant did not necessarily have complete control.  In fact after the 
respondent’s determination the applicant had some return in respect of the stranded 
assets whereas before (in fact) they had none. 
 
 
Aer Lingus’ Submissions 
Submissions on behalf of Aer Lingus were to like effect.  An example of true 
retrospective operation arose in the case of  In Re Hefferon Kearns Limited (No. 1
[1993] 3 I.R. 177 which involved the offence of reckless trading which did not exist 
prior to that Act.  The Act therefore had to be construed in a manner consistent with 
Article 15.5 of the Constitution which prohibits the Oireachtas from declaring acts to be 
 

 
57 
an infringement of the law which were not so at the date of their commission.  This rule, 
which is a rule of interpretation, was explained by Fennelly J. in Minister for Social 
Community & Family Affairs v. Scanlon [2001] 1 I.R. 64 at 88 as follows  
“The two essential elements of the rule … are:- firstly, it is designed to guard 
against injustice, in the sense that new burdens should not be unfairly imposed 
in respect of past actions; secondly, the rule is one of construction, not of law.  It 
amounts to a presumption against retrospective effect which may be displaced 
by the clear words of the statute.” 
 
This was emphasised recently by Keane C.J. in Murphy v. G.M. [2001] 4 I.R. 
113 at 129 and Grealis v. Director of Public Prosecutions [2001] 3 I.R. 144 at 159 
where he emphasised that the rule had no application where the words of the statute 
were clear.   
 
The Act of 2001 is clear: it obliged the respondent to make a determination 
within six months of the establishment day.  He must (under s. 33) have regard to the 
matters set out therein and where this section refers to investment no exception is made 
in relation to investment incurred prior to the establishment day.  This could easily have 
been done and given that it was not done the clear intention of the Oireachtas was that 
the stranded assets should also be included in the respondent’s calculations.  This was 
taking past events into account; not applying a new law to them. 
Conclusion 
 
In the first place it is clear that the rule against retrospective application is a rule 
of interpretation.  And that it comprises a presumption that, in the absence of clear 
language to the contrary, an Act is to be interpreted as having effect on circumstances 
which come into existence after the date of its coming into force.  So much is clear from 
the authorities already cited.   
 

 
58 
 
It is equally clear that there are no words in the Act of 2001 to suggest that it 
should have retrospective effect.  Accordingly the true interpretation of this Act shows 
an intention of the Oireachtas that it would operate prospectively only. 
 
A distinction is to be drawn between an Act which operates prospectively in the 
sense that it is applied so as to have effect on circumstances which come into existence 
after the Act itself comes into operation on the one hand, and on the other, the taking 
into consideration by the operator of the Act for purposes of carrying out the relevant 
statutory functions thereunder of circumstances which were in existence when the Act 
came into operation.  This latter activity is perfectly commonplace and can be described 
as retrospection in the sense that in the present case the respondent takes into 
consideration and looks at elements of the applicant’s CAPEX which because they are 
already in existence were the subject of decisions by the applicant and the Minister 
which took place before the Act of 2001 came into effect.  The applicant takes no 
exception to such retrospective scrutiny by the respondent.  The point it makes is that 
the effect of the determination is to reverse a pre-2001 Act decision by another 
authority authorising the construction of the stranded assets together with the necessary 
implication that the applicant had a right to be remunerated in respect of this capital 
outlay.  By disallowing these stranded assets from his calculation this vested right has 
been impaired and this is a clearly retrospective application of the Act in breach of the 
principles of retrospection.  Of course the charges are prospective: but this does not 
meet the point, however, according to the applicant, because the methodology by which 
the respondent set those charges, involved reversing in effect a pre-2001 Act decision 
that these assets would be allowed for the purpose of earning remuneration.  The 
respondent’s determination attached to this situation a disability and removed a vested 
right which was the right of the applicant to expect a return on the capital involved.  
 

 
59 
This was not merely taking past events into account, which is legitimate, but reversed 
past decisions which is not. 
 
In my opinion the decision to authorise capital expenditure in the past is 
different to the decision taken by the respondent who has to decide (insofar as the 
stranded assets are concerned) what impact this expenditure should have (if any) on the 
calculation of the cap. 
 
Furthermore I cannot agree that the expectation asserted on behalf of the 
applicant that these assets, at all times in the future, will generate a return on the capital 
expenditure involved (an expectation founded inter alia on the applicant’s obligation to 
ensure a return on capital) is something which can properly be described as a “vested 
right” as that phrase is used in the context of the relevant jurisprudence.  The concept of 
vested right is a right which comprises an immediate fixed right: the concept of an 
expectation connotes an assumption in relation to future events.  An expectation, no 
matter how legitimate (to borrow the word), can never, in my view, amount to a vested 
right. 
 
Nor do I think that there is an element of injustice involved in the change of 
statutory regime because there could have been no reasonable expectation that the law 
in relation to airport charges would always remain the same insofar as it impacted on 
the stranded assets. 
 
If the respondent had made a calculation that certain capital assets of the 
applicant had prior to the coming into effect of the Act of 2001 earned an excessive 
return (with the approval of the Minister) and had proceeded to make a deduction to 
disallow the appropriate amount, for example, with reference to the applicant’s airport 
charge revenue for the year 1998, then this deduction might well be said to be a 
retrospective application of the Act of 2001 and ultra vires for this reason.  This is 
 

 
60 
because it would have, under the guise of prospective charging, actually taken away 
something which had already happened namely the receipt of these moneys at a time 
when the Act of 2001 did not apply at all.  The respondent has no business in 
determining airport charges prior to those levied after a month following the 26th 
August, 2002.  In the foregoing example he would have in fact made such previous 
charges his business and in so doing I think could well have acted ultra vires.  But this 
is, notably, what the respondent did not do.   
  
His determination clearly applies only prospectively (as is accepted by the 
applicant) and in my opinion in making his calculations he did no more than consider 
the existing capital expenditure which had already been incurred by the applicant for 
the purpose of determining the cap.  The subject matter of his decision was the 
identification of a maximum airport charge.  It was not whether or not a particular piece 
of infrastructure should be built and he did not purport to reverse decisions in relation to 
this latter category.  I do not agree with the applicant’s submission that the 
methodology deployed by the respondent in dealing with the stranded assets involved a 
disallowance of these assets in a way which involved the retrospective application to 
past events of the Act of 2001.  On the contrary, in my view all that was done was a 
retrospective consideration of these events for the purpose of determining airport 
charges with prospective effect.   
 
I should clarify that in reaching this conclusion I am dealing only with the point 
relating to retrospective application.   
 
 
Q. 3-9 THE ALTERNATIVE ARGUMENTS 
 
Applicant’s Submissions 
 

 
61 
 
The applicant further submits if, contrary to the foregoing, the court holds that 
the respondent does have jurisdiction to review its CAPEX both past, present and future 
then in doing so he is restrained in a number of ways as follows: 
1.  
He may only review the CAPEX and projects within it on the grounds of 
unreasonableness in the Wednesbury sense thus giving the applicant a 
proper margin of appreciation and thereby having due regard to the 
level of investment in the relevant airports as required by s. 33 (a) as part 
of the overall objective of aiming to facilitate their cost effective 
development; 
2.  
He may not micro-manage or micro-analyse the applicant’s CAPEX in 
the sense of purporting to disallow individual projects within it as 
distinct from imposing an overall cap thereon; 
3. 
He may not substitute his own CAPEX on the advice of his consultants 
(IMG) for that of the applicant; 
4. 
He may not, without more, exclude projects in the applicant’s CAPEX 
on the basis that the applicant has failed to justify them or on the basis 
that there has been insufficient consultation with airport users in respect 
thereof. 
 
As will be seen the foregoing propositions involve, further, a determination as 
to whether the respondent did in fact disallow the applicant’s CAPEX or any part 
thereof and of the issue whether the list of ten considerations set out in s. 33 is an 
exhaustive list. 
 
As indicated earlier whilst it is possible to identify the foregoing questions as 
discrete issues they, or at least some of them, were, in fact, dealt with together at least in 
part during the argument.  This was because to a certain extent they are organically 
 

 
62 
connected and in what follows I will not attempt a water tight compartmentalisation any 
more than did the parties during the hearing. 
 
 
Irrationality, Due Regard and Margin of Appreciation 
 
The applicant submitted that it was to the applicant and to no-one else that the 
Oireachtas had entrusted the development of the relevant airports imposing on it a clear 
statutory duty in this regard.  The applicant had long experience and expertise explicitly 
acknowledged by the respondent who was in turn clearly obliged to have due regard to 
the level of investment in the airports under regulation.  Moreover it is important to note 
that the overall objective of s. 33 which aims to facilitate the development of 
cost-effective airports which meet the requirements of users is effectively the same as 
the duty imposed on the applicant to develop airports under s. 16 of the Act of 1998 and 
to carry out that general duty in a cost effective manner (s. 24 (1) (c) of the same Act).   
Whilst the emphasis in the Act of 2001 may also include reference to cost 
effectiveness which meets the requirements of users and to having regard to investment 
in the context of safety requirements and commercial operations which meet the current 
and prospective needs of the airlines, it is quite clear that the respondent is not at large 
and is obliged to have due regard to the actual investment carried out and proposed by 
the applicant at the relevant airports.  What he did was exactly the reverse: namely he 
set up a non-statutory criterion that the applicant would have to justify its CAPEX and, 
in the event that the applicant failed to do this, stated that he was statutorily bound to 
exclude it.  Whatever else this is it is not having due regard to the level of investment in 
the relevant airports. 
 
In truth, given the clear and strong statutory duty imposed by the Oireachtas on 
the applicant and to which the respondent has to have due regard under s. 33 (i) of the 
 

 
63 
Act of 2001, the respondent should approach the applicant’s CAPEX by presuming that 
the applicant has complied with the law (not the reverse which is in effect what he has 
done) and decide to exclude or reduce the relevant costings only if they are 
unreasonable in the Wednesbury sense.  Such an approach is the only one which would 
involve having due regard to the applicant’s investment. 
 
What the respondent has done, on the contrary, was to look at each individual 
item contained in the applicant’s CAPEX and require the applicant to justify it in the 
absence of which he has held himself statutorily bound to exclude it.  Apart from 
involving an assumption that the applicant has failed to comply with its own statutory 
obligation, this approach involves an impermissible micro-management of the 
applicant’s CAPEX.  Not only is this ultra vires the powers of the respondent (the 
Oireachtas has given to the applicant and to the applicant alone the decision making 
function in relation to what projects are required for the development of the relevant 
airports) but when the consequences of this are considered it is apparent why this 
should be an impermissible straying by the respondent into the exclusive jurisdiction of 
the applicant. 
 
The respondent has opted for the single-till approach which he is in principle 
entitled to do.  Having done this, however, he must accept the consequence that there is 
no revenue out of which the applicant will be able to fund any portion of its proposed 
CAPEX which the respondent has disallowed.  The respondent has included all revenue 
streams available to the applicant for the purpose of computing the price cap and 
therefore, if the applicant were to embark upon constructing any project which has been 
disallowed by the respondent, this can only be at the expense of another project which 
has been allowed and in respect of which, therefore, both the applicant and the 
respondent agree that it is necessary for the development of the airport.   
 

 
64 
No responsible board of management of the applicant could contemplate 
authorising a disallowed project in these circumstances even if they could persuade 
some third party to fund it.  This is because they would not be able to guarantee any 
return on such an investment and it would be in breach of its general obligation under 
the Act of 1998 to remunerate its capital and pay interest on and repay its borrowings.  
By choosing to adopt the single-till approach and by further engaging in the 
micro-management of the applicant’s CAPEX down to items of considerable detail, it 
can be seen that the respondent, despite his protestations to the contrary, has effectively 
taken management decisions out of the hands of the applicant.  This cannot have been 
the intention of the Act of 2001 which, whatever about entitling the respondent to 
regulate airport charges and thereby qualify (it seems) the applicant’s statutory 
obligations under the Act of 1998, it cannot have been the intention of the Act of 2001 
that the respondent would become the effective manager of the applicant’s CAPEX, 
pre-empting specific decisions in advance and in that regard at least reducing the 
applicant’s board to the status of a rubber stamp or, perhaps the proposer of projects.  In 
fact the respondent went further because, in place of the applicant’s CAPEX to which it 
effectively paid no regard, it substituted its own as prepared for it by its independent 
consultants IMG.  Indeed these consultants, in stating the statutory objective to which 
their efforts were directed, actually misstated the regulatory requirements of the Act of 
2001 and this is something which in turn has infected the respondent’s determination 
with invalidity since he adopted IMG’s alternative CAPEX.   
 
In the course of making his determination the respondent not only required the 
applicant to justify its CAPEX on pain of having it automatically eliminated for failure 
so to do, but also introduced a further non-statutory criterion, namely consultation with 
the airlines.  The list of ten matters to which the respondent is obliged to have regard 
 

 
65 
under s. 33 of the Act of 2001 does not include consultation but does include an 
obligation to have due regard to the level of investment, in line with safety requirements 
and commercial operations, in order to meet the needs of those on whom the airport 
charges may be levied – namely the airlines and also a requirement to have due regard 
to the level and quality of services offered at the airport by the airport authority and the 
reasonable interests of the users of these services.  In this way the interest of users are 
taken into account by the respondent.   
 
For the respondent to go further and effectively erect consultation into a 
criterion by reference to which the applicant’s CAPEX can succeed or fail is to 
introduce a non-statutory criterion and to give excessive weight to the views of airlines 
which are taken into account in the manner identified in s. 33 and not in the manner 
identified by the respondent.  Indeed, in some instances, the respondent appears to have 
required consensus amongst the airlines in respect of a proposed CAPEX project as a 
test by reference to which it could be excluded.  It should not be forgotten that s. 33 (i) 
requires the respondent to have due regard to “imposing the minimum restrictions on 
the airport authority consistent with the functions of the Commission”. 
 
By erecting justification as an additional non-statutory hurdle, the respondent 
has clearly failed in his duty to have due regard to the applicant’s level of investment at 
the relevant airports.  He has had no regard to it by reference to his own non-statutory 
criterion.  He has thus failed in his statutory duty and his determination is ultra vires 
and should be quashed.  Moreover, having adopted the single-till approach he should 
not have gone on to micro-manage the applicant’s CAPEX on an item by time basis 
because the inevitable result in practice was that he thereby pre-empted the applicant 
board’s decision-making function in regard to these items.   
 

 
66 
 
Specifically with regard to the respondent’s decision to exclude elements of the 
applicant’s CAPEX for inadequate consultation it should be noted that about €200 
million worth of such CAPEX was excluded in the determination of 26th August, 2002, 
notwithstanding that it had been included in the draft determination.  It seems that the 
respondent took the view that, following representation from airlines after the 
publication of the draft determination, he was satisfied that there had been inadequate 
consultation in relation to these items and on that basis decided to exclude them.  This 
could not be a proper exercise of his statutory duty because presumably, in such a 
proper exercise, he had already included these items in the draft determination upon the 
basis, again presumably, that they satisfied all the s. 33 criteria including that they were 
part of a level of investment in the relevant airports which met the current and 
prospective needs of the airlines. 
 
It is important to distinguish between the concept of consultation, which is not 
included in the Act of 2001, and the concept of satisfying the needs of the airlines which 
is.  Part of the applicant’s CAPEX which was not made the subject of consultation 
might well, nonetheless, satisfy the relevant statutory needs.  Presumably the elements 
of the applicant’s CAPEX which was included in the draft determination but excluded 
in the determination itself had satisfied this statutory requirement.  The mere 
inadequacy of consultation (which is not accepted) in relation to this could not mean 
that these items subsequently and retrospectively failed the test which they had already 
passed. 
 
Furthermore s. 33 contains an exhaustive list of the matters to which the 
respondent has to have due regard.  The draftsman has notably declined to use any 
phrase such as, “in particular” or to matters “including the following” or any other such 
standard formula.   
 

 
67 
 
The respondent specifically misinterpreted the import of the Act of 2001 when 
he said that he regarded himself as statutorily bound to exclude items of the applicant’s 
CAPEX which were not justified and thereby precluded him from exercising his 
statutory discretion in relation to the applicant’s CAPEX which he was bound to do.  
Furthermore he adopted the substitute CAPEX from IMG which, in turn, fell into error 
in regard to the statutory requirements when it identified its objective in preparing the 
alternative CAPEX as the main purpose of the review of the applicant’s CAPEX was to 
satisfy the Commission mandate that “the level of investment in airport facilities at an 
airport to which the determination relates be in line with safety requirements and 
commercial operations in order to meet current and prospective needs of those on 
whom the airports charges may be levied.” 
 
Not only does this objective fail to identify the overriding objective of s. 33 
which is to aim to facilitate the development and operation of cost effective airports 
which meet the requirements of users but also misstates one out of ten matters to which 
the respondent shall have regard – specifying in effect that the level of investment in the 
subject airport shall be in line with safety requirements and commercial operations as 
identified rather than subject to the overall requirement that this determination shall aim 
to facilitate the development and operation of cost effective airports.  Furthermore this 
identifies only one of ten matters to which the Commission shall have due regard and 
thereby fails to consider the other nine and places undue weight on the one identified.  
This error further fatally invalidates the Commissioner’s determination. 
 
 
Respondent’s Submissions 
 
With regard to the applicant’s argument that the Commissioner can only review 
the applicant’s CAPEX if unreasonable in the Wednesbury sense, there is simply no 
 

 
68 
justification for such a conclusion in the act.  The  act does include provision for judicial 
review but it is the court which performs this function as one would expect and not the 
Commission.  Moreover the arguments relating to institutional competence do not 
apply because the Commission has available to it all the relevant expertise which the 
court does not.  This proposition is wholly inimical to the notion of regulation and 
would mean that the intention of the Oireachtas was that, in regard to CAPEX, the 
regulator would have jurisdiction only on those rare instances when the courts would 
find the applicant’s CAPEX unreasonable.  With regard to the submission that the 
respondent was not entitled to require the applicant to justify its CAPEX and was 
entitled to disallow it (for the purpose of regulating the airport charges) by reference to 
inadequate consultation, this submission misrepresents the reality of what was done 
which was in fact in accord with the requirements of section 33.   
 
If all that the respondent was empowered to do was to place an overall cap on 
the applicant’s CAPEX and if he was specifically precluded from engaging in what the 
applicant has termed micro-management then there would be no need for the detail set 
out in s. 33 and s. 32 (combined with s. 7) would suffice.   In fact the requirements of s. 
33 show that the respondent is required to have regard to matters of considerable detail 
which clearly authorise him to have regard to the individual projects in the applicant’s 
CAPEX if indeed they do not oblige him so to do.  He is clearly required in aiming to 
facilitate the development of cost effective airports to have regard to the level of 
investment therein (in line with safety requirements and commercial operations) in 
order to meet current and prospective needs of the airlines.  It is difficult to see how the 
respondent might discharge these statutory functions and obligations without having 
regard to the elements in the applicant’s CAPEX and impossible to conclude that 
having such regard is specifically excluded. 
 

 
69 
 
The further indication that the legislators anticipated that the respondent’s 
determination will be intrusive and have an impact on the applicant’s CAPEX can be 
seen in the elaborate provisions facilitating appeal and time limit on the determination 
of five years with the possibility of review after two.   
 
With regard to the argument that the micro-management by the respondent was 
prohibited this is clearly related to the consequences alleged to follow from such 
micro-management rather than to the concept that the respondent can be criticised for 
being able to furnish reasons and explanations as to why and how he has arrived at a 
particular cap.  The consequences complained of are that the applicant’s board are 
effectively pre-empted from taking the relevant decisions given that there will be no 
funding available for disallowed projects and also that these will, in all likelihood, not 
be included in the RAB for the next determination in five years time.  With regard to 
this the respondent submitted that the applicant’s board is required under the 
respondent’s regime to do no more than face the uncertainty facing any board on a 
company whose activities are subjected to ordinary market forces.  There is nothing in 
the Act which says that the applicant’s board had to be given certainty in regard to 
proposed investments.  So far is the Act of 2001 from requiring this, it requires, instead, 
that the respondent have regard to the many matters set out in s. 33 which clearly 
authorise him (if they do not require him) to assess the applicant’s CAPEX in the 
detailed micro-managerial way in which he has done. 
 
Section 33 of the Act of 2001 must not be construed as a straight jacket.  In 
Glencar Exploration Plc v. Mayo  Co. Co. [2002]1 I.L.R.M. 481 the Chief Justice, in 
the context of a statutory obligation on a planning authority to “have regard to … 
policies and objectives …of the Government insofar as they may relate to its functions” 
said: 
 

 
70 
“There was no evidence to indicate that the respondents simply ignored the 
letter from the Minister for Energy: on the contrary, they adjourned the meeting 
at which they were to make the vital decisions so that the Minister’s views could 
be considered.  The fact that they are obliged to have regard to policies and 
objectives of the government or a particular minister, does not mean that, in 
every case, they are obliged to implement the policies and objectives in 
question.  If the Oireachtas had intended such an obligation to rest on the 
planning authority in a case such as the present, it would have said so.” 
 
It is noteworthy that in regard to this aspect of the case the decision of the Chief 
Justice reversed that of Blayney J. in the High Court who appeared to consider that the 
local authority could not be said to have had regard to the relevant policy where its own 
policy in the development plan was opposed to it.   
 
It is worthy of note in this context that the views of the House of Lords are 
equally disposed to allow a wide margin of discretion to the relevant statutory authority 
in a similar statutory context.  In Tesco Stores Ltd. v. Secretary of State for the 
Environment [1995] 1 W.L.R. 759 Lord Keith of Kinkel said: 
“But it is entirely for the decision maker to attribute to the relevant 
considerations, such weight as he thinks fit, and the courts will not interfere 
unless he has acted unreasonably in the Wednesbury sense.” 
 
Lord Hoffman put it more assertively when he said 
“The law has always made a clear distinction between the question of whether 
something is a material consideration and the weight which it should be given.  
The former is a question of law and the latter is a question of planning judgment 
which is entirely a matter for the planning authority.  Provided that the planning 
authority has regard to all material considerations, it is at liberty (provided that 
 

 
71 
it does not lapse into Wednesbury irrationality) to give them whatever weight 
the planning authority thinks fit or no weight at all.  The fact that the law regards 
something as a material consideration therefore involves no view about the part, 
if any, which it should play in the decision-making process. 
The distinction between whether something is a material consideration and the 
weight which it should be given is only one aspect of a fundamental principle of 
British planning law, namely that the Courts are concerned only with the 
legality of the decision- making process and not with the merits of the decision. 
If there is one principle of planning law more firmly settled then any other, it is 
that matters of planning judgment are within the exclusive province of the local 
planning authority or the Secretary of State.” 
 
In reliance upon these citations the respondent submits that it is a matter for him 
to determine what weight he must attach to the needs of the airlines.  Once it is 
established that the respondent did have regard to this particular factor then it is a matter 
for him and not for the court as to what weight he has attached to it, if any.   
 
In this context it was a perfectly reasonable implementation of his statutory 
function to give consideration to the level of consultation conducted by the applicant 
with airport users including the airlines in order to ascertain whether its CAPEX met 
their needs as identified in the Act. 
 
It was, further, a reasonable implementation of his duty under s. 33 generally in 
aiming to facilitate the development of cost effective airports to require the applicant to 
justify its CAPEX and thereby demonstrate that it facilitated cost effective airports.   
 
The respondent in further carrying out this part of its function commissioned an 
alternative CAPEX from IMG so that in making his determination he should be in a 
 

 
72 
position to aim to facilitate cost-effective airports. He was clearly entitled to prepare his 
own CAPEX as the applicant puts it in discharge of his statutory obligation. 
 
Third Party Submissions 
 
On behalf of Aer Lingus, it was submitted that s. 33 made it clear that the 
respondent had an obligation to consider the applicant’s CAPEX.  Moreover to adopt a 
CAPEX which did not take account of airport users was virtually worthless in the 
context of section 33.   
 
This party emphasised the other sources of revenue available to the applicant 
not included in the single-till.  It may make efficiency gains, borrow money, dispose of 
surplus assets or develop part of its lands, gain additional rent, sell water, recover 
monies for road, bridge and tunnel construction works, secure investment in the airports 
and engage in profitable business.  It may develop self funding projects and devise new 
revenue streams from, for example, vehicle permits, access permits, clamp removals or 
such like.  The respondent was entitled to require financial analysis and justification 
from the applicant so that it could discharge its statutory function and the matters 
complained of by the applicant are all matters which the respondent was entitled to have 
regard to in discharge of his own statutory functions under section 33. 
 
This party submitted that the consultation engaged in by Aer Rianta was, in its 
view, wholly inadequate and the reliance on the applicant’s consultation was an entirely 
reasonable method whereby the respondent assessed whether the proposed CAPEX met 
the requirements of users as he was required to do.  In this context Aer Lingus 
submitted that it was not merely lack of consultation upon which the Commission 
placed weight but an overwhelming opposition of airport users and specifically airlines 
to the applicant’s proposed CAPEX to which regard was had.  This was clearly a 
 

 
73 
legitimate way by which the respondent could have had regard to the level of 
investment made in order to meet the current and prospective needs of the airlines and 
the level and quality of services offered and the reasonable interest of the users of those 
services.  This was not the imposition of an additional criterion but rather the 
implementation by the respondent of the requirements set out in section 33.  Given that 
this is so, there can be no question of the respondent attaching impermissible weight 
because it is up to him and not the court as to what weight he attaches to any particular 
statutory criterion. 
 
It was submitted on behalf of Ryanair Limited that s. 33 of the Act of 2001 
makes the requirements of users of an airport a paramount consideration in the making 
of a determination.  The Act of 2001 places no restriction on what are to be the 
requirements of users which are to be taken into account by the respondent in carrying 
out his function thereunder.  Clearly airlines are users and there is an argument (already 
detailed earlier in this judgment) to the effect that they are the only users.  Even if they 
are not the only users it is clear that they are an important and indeed pre-eminent user, 
the needs of which must be taken into account by the respondent. 
Equally clearly the applicant is not a user in this context and so the weight 
attached by the respondent to the needs and consultation with airlines was entirely 
justified and within the statutory scheme.   
On behalf of Ryanair, it was also submitted that there are revenue streams 
available to the applicant outside the single till taken into consideration by the 
respondent including aeronautical fees other than airport charges, commercial revenues 
such as car parking charges, charges to concessionaires, inter-company loans and 
borrowings.  Of course the setting of a cap for airport charges will inevitably impact on 
the applicant’s business and managerial role.  This, one assumes, must have been the 
 

 
74 
intention of the Oireachtas.  But this is not the same as to say that the setting of a price 
cap involves usurpation of the applicant’s managerial role or functions.  All the 
respondent does in setting the price cap is to aim to facilitate the development and 
operation of cost effective airports: the statutory requirement is not that he ensure that 
this happen which would be language more appropriate to the functions of a manager.   
 
The submission that, by requiring the applicant to justify its CAPEX, the 
respondent was introducing a fresh and new statutory criterion is to distort the 
procedures actually adopted by the respondent.  The primary aim of the respondent 
must be to facilitate the development of cost effective airports.  Clearly under the Act of 
2001 the respondent had to consult widely before making a determination in order to 
satisfy himself with regard to the matters referred to in section 33.  It is to be noted 
however that consultation per se was not the reason why the respondent factored out or 
disallowed part of the applicant’s CAPEX.  The immediate reason for this was – as 
clearly stated by the respondent himself in the reasons given for his determination – 
because the respondent found that much of the applicant’s CAPEX was not cost 
effective and did not meet the needs of users.  It was provided in the determination that 
“Airlines expressed a view that this statutory factor (that is section 33 (a)) must 
be considered in the context of the overall statutory objective.  In particular, 
many airlines expressed their concern that the capital expenditure programme 
(CAPEX) of Aer Rianta did not and would not meet the needs of users.  
Following a careful analysis of the CAPEX at Dublin, Shannon and Cork, the 
Commission accepted many of their representations.…The Commission notes 
the following in relation to both the previous, as well as current CAPEX, for the 
Aer Rianta airports:  
•  Poor consultation with the users of the airport, 
 

 
75 
•  Lack of transparency in quality of information provided to users of the 
airport, particularly as to planned costs of proposed projects,  
•  Construction (both past and planned) of facilities that are inefficient 
and/or do not meet the requirements of users of the airports in line with 
best international practice, 
•  Inadequate or non existent cost-benefit-analysis or business cases 
undertaken to justify the specific CAPEX projects,  
•  Internal inconsistencies in information supplied by Aer Rianta to the 
CAPEX programme. 
Therefore the Commission has not relied on the Aer Rianta CAPEX programme 
in making its determination on the maximum levels of airport charges, save to 
the extent that it identifies necessary compliance/safety projects. 
 
In its draft determination, the Commission had prepared its best estimate 
of a CAPEX programme for Dublin, Shannon and Cork airports based on the 
information and the documentation it had gathered at that time, referred to in 
the draft determination as the recoverable CAPEX programme.  Many users 
of the airport made representations that elements of the recoverable CAPEX 
programme did not meet the requirements of users.  The Commission 
accepted some of these representations.   
 
Therefore the Commission has revised its recoverable CAPEX 
programme for the final determination.  It retains all projects deemed by the 
Commission to be necessary for safety or compliance.  In addition, it also 
includes those projects required to increase needed capacity at the airports, 
but only those in line with the interest of users…” 
 

 
76 
 
This party submitted that it is clear from the foregoing that the issues of poor 
consultation and inadequate information and indeed the failure by the applicant to 
justify parts of its CAPEX is embedded in the main statutory criteria referable to the 
question of cost effectiveness and the requirements of users and has not been, as 
contended by Aer Rianta, erected into a new and unauthorised criterion invented by the 
Commission.  The consultation issue has to be seen in its proper context which is that 
referred to in the citation from the reasons given by the Commission itself in its 
determination and this clearly shows the decision to have been taken by reference to the 
correct statutory criteria.   
 
 
Conclusions 
  
I can find no warrant in the language of the Act of 2001 to support the 
proposition that the respondent may only interfere with the applicant’s CAPEX insofar 
as he finds it to be unreasonable in the Wednesbury sense.  No such limitation appears 
attached to the concept of regulation itself in section 7.  The language of s. 33 requires 
the respondent to aim to facilitate the development of cost effective airports which meet 
the requirements of users and this insofar as the subject airport’s CAPEX is involved 
gives the respondent a far more intrusive relationship to it than that connoted by the 
concept of irrationality review.   
He must, in my view, test and measure the CAPEX by reference to this overall 
aim and this in turn involves assessing whether the CAPEX or any particular element in 
it is conducive to that aim.  If the applicant’s submission on this point is correct then he 
must simply pass through the CAPEX unless he finds it irrational regardless of whether 
it facilitates such an aim or not.  Such an interpretation would require specific language 
which is not present.  On the contrary, in my view, the respondent when dealing with an 
 

 
77 
applicant’s CAPEX shall aim in the manner specified and shall have regard to the ten 
matters listed in section 33.  The manner in which he carries out his duties insofar as the 
applicant’s CAPEX is concerned is set out comprehensively, albeit in fairly general 
language, in s. 33 which requires him to carry out an assessment and evaluation of the 
CAPEX by reference to the statutory criteria. 
 
In this regard it is worth noting that the duty performed by the applicant in 
carrying out its functions under s. 16 and ss. 23 and 24 of the Act of 1998 is a different 
duty to that carried out by the respondent when carrying out his function under s. 32 of 
the Act of 2001.  Clearly it makes sense that the legislature would have required the 
respondent under s. 32 to have regard to many of the matters which have a close 
relationship to the management and development of a subject airport but it is for the 
purpose of a distinctly different function albeit closely linked. 
The respondent is not carrying out the self same statutory function as is carried out by 
the applicant under s. 16 of the Act of 1998.  Once again it would have required specific 
statutory language, which is absent, in order to achieve this result. 
 
What the applicant does under s. 16 is manage and develop airports and in doing 
this shall ensure the provision of certain specified services and facilities which are 
necessary for the operation, maintenance and development of same.  What the 
respondent does under s. 32 of the Act of 2001 is make a determination specifying 
maximum levels of airport charges.  The two functions are brought into harmony with 
one another by the statutory requirement that the respondent shall have regard to 
several matters listed in s. 33 of the Act of 2001 and specifying in s. 34 that the 
applicant’s power to determine charges is subject to the function of the respondent.  The 
fact that the two functions are brought into harmony does not mean, however, that they 
are the same, nor does the fact that the respondent’s function is intended and will 
 

 
78 
inevitably impact quite intrusively, as may be, upon the discharge of the applicant of its 
functions.  To that extent the latter’s statutory duties are qualified but once again they 
remain the duties of managing and developing airports, not regulating airport charges 
and the respondent’s function remains the duties of regulating maximum levels of 
airport charges, not managing and developing airports.  To achieve another result 
would require different statutory language which is not present.   
 
There is nothing in principle, therefore, inimical to the concept that the 
respondent should conduct an item by item analysis of the applicant’s CAPEX with 
power to review, disallow or reduce it if this is the method by which he intends to carry 
out his functions under section 33.  The fact that this may impact intrusively on the 
management function of the applicant is to be expected.  It does not mean however that 
the applicant is relieved of its function: merely that the latter is qualified by reference to 
the available funding: no court would construe the duty of the applicant under the Act 
of 1998 as requiring it to do something which is impossible or to spend money which it 
does not have.   
 
In my view there is a specific duty on the respondent to review a subject 
airport’s CAPEX.  This applies even if the subject airport fails to provide information in 
relation to such CAPEX or insufficient detail for the purpose of the respondent’s 
analysis.  The duty still remains on the applicant to aim to facilitate the development 
and operation of a cost effective airport and to have due regard to the level of 
investment in such airport in line with the statutory requirement.  That is his duty and he 
must carry it out in my view even if the information given him by the subject airport is 
inadequate.  Clearly if the subject airport provides relevant information this is 
something to which the respondent shall have due regard but in the absence of such 
 

 
79 
information or inadequate information he still has to have due regard to the statutory 
objective. 
 
It is submitted by the applicant that in making his determination in the way he 
did the respondent actually trespassed into the area of management which is the sole 
prerogative of the applicant’s board.  By getting into the detail of the individual items 
contained in the CAPEX and purporting to allow or disallow or reduce the costs in 
relation to these items the applicant says that the respondent’s decision has pre-empted 
and shackled their management function for the reasons already cited in the earlier part 
of this judgment.  The respondent accepts that his decision will have an impact on 
theirs.  This is intended and not surprising.  But he says he does not manage and has 
argued that the applicant is free to develop its own CAPEX subject only to his 
determination in relation to maximum levels of airport charges.   
 
As already stated, in my opinion the respondent was, if not obliged, certainly 
authorised by the specific provisions of s. 33 to carry out an item by item analysis and 
review of the applicant’s CAPEX with power to allow, disallow or reduce same.  Again 
already as stated, I do not think that this means that he was carrying out management 
and development functions as identified in s. 16 of the  Act of 1998.  It may well be that 
the applicant’s board will feel itself constrained by the respondent’s methodology and 
the information they have in relation to his approach to their CAPEX but this does not 
mean that it is his decision rather then theirs to carry it out or not to carry it out.   
Nor does this mean that they are reduced to the function of a rubber stamp.  The 
respondent and the notice parties have suggested various other revenue streams which 
may be available to the applicant and whilst I think that these arguments fail to fully 
take into account the effect of the single till approach adopted by the respondent it 
remains the case that it is the board of the applicant and not the respondent which will 
 

 
80 
continue to manage and develop the airport forward into the period affected by this 
determination.  The respondent’s decision no more deprives them of that duty and 
power than would a total collapse in passenger numbers due to some unforeseen world 
catastrophe resulting in the annihilation of their revenues from airports charges.  So far 
from the language in the Aviation Regulation Act, 2001 supporting the applicant’s 
contention in this regard it seems to me to go powerfully in the opposite direction.   
The respondent has a duty to aim to facilitate the effect of cost effective airports 
which meet the requirements of users and must have regard to the level of investment in 
those airports in line with the statutory objectives.  He must have regard to the level and 
quality of services at the airports and the reasonable interests of the users of these 
services.  He must have regard to the cost, competitiveness and operational efficiency 
of the airport services with respect to international practice.  This list of matters to 
which the respondent is obliged to have regard, in my view, clearly authorises him to 
conduct the detailed review of the applicant’s CAPEX which he has done in this case: I 
do not say that he is obliged to adopt this item by item method in order to discharge his 
statutory obligation but I do say that in carrying out this item by item review he is 
clearly doing what the Oireachtas intended him to do under the characterisation of 
determining maximum airport charges and not under the characterisation of managing 
and developing an airport.  
The nomenclature is unimportant: clearly it is possible to describe what the 
respondent did in relation to the new terminal at Cork for example as a disallowance: 
the issue is not whether he did or did not disallow the terminal or indeed what the word 
might mean.  The issue is whether what he did was within his powers (and it was) and 
whether this amounted to a usurpation of the applicant’s management function (and it 
did not).   
 

 
81 
 
The applicant further submits that in relying upon the airlines’ allegation that 
there was inadequate consultation with them by the applicant in relation to its CAPEX, 
he is actually introducing a new statutory criterion by reference to which he then 
proceeds to exclude and disallow portions of the applicant’s CAPEX.  It is submitted 
that the true position is that he had already included some £200 million worth of the 
applicant’s CAPEX in the draft determination and must therefore have already 
concluded at that point that such items had satisfied the various statutory criteria set out 
in section 33.  Following the publication of the draft determination, it is submitted, the 
various airlines complained about the level of consultation and this was used by the 
respondent to remove £200 million worth of the CAPEX from his final determination.  
These items cannot have been removed from the category of items which meet the 
statutory criteria simply because it was subsequently shown that there was not adequate 
consultation in relation to them (this is contested by the applicant).  Clearly they can 
satisfy the needs of the airlines even if there was no consultation. 
 
The respondent in publishing the draft emphasised that it was just that and was 
subject to review.  Furthermore in the determination the respondent in giving his 
reasons for justifying it referred to the view expressed by the airlines that the 
applicant’s CAPEX would not meet their needs.  This primary submission was 
accepted in part by the respondent.  The reasoning then proceeds to note certain points 
in relation to previous and current CAPEX which are clearly secondary reasons and 
which include poor consultation with users of the airport and also inadequate or 
nonexistent cost-benefit-analysis or business cases undertaken to justify specific 
CAPEX projects.  The determination then proceeds to say that therefore the 
Commission has not relied on the Aer Rianta CAPEX programme save to the extent 
that it identifies necessary compliance/safety projects.  It is also clear, as I will point out 
 

 
82 
in a moment, that the respondent, having reached this conclusion, decided to subject the 
applicant’s CAPEX for further analysis to its independent consultants IMG and 
ultimately adopted the latter’s alternative CAPEX for the purposes of his 
determination.   
 
Whilst of course it is true to say that the concept of consultation is not identical 
with the concept of meeting the needs of airlines or the reasonable interests of airport 
users, the two concepts are clearly intimately related.  If, due to consultation, the 
airlines and users are unanimous in approval this would clearly greatly assist the 
respondent in reaching a decision that the approved project satisfied the statutory 
criteria.  Equally, if there was strong opposition this would, as his counsel submitted, 
induce him reasonably to take a hard look at the project involved.  The applicant 
submits, however, that the respondent did not even take a “hard look” at projects which 
he deemed not to have been justified by the applicant but rather regarded himself, as he 
stated, as statutorily bound on this basis alone to exclude it from his calculation. 
 
At this point I wish to distinguish my findings in relation to the consultation 
element of this submission and the justification element.  In relation to the former it 
does seem to me that the reasoning offered by the respondent in his determination, 
which I cited at some length in my account of the submission made on behalf of 
Ryanair, places the acceptance by the respondent of the claimed inadequate 
consultation in its proper statutory context, because the respondent gives as his reason 
for refusing many items of capital expenditure programme included in the draft 
determination, the fact that they would not meet the needs of the users - a conclusion 
which he reached, it is true, following their claims that there had been insufficient 
consultation in relation to them.  However in my view he was perfectly entitled to 
 

 
83 
conclude in that context that the identified projects did not meet the needs of the users 
and for this reason to exclude them.  This is a clear adherence to the statutory scheme. 
 
Rather different considerations apply to his treatment of the failure of the 
applicant to justify the inclusion of certain items in its CAPEX.  In this regard the 
respondent did specifically say in his reason for rejecting submissions by the applicant 
in Part II of the reasons given for his determination that he regarded himself as 
statutorily bound to exclude items which the applicant had not justified.  (I note, as 
well, that this non-justification is also referred to by the respondent in the same context 
as the inadequate consultation namely as a list of noted elements given following the 
primary determination that the CAPEX was excluded because it did not meet the needs 
of users.)  However it must be acknowledged that the respondent has misstated the 
effect of the statutory provisions when he described himself as statutorily bound to 
exclude items of the applicant’s CAPEX which the applicant had failed to justify.  I 
have already said that in my opinion, regardless of the fact as to whether the applicant 
submitted a CAPEX or did or did not submit adequate information in relation thereto, 
the respondent had an independent obligation to consider the matters identified in s. 33 
which included aiming to facilitate the development of cost effective airports and 
having due regard to the level of investment therein.  I do not think he can be relieved of 
this duty simply because the applicant fails to justify elements of its CAPEX.   
 
Accordingly I now turn to see whether this description by the respondent 
himself which suggests that, contrary to the foregoing, he abandoned the exercise of his 
statutory discretion, once the applicants failed to justify its CAPEX, is an accurate 
description of what actually happened. 
 

 
84 
 
A description of how the applicant’s CAPEX was treated is to be found in the 
third affidavit of the respondent and the first affidavit of Jorge Gonzalez sworn 
respectively on the 28th and 29th January, 2002.   
 
The respondent in his affidavit says he first met employees of IMG on 23rd 
February, 2001, and discussed with them the proposed methodology and list of 
information required from the applicant in respect of CAPEX.  On 20th and 23rd April a 
similar meeting reviewed information provided by the applicant in response to a first 
request for information and it was decided that a new list of information was required.  
On 21st May, there was a meeting to discuss IMG’s review of the applicant’s proposed 
CAPEX.  More information was anticipated from the applicant on 24th May.  On 11th 
June, 2001, IMG presented the respondent with initial results of its review of the new 
CAPEX information provided.  It was agreed that IMG would provide a report by 22nd 
June, so that the respondent could review and comment on it before the draft report on 
24th June, for inclusion in the draft determination (which was published on 26th June).  
The further review of IMG’s work was done on the 20th July, 2001, and on 30th July, 
IMG were briefed as to what work was expected of them following receipt of the final 
statutory representations.  They discussed, inter alia, the need to generate a new 
recoverable CAPEX for the final determination.  There was another review of IMG’s 
work on 6th August, 2001, and this meeting largely consisted of an analysis of all items 
in the applicant’s and respondent’s recoverable CAPEX – description, justification, 
cost, inclusion, exclusion, inclusion at a later stage.  The respondent was presented with 
the latest results of IMG’s recoverable CAPEX and there were discussions regarding 
reasons for allowing modifying or disallowing any CAPEX items.  This discussion 
included consideration of the submissions made by the applicant and other bodies in 
response to the draft determination.  There was a final meeting in respect of CAPEX on 
 

 
85 
20th and 21st August, 2001, where the subject was the content and results of the final 
review of the applicant’s CAPEX.  The respondent undertook a line by line review of 
the recoverable CAPEX proposed by IMG.  He also reviewed items for inclusion in the 
final IMG CAPEX report.  At that meeting the respondent decided that he would “use 
as (his) recoverable CAPEX for the purposes of (his) determination the recoverable 
CAPEX now contained in the IMG report included in the report on reasons for the 
determination.” 
 
Also in the same affidavit the respondent gives a history of the response by the 
applicant to the statutory request for information issued by the respondent.  The 
applicant’s response to the first statutory request provided some documentation and 
noted that certain documentation was designated as confidential and noted that 
“financial analysis performed to justify investment” was “not in existence”.  Therefore 
in respect of future capital expenditure totalling in excess of £1.351 million there was 
no documentation in existence relating to financial analysis of that expenditure.  In 
relation to financial analysis to justify past capital expenditure a one page memorandum 
without any accompanying documentation was submitted which did refer to specific 
projects.  Further information was indeed furnished by the applicant but on 24th May, 
2001, it insisted once again that it would be seriously prejudicial to the applicant if the 
information provided in respect of planned capital expenditure were to be published at 
this level of detail.  The respondent had, therefore, to consider how to protect the 
applicant’s confidentiality on the one hand and on the other how he could publish in the 
draft determination sufficient material to achieve transparency and to enable 
representations to be made by interested parties in a meaningful way.   
The respondent had received from IMG a recoverable CAPEX based on the 
applicant’s CAPEX which identified individual projects and was now asked to 
 

 
86 
aggregate these so that each individual project and its cost could not be identified.  On 
14th June, 2001, it emerged from a telephone call that the applicant did prepare financial 
analysis of certain projects in its CAPEX programme which had been asked for on two 
previous occasions but not supplied.  The respondent wrote expressing concern and 
demanding the information.  Under pressure, the applicant furnished the information 
which provided a financial analysis only of certain projects and not others. The 
respondent refers to an averment in an affidavit sworn by Mark Foley on behalf of the 
applicant to the existence of formal appraisal including relevant cost benefit analysis 
and/or business cases prior to CAPEX projects being formally approved by its board 
and notes that he has never seen any such analysis despite the making of several 
statutory requests for information.   
Following the publication of the draft determination, the applicant made a 
detailed representation to the respondent on 26th July, 2001.  This contained CAPEX 
information which differed in some respects substantially from that already provided.  
In summary, therefore, whilst the applicant submitted information on CAPEX on five 
occasions that information contained some inconsistencies, did not provide a full cost 
benefit analysis of all elements of the CAPEX nor did it appear to justify all elements of 
the applicant’s CAPEX programme.  Furthermore following the publication of the draft 
determination the respondent received a large number of representations from 
interested parties including a number of the airlines who expressed the view that the 
applicant’s CAPEX did not and would not meet the needs of users.  They also criticised 
the lack of consultation engaged in by the applicant.   
This was taken seriously by the respondent and on 10th August, 2001, he wrote 
to the applicant and referred to its representation on 26th July, 2001, which stated that 
for all major capital projects general consultation was carried out and specific working 
 

 
87 
groups were set up.   The respondent requested the applicant to provide this information 
because there was an issue on this subject between the users and the applicant.  
Publication of the draft determination was the first time that the airlines had seen any 
detail of the applicant’s CAPEX albeit in an aggregated form.  The respondent was now 
approaching the deadline for publication of his determination.  At the request of the 
applicant, however, he extended the deadline for the applicant submitting information 
on consultation to 20th August and on that date the applicant provided the information.  
Having considered this information and also information from other interested parties, 
the respondent concluded that the consultation process engaged in by the applicant in 
relation to its proposed CAPEX with users of the airport had been poor.  He therefore 
took the view that the users’ comments about the recoverable CAPEX should be 
considered very seriously indeed and fully taken into account in deciding upon the 
recoverable CAPEX.  He took this view in light of his statutory obligations.  In his 
affidavit he says 
“Had the views of users and in particular those on whom the airport charges 
may be levied been taken into account then I would not necessarily have 
attached such weight to their criticism of the proposed CAPEX since I would 
have assumed that CAPEX had been arrived at following a consideration of the 
users’ views.  However where I had formed the view that consultation with 
users was poor I gave great weight to the views of users.  In this regard I gave 
instructions to IMG to attach significant weight to the views of users in coming 
up with a recoverable CAPEX.”   
In his affidavit Jorge Gonzalez, vice-president of IMG, says that his company 
reviewed the applicant’s proposed five year CAPEX programme taking into 
consideration the statutory obligations of the respondent, and in particular the 
 

 
88 
obligation on the respondent to have due regard to the level of investment in airport 
facilities at an airport to which the determination relates, in line with safety 
requirements and commercial operations in order to meet current and prospective needs 
of those on whom the airports’ charges may be levied.  He further says that IMG’s 
review of the applicant’s CAPEX proceeded from an initial assumption that IMG 
would accept the metrics (scale, timing and cost) of the applicant’s CAPEX 
programme, subject to justification of the need for each component and verification of 
its cost.  It became clear that there were difficulties with the information provided by 
the applicant in light of which the respondent concluded it could not rely exclusively on 
the applicant’s information in deciding whether or not all of the proposed expenditure 
should be included by the respondent when calculating the level at which maximum 
charges should be set.  It was decided to take into account the applicant’s CAPEX as its 
initial starting point and analyse whether that CAPEX programme could be objectively 
justified.   
 
In carrying out this process each and every project included in the applicant’s 
proposed CAPEX programme was scrutinised in the same way.  The first step was to 
review all relevant information that had been provided on the project by the applicant 
through its response to the respondent’s information request.  The need for the project 
was then determined by classifying the project within any of the six investment drivers 
identified by IMG and if the project was deemed to be driven by safety and compliance 
issues its need was established based on the requirement set by the Irish Aviation 
Authority or any other agency with jurisdiction on the subject.   
If the project was classified as being required by any other driver, IMG first 
reviewed the applicant’s information on the project and ascertained whether it provided 
any form of justification that could be verified.   
 

 
89 
If information was lacking, as was the case in many instances, IMG proceeded 
to review any relevant information associated with the project from third party sources.  
IMG then proceeded to analyse whether the project could be objectively justified.   
IMG gave the applicant’s CAPEX programme the benefit of the doubt and 
made every effort to justify each project through the use of industry practice and 
standards.  Due to the lack of information provided by the respondent of the need to 
meet capacity demand, IMG developed a detailed demand/capacity study, a copy of 
which was included in Appendix V of the determination. The demand capacity study 
carried out by IMG was based on the applicant’s own air traffic forecast.  Where it was 
considered that the project was required, IMG then established what a reasonable 
amount of capital expenditure on that project would be, with reference to the 
information provided by the applicant, third parties and industry standards.  In the 
absence of satisfactory information from the applicant, it was difficult to verify the need 
for any proposed investment, its timing and sometimes its cost, and how it would 
impact upon the level and quality of services at the airport.   
Mr. Gonzales then refers to the fact that in publishing the draft determination 
the respondent was anxious that interested parties and the public would be able to 
provide as full a submission as possible and, with that in mind, IMG provided an annex 
setting out the recoverable CAPEX.  Because of the applicant’s insistence that much of 
this information was confidential, the information had to be published in aggregated 
ways so that it did not set out in detail the applicant’s categories of CAPEX.  Following 
publication of the draft determination, new information was provided by the applicant 
and also from representations made by interested parties and members of the public.  In 
view of the users’ opposition to the CAPEX and the respondent’s instructions as to the 
weight to be attached to that opposition in view of the lack of consultation engaged in 
 

 
90 
by the applicant as well as the further analysis that the representations prompted, the 
recoverable CAPEX ultimately decided upon differed significantly from that set out in 
the draft determination.  
 
From the foregoing it can be seen that, far from regarding himself as statutorily 
bound to exclude items in the applicant’s CAPEX which the applicant had failed to 
justify, the evidence is that every facility and benefit of the doubt was given by or on 
behalf of the respondent to the applicant’s CAPEX starting with IMG’s initial 
assumption that it would accept the metrics (scale timing and cost) of the applicant’s 
CAPEX programme subject to justification of the need for each component and 
verification of its cost.  Each and every project included was analysed in a step by step 
process described in the affidavits and it is also clear that the recoverable CAPEX 
programme prepared by IMG was prepared on the basis of its analysis from this 
favourable starting point of the applicant’s CAPEX.  The CAPEX programme included 
in the final determination of 26th August, 2001, was completed after detailed and 
repeated review by the respondent in light of information relating to consultation 
(which the respondent considered was poor) and inadequate justification which came to 
light in some instances after the publication of the draft determination.  It is clear, 
therefore, that despite the misdescription by the respondent in his own reasons included 
for rejecting Aer Rianta’s submission in relation to the CAPEX to the effect that he 
regarded himself as statutorily bound to exclude items of the applicant’s CAPEX which 
the applicant failed to justify, the respondent gave the true description of his application 
of the statutory provisions when giving his reasons for making his determination (Part I 
of CP8 /2001) as distinct from his reasons for rejecting Aer Rianta’s submissions (Part 
II) under the heading “statutory factors” where he said  
 

 
91 
“In particular, many airlines expressed a concern that the capital expenditure 
programme (CAPEX) of Aer Rianta did not and would meet the needs of users.  
Following a careful analysis of the CAPEX at Dublin, Shannon and Cork, the 
Commission accepted many of these representations.” 
This (namely that CAPEX would not meet the needs of users) is the 
respondent’s reason for rejecting the applicant’s CAPEX and it is clearly squarely 
within the provisions of section 33.  In my view it would be a distortion of the process 
actually engaged in by the respondent as described in the affidavits referred to, to 
characterise it as has indeed the respondent himself at one point in Part II of CP8/2001 
as a process whereby the respondent regarded himself as statutorily bound to exclude 
the elements of the applicant’s CAPEX which had not been justified by the applicant.  
This is clearly not the way in which the respondent proceeded and to rely on this 
misdescription of the procedure would, in my opinion, result in an erroneous 
conclusion that the respondent had acted ultra vires his powers.  The respondent was 
obliged, inter alia, to assess whether the applicant’s CAPEX met the needs of the 
airlines and the reasonable interests of the users of airport services and this he clearly 
did in the process described in the affidavits referred to above. 
Whilst issue was taken on behalf of the applicant (primarily in the affidavits 
sworn by Margaret Sweeney on 12th June, 2002, and by Cathal Guiomard on 12th April, 
2002), with much of the substance in the conclusions of the respondent in relation to 
CAPEX, and whilst the account given by him and Jorge Gonzalez was adversely 
commented upon and subjected to doubt especially by Ms. Sweeney, it remains clear 
that so far from regarding himself as statutorily bound to disallow the applicants’ 
CAPEX unless justified, the respondent’s account given in these affidavits, which is 
substantially at variance with that description, is how it was dealt with in practice.  
 

 
92 
Accordingly what initially appears to be a worrying self-description by the respondent 
of this part of his process giving rise to an implication that he failed to exercise his own 
judgment and his own assessment as required to do by the statute turns out in reality to 
be a misdescription and when the process adopted by the respondent is subjected to 
closer scrutiny, it is clear that the respondent did in fact exercise his own judgment and 
make his own assessment in relation to the applicant’s CAPEX in a manner which 
complied with his statutory duty. 
 
The applicant has submitted, further, that by adopting IMG’s alternative 
CAPEX which was itself based, according to IMG’s own statement, on misdescription 
of the relevant statutory objections, the respondent himself acted ultra vires.  In the first 
place, it should be noted that the primary work which IMG was required to do was 
indeed an analysis of the applicant’s CAPEX.  Whilst the overall objective required of 
the respondent in s. 33 is set out in the first three lines thereof it may well be thought 
that subpara. (a) is the one which deals most specifically with the CAPEX.  In this 
context it is not entirely wide of the mark for IMG to identify this as the particular 
statutory objective to which they had regard in their work.  More importantly, in my 
opinion, the respondent himself in giving his report of the reasons for his determination 
sets out at the very forefront of this document the primary objective as it set out in the 
first three lines of section 33.  It would be a distortion, I think, to conclude that the 
respondent failed to aim to facilitate the development and operation of cost effective 
airports which meet the requirements of users when this is in fact what he sets out as the 
primary statutory objective to which he had regard.  In my view the applicant has not 
made out a case to the contrary effect.   
 
 
Q. 10 EXOGENOUS UNFORESEEN COSTS 
 

 
93 
Applicant’s Submissions 
 
These are costs imposed upon Aer Rianta from an outside agency which by 
definition cannot be specifically predicted or calculated at the time of the making of the 
determination.  The example used in the submissions was security costs imposed on 
Aer Rianta which it is obliged to incur.  It appears to be accepted that some such 
exogenous unforeseen costs will, in all probability, be incurred during the lifetime of 
any five year period.  In these circumstances the applicant contends that the 
determination should have provided a mechanism for dealing with these costs if and 
when they arise and that the determination is invalid for failing so to do.  The applicant 
points out that it made a submission prior to the making of the determination to the 
effect that compliance with the statutory requirements and in particular s. 33 (a), (b), (f) 
and (j) can only be achieved by making such a provision.  Under these provisions, the 
respondent is required to have regard to the level of investment in airport facilities 
which, by definition, will include such costs (the appropriate mechanism will be 
“triggered” only if and when such costs are incurred) and a reasonable rate of return on 
such capital employed.  Moreover, the respondent is obliged to have regard to the 
operating and other costs incurred by the airport authority and to national and 
international obligations which are relevant.  The applicant relied on an example where 
the U.K. regulator allowed 95% of such costs, holding back 5% presumably as a way of 
incentivising the regulated airports to achieve economies.  No objection could be taken 
to such a reduction but every objection is taken to making no provision whatsoever for 
these costs given that they will in all probability arise.  The making of a nil allowance is 
incompatible with the obligations imposed on the respondent under section 33.   
The reasons given by the respondent for refusing to make any allowance do not 
bear analysis in the submission of the applicant.  These reasons are that cost pass 
 

 
94 
throughs are fundamentally at variance with the principle of cost effectiveness, and  
foreseen changes are provided for whereas unforeseen changes may constitute 
substantial grounds for reviewing the determination (in two years time).  The applicant 
submits that these reasons may support a reduced allowance but cannot support a 
decision that the applicant should absorb the entire burden of such costs.  Cost 
effectiveness could have been provided for by allowing a percentage: the argument 
does not support a complete disallowance.  A complete disallowance cannot be the 
discharge by the respondent of his obligation to have due regard to the level of 
investment (which ex hypothesi include these costs), a reasonable rate of return on the 
capital employed, the operating and other costs incurred, and national and international 
obligations which are relevant.  It is surely fundamentally mistaken of the respondent to 
argue that it was under no obligation, statutory or otherwise, to provide for the recovery 
of unforeseen exogenous costs as has been done.   
 
Respondent’s Submissions 
The respondent submitted that, absent s. 33, its determination on this aspect 
could only be challenged by reference to Wednesbury criteria.  Clearly it gave 
consideration to this question and has adduced its own reasons and clearly in the 
respondent’s submissions there is no question of Wednesbury unreasonableness.   
 
The additional duties which s. 33 might impose on the respondent, as contended 
for by the applicant, must be seen against the overriding statutory objective of 
facilitating the development and operation of cost effective airports meeting the 
requirements of users.  In this context none of the specific paragraphs referred to by the 
applicant is capable of imposing upon the respondent a mandatory duty to provide for 
these costs (as distinct from having due regard to the relevant criteria) which are not 
 

 
95 
even identified or mentioned in the statutory objectives.  The respondent accepted that 
he was obliged to have due regard to these costs given that they were mentioned in the 
applicant’s submission, but not necessarily to provide for them.   
The court is entitled to test whether such due regard was had by the respondent, 
but with regard to the substantive result, may only interfere with it on Wednesbury 
principles.  The applicant is in effect requiring the court to review the substantive 
decision in this respect otherwise than by reference to Wednesbury principles.  The 
reasons given in the statutory documentation must be considered.  In its report dated 
26th August, 2001, on the reasons for its determination the respondent made it clear that 
he had due regard to the applicant’s safety compliance obligations under national and 
international obligations: separately with regard to security, immigration and health and 
safety requirements - these are evolving and could be the subject of change during the 
period of the determination: changes in compliance obligations required over the next 
five years, the effects of which are quantifiable, have been allowed but, in relation to 
cost pass throughs for security, the Commissioner decided that inclusions would be 
fundamentally at variance with the statutory objective of cost effective airports.  He 
noted, further, that the applicant is planning to reorganise its use of human resources in 
the discharge of compliance obligation in respect of fire and security.  This is likely to 
lead to costs savings.  He also noted that after two years, if there was a material change 
in respect of its compliance obligations, this could constitute substantial grounds 
leadings to a review of the determination.   
In light of the specific reasons published the respondent argues that it is clear 
that he did have due regard to the question of how exogenous unforeseen costs are to be 
dealt with.  Clearly he has reasons (which were given) for his determination and 
therefore there can be no question, it is submitted, of a Wednesbury review.  Equally it 
 

 
96 
is clear that he did have due regard to the relevant factors which included that all 
existing and foreseeable changes in compliance obligations had been provided for and 
it is not necessarily the case that such increases in costs are always passed on to 
customers, for example airlines, which had to incur higher security costs following 
September 11th and have not necessarily increased their fares but have made cost cuts 
elsewhere.   
 
The respondent submits that it is also relevant that the applicant has never given 
any indication of the magnitude of these exogenous costs or defined what it considers 
are included in this definition; moreover, it did not appeal this decision to the appeal 
panel and its example from the U.K. has not been supported with sufficient detail. 
 
Conclusion 
 
I have already referred to the observations of the Chief Justice in Glencar 
Exploration Plc v. Mayo Co. Co. [2002] 1 I.L.R.M. 481 and to the observations in 
particular of Lords Hoffman and Keith of Kinkel in Tesco Stores Limited v. Secretary of 
State for the Environment [1995] 1 W.L.R. 759 above, indicating how the courts 
construe a statutory obligation on a decision maker to have regard to certain matters 
defined in the statute.  It is, in short, a matter for the decision maker to determine what 
weight should be attached to the relevant statutory objectives and indeed in Lord 
Hoffman’s view it is for the decision maker to decide to give them “whatever weight 
the planning authority thinks fit or no weight at all”.   
 
In my opinion it is clear that the reasons given by the respondent for his decision 
in this matter clearly preclude any possibility of arguing that his conclusions are 
irrational.  It is not irrational, in my opinion, for someone in the position of the 
respondent to say, in effect, that given the overriding objective to aim to facilitate the 
development of a cost effective airport, given that exogenous unforeseen costs are not 
 

 
97 
necessarily passed on by the persons primarily responsible (for example by airlines to 
their passengers), given also the fact that there is a mechanism for a review of this 
decision in two years time and given its opinion that pass throughs are inherently 
inimical to the principle of cost effectiveness that there should be no mechanism in the 
initial determination for such a pass through.  In my view this is clearly a rational 
conclusion and cannot be impugned on Wednesbury grounds.   
 
Does it, however, show that the respondent had “due regard” to the matters 
identified by the applicant in argument?  Is the applicant entitled to say, as it has, that no 
regard was paid to these matters, for example, to the operating and other costs incurred 
by the applicant or the national and international obligations which are relevant to the 
respondent’s function?  The respondent has specified that it has built into its 
determination a calculation in respect of identified exogenous costs.  With regard to 
unforeseen exogenous costs it has indicated that changed costs for the applicant may 
provide substantial grounds for review.  I think this is an important feature in the 
respondent’s thinking because it shows that this is not a determination in regard to these 
costs once and for all and for all time.  It seems, rather, that the respondent’s attitude is 
that given its overriding statutory objective to aim to facilitate the development and 
operation of cost effective airports and given its opinion that pass throughs are at 
variance with the principle of cost effectiveness (they provide no incentive to the 
airport operator to manage a cost increase in the most efficient manner possible) I think 
it is perfectly reasonable for the respondent and in compliance with his statutory duties 
under s. 33 to effectively adopt a wait and see attitude and specifically keep the door 
open to the possibility of a review in two years time.   
Given the jurisprudence I find it impossible to say that the respondent has not 
had due regard to the various statutory objectives in light of its own stated reasons for 
 

 
98 
making no provision in its initial determination.  The applicant submits, however, that 
the objective of incentivising cost effective airports could equally be attained by 
allowing a percentage (say 90%) of these unforeseen costs but that to disallow them 
entirely involves ignoring (paying no regard to) the statutory objectives identified in 
argument.  This submission seems to me to ignore the overall approach of the 
respondent in this context and in particular his submission that such cost increases are 
not necessarily passed on to customers and also his clear indication that an increase in 
such costs might well trigger a review in two years’ time.   
 
I am unable to agree with the applicant’s submission that an obligation to have 
due regard to the various matters identified in argument means or amounts to an 
obligation to make provision for this particular element of unforeseen costs.  The fact, 
therefore, that no provision has been made in the determination under challenge does 
not of itself mean that there has been a failure to comply with the statutory objective.  
For these reasons the respondent’s decision cannot be challenged on this ground.     
 
Q.11 MINISTERIAL POLICY DIRECTION 
 
The background to this issue is that on 16th August, 2001, the Minister under s. 
10 of the Act of 2001 gave the Commission a direction “that the Commission make 
every reasonable effort to ensure that its final determination reflects the important 
emphasis which the Government has placed on balanced regional development”.    
Section 10 where relevant provides 
10.—(1) The Minister may give such general policy directions (including 
directions in respect of the contribution of airports to the regions in which they 
are located) to the Commission as he or she considers appropriate to be 
followed by the Commission in the exercise of its functions. 
 

 
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(2) The Commission shall comply with any direction given under subsection 
(1).” 
 
The direction already quoted came as the conclusion to a two page letter 
addressed to the Commissioner by the Minister.  In the course of that letter she wrote 
“As I, indeed the Oireachtas in general, regarded the issue of the contribution of 
the airports to their regions, as being of particular importance, a separate 
obligation in respect of this matter was inserted in the list of regulatory 
objectives in section 33, to which the Commission was required to have regard. 
I wish to advise you that I have decided that it is appropriate at this juncture to 
give you a direction under section 10, so that as you reflect on your conclusions 
on the proposed price cap determination, you are aware of the purpose and 
intent of Government Regional Development Policy.” 
 
 
She then drew the Commissioner’s attention to the two relevant policy 
documents as follows 
 
“1.   The National Development Plan – 2006 (NDP) 
 
 
… 
“The fostering of balanced regional development” is one of the four 
national objectives identified in the plan.   Specifically, the plan states 
that it is the Government’s objective to achieve more balanced regional 
development in order to reduce the disparities between and within 
regions and to develop the potential of the regions to “contribute to the 
greatest possible extent to the continuing prosperity of the country.”  
 

 
100 
The government considers that our airports have a key role to play in 
supporting the national objectives of the plan.   
2. 
National Spatial Strategy:  
In order to bring together the various elements of regional policy and to 
achieve the necessary balance in accordance with the principles of 
economic competitiveness and sustainable development, the Minister 
for the environment was mandated to prepare a National Spatial 
Strategy (NSS) which would translate the broad approach to regional 
development into a more detailed blue print for spatial development. 
One of the key principles to be achieved under the strategy is the 
creation of the right conditions for balanced regional development to 
take place by developing the potential of areas in the regions to create 
and sustain economic strength in a structured way.  In that regard you 
are referred to the “scope and delivery” document which is available on 
the Department of the Environment’s website.”   
These introductory paragraphs were then followed by the direction which I have 
already quoted.   
 
For the purpose of considering the arguments, which I will outline in a moment, 
I have been furnished with and have carefully considered both of these documents 
where relevant to the issues raised by the applicant.  
 
In the determination, as will already have been seen, the respondent fixed a 
general overall cap which applied to all three airports in the sum of €6.34 and an 
individual sub-cap for Dublin in the sum of €5.38.    
 
 
 

 
101 
Applicant’s Submissions 
 
The applicant submits that the Commissioner failed to comply with the 
direction in two regards: firstly, he disallowed a £73 million new terminal project for 
Cork and allowed instead only a £36 million extension and secondly, by so arranging 
the caps as to confer a significant advantage on Dublin, his decision was entirely 
inconsistent with the objective and so far from reducing the disparities between and 
within regions and developing the potential of regions, it in fact contributed to widening 
those disparities and hindering such development.  
 
The Commissioner is obliged to comply with s. 10 – it is a mandatory duty cast 
upon him and can be distinguished from his obligations under s. 33 which are merely to 
have regard to the statutory objectives which include at (d) “the contribution of the 
airport to the region in which it is located”.  It is not sufficient for the Commissioner to 
have regard to the directive or to the contribution of the airport to the region in which it 
is located: rather he is under a strict statutory obligation to comply with the direction.  
This he clearly failed to do, and it is of no avail to the respondent in this particular 
context to pray in aid the jurisprudence and principles which apply to his s. 33 (d) 
obligation.   
 
Moreover, the direction requires the respondent to “make every reasonable 
effort to ensure” that his determination reflects Government policy as identified.  He 
must, in short, deliver: it is not sufficient that he merely takes this policy into 
consideration. 
 
Given this direction, it was perverse for the respondent to fix a cap for Dublin 
airport which is considerably lower then the cap applying to all three.  He cannot on any 
basis be said to have made every reasonable effort to ensure that this determination 
complies with the ministerial direction. 
 

 
102 
 
The respondent’s submission that he is free to have regard to the direction and, 
by implication, to determine what weight to give it is wide of the mark: he is not so free.  
He must comply with it and his non-compliance has been misinformed by his 
misunderstanding of the nature of his legal obligation.   
It is accepted that there may be a range of determinations which would have 
complied with the ministerial direction.  But the determination actually made is outside 
that range because it is clearly inconsistent with the direction itself.  The respondent 
appears to have regarded the idea that Dublin would subsidise the regions as something 
objectionable.  However, s. 33 clearly contemplates that he would consider airports, in 
the plural, together, and this clearly permits subsidisation as does s. 32 (4) under which 
it is clear that the respondent may consider several airports in the aggregate – a course 
he has chosen to adopt in the present determination.  Any suggestion that the Act of 
2001 prevented the respondent from permitting the applicant so to conduct his business 
as to subsidise costs at one airport from income at another, is unsustainable.   
 
In argument it appeared that the respondent was contending that Dublin also is a 
region but this contention ignores the direction to achieve “balanced regional 
development” when the whole purpose of government policy is to address imbalances 
in development and to reduce disparities in the regions.  The context (identified in the 
National Spatial Strategy) is to achieve economic competitiveness and sustainable 
development and therefore, the whole purpose of government policy is to address 
imbalances in development and reduce disparities between regions such as the disparity 
which exists in favour of the greater Dublin area region, which is not sustainable in the 
long term and the consequent need to develop the other regions so that they can achieve 
economic competitiveness with the greater Dublin region.  To make a decision which 
 

 
103 
accentuates that imbalance is simply inconsistent with that policy and therefore fails to 
comply with the direction. 
 
 
Respondent’s Submissions 
 
The Minister’s is a general policy direction and does not dictate any specific 
outcome.  The respondent clearly has a wide discretion as to how he may comply with 
it.  The wording of this general direction requires merely that he “make every 
reasonable effort” to ensure that his determination reflects the important emphasis that 
government policy has placed on balanced regional development in light of the 
identified documents.  Clearly there may be a number of reasonable views as to how he 
should comply with this direction.  
 
The respondent has set out in detail how he has done this.  He summarises the 
direction, refers to his review of the two documents, identifies two objectives namely 
first, the need to provide Dublin with sufficient resources to provide for its continued 
infrastructural development to deal with congestion and bottlenecks and second, the 
need to ensure that Shannon and Cork can develop strong and sustainable economic 
growth and therefore further develop as regional gateways.  The respondent has said 
that the first of these objectives is met by providing Dublin with a separate price 
determination, thereby preserving the particular place allocated to it in the documents 
and also ensuring that development at Dublin will not be restricted by a cross subsidy to 
Shannon or Cork and further states his belief that the second objective is met by both 
the individual price determination on Dublin and the overall price determination for all 
three airports, which approach will ensure that development at Shannon and Cork will 
be sustainable in line with the interplay of market forces, location and accessibility and 
also ensures that Shannon and Cork will both have adequate resources for development 
 

 
104 
while providing the applicant with the maximum flexibility possible as to the 
implementation of an appropriate development strategy. 
 
The applicant further submits that there has been no objection to his 
determination by the Minister and this in the context that the direction was given some 
ten days before that determination was due to be made.  Moreover no group has 
appealed it. 
 
The respondent submits that it is clear that he did give considerable attention to 
the direction and to both relevant documents and further submits that once this has been 
established a court can interfere with it only if it is irrational in the Wednesbury sense.  
Clearly there is no evidence of this.   By challenging this decision by way of judicial 
review rather than by way of appeal the applicant must, accordingly, establish that there 
is only one right way to implement the ministerial direction and that the respondent has 
not achieved it.  Indeed if there were to be only one right way then this could have been 
much more clearly expressed in the legislation. 
 
With regard to the element of this argument that the respondent by allowing 
only an extension of the existing terminal at Cork rather than allowing for a new one 
has failed to comply with the direction, the respondent submitted that he has not been 
given leave to advance this ground in the appropriate order.  Accordingly the court 
should not now concern itself with this particular proposition. 
 
 
Conclusion 
 
Before I consider the substance of this submission I think I should first deal with 
the last point referred to above. 
 
In the order of Murphy J. of 22nd April, 2002, the applicant was given liberty to 
amend its statement grounding application for judicial review, which now included a 
 

 
105 
claim for a declaration at para. 16 that the determination failed to have any or any 
proper regard to the provisions of s. 10 of the Act of 2001, the direction of the Minister 
for Public Enterprise thereunder and s. 33 (b) of the Act of 2001.  Ground 14 is relied 
upon to support this relief.  14.1 recites the obligations under s. 33 (d) and also under s. 
10 and includes reference to the specific direction.  14.2 asserts that the implementation 
of the maximum charges allowed “would result in a significant reduction in the number 
of passengers per annum at both Cork and Shannon airport” and para. 14.3 asserts that 
no reasonable regulator “could have determined charges … of this nature, consistent 
with the statutory obligation and direction referred to herein.” 
 
 
There is no reference in this pleading to the specific point that the respondent 
failed to allow a new terminal as distinct from an extension of an existing one as a basis 
on which to ground the claim for the declaration.  In my opinion the applicant has not 
been given leave to base its claim for this relief on this particular ground and 
accordingly I decline to consider it.   
 
Turning to the generality of the submission it does seem to me that there is a 
clear distinction between the character of the obligation cast upon the respondent in s. 
33 (d) whereunder he is obliged to have due regard to the contribution of the airport to 
the region in which is located, on the one hand, and on the other the obligation cast upon 
him under s. 10 which requires him to comply with the direction.   In this context I do 
not agree with the submission of the respondent that the cases in relation to “due 
regard” obligations are of relevance to my consideration of the respondent’s obligation 
under section 10.  On the contrary, I think a clear distinction should be made between 
them.  I agree with the applicant’s submission that under s. 10 the respondent must 
comply with the direction and whilst there may be a choice and a variety of ways in 
which he can achieve this, I do not think that the true test as to whether he did so 
 

 
106 
(assuming it is established, as it has been, that he considered the direction and the 
relevant documents referred to) is whether his decision can be faulted on the grounds of 
irrationality alone.  I think the test is simply whether he has complied with the direction, 
which is a ministerial direction, that he make every reasonable effort to ensure that his 
final determination reflects the important emphasis which the government has placed 
on balanced regional development.  If I conclude that he has made every reasonable 
effort to achieve this then he has complied.  If I conclude that he has not, then he has 
not, no matter how rational his own thought processes and procedures may have been.  
 
Having said this, it is also clear that the ministerial direction itself is cast in the 
language of generality.  The obligation cast upon the respondent is to make every 
reasonable effort: it is not an obligation to achieve a particular result or to aim for a 
policy objective in a particular way.  Indeed given the wide language of s. 10 itself, 
which refers to making a general policy direction, a specific direction might well be 
open to question.   
 
I also think it is true to say that a court, when considering whether or not there 
has been compliance with such a generally worded direction in respect of which both 
sides agree there is no black and white answer, must accord to the respondent a measure 
of deference or a margin of appreciation if only for the fact that the respondent has 
available to him a level of economic and other relevant advice which is not available to 
the court.  By this I mean that if I, myself, were to conclude, having read the relevant 
documents, that if I were the regulator I would comply with it in a way other than the 
regulator has done I must not proceed to say that therefore the regulator has not 
complied.  Both parties agree there may be different ways in which compliance can be 
achieved and it is not for me, I think, to gainsay this or to conclude that a particular way 
chosen by the respondent does not amount to compliance unless I am clearly satisfied 
 

 
107 
on this point.  This does not mean, however, that I cannot be satisfied unless I am also 
satisfied that the determination is itself irrational. 
 
It seems to me that the detailed three page account of his reasons given by the 
respondent on this topic bears – certainly on a first reading – all the hallmarks of a 
careful balanced and considered response to the Minister’s direction.  His obligation 
under s. 10 is clearly identified as are the two relevant national documents.  The 
respondent then proceeds to say that he undertook an intensive review of both of these 
and had to determine how the objective of balanced regional development could be 
integrated into his final determination.  This, it is noted, must still achieve the statutory 
objective (of regulation) whilst having due regard to the statutory factors set out in 
section 33.   
 
A more detailed account of the contents of the National Development Plan is set 
out and it is noted that this plan seeks to promote two types of policies simultaneously, 
namely the addressing of urban congestion and general bottle necks to growth, 
particularly as regards economic and social infrastructure and human resources, and 
secondly the policy of further developing counterbalances to Dublin, relieving pressure 
on the capital and its hinterland and distributing growth more widely throughout the 
region.  The respondent says that in his final determination he has attempted to promote 
both policies to the extent that it furthers the statutory objective by ensuring that Dublin 
has sufficient resources to relieve congestion and bottlenecks while also providing 
Shannon and Cork with the necessary resources to develop as counterbalances to 
Dublin.  He specifically says that preferring one policy at the expense of the other 
would be at variance with the National Development Plan.   
 
The respondent goes on to say that the plan identifies particular means of 
fostering balance to regional development by calling for focused development at 
 

 
108 
regional gateways at a limited number of strategically placed centres and acknowledges 
that he must have consideration in his final determination for these focused 
development regional gateways.  These are self selecting gateways in the interplay of 
market forces location and accessibility.  It is stated that the respondent should not 
undermine the position of regional gateways by facilitating the development of 
inefficient infrastructure which cannot be sustained in the medium to long term. 
 
Turning to the scope and delivery document of the National Spatial Strategy the 
link of the latter with the National Development Plan is noted.  This envisages 
continued economic growth for the south and east and the border, midlands and western 
region but also (as does the National Development Plan) sees the need for greater 
infrastructure development in Dublin: hence the need to combine two objectives 
namely to provide Dublin with sufficient resources to provide for its continued 
infrastructure development and secondly the need to ensure that Shannon and Cork can 
develop strong and sustainable economic growth and therefore further develop as 
regional gateways.  I have already referred to the conclusions of the respondent as to 
how, in his opinion, these two objectives can be integrated into his determination.   
It seems to me, in argument, that the applicant’s submission included the 
proposition that in order for the applicant to derive maximum revenue from the caps 
identified by the respondent, it is compelled by the way the determination has been 
framed, to levy airport charges at Shannon and Cork which are significantly higher than 
those which can be charged in Dublin.  This means, the submission runs, that Shannon 
and Cork are disadvantaged by comparison with Dublin and indeed this is true to such 
an extent that the evidence shows that the applicant has not been able to charge the full 
amount at Shannon and Cork because of its strong conclusion that if it does it will loose 
passengers at these airports – the very thing, its says, the National Development Plan is 
 

 
109 
aimed at avoiding.  This seems to boil down to a submission that no airport charge 
arrangement dictated by the respondent which involves the applicant having to charge 
more at Shannon and Cork than at in Dublin can amount to a compliance with the 
ministerial direction, given that the purpose of the direction is to favour Shannon and 
Cork at the expense of Dublin. 
 
It seems to me that, on the other hand, the regulator’s view is that, in order to 
comply with both objectives which he has identified and published in his reasons for his 
determination and which include providing Dublin with the necessary resources to 
develop its infrastructure so as to avoid congestion and bottlenecks, it is appropriate 
that there should be a separate price determination for Dublin and that Dublin should 
not be restricted by cross-subsidising Shannon and Cork.   
 
Perhaps it is over simplistic to say that in the view of the applicant, compliance 
with the ministerial direction can only be achieved by a price arrangement which 
inevitably means that charges in Shannon and Cork will (in the case of a full 
implementation of the allowed expenditure) always be cheaper than in Dublin, whereas 
in the view of the respondent, his determination must reflect the two objectives of 
ensuring that Dublin will not be hampered by cross-subsidisation in its need to provide 
infrastructure to avoid bottlenecks and congestion together with a second objective to 
ensure that regional gateways (which are self-selecting locations) will be able to secure 
the necessary resources to develop as counterbalances to Dublin.   
 
No attack was made by the applicant on the respondent’s reasoning process 
insofar as it identified these twin objectives.  Moreover having considered the relevant 
documentation his summary and analysis appear to me to be justified.  In those 
circumstances, and bearing in mind that both parties agreed that there may be different 
ways of achieving compliance with the ministerial direction, I cannot say that it is clear 
 

 
110 
that the respondent has failed to comply with the direction.  Accordingly in my view the 
applicant is not entitled to the declaration sought in this regard. 
 
 
Q.12  UPDATED PASSENGER ESTIMATES 
 
The background to this issue is as follows: 
 
In his determination of the 26th August, 2001, the respondent said that in his 
formula he intended to use the centre line forecast for passenger growth provided by 
Aer Rianta.  He subsequently discovered that this was not done due to an oversight and 
communicated with the appeal panel in this regard.  The panel stated that the 
respondent should review its treatment of passenger numbers and this the respondent 
decided to do, thereby varying his original determination to correct this oversight by 
introducing the correct (centreline) passenger forecast number as given by the 
applicant, instead of the erroneous figure which had been used through the oversight. 
 
By the time the respondent came to make his varied determination, these 
original centre line figures had become out of date by reference to a number of factors 
which included the subsequent impact of foot and mouth disease, the decline in the 
world economy and the impact on air passenger numbers of the terrorist attacks of 
September 11th.  Accordingly, an argument was advanced that the originally intended 
centre line passenger forecast numbers should be replaced by more up to date figures 
which would take into account these factors.  
 
There were various contentions made on either side on the merits of this 
argument but it was agreed at the hearing before me that the issue boiled down to one 
simple point of statutory interpretation: namely whether the respondent was correct in 
interpreting the relevant statutory provisions as precluding him from taking into 
account events which occurred after the 26th August, 2001, the date of his original 
 

 
111 
determination.  At issue is simply this single point of statutory interpretation and 
nothing else. 
 
The relevant provisions from the Act of 2001 are 
“40. – (5) An appeal panel shall consider the determination and, not later than 2  
months from the date of its establishment, may confirm the determination or, if 
it considers that in relation to the provisions of section 33 … there are sufficient 
grounds for doing so, refer the decision in relation to the determination back to 
the Commission for review.  
… 
(8) The Commission, where it has received a referral under subsection (5) from 
an appeal panel, shall, within one month of receipt of the referral, either affirm 
or vary its original determination and notify the person who made the request 
under subsection (2) of the reasons for its decision.”   
In giving its reasons for its varied determination the respondent said with regard 
to the review which it carried out of the matters referred back to it by the appeal panel   
“In carrying out the review, the Commission has not taken into account facts 
which came into being or events which occurred after the making of the original 
determination.” 
It was accepted by the parties at the hearing before me that this refers to the 
view taken by the respondent on the relevant statutory provisions that he was not 
authorised thereby to introduce passenger forecast numbers which came into existence 
after that date.   
 
Applicant’s Submissions 
 

 
112 
On behalf of the applicant it was submitted that the respondent had originally 
intended to use passenger forecast numbers which were credible: in error he used the 
incorrect numbers.  When it came to correcting the error, however, the originally 
intended numbers had lost all credibility and it was clearly not the intention of the 
legislature that such figures would be used; in the circumstance that the respondent 
decided to review the original determination, the original determination did not stand 
and therefore the original centre line figures did not stand.  By substituting a new 
determination it was clearly intended that he would have statutory jurisdiction to 
include in this exercise a substitution of the original figures.  It can never have been the 
intention of the legislature that the respondent would be forced to use a figure which he 
knew was “wrong”.  This he has done because of his view of the law which was, 
therefore, clearly mistaken.  No interpretation of the law can require such an irrational 
approach; the irrationality of the respondent’s approach is underlined by the fact that a 
few weeks later an up to date passenger centreline forecast was used in the respondent’s 
determination and report on aviation terminal service charges reflecting a five per cent 
reduction in traffic from the earlier (2001) figure.  These two determinations were made 
within three weeks of each other and highlight the irrationality of the respondent’s 
interpretation.  It is accepted that passenger forecast figures will always be subject to 
updating and change: in the present case, however, the figures actually used were 
clearly erroneous by reference to an external set of objectifiably verifiable factors and 
therefore the appropriate updated figures should have been used. 
The refusal of the respondent to use these figures was clearly in breach of his 
duties under s. 33, which included an obligation to have regard to a reasonable rate of 
return on the capital employed which can only be properly calculated by reference, 
inter alia, to appropriate passenger forecast figures. 
 

 
113 
 
Furthermore, it is an absurd construction of the relevant statutory provisions to 
read them as requiring the respondent to use passenger numbers known to be obsolete.  
Moreover, it is absurd that in “correcting” admittedly erroneous numbers, the 
respondent should use “correct” numbers which were known to be false.  If the 
respondent was indeed correcting the numbers then up to date numbers should have 
been used as envisaged apparently by the appeal panel.   
 
Section 40 (8) entitles the appeal panel to send the determination back “for 
review” and enables the respondent to “vary” its original determination.  These powers 
are not limited and should not be construed so as to bring about an absurd result.  
Moreover this runs counter to the much eulogised system in the 2001 Act for “running 
repairs” extolled, in particular, by the respondents in their submission to the court. 
 
Furthermore, the varied determination is unlawful because it fails to take into 
account a relevant consideration, namely, updated reliable figures.  Moreover it is 
invalid because based upon an error of law, namely, an erroneous interpretation of the 
statute. 
 
Finally leave was granted to advance this argument and has not been excluded 
by the judgment of the court delivered on the 16th January, 2003, as contended for by 
the respondent. 
 
 
Respondent’s Submissions 
 
In the order giving leave to bring judicial review proceedings of Murphy J. 
dated 27th April, 2001, an order of certiorari quashing the determination is sought on 
the grounds, inter alia, that the determination of the respondent to use centreline 
forecast figures which were out of date was unreasonable, no adequate reason has been 
advanced for this decision and the respondent failed to take an account of a relevant 
 

 
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factor in arriving at the decision namely the revised passenger figures.  It is submitted 
that those grounds were excluded by the judgment which I delivered on the 16th 
January, 2003: moreover the declarations relating to alleged procedural defects in the 
varied determination which were allowed in the order of the 26th April, 2002, make no 
reference to the challenge in relation to the revised passenger forecast figures and 
therefore under the existing jurisprudence (McNamara v. An Bord Pleanála [1995] 2  
I.L.R.M. 125 and Keane v. An Bord Pleanála  [1997] 1 I.R. 184), the applicant may not 
now introduce a new ground outside the relevant statutory two month period. 
 
Without prejudice to the above, it is submitted that the respondent acted 
lawfully.  Section 40 (8) provides that the respondent on a referral back to it from an 
appeal panel shall “either affirm or vary its original determination” .  The use of this 
phrase shows that the respondent must consider only its original determination and 
consider whether it should be affirmed or varied and also shows that, of necessity, it is 
precluded from taking into account any factual occurrence that took place subsequent to 
that determination.   
 
The general scheme of the Act is also relevant because it is clear that there is 
provision for a review two years after the original determination if substantial grounds 
justify it and such grounds clearly are matters which may come into existence after the 
date of the original determination.  In this context the power of the respondent is to 
amend the determination as distinct from its power to vary it on a reference from an 
appeal panel.  The use of two different words indicates two different kinds of review. 
 
Furthermore subs. (7) – (13) show that, in making a determination, there is a 
strict requirement that the respondent would notify the public and permit 
representations which must be considered and reasons must be given for its 
determination.  No such requirements exist in relation to the s. 40 (8) procedure when 
 

 
115 
the respondent receives a referral back from an appeal panel.  This shows that new 
matters will not be taken into account at this stage (as distinct from at the two year 
review stage) in respect of which the public would under the policy of the act have a 
right to make submissions. 
 
The view of the Act taken by the respondent is justified by the consideration that 
all production figures are likely to become obsolete and inaccurate by reference to later 
events.  Moreover if one were to permit the introduction of up to date figures at the 
stage of reviewing the original determination then the question arises where would one 
stop?  On a practical basis as intended by the legislature this was never intended.   
Furthermore to introduce up to date passenger figures would allow subsequent 
events to alter the determination in a random manner which lacks consistency.  Such 
alteration would appear to depend on whether a new factual situation was raised by an 
appellant and if so whether the appeal panel decided to refer it back and if so whether 
the respondent decided to vary the determination.  Other new factual situations may not 
have gone through this process and would thereby be excluded, thus producing an 
imbalanced or partial view.   
Moreover, one particular figure cannot be separated from the overall.  For 
example, the introduction of a change in passenger forecast might affect CAPEX or 
commercial revenue and operating costs.  If only passenger figures had been referred to 
the respondent (as in this case), would the respondent be able to consider these other 
issues which were not referred back?  Or if he could, would his jurisdiction extend to 
taking account of further new factors in relation to those other matters, even though it 
did not have the information gathering powers available to it in the event of the original 
determination. The applicant’s submission takes no account of the question of how the 
respondent would inform himself of these relevant matters. 
 

 
116 
 
Indeed the applicant has not informed the court of how far in its view the 
original passenger numbers are inaccurate and obsolete.   
 
The respondent adopted different passenger numbers in relation to its Irish 
Aviation Authority determination because that original determination was adopted six 
months after the determination in the present case.   
 
Moreover the Supreme Court, in its general jurisprudence, has adopted the view 
that the power of the court to receive new evidence on appeal is discretionary and 
should be admitted where a serious injustice would be suffered by a plaintiff.  
 
 
Conclusion 
 
I am unable to agree with the respondent’s submission that my judgment of the 
16th January, 2003, has precluded the applicant from raising this point.  It appears to me 
that the clear proposition alleged by the applicant that the respondent had failed to take 
into account a relevant factor, namely, the revised passenger figures was itself 
sufficient to cover this point and has nothing to do with the grounds based on alleged 
irrationality for computational error.  Accordingly, I propose to consider the 
submission. 
 
The arguments on both sides of this issue are forceful and impressive.  It is 
forceful and impressive for the applicant to say that it is irrational and absurd for the 
respondent to use an avowedly obsolete figure for its passenger forecast.  It is equally 
forceful and impressive for the respondent to say that if post determination material is 
to be considered on one topic, in principle all topics should be open for consideration in 
order not to produce an imbalance and that, furthermore all estimates are inherently 
prone to prove inaccurate in the event. 
 

 
117 
 
The question for decision is whether the statutory provisions should be 
construed as precluding or not precluding the respondent from considering post 
determination information on a review by him on a reference back by the appeal panel.   
An appeal can be taken by an airport authority or an airport user in the limited 
sense of (effectively) an airline.  Accordingly the scope of the appeal panel’s 
jurisdiction is limited, potentially, to grievances by either an airport authority or 
airlines.  Within that, the scope of appeals seems to be unlimited and the procedure to 
be adopted is to be determined by the appeal panel itself, subject, of course, to the 
limitation that it must either confirm the determination or refer “the decision in relation 
to the determination” back to the Commission for review within two months from the 
date of its establishment.  What is referred back to the Commission, therefore, is a 
decision which has aggrieved either an airline or an airport authority or both.   
On receipt of this referral back, the Commission appears to be also at large save 
only that it has one month to either affirm or vary its original determination (and notify 
the appellant of its reasons).   
The language of s. 40 (8) to the effect that the Commission shall “either affirm 
or vary its original determination” (emphasis added) is crucial to the point at issue.  
One could legitimately ask what the difference would be if the word “original” had 
been omitted.  What meaning should the court ascribe to the use of this word?  It seems 
to me that it connotes an intention to refer the respondent backwards in time to the date 
of its determination rather than to some or any information or event which came into 
existence after that date.  It may well be that the reason for this provision is to avoid the 
difficulties and anomalies identified by the respondent in its submission.  Equally it is 
fair to say that if post-determination events rendering pre-determination events obsolete 
 

 
118 
cannot be taken into account at this stage by the respondent then that too many produce 
an anomalous result.  Either way, it seems, there will be difficulties.   
 
Having said that, I must look at the words actually used.  In my opinion the 
word “original” in the phrase “original determination” connotes an intention that on 
review the respondent shall consider only information which was available at the time 
of the determination and not subsequently. 
 
It would seem, accordingly, that post-determination facts and events can only 
be dealt with on review after two years or in a subsequent determination rather than by 
way of appeal.  Such a conclusion seems to me to be consistent with the overall 
approach of the Act of 2001 which is to provide intermittent quinquennial 
determinations, with interim reviews if there are substantial grounds for them, and with 
periods of relative stability or relative predictability in the interim.  In my view, 
therefore, the respondent was correct in taking the view that he was precluded by statute 
from considering the updated passenger forecast numbers.   
 
Insofar as the issues raised in this judgment are concerned, accordingly, I 
decline to grant the applicant the reliefs sought. 
 

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