Competition Commission v BAA Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Maurice Kay,Lord Justice Jacob,Lord Justice Patten |
| Judgment Date | 13 October 2010 |
| Neutral Citation | [2010] EWCA Civ 1097 |
| Docket Number | Case No: C3/2010/0589; C3/2010/0596 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 October 2010 |
[2010] EWCA Civ 1097
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION) ON APPEAL FROM
The Competition Appeal Tribunal (Mr Justice Barling, Lord Carlile of Berriew QC, Ms Sheila Hewitt)
Before: Lord Justice Maurice Kay (Vice-President of the Court of Appeal, Civil Division
Lord Justice Jacob
and
Lord Justice Patten
Case No: C3/2010/0589; C3/2010/0596
REF: 11106809
Mr Jonathan Sumption QC and Mr Ben Rayment (instructed by Treasury Solicitors) for the Appellant
Lord Pannick QC and Mr Mark Hoskins QC (instructed by Herbert Smith LLP) for the Respondent
Mr Daniel Jowell and Ms Sarah Love (instructed by Nabarro LLP) for Ryanair Ltd (Intervener)
Hearing dates: 23 and 24 June 2010
Lord Justice Maurice Kay:
On 29 March 2007 the Office of Fair Trading (OFT) made a reference to the Competition Commission (the Commission) for a market investigation into the supply of airport services in the United Kingdom pursuant to section 131 of the Enterprise Act 2002 (the 2002 Act). The OFT expressed the view that if the Commission were to find that an adverse effect on competition (AEC) existed, there was a reasonable prospect of appropriate remedies being available, including divestiture of some of the airports operated by BAA Ltd (BAA). In April 2007 the Commission appointed a six member panel (the Panel) to carry out the investigation. One of the six members was Professor Peter Moizer. On 19 March 2009, the Commission published its Report. It found that BAA's common ownership of airports in south- east England and Lowland Scotland gives rise to AECs. It adopted a package of remedies including divestiture by BAA of Gatwick and Stansted airports and also one of Glasgow and Edinburgh airports. BAA appealed to the Competition Appeal Tribunal (CAT) pursuant to section 179 of the 2002 Act. It alleged apparent bias on the part of Professor Moizer.
The allegation of apparent bias was based on the following circumstances. Professor Moizer has acted since 1987 as one of three external advisers to the Greater Manchester Pension Fund (the Fund). The Fund is administered by Tameside MBC. That council's functions in maintaining the Fund are delegated to the Pension Fund Management Panel (PFMP) which comprises local councillors from the ten local authorities within Greater Manchester. The same ten local authorities own the issued share capital of Manchester Airport Group plc (MAG), which in turn owns and operates Manchester airport as well as other airports in the United Kingdom. MAG played an active role in the Commission's investigation in the course of which it made both written and oral submissions which related to the future business of BAA. On 17 April 2007 the Commission made a disclosure (the 2007 Disclosure) in relation to the interests of panel members. It referred to Professor Moizer's advisory role with the Fund. On 20 August 2008 the Commission published its provisional findings and a notice of possible remedies, including the divestiture of Gatwick and Stansted. On 17 September 2008 BAA announced its intention to sell Gatwick. On 26 November 2008 the Fund and MAG met to discuss the Fund's possible involvement with MAG in a purchase of Gatwick. Professor Moizer was not at the meeting. On 2 December 2008 Professor Moizer received a telephone call from within the Fund regarding a potential investment in an airport. He brought the call to a rapid end and says that he did not know that it was to have referred to a possible investment in Gatwick. On 16 December 2008 the Commission was notified that MAG and the Fund were interested in the purchase of Gatwick. The following day the Commission published a provisional decision on remedies indicating that it was minded to require the divestiture of Gatwick. On 9 January 2009 at a meeting of the Panel it was brought to Professor Moizer's attention that the Fund was involved in a potential bid for Gatwick as part of the MAG consortium. On 14 January 2009 the Panel met, with Professor Moizer present, in order to discuss BAA's response to the provisional decision on remedies and the suitability criteria for potential purchasers. By a letter dated 6 February 2009 BAA wrote to the Commission referring to its limited knowledge of Professor Moizer's connection to the Fund and asking for further detailed information. Professor Moizer continued to attend meetings of the Panel until 17 February 2009. After 20 January (when the Commission learnt that the MAG consortium had made a bid for Gatwick) he was subject to quarantining to the extent that he was not involved with matters relating to the Gatwick sale. Following a statement on 23 February 2009 by the Commission's chief executive that Professor Moizer should stand down immediately, Professor Moizer formally stood down on 3 March. The Report of the Commission was published on 19 March. In the event, Gatwick was ultimately sold on 20 October 2009 to a purchaser with no connection with MAG or the Fund.
Before the CAT (Barling J as President, Lord Carlile of Berriew QC and Ms Sheila Hewitt) the Commission and Ryanair Ltd (Ryanair) as intervener sought to resist the allegation of apparent bias. In a judgment running to 98 pages the CAT considered numerous issues including whether BAA had waived its right to object to any apparent bias and whether there was a relevant perception that Professor Moizer might have influenced the Panel in relation to its deliberations, thinking and ultimate conclusions by reason of any apparent bias.
The CAT upheld BAA's appeal on apparent bias and by an order of 25 February 2010 quashed the decisions, findings and reasoning of the Commission contained in the Report relating to the common ownership of airports by BAA. It referred the matter back to the Commission for reconsideration.
The central findings of the CAT are set out in the following extracts from the judgment:
“Summarising the Tribunal's findings on this aspect of the case, the fair-minded and informed observer would conclude in the light of the material facts (1) that from late October 2007 until he stood down from the Investigation there existed a real possibility that Professor Moizer was biased in favour of MAG and (2) that from 2 December 2008 until he stood down from the Investigation there existed a real possibility that Professor Moizer was also biased in favour of the Fund.” (paragraph 136)
“There is … no question of BAA having waived the apparent bias before 26 January 2009, whether impliedly or otherwise.” (paragraph 172)
“BAA did not waive its right to object to Professor Moizer's apparent bias which existed from October 2007 and we must therefore consider what impact that apparent bias had upon the other members of the Group, who were his co-decision makers.” (paragraph 181)
“In our view the fair-minded and informed observer would conclude in the light of the material facts that there was a real possibility that, as a result of Professor Moizer's influence within the Group from October 2007 till February 2009, the deliberations, the thinking and the ultimate outcome of the Investigation were affected by bias.”
I emphasise that at no point during the proceedings in the CAT or in this Court has it been suggested that Professor Moizer was affected by actual bias. The case has always been put on the basis of apparent bias.
By the grounds of appeal pursued in this Court, the Commission, again supported by Ryanair, contends that apparent bias was not made out because the connection between Professor Moizer and the Fund was too remote to be material; alternatively, that any connection had no operative effect and/or did not contaminate the other members of the Panel; and, in the further alternative, that BAA waived its right to object to any apparent bias.
Apparent bias
Before turning to the law on apparent bias and its application in this case, it is appropriate to set out the matters to which the CAT thought that the informed and fair-minded observer would have particular regard. It listed the following matters (at paragraph 123):
“(a) that Professor Moizer, as a chartered accountant and professor of accounting, and having sat on other Commission inquiries, was well aware of the importance of impartiality, and of the public perception of impartiality, on the part of the members of the [Panel];
(b) that the Fund has no separate corporate identity; it sits within the 10 local authorities making up Greater Manchester, one of which (Tameside MBC) has had delegated to it the role of administering the Fund; there is further delegation of the Fund's management to the Management Panel made up of councillors from the same 10 local authorities; this Panel, which has duties equivalent to those of a pension fund trustee, is assisted by the Advisory Panel; day to day administration is carried out by a Director of Pensions;
(c) that the administrators of the Fund are subject to rules and fiduciary duties which require them to have regard to the suitability and diversification of investments and to take proper advice in relation to investment decisions;
(d) that Professor Moizer has been a fee-paid adviser to the Fund continuously since about 1987, attending quarterly joint meetings of the Management and Advisory Panels, and giving advice at other times as and when required, sometimes frequently; that his advice and comments are sought on whatever issues happen to arise, and would be sought on an investment such as Gatwick ‘as a matter of course’; that Professor...
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