Bus company wins legal challenge against Minister for Transport

Bus company wins legal challenge against Minister for Transport

A private bus company has today won its High Court challenge against the Minister for Transport's decision that there was no competition between the company and Dublin Bus on a route operating between Swords and Dublin city centre via the Port Tunnel.

In his judgment Mr Justice Bryan McMahon today said that Minister Noel Dempsey has erred by concluding that there was no competition between a service operated by Digital Messenger Ltd, trading as Swords Express and Dublin Bus.

In its action Swords Express, Lower Grand Canal Street, Dublin, said the Minister's decision, of August 2009, was flawed because it was based on a report from consultants which did not address the issue of competition, but had in fact addressed the question of competitive advantage.

Swords Express also said that the Minister has unlawfully delayed in making a decision its application for an additional road service.

Dublin Bus was a notice party to the action brought against the Minister who denied the claims.

The Judge, in finding for the company made orders quashing the Minister's decisions to permit Dublin Bus to operate the altered route of 41X passenger service between Swords and Dublin City Centre via the Port Tunnel and the decision that the altered 41X service did not compete with the Sword Express Service.

The Judge further made a declaration that the Minister has unlawfully delayed making a decision made by Swords Express in February 2008 for a second service.

Sword Express commenced operating a bus service between the City centre and Swords via the tunnel after obtaining a license from the Minister in October 2007.

Encouraged by its success it applied to for a second passenger license.

However between March and June 2008 Dublin bus applied to the Minister to re-routed the 41X service between Swords and the City Centre through the tunnel.

The Department determined that Dublin bus was not in competition with Sword Express and thus it meant that Dublin bus were entitled to state subsidies for operating the route.

The Department's finding of no competition was contested by Swords Express, who argued that their business was being damaged.

That matter was settled on terms including that the Minister would engage consultants, Booz & Co to assist in determining if there was competition on the route.

It was also agreed that the Minister would use his best endeavours to decide the Sword Express second licensing application within three months of deciding if there was competition on the 41X route.

The consultants reported to the Minister that there was competition on the route in February 2009.

Following that report Dublin bus revised the 41x route by removing a stop at Ballintrane Wood on Forrest Road, which the consultants held was the most controversial issue.

In a second report the consultants held that the removal of that stop would remove Dublin buses competitive advantage, and restore a level playing field.

Based on that second report that Department held in August 2009 that there was no competition on the route.

In his judgment Mr Justice McMahon agreed with Swords Express that the Minister's decision was wrong.

The second report, he said, did not address the issue of competition but rather the question of competitive advantage and in his view the Minister had erred.

He said that the relevant section of law "did not speak of competitive advantage or disadvantage."

He added that "all it requires is competition between the relevant parties".

In relying on the second consultants report that Minister "had taken something into account which was not of statutory concern".

The first consultant's report, the Judge added had firmly concluded that Dublin Bus was in competition with Sword Express on the route.

The Judge said that it was "difficult to understand" how the consultants could have found that there was competition in the first report but found no competition on the route in its second report.

It was "even more difficult to understand" how the Minister relying on those reports reached his decision that there was no competition due to the alteration of the route proposed by Dublin bus, added the Judge who said that that he could only assume that there was confusion as to what question the consultants were asked to deal with.

The Judge also rejected the Department's excuse that there was a delay, of more than two years, in dealing with Swords Express's second application because it was queued being another application by a third party.

The Judge said that there was no details about the third-party application and the first-come-first-serve principle could never excuse inordinate delay.


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