- March 25, 2014
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
A company that invested more than £60 million in the port of Great Yarmouth over a six-year period, greatly boosting its income, has nevertheless failed in a High Court bid to take over as its official harbour authority.
The Great Yarmouth Port Company, which is part of a group which operates harbours around the world, was granted a 99-year lease of the ancient port in 2007. It had since invested heavily in improving the port’s infrastructure – including the construction of a new outer harbour – and, as a result, there had been a 50 per cent increase in the port’s revenues between 2007 and 2010.
However, management of the port remained split, with the Great Yarmouth Port Authority continuing to hold a range of statutory powers and duties performed in consultation with the company, including the setting of tariffs for use of the port’s facilities and the employment of harbour pilots.
In 2010, the company applied to the Marine Management Organisation (MMO) – the Government agency responsible for overseeing the nation’s ports – for a harbour revision order (HRO) under Section 14 of the Harbours Act 1964. The order, if granted, would have seen the authority’s statutory functions transferred to the company and the latter’s appointment as harbour authority.
The company argued that the complexity of the current arrangements was hindering the port’s growth and leading to customer confusion. In a highly competitive market, it was submitted that the existing structure of the port’s management made it more expensive than competing harbours. The split roles were impeding the smooth running of the port and its ultimate economic success.
However, the company’s application was fiercely opposed by the Great Yarmouth Port Users Association (GYPUA), which represents 20 of the main businesses operating in the port area. GYPUA expressed concerns in relation to the company’s operation of the port and denied that the existing management structure was causing any confusion or other difficulties.
Following a public inquiry, the MMO refused the company’s application in December 2013 on the basis that it was not satisfied that the making of the HRO was desirable in the interests of the improvement, maintenance or management of the harbour in an efficient and economic manner.
The company launched judicial review proceedings, attacking the MMO’s decision as irrational. However, in dismissing the company’s complaints, the Court found that the MMO had correctly interpreted its role and enjoyed a wide discretion. Making the HRO ‘was definitely not the only rational course open to the MMO and it could certainly not be said that the order would inevitably result in operational and business improvements in the harbour’.
The company’s arguments that the MMO had failed to take into account relevant considerations were rejected and the Court described as ‘hopeless’ submissions that the procedure followed was unfair and that the company had been denied ‘a fair crack of the whip’.