ICO Satellite Ltd, R (on the application of) v Office of Communications

A decision-maker exercising a statutory discretion must distinguish between matters it is legally required to consider and matters it may consider. Failure to address a matter invalidates the decision only where the governing statute or scheme, expressly or impliedly, makes it mandatory, including where the facts make it obviously material. In a satellite-frequency regime, a regulator may lawfully focus on sustained non-compliance, the absence of a realistic prospect of operation and the absence of funding. It need not treat the absence of a known competing operator or the applicant’s investment as mandatory considerations. Proportionality is inherent in the scheme and does not create a separate ground of challenge. Cancellation was proportionate on the facts.

Ofcom decided to ask the International Telecommunications Union to cancel frequency assignments recorded for the appellants’ satellite system in the Master International Frequency Register. The decision followed prolonged non-compliance with due-diligence requirements, including the absence of evidence that the system would be completed, funded and brought into operation.

The Administrative Court, Queen’s Bench Division, refused judicial review: [2010] EWHC 2010 (Admin). The appeal alleged failure to consider the effect on third parties and the appellants, reliance on an erroneous ITU requirement to cancel, and disproportionality. The central issue was whether those matters were legally mandatory considerations and whether cancellation was lawful and proportionate.

Appeal dismissed. Lord Justice Pill delivered the judgment, with Lord Justices Toulson and Sullivan agreeing.

1. Ofcom’s decision was made within the statutory and international framework governing satellite filings, including the Communications Act 2003, the ITU Constitution, the Radio Regulations and Ofcom’s Guidance. The formal reasons were clear. They relied on prolonged and substantial default, the absence of a realistic prospect of bringing the network into operation, and the absence of necessary funding.
2. The second ground failed. The international regime contemplated cancellation following non-compliance. The officer’s references to an ITU expectation did not establish that the decision was based on an erroneous mandatory requirement. The formal decision letter did not adopt that reasoning. An email from the ITU Secretary-General sent shortly before the hearing was not an authoritative statement of the ITU’s institutional position.
3. The court distinguished between a consideration being capable of being taken into account and being legally required. That distinction was stated in Re Findlay [1985] AC 318, through the approved reasoning in CREEDNZ Inc v Governor General [1981] 1 NZLR 172, and was reflected in R (Hurst) v London Northern District Coroner [2007] 2 AC 189 and R (Corner House Research) v Director of the Serious Fraud Office [2009] AC 756.
4. On the statutory context and facts, Ofcom was not obliged to consider the absence of evidence that another operator was seeking or being deprived of the assignment. It was also not obliged to consider the financial loss to the appellants. Ofcom was entitled to give effect to the international interest in the rational, efficient and economical use of limited spectrum and orbital resources.
5. Proportionality was inherent in the scheme and did not create a separate head of challenge. Ofcom retained flexibility in borderline cases, but cancellation was proportionate after the appellants had received repeated opportunities to comply and had proposed waiting for the Boeing litigation rather than a workable modification.

• Court of Appeal (Civil Division): dismissed the appeal against the Administrative Court’s refusal of judicial review, [2011] EWCA Civ 1121.
• Administrative Court, Queen’s Bench Division: Lloyd Jones J refused the application for judicial review, [2010] EWHC 2010 (Admin).