Court of Appeal Rules In Favour Of C3, Case Now Goes Back To Grand Court

By Alric Lindsay

Today, September 10, 2024, The Hon John Martin KC, Justice of Appeal, The Rt Hon Sir Michael Birt, Justice of Appeal and The Hon Clare Montgomery KC, Justice of Appeal, ruled in favour of Infinity Broadband Limited (Trading as C3 Pure Fibre), allowing its appeal on the basis that C3 has an arguable point concerning the Grand Court’s refusal of C3’s application for leave to seek judicial review of its case against The Utility Regulation and Competition Office (OfReg).

Background

For members of the public unfamiliar with the case, the background of the issues is best summarised in OfReg’s press release dated October 9, 2023.

The press release said:

Telecommunications operator Infinity Broadband Ltd “C3” has failed to comply with its longstanding licence obligations resulting in regulator OfReg issuing an enforcement notice that lists repeated failures of C3 to pay its Licence Fees, as well as failure to submit its audited financial reports.

Additionally, OfReg has issued C3 with a notice outlining the demands for payment of outstanding fees, including any interest accrued, and the proposed imposition of fines for the various breaches.

The press release added:

Following several reminders and requests being sent to C3, OfReg issued C3 with an initial enforcement notice in July 2022 setting out C3’s failure to pay its licence fees totalling, at that time, over CI $500,000 (including interest). At that time C3 had also failed to submit its required audited financials for 2021.

C3 issued a response challenging OfReg’s authority to collect licence fees as per the obligation set out in C3’s own ICT licence and demanded that OfReg pay back fees already paid by C3 for previous periods.

The press release continued:

Following this challenge, OfReg continued with enforcement action and issued a final determination in late August 2023. The determination confirmed the OfReg’s position that C3 was, and remains, obligated to pay its licence fees and submit its financial reports and as such C3’s failures amounted to a breach of its licence. As a consequence, OfReg issued C3 with a further notice on intended fines for the breaches beyond any demand to pay the outstanding fees.

In response, C3 took the matter to the Grand Court and applied for leave to seek judicial review on two grounds:

Ground 1: OfReg has no power to charge C3 the Royalty or Regulatory Fee unless and until it makes regulations prescribing a Licence Fee under the ICT Act.  Having failed to do so, OfReg’s demands for payment of the Royalty or Regulatory Fee are of no legal effect.

Ground 2: OfReg has no power to charge C3 the Regulatory Fee unless and until it publishes the amount of the fee in accordance with the terms of the Licence. Having failed to do so, OfReg’s demands for payment of the Regulatory Fee are of no legal effect.

The Grand Court judge ruled in favour of Ofreg, saying:

In summary, I resolve the application for leave to seek judicial review on the presently pleaded grounds as follows:

…(b) leave is refused in relation to Ground 1 because the Respondent has validly made regulations prescribing the License Fee

(c) leave is refused in relation to Ground 2 because (1) publication of the Regulatory Fee to the world at large was not a condition precedent to liability to pay it, and/or (2) by notifying the Applicant of the amount of the Regulatory Fee the Respondent has complied with the requisite publication requirements in any event.

C3 subsequently appealed to the Court of Appeal, the grounds for which were reviewed by the Court of Appeal.

The Court of Appeal decided today in favour of C3, saying:

We’re going to allow this appeal on the basis that we’re not deciding whether the judge was right or wrong.

But it follows from what I’ve said we don’t need to hear any further arguments on the other point of this and the matter will now be remitted to the Grand Court to consider the leave application in its terms together with presumably anything which may probably also be advanced that hasn’t already been advanced at that stage.

We will allow the appeal… on the basis that it is arguable.

The Court of Appeal added:

As to directions, we don’t think it’s appropriate for us to give those directions. We do think that there should be a directions hearing before the Grand Court.

Note to readers

For details of the OfReg press release, see https://www.ofreg.ky/news/c3-fails-to-comply-with-its-licence-conditions

For the details of the C3 Enforcement Notice, see:  https://www.ofreg.ky/viewPDF/documents/2023-10-09-13-22-29-Public-Version-20230818NOTICES-to-C3-re-Enforcement-.pdf

This case is highly important. Depending on how the Government handles the matter and the final outcome of all subsequent hearings, licensees could file claims demanding fee reimbursements from OfReg.

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