Abbey Mine Ltd v The Coal Authority

This heading encompasses grounds i) – iv) which are further broken down as set out below.

The Claimant contends that the Authority’s Guidance Notes do not conform with the requirements of fairness because they did not adequately cater for a situation where there were competing applications. The Claimant should have been given advance disclosure of all facts and matters relevant to and including the Corus application (suitably redacted), both before the interim decision and/or prior to the Review Hearing. Such advance disclosure was necessary in order to put the Claimant in a position where it was able to comment on the material aspects of the Corus application, and/or to draw appropriate comparisons with its own.

As a matter of fairness, an applicant is entitled to know what concerns a decision maker has and be given an opportunity to respond: see R v Secretary of State ex parte Fayed [1998] 1 WLR 763; If that opportunity is to be meaningful, the applicant must be told the allegations being made against him which he has to meet: see Hadmor Productions v Hamilton [1983] 1 AC 191, 233 per Lord Diplock. This is particularly so in the context of a competitive licensing application, where the decision-making process involves determination of the relevant facts affecting the competing applications and then a comparative assessment or evaluation of the applications against each other. (See: Agnello v London Borough of Hounslow [2003] EWHC 3112 (Admin) at paragraphs 102-104). AML was completely in the dark about the comparative evaluation that the Panel had to make. Moreover, there was close scrutiny of AML’s application with no testing of the Corus application, thus the focus is on the unsuccessful applicant, the position of Corus remaining intact on paper.

The Defendant, submits that, in the context of the statutory framework, there is no legal duty of disclosure. Moreover, the claimant cannot point out any express or implied duty for the rules of natural justice to be applied to the tendering process envisaged in this case: (See: the three principles set out in Mass Energy v Birmingham City Council 1994 Env. LR 298, as referred to by Mr Justice Kay (as he then was) in the case of R v Brigend County Borough Council ex parte Jones (CO/873/199 @ pages 7 and 10).

If there is such a duty of disclosure of adverse matters, the requirement of fairness is set out in paragraph 11.7 of the Guidance notes, and has to be assessed in the context of the purpose of the Review. The Claimant has misunderstood the purpose of the Review panel, which is to consider whether the Director exercised his delegated power properly by enabling the claimant to be heard on the specific matters relevant to his application. The Defendant disclosed and allowed the Claimant an adequate opportunity to comment on the facts and matters, which weighed against it, in relation to its own application.

The procedure does not and cannot give a right to disclosure of facts and matters relevant to a competitor’s application. This would be the antithesis of competition, risking the disclosure of commercially-sensitive material and prejudicing any subsequent competition between the applicants in respect of the same licence. The hearing is not an opportunity for the Claimant to “have a second bite at the cherry” and cannot be used as a means to get an advantage over a competitor. Disclosure of competing applications would not be practicable and redaction would not solve the problem.

The case law does not support the generalised disclosure contended for by the Claimant. At most an applicant should be put in a position to address specific adverse impressions that may weigh against its own application. The case of Hadmor can be distinguished on its facts and does not lay down an absolute rule. The present case is not inconsistent with the case of Agnello v London Borough of Hounslow [2003] EWHC 3112 (Admin) as AML had passed the stage one determination of the factual basis on which the assessment of the applicants was to be based (i.e the eligibility stage). AML would have been awarded the licence had Corus not applied. This was, if anything, the comparative evaluation stage (i.e stage two) and thus the same principles do not apply. Mr Justice Silber, by reference to the case of R v. (Asha Foundation) v. The Millennium Commission [2003] EWCA Civ 88 at paragraphs 28-30, rejected the generalised disclosure of material relevant to the comparative evaluation process (stage 2), holding that an applicant may, at most and in certain specific circumstances, be entitled to be given an opportunity to comment on material on which the decision maker intended to rely, relating to him in the evaluation process. All relevant circumstances have to be taken into account and a balancing act carried out in relation to the various factors.

Claimant: There was no provision in the Guidance Notes for Corus to attend the Review hearing. The Authority should have informed Corus of the process and invited them to attend. Their absence created a lopsided impression, inclining members of the Review Panel against reversing the Interim Decision in Corus’ absence.

Defendant: There was no need for Corus to attend. It was the Claimant’s application for a review, the proceedings are not adversarial and their purpose is not a hearing for the two sides to “pick holes” in each other’s application.

Claimant: There were a number of documents in front of the Review Panel which were not made available to the Claimant: a briefing note prepared by Mr Schofield (479-486), Corus’ application, the comparison documents prepared for and by Mr Wilson including the Licensing Recommendation Report (487-492, 499-500, 435-441 respectively), and Mr Wilson’s written commentary on the letter from the Claimant dated 5^th October 2005 asking for a Review hearing. (501-3). These placed the Claimant at a disadvantage because there were adverse matters contained therein which he had no opportunity to deal with. There were also irrelevant matters therein which were prejudicial to the Claimant.

Defendant: There was no legal duty of disclosure. There was material which it was not appropriate to disclose, including documentation containing sensitive commercial information and the working documents of the Panel. The Claimant at no time prior to, during or subsequent to the Review hearing requested any further material than was provided, or gave any indication that it was unable to deal with any matters raised. The Claimant had sufficient information before and during the hearing to deal with the relevant matters to be addressed. Moreover, the Claimant was offered the opportunity to make further written submissions setting out its or its counsel’s position. It chose not to do so.

Claimant: The Defendant failed to put certain matters of concern to AML during the hearing, thus depriving Mr Williams of the opportunity of addressing them. The areas are i) Track Record; ii) Time Frames; iii) Production Targets.

The Decision Letter (189-191) concluded that:

“The Panel notes that there are a number of companies with which you have been associated and which are involved in coal mining initiatives, which have failed to make tangible progress in carrying out mining operations, and this fact has raised concerns about AML’s commitment to progress the Margam site”.

The following points are made: AML was not afforded a full and fair opportunity to comment on the issue. There is no mention of it in the Interim Decision (156-7); it was not raised prior to, or meaningfully at, the Review Hearing; the Claimant should have been told that the Panel found his explanation about the company Modal unsatisfactory. The suggestion by Mr Schofield that the Panel only took into account the failure by Modal to progress the Margam site is contradicted by the documentation which refers to “a number of companies” (See: Mr Schofield’s Briefing note paragraph 3.6(iv) (485), the Licensing Recommendation report @ paragraph 4.5.9 (440) and Annex 1, (a list of companies and their track record, which were not shown nor put to AML. The list itself, it is said, contains serious inaccuracies).

Defendant: The Claimant was offered an adequate opportunity to deal with the issue. The continuing doubts about the Claimant’s commitment were based on the fluctuating price of coal, an important matter to take into account in the light of Mr William’s explanation. Modal was, understandably, the most relevant of the Claimant’s companies for the purposes of the review hearing.

Claimant: In relation to Time Frames, the Decision Letter said this:

“Corus put forward clear, tangible Time Frames for its proposal whereas AML has been less clear.”

This was an unfair and/or irrational conclusion for the Defendant to reach because a) the Claimant was not told that this might impact adversely on the application and b) it did not feature as a reason in the Interim Decision. Had this been raised, AML would have been able to submit a more detailed time frame immediately after the Review hearing. In any event the approach was perverse, as a genuinely meaningful timetable cannot be produced where the manner in which the venture would be taken forward is dependent on the results of exploration.

Defendant: The application form at paragraph 2.6 clearly required the applicant to state the proposed date of commencement of operations or when the authorisation should come into effect and the proposed duration of the operations. Failure by the Claimant to set out even a Time Frame for exploratory works was a relevant factor to take into account.

Claimant: The Authority concluded that “Corus has submitted realistic production targets, whereas AML has overly optimistic targets which, in the Panel’s view, are unlikely to be achievable”. The issue was not mentioned in the Interim Decision, nor was any advance notice given to AML to the effect that this was a matter of concern to the Authority. Mr Williams dealt with the issue at the hearing. The Panel did not indicate that it was dissatisfied with his explanation.

Defendant: The matter was put to the Claimant. He was able to deal with it. Further written submissions could have been sent to the Panel following the hearing. The application form itself made it clear that a significant amount of technical information was required (paragraphs 4.5-4.20). The Defendant, on the basis of its expert knowledge, was entitled to entertain doubts about the Claimant’s figures.

Claimant: The Authority’s conclusion on the issue of surface rights was “Corus already has surface rights at its existing site. By contrast, AML has not clearly specified the location(s) of the mine and, hence, there is no certainty regarding its ability to acquire surface rights”. The Defendant failed to take into account the fact that the land which Corus had identified to provide mine access is adjacent to a site of specific scientific interest (SSSI). This raises a large question mark as to the deliverability of Corus’ proposed scheme, given the likelihood of harm from a mine access operation. The Authority was unaware of the status of the adjacent land and it must have wrongly accorded Corus a higher degree of certainty than justified.

An issue relating to the above is that of Planning Consents. The Authority’s conclusion on that issue was: “Corus will find it easier to obtain planning consents on an existing industrial site”. The same point is made as with the surface rights issue, namely that if the surface access strategy is incapable of implementation because of the likely damage to the SSSI, it will not get (or will not be able to implement) the planning permissions that are necessary. Thus, it will not matter whether the Corus site is brown-field and in existing industrial use.

Defendant: The issues were explored with the Claimant at the hearing and the Panel’s concerns put to him. There was no unfairness. Corus owned the land which it proposed to use for access, AML did not and could only point to an oral agreement to use land - land which it was agreed was not a preferred site. The Defendant’s decision was not unreasonable in the circumstances.

Corus proposed to access the coal from an area that is already in use for industrial purposes. The Claimant had a multi-site proposal based on an unspecified and possibly a green-field site. It was not unreasonable to conclude that Corus would have better prospects of getting planning permission. With regard to the SSSI, the Claimant made no reference to the existence of an SSSI at the hearing. The Claimant confuses site access with mine access. Coal extracted at Corus could be transported from the site by rail or sea without disturbing the adjacent land.

A number of issues arise under this heading. They are points, save for the “ready market” point, which were raised for the first time in court. They do not feature in the skeleton argument or pleadings. They are: i) the Welsh Assembly; ii) “synergy”; iii) availability of ready market; iv) Greek shipping company; v) selling off to the highest bidder.

Claimant: Paragraph 4.5.6 (440) of the memorandum which was in front of the Panel, prepared by Simon Cooke, the Deputy Operations Manager of the Authority, summarising the comparative strengths and weaknesses of the two applications, reads as follows: “Corus is already part of the South Wales economy and any further development by them is likely to receive a favourable reaction both politically and locally. Officials at the Welsh Assembly are keen for Corus to proceed with the project.” There is no explanation as to what weight has been attached to this. For the Panel to have read this is so prejudicial to the claimant’s position that it vitiates the whole of the decision-making process. The fact that the panel had wholly prejudicial material in front of them means that they may or did take into account something they should not have done.

Defendant: None of the points have been raised previously. They are not pleaded. Permission is needed to amend the grounds and to call evidence. No such application has been made. The effect of the submission is that the Authority did not give the real reasons for their decision. In light of the obvious allegation of bad faith, leave should be sought to cross-examine Mr Schofield on the allegations. No such application has been made.

Claimant: Paragraph 4.5.7 of the memorandum reads: “Corus are the natural market for the coal produced as their Port Talbot steelworks plant is within the reserve area and a very large investment has recently taken place in new coke ovens. This would be the case whichever party operated the mine site. There is a natural synergy between the Corus steel operations and coking coal production.” The author is saying that the synergy between coal and steel is determinative of the application, so that where there is a non-steel application, it is bound to fail. This was highly prejudicial to AML.

Defendant: This is another allegation of bad faith and should be pleaded. The Claimant wrongly interprets the import of the observation.

Claimant: The Authority found that “Corus has an existing and ready market for the coal, in that it has a need for coking coal at its own Port Talbot site. AML’s market is more speculative, although in practice it is also likely to sell coking coal to Corus and proposes to supply steam coals into the power generation sector.” Although no particular criticism is aimed at the comments, it is hard to see how the comments afford any weight in support of a preference for Corus and thus it is irrelevant.

Defendant: There is nothing in the point. Mr Schofield sets out the reasoning in his statement (455-6). It is a factor which gave greater weight to the Authority’s conclusion that Corus would be keen to pursue its proposals.

Claimant: Paragraph 4.5.8 of the memorandum reads: “Abbey’s financial backing is of a speculative nature. A Greek shipping company registered in Liberia does not have the connection with a potential Welsh coal mine that a steel producer sited adjacent to the potential mine site has. It is likely that Abbey would wish the licence to be a paper asset to be sold on to the highest bidder (which could include Corus)”. The comment about the Greek shipping company with no ties to Wales points to an irrelevant factor relating to finance being taken into account when awarding the lease to Corus. If there was a concern about the origin of the financing they should have raised it.

Defendant: The point is misconceived. The findings in relation to finance were neutral, favouring neither party. This point was also not pleaded and should have been.

Claimant: The last sentence in paragraph 4.5.8 about the likelihood of AML selling off to the highest bidder is highly prejudicial. It was a material consideration which would influence the decision making. Although it is not an express reason, it was part of the underlying reasons, which should have been put to AML.

Defendant: This was not pleaded. This also amounts to an allegation of bad faith. The Defendant should have a proper opportunity to deal with it.

There is yet a further point made by the Claimant which was not in the skeleton argument, namely that the document entitled “The decision of the review panel” (505) contains more details for the reasons for the decision than the decision letter itself. This document, although written after the Review hearing, was not disclosed to the claimant and this omission goes to the issue of process.

Defendant: This is wholly misconceived. It does not go to the fairness of the review hearing process and does not vitiate the decision sent to the Claimant. The decision letter was a fair summary of the point the panel relied on in upholding the decision of Mr Wilson.

Claimant: Paragraph 7.8 of the decision of the panel (514) demonstrates that the authority has only focussed on one issue, namely section 2 duties, and has not looked at matters in the round, particularly its duty under Section 3(4) of the Act to secure the best terms reasonably available. The Claimant had offered a potentially higher financial return. The approach of the Authority was in error not to take that into account.

Defendant: This point has not been pleaded and is not in the skeleton argument. It is quite clear from the decision letter that Section 3(4) was addressed specifically.

Mr Justice Collins queried whether the competition point was amenable to Judicial Review. The Claimant submitted that it was. The defendant has not argued to the contrary. Accordingly, I approach the submissions on the basis that it is. (264)

Claimant: There is no definition of the term “undertaking” in the EC Treaty, but the ECJ has held that it “encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way it is financed”: see Hofner v Macrotron [1991] ECR I-1979, para 21; and SAT v Eurocontrol [1994] ECR I-43, paragraph 18.

Section 7(3) of the CIA 94 transferred the ownership to the Authority of all the un-worked coal and coal mines which had previously been vested in the British Coal Corporation: Schofield, paragraph 5 (443). This made the Authority the owner of most of the coal in the UK. The Authority’s functions include “holding, managing and disposing of interests and rights in or in relation to the un-worked coal and other property which is transferred to or otherwise acquired by it by or under this Act” (section 1(1)(a)) and “carrying out functions with respect to the licensing of coal-mining operations” (section 1(1)(b)). Section 3(1)(a) requires the Authority to have regard to the need to co-ordinate its practices in relation to relevant property dealings with its licensing functions under Part II. Further, where the Authority disposes of a property interest, its duty is to “secure the best terms reasonably available for the disposal”: (section 3(4)). It is clear therefore from these matters that the Authority is in reality engaged in a commercial activity, namely the disposal of rights in un-worked UK coal (in particular) in return for royalties. The Authority is, or is little different from, a “revenue-producing monopoly”.

It is self-evident that the Authority’s licence agreement with Corus will have an appreciable and adverse effect on competition in the relevant product markets in the UK and more widely because of the removal from the market of one significant customer (Corus) and the ability of Corus to supply itself with coking coal at below market price. This will give Corus an obvious competitive advantage as against other steel producers.

Defendant: The claimant has failed to show any infringement of Article 81 because: a) the Defendant is not engaged in an economic activity for the purposes of EC and UK competition law, being a public authority acting pursuant to statute to regulate the exploitation of a scarce resource; b) even if the Defendant was so engaged, the Claimant has not performed the necessary market analysis required under Article 81 to demonstrate that the agreement would have a negative effect on prices, output, innovation or the variety or quality of goods that can be expected with a reasonable degree of probability; or that any such effect would be appreciable; c) it is not credible to contend that the licensing of the Margam site would have any appreciable impact on the world market, given that the market for coking coal is international. This was acknowledged by the claimant when asked at the Review hearing (250); d) the claimant has cited not a single case from the huge volume of UK, EC and US case law on competition, to support the proposition that vertical integration of an undertaking through the acquisition of a supplier has an adverse effect on competition. To the contrary, the agreement with Corus is likely to promote competition, and would have a positive effect on consumers of steel.

Under Section 2(2)(b) of the Coal Industry Act 1994, the Authority has a duty to “have regard to the desirability of securing … that competition is promoted between the different persons carrying on, or seeking to carry on, coal-mining operations”. The manner in which the Authority addressed s2(2)(b) reveals two errors of law in that a) the grant of the licence to Corus will have an anti-competitive and adverse effect on the coal market and will not promote competition between coal-mining operations, and b) the Authority erred in law by wrongly regarding the duty in s2(2)(b) as a secondary duty, subservient to section 2(1)(a) (the requirement to carry out its duties in a manner that it considers best calculated to securing, so far as is practicable, the maintenance and development of an economically viable coal mining industry in Great Britain). This is apparent from Mr Schofield’s memorandum: (Para 7.4 at 512) recording that “the Panel finds that its section 2(1) duties are paramount” i.e. over its s2(2)(b) duties.

Defendant: The Authority had careful regard to its duty under section 2(2)(b). This can be seen from the decision letter and the statement of Mr Schofield. (paragraph 37 at 128). Regard was paid to the following factors: a) by advertising the licence, competition was promoted between different persons seeking to carry on coal mining operations; b) both the Claimant and Corus would be seeking to supply coal to power generators in competition with other existing sources of supply; c) there were already numerous suppliers of coal steam to the UK power generation industry should Corus decide not to produce coal steam, and thus the need to ensure competition between persons carrying on coal mining did not necessitate granting the licence to the claimant; d) as regards coking coal, Corus and the claimant were competing to mine coal in order to sell to the Corus steel works. Having considered its duty, it was entirely lawful and reasonable to award the licence to Corus.

In any event, the priority to be accorded to the various duties under the Coal Industry Act 1994 did not arise as a material issue since the Defendant had regard to the matters under Section 2(2)(b) and concluded that it had no impact as between applications.

Claimant: Chapter II of the Competition Act 1998 prohibits conduct on the part of an “undertaking” which amounts to an abuse of a dominant position “if it may affect trade within the United Kingdom”. Article 82 of the EC Treaty contains the equivalent provision as regards trade between Member States.

Corus has over 50% of the UK steel market. Corus had a turnover of £9.3 billion in 2004: (paragraph 2.2.3 at 436). Corus has used its dominant position in the steel market to secure the licence. It was a fundamental part of Corus’ application that its recent investment of £250m into its Port Talbot steel works provided a basis for their preference over AML. The Decision Letter relies (190) on precisely this point. Further, Corus used its market power to secure the licence at a lower price than that offered by its competitor AML. That being the case, the agreement is void: BRT v SABAM [1974] ECR 51. Moreover, the Authority, as a public body, cannot lawfully be party to Corus’ breach of the Chapter II prohibition and/or Article 82.

Defendant: In order to show the applicability of Article 82 and/or the Chapter II prohibition it is necessary to do the following: a) define the relevant market. The Claimant has failed to demonstrate that there is a UK steel market as opposed to an international market and that Corus has dominance; b) the assertion that Corus has over 50% of the UK market is not accepted. There is no evidence to support a finding of dominance in the market; c) investing in infrastructure is not abusive conduct; d) the burden is on the claimant: Article 3, Regulation 1/2003. There is no evidence of any abusive conduct by Corus.

Article 87 prohibits State Aid, the main elements of which are: (a) an advantage; (b) granted by a Member State or through State resources; (c) favouring certain undertakings or the production of certain goods; (d) distorting competition; and (e) affecting inter-State trade. The concept of “aid” is wide, going beyond mere subsidy, and comprising of any form of intervention or assistance which has the same or similar effects to a subsidy: see Steenkolenmijnen v High Authority [1961] ECR 1 and Amministrazione delle Finanze v Denkavit Italiana [1980] ECR 1205. Corus’ bid was at a price which was lower than that offered by AML. This will enable Corus to produce steel at a considerably lower cost than its EU competitors. The effect of the Decision Letter is therefore to grant State aid to Corus. This should have been notified to the Commission for approval under Article 88(3), but has not been.

Defendant: There is no question of subsidy to Corus. The existence of the licence was advertised, the competing applications assessed. Although AML’s figure was hypothetically higher than Corus, the bid by Corus was considered to have a higher probability of being pursued and achieved and thus represented the best terms reasonably available, taking into account the royalty offered and the likelihood of payment eventuating; no complaint has been made to the EC Commission by the Claimant, as would be expected if illegal aid had been granted.

In this case, there is no regime laid down for disclosure in the context of the statutory framework, accordingly there is no statutory duty of disclosure. Whilst counsel for the Defendant may or may not be correct in stating that the Claimant has failed to point out any express or implied duty for the rules of natural justice to be applied to the tendering process in this case, nevertheless the guidance notes themselves at paragraph 11.7 impose a review procedure that is consistent with the requirement of fairness, and thus this is really the issue to be addressed. What constitutes fairness within the context of this case has to be determined.

Fairness has to be considered first of all in the light of the statutory framework and the purpose of the Review and then more generally, to ascertain, in the light of what actually happened, whether the process was manifestly unfair. The Review presents the unlucky applicant with an opportunity to set out why the decision taken in relation to his application is unsustainable. It is clear from paragraph 11.9 of the Guidance notes (83) that the hearing is not an opportunity to introduce new material or restructure the application, nor, as Mr Schofield noted, is it adversarial. The Panel has to consider whether the decision reached by the DMPP is tenable in the light of the submissions made by the applicant and the DMPP. What does fairness demand in these circumstances?

The reasons for rejection and the opportunity to deal with the reasons (whether in writing or orally) are the most important aspects. Does fairness require that disclosure of all matters be made, including disclosure of the Corus application, so that the Claimant can comment on them? In my judgement, given the function of the review hearing, it does not. The review hearing was not to enable the Claimant to comment on the Corus application but rather to deal with what were perceived to be the “shortcomings” of the Claimant’s application. The important issue is that the Applicant is made aware of and has a proper opportunity to deal with the material issues of concern. In the absence of a specific duty, there is, in my view, no general duty or requirement for disclosure of all documents before the interim decision or prior to the hearing. I will deal with the non-disclosure of the documents which were before the Panel and the Claimant’s opportunity to deal with matters of concern shortly.

Reliance on the case of Agnello does not take the Claimants case any further because, as Mr Justice Collins rightly pointed out during the permission hearing, (304-5) this case fell into the second stage of the Agnello test. Counsel for the Claimant contends that it is still at stage one and that it does not fall into stage two until sufficient information has been given to the applicant so that it knows the facts upon which the comparative evaluation is to be made. However, on invitation by the court, counsel was unable to point to where stage two fell in the context of this case. It is to be noted that Agnello and similar cases were concerned with disclosure of matters adverse to the applicants of which they were unaware. The question of the need for disclosure and fairness need to be considered in that light.

This point can be taken shortly. As indicated above, the proceedings are not adversarial and the purpose of the Review hearing is set out clearly. The Authority clearly has the power to send back an application to the Director for re-consideration and there is no reason why in appropriate cases it should not do so if the decision is found to be flawed. The submission that the absence of Corus would incline members against reversing the decision is without substance and it implies that the professional members of the panel, would be influenced by matters extraneous to the merits of the submissions made to them by the Claimant. This comes very close to an allegation of bad faith.

The briefing note prepared by Mr Schofield as a working document set out the principal terms of the applications, the decision of the Director and AML’s grounds for seeking a review. It is a working document without comment and without bias. Also included were the applications of Corus and AML, the licensing report, and recommendations and a written commentary by Mr Wilson on AML’s letter seeking a review.

Although the application of Corus was part of the documentation, as Mr Wilson made clear during the hearing, “inferences” (sic) regarding the Corus application were inappropriate given that Corus and AML were competitors. In the light of those factors, it was appropriate for the Corus application not to be disclosed to AML. With regards to the licensing recommendation and the overall view of the two competing applications – these were working documents for internal use. They summarised the issues and the views as to the strengths and weaknesses of each application. Mr Wilson dealt with the material issues contained in the working documents during his submissions and during questioning. It was no secret that the applications were in front of the panel members, as reference was made to this by one of the members (253). No objection or point was taken, that AML were prejudiced by this fact, either at the time, after the hearing or in the pre-action letter (28). The matter was first raised in the amended statement of grounds. In my judgement, there was no requirement for those documents to be disclosed, as long as the Claimant was given an opportunity to deal with any matters, which had or may have had a material effect on the decision.

In relation to one document however, it would, in my view, have been preferable if the commentary of Mr Wilson had been disclosed to the Claimant, prepared as it was for the hearing and dealing as it did with the application for the review, it being in essence Mr Wilson’s defence of his decision (501). That said, in the light of the issues being dealt with during the course of the hearing, I take the view that AML was not prejudiced by the lack of disclosure of this document. No specific submissions were made about unfairness in relation to this document and its contents. The only point made was that in the document Mr Wilson explained that the interim decision letter to AML set out the essence but not the detail of the reasons.

There is a further document of which complaint is made. It is a document headed: “Coal licences and coal methane agreements held by companies associated with Mr Williams” (486a). The document sets out factual information (without comment) about the history of the licences and agreements, information which would be within the personal knowledge of Mr Williams. Indeed details of the relevant companies were provided by AML in Section 3 of the application form. This section deals with information on associated companies, including companies with an interest in coal. It is not an unreasonable assumption that this information would be followed up. Counsel for the Claimant has asserted that the document contains many inaccuracies, but has failed to elaborate further. No prejudice has been shown regarding the lack of disclosure of that document.

Track record.

Track record was not mentioned in the interim decision. Given the information required in the application form, there are bound to be checks on the viability and track record of the associated companies and persons involved. Mr Williams cannot have been in any doubt about that. Indeed, Dr Jones, during the hearing addressing Mr Williams, observed that track record plays a major part in planning mines. (248). Although the wording of the decision letter of 16th December (189) refers to companies in the plural, given Modal’s lack of progress with the very same site as in the present application, it is obvious that the concerns of the Authority would focus more keenly on that site than the other sites and companies. Mr Williams was given an opportunity to deal with the lack of progress by Modal (250). The Panel was not obliged to tell him that they found his explanation unsatisfactory. His explanation that the low price of coal had affected progress, gave the panel legitimate cause for concern about Mr William’s commitment to the site in light of future fluctuating prices of coal. The failure to ask questions about the other companies would not have affected the position so far as Modal’s failure to progress the Margam site is concerned and is therefore not a material omission. In any event, on a close reading of the record of the hearing, Mr Williams was indeed asked about the associated companies listed in the application form. He was asked if they were still trading. He had the opportunity to deal with each company listed in the application form had he wished to avail himself of it. Whilst there were two or three companies which featured in Appendix 1 (486a) which did not feature in the application form, given the import of the question, Mr Williams could have told the panel about other relevant mining companies with which he had an association which were no longer trading should he have wished to do so. (247). The observation of Dr Jones (see above) afforded Mr Williams the opportunity to address the panel further on the track record of his companies had he wished to do so.

The interim decision letter did not refer to time frames. Section 2.6 of the application form clearly required time frames to be filled in. The Claimant merely stated “As soon as possible”. This issue was raised by Mr Wilson at the hearing, (244) but Mr Williams did not avail himself of the opportunity to deal with it. In relation to the alternative submission that to give weight to time frames was perverse since meaningful timetables cannot be produced - the Claimant cannot both complain that the company could have given a more detailed time frame after the hearing had the matter been raised, and at the same assert that time frames are meaningless. Given that the matter was raised at the hearing, there is no unfairness to AML. Moreover, given that there was a section dealing specifically with timeframes, it was not irrational to take this aspect into account.

The interim decision letter did not refer to production targets. The application form made it clear that detailed technical information was required. The matter was put to Mr Williams and he gave his response (248). He did not seek to amplify his response by further written submissions after the hearing. The Panel was entitled to entertain doubts on the achievability of his figures in the light of their experience and did not have to indicate to Mr Williams what view they took of his response.

The Claimant has provided no evidence whatsoever to show that the adjacent SSSI would affect the deliverability of Corus’ proposed scheme. It is merely assertion. The issue of surface rights and site access were raised at the hearing and the Claimant had every opportunity to raise any doubts he entertained. He did not. The Authority was entitled to come to the conclusions it did, given, in particular, that AML did not have surface rights and thus no surface access strategy, whereas Corus had both.

The points which follow were not, with one minor exception, raised either in the pleadings or the Claimant’s skeleton argument. No application was made for permission to amend. For the sake of completeness, even in the absence of an application to amend, I deal with the points raised.

When Mr Griffiths stood up to address the court, he began by indicating that this case was one of great importance both for his client and for the people of Wales. When asked whether the Claimant expected the court to find in its favour because of that fact, Counsel conceded that it was irrelevant and something which the court could not take into consideration. It is therefore difficult to see how it can be submitted that a panel of experienced members of the Authority appointed under statute were swayed by the fact that Corus would be a popular choice. Mr Griffiths denies that an allegation of bad faith has been made or is to be inferred, suggesting that the members could have been influenced subconsciously. A document with further submissions dated 30^th April has been received very recently from Mr Griffiths. The document shows that there were eleven meetings in 2004 and 2005 in which representatives of the Welsh Assembly met and discussed the Margam site. There was a Corus representative at seven of the meetings and on one occasion a representative of the Coal Authority. This, it is submitted lends “considerable additional credence… to the submission that the Authority’s decision which is impugned in this case was infected by the (legally irrelevant) factors referred to at paragraph 4.5.6”

I reject the submission for the following reasons. A close reading of the notes of hearing (240 et seq.) and the record of the decision of the panel (505 et seq.), reveals that the Panel came to its decision based on the matters aired at the hearing. It is interesting to note that Mr Williams himself referred to the Welsh Assembly twice during the hearing; one referring to the favoured site being Corus or British Oxygen in relation to entry to the mine and a further reference later on (249). He was well aware of the rumours of Corus being the favoured/successful bidder as he himself drew the attention of Mr Wilson to an article in the Guardian newspaper and a piece on BBC Radio Wales to that effect in an email dated 23^rd August 2005 (143).

Further, paragraph 4.5.6 (the Welsh Assembly point) was only one of ten reasons put forward in the recommending report under the issue of “achievability and best terms reasonably available”. It did not feature in the reasoning of the panel. The details of the eleven meetings alluded to, show that six of them are before 2^nd November. The suggestion of subconscious influence/bias is at odds with Mr Wilson writing to AML on 2^nd November inviting them to apply for the Margam licence. (Wilson 387-9) There was no letter to Corus inviting application, but in accordance with the Guidance notes, an advert was posted. The submission also does not sit comfortably with Mr Wilson’s encouraging a joint enterprise between the competing applicants, an initiative which came to nought because AML was not prepared to have Corus as the licence holder (252). The details of the discussions are unknown. Even though the Coal Authority was present at a meeting just before the interim decision was made, and was quite likely to have been the source of the observation in paragraph 4.5.6, the fact of the meetings themselves does nothing to further support the submission already made. The letter from the Defendant’s solicitors dated 4^th May 2007 received by the court on 10^th May, confirms that the observation in paragraph 4.5.6 was as a result of the meeting on 31^st August. None of the Panel members attended the meeting with the Welsh Assembly.

This point can be taken quite shortly. It is not possible to draw the inferences contended for by the Claimant on a proper reading of the extract. The meaning is clear. It does not say or mean that only steel producers will get the licence.

This point was pleaded but with some diffidence. The observations were perfectly justified in the light of AML’s information about its potential market. These were matters which could properly be taken into account.

The point of the Review was in order to raise points which were material to the decision. The findings in relation to finance, despite the observations made, were neutral. There was no need for this to be raised, and the Claimant has suffered no prejudice.

There is no evidence at all either in the notes of hearing or indeed during the decision making process (505-514) that the comment about selling off to the highest bidder was part of the underlying reasons for rejecting the AML claim. The report of the panel setting out its decision and the reasons for it dealt solely with what had been discussed during the review hearing and nothing more.

The related point that the decision of the authority was more detailed than that of the decision letter is totally without merit. No prejudice to the Claimant has been or can be shown in relation to the Review process which took place before this document was written.

This point can also be taken quite shortly. It is apparent both from the notes of the decision of the Review Panel and the decision letter itself that proper consideration was given to all relevant matters including the duty under section 3(4). (191/514). In light of AML’s more speculative proposals, the Authority was entitled to reach the conclusion that it did.

The Chapter I argument. The anti-competitive agreement.

The Authority is not, in my judgment, an undertaking. I come to that view for the following reasons: a) The Coal Authority is a public authority acting pursuant to statute; b) looking at the powers and duties of the Authority and purpose of the Authority under statute, they are in keeping with powers typically to be exercised by public authorities; c) it is acting to regulate the exploitation of a scarce resource. In this respect, it is similar to an air traffic control agency regulating access to the air space over Europe, or a communications regulator regulating access to the radio-spectrum; d) the Coal Authority is not in competition with any other body. By Section 5(6) of the Act, the Authority is precluded from mining coal; e) by Section 5(7) of the Act, the Authority is precluded from acquiring land and other property without the permission of the Secretary of State and the consent of the Treasury; f) under section 25 of the Act, there can be no mining of coal without a licence from the Authority, this applies even in respect of coal which the Authority does not own. Section 31 gives the Authority powers of enforcement in respect of breach of Section 25; g) Paragraph 9 of the judgement in the case of SAT v. Eurocontrol [1994] ECR I-43, said this: “…. It is apparent that the essential factor in classifying a body as an undertaking is the pursuit of an economic activity capable of being carried on, at least in principle, by a private undertaking with a view to profit”. It is clear from the powers and regulatory duties of the authority that the activity is not capable of being carried out either in principle or practice by a private undertaking with a view to profit; h) save for a retention of a modest proportion of the royalties from the licences as a contribution towards administrative costs, the revenue generated is remitted to central funds. In my judgement the Authority is a public authority disposing of public assets having regard to commercial considerations. That being the case, it is not an undertaking and not subject to Article 81.

If the above reasoning were wrong and the Coal Authority were an undertaking, I would turn to consider whether the Claimant has discharged the burden of showing that the agreement would have a negative effect on prices, output, innovation or the variety or quality of goods that can be expected with a reasonable degree of probability, or whether any such effect would be appreciable. The Claimant has not, in my view, discharged the burden. There has been no market analysis carried out to demonstrate the necessary negative effect, and no evidence has been adduced to support the proposition that vertical integration of an undertaking through the acquisition of a supplier has an adverse effect on competition. There has been mere assertion without any supporting evidence.

This ground fails for the reasons given by the defendant. (See para 58 above). The Section 2(1) duty favoured Corus on deliverability and the Section 2(2)(b) duty was neutral as between the parties, see: decision letter (191). There was therefore no conflict between the two duties.

The Claimant has failed to discharge the burden of showing breach of Chapter II and/or Article 82 for the following reasons: a) the “relevant market” has not been defined and b) no cogent evidence has been presented to show that Corus has dominance of the relevant market. It is clear from the EC Commission Decision in case No COMP/M.4137 Mittal/Arcelor of 2^nd June 2006, a decision which involved the largest steel producer in the world and the largest European and second largest steel producer worldwide, that the steel market is complex. The Commission distinguished four broad categories of finished steel products with sub-categories. The markets are different for each. In 2004-5, Corus’s share in the various markets, save for two particular areas, is a figure between 5-15%. In relation to metallic-coated steel for packaging and organic-coated steel, it is a figure between 15-25% of the market. These figures go nowhere near supporting the contention put forward by the Claimant. It does not show dominance in the international market and there is no analysis of the UK market. Given this, there is no evidence of abuse of dominant position and the allegation that Corus used it dominant position in the market to secure the licence at a lower price than its competitor falls away.

There is no question of State Aid in this case. It is not surprising that Mr Justice Collins was unimpressed by the argument. Mr Griffiths conceded that it was not the strongest of points and was one which he could delete in his amendments (315). Regrettably, he did not. The Coal Authority took an overall view and chose the bid offering the best terms in relation to deliverability. Best terms does not necessarily mean best price, and I find that there is no question of subsidy.

Having dealt with the individual submissions, I now stand back and look at the cumulative effect of the submissions to see if this reveals: a) unfairness in the process overall and whether, in all the circumstances, the decision of the Authority could be said to be unlawful, perverse, irrational or unreasonable.

Whilst it is true that the reasons given in the interim decision letter were short and that three issues in particular were not raised until the hearing, as indicated by Counsel for the Claimant, Mr Williams nevertheless went to the review hearing confident that he could deal with any issue which arose. Looking at the notes of the hearing, it is clear that Mr Williams was perfectly able clearly to convey the issues which he, with the benefit of advice from Leading Counsel, had identified as being relevant. Moreover, as indicated by Mr Schofield, the opportunity for written submissions had been offered. That opportunity was not pursued.

On a close reading of the notes of the review hearing, all relevant issues were canvassed during that hearing. Mr Wilson was questioned very closely about the process he had employed in relation to the applications, and this included the Authority’s approach to its duties, how Mr Wilson had reached his conclusions on the different issues, and the competition and other issues raised by Mr Williams (250 et seq.). Whilst the details of the Corus application were not made available to AML, Mr Wilson did explain why Corus fared better in the various aspects of the bid. Mr Williams was given a full opportunity to develop his arguments and objections. During the course of the hearing Mr Williams indicated that he was happy that the Director of Mining knew all the facts. Further, he e-mailed Mr Wilson after the review hearing (cc Mr Schofield) to thank him for the very professional manner with which he had conducted himself during the review hearing (188).

It is strange, given the manifold criticisms that are made about non-disclosure, that the lawyers advising AML did not raise these matters prior to the Review hearing. It is not clear who the solicitors were at the time, as all correspondence came from AML. However in the correspondence, AML referred to having taken advice from Leading Counsel (465) and during the course of the review hearing Mr Williams quoted from the advice of Leading Counsel (246). Indeed it had been envisaged initially that Leading Counsel would attend the Review hearing. On enquiry by this court, it is clear that no requests were made by AML, either themselves or through their legal representatives, for the material which the Claimant now submits should have been made available to AML in advance of the review hearing.

As noted earlier, the document containing the decision of the Review panel (505-514) shows that the panel went through all the relevant issues raised during the hearing. The irrelevant issues referred to by the Claimant did not feature in its reasoning. Moreover, it is to be noted that Mr Wilson made it clear that AML had crossed the eligibility threshold and would have been granted the licence had Corus not had a better proposal (251). Mr Wilson also emphasised during the hearing that the Authority had a “good interaction” with Mr Williams. This was endorsed by Mr Williams himself (253). Further, in the interim decision letter, availability of finance had been given as one of the reasons for preferring the Corus application. In the decision letter, finance was neutral, in other words the Panel had rejected one of the reasons originally given for finding against AML. This evidence sits somewhat uneasily with the Claimant’s submissions of conscious or sub-conscious bias arising from the presence of irrelevant material in front of the panel.

My conclusions in relation to the questions raised in paragraph 94 are in the negative. This Review process was in its infancy, this case being the first under the Authority’s procedures. There is clearly room for fine-tuning of the process and no doubt the Authority will wish to do so in light of this experience. However, what actually transpired in this case cannot, in my judgement, be said to have been unfair in any sense of the word, public law or otherwise. The Claimant had the opportunity both before (in relation to the issues raised in the interim decision letter) and after the hearing (in relation to all matters raised at the hearing) to deal with the material matters. The decision made followed a clearly definable line of reasoning based on the issues raised during the hearing, including matters of law. The conclusions are sustainable. There are no grounds for finding that the decision was unlawful, perverse, irrational or unreasonable. It follows therefore that this application for judicial review is refused.