Procedural fairness for competitors to licence applicants?

The Manitoba Court of Appeal, in London Limos v. Unicity Taxi Ltd., 2012 MBCA 75, recently discussed whether market participants in regulated industries have any procedural rights when new companies apply to enter the market. The answer in this case was some, but not many.

London Limos applied to the provincial Taxicab Board for licences to operate taxi services. Two well-established taxi operators (surprise!) resisted the application. In this, they were only partially successful: London Limos succeeded in getting some of the licences it sought. Frustrated, the market incumbents appealed to the Court of Appeal.

One of the grounds raised was that the objectors were given no disclosure of critical information about the application, such as London Limos’ business plan. They were allowed to come to the presentation made by London Limos and even to cross-examine the London Limos representative. They were also allowed to make their own submissions.

This was enough to satisfy the Court of Appeal. In an area of economic regulation, where the regulator had significant authority to prescribe the procedures to be followed in application hearings, confidential information was at issue, and the objectors had no direct interest in the hearing, the level of procedural protection afforded was more than adequate:

Determining the extent of disclosure necessarily requires a balancing of the interests of the Objectors and London Limos.  In this case, considering that the statute was silent on this issue, that the appellants were objectors and that, while increased competition might in varying degrees have an impact on them, no legal rights of the Objectors were affected and that they did have substantial disclosure, if not before the hearing, then certainly during the hearing, I believe the Board fulfilled its duty of fairness in this situation…

In the circumstances of this case, there was no breach of procedural fairness or natural justice with respect to disclosure as the Objectors are not parties to the application.  Indeed, they are competitors of the applicant and the information requested was confidential within the context of an administrative tribunal dealing with economic regulation of an industry.  The Board balanced the interests of all parties and participants and disclosed a sufficient amount of information both before and during the hearing.

This seems a sensible conclusion, especially in the circumstances. Generous participatory rights in adjudicative settings are doubtless appropriate when polycentric decisions have to be taken, but a right to peer over the shoulder of a licence applicant against whom one may soon be competing for business seems unnecessary and inappropriate. To hold otherwise would surely be to chill entry into the market in question, to the benefit of the incumbents and to the detriment of the public interest.

The Court of Appeal also dismissed a challenge based on inadequacy of reasons. Although no formal reasons were provided (assuming that there was any duty to provide reasons to objectors), the basis for the decision was evident from the record.

This content has been updated on June 11, 2014 at 09:47.