The High Court has affirmed the Commission for Aviation Regulation’s refusal to renew Manorcastle Limited’s tour operator licence, finding that the regulator did not act unreasonably in concluding the company had not shown it met the financial criteria in the Transport (Tour Operators and Travel Agents) Act 1982.
Mr Justice Charleton delivered the decision on 28 November 2008, following a statutory appeal against the Commission’s 24 October refusal. The court assessed the decision against the circumstances on the date it was made. It did not conduct a full rehearing, but considered whether the decision was vitiated by a serious and significant error, including a mistake of fact going to its foundation.
The Commission’s concerns followed accounts showing a €630,105 loss for 2007, negative shareholders’ funds and questions about the company’s liquidity, debts and ability to fund planned overseas trips. The judgment records that the company submitted explanations for the loss, including costs associated with chartering aircraft for its Lapland trip and a dispute with a Bulgarian ground-handler. It also described measures the company said it had taken after the refusal, including a directors’ resolution to convert loans to share capital and a further €100,000 contribution by a director.
Those later developments did not determine the appeal. The judge said post-decision evidence could be relevant to conditions if an appeal succeeded, but assessed the Commission’s decision as of 24 October. He rejected the company’s complaints concerning the VAT refund, directors’ loans, the asset-to-liability ratio and the Commission’s failure to specify steps required for renewal. He also found the company had been given a full opportunity to make submissions, with multiple letters and meetings before the decision.
The court affirmed the refusal. It did not order the Commission to issue a licence. The judgment said the Commission could reconsider its determination because it was not functus officio, and that a company whose position had materially improved could apply again in appropriate circumstances.