(CMR) The Cayman Islands Grand Court has ruled that Infinity Broadband, which operates as C3 Pure Fibre, is liable to pay outstanding fees to the Utility Regulation and Competition Office (OfReg), denying C3's application for leave to seek judicial review.
C3 made an application for judicial review after OfReg issued an enforcement order to the telecommunications company in 2022, citing its failure to pay its license fees totaling, at that time, over CI $500,000, including interest.
According to the judgment issued on December 1, C3 then asked OfReg to clarify how the Royalty Fee portion of the license fees had been defined, and OfReg replied on 16 February 2023.
C3, through its attorneys, invited OfReg to revoke the Initial Notice in a McGrath Tonner letter dated 17 March 2023, stating that OfReg had no power to impose a Royalty Fee or Regulatory Fee because, under section 30 of the Information and Communications Technology Act (2019 Revision) (ICTA), such fees could only validly be imposed through regulations.
OfReg issued an Enforcement Notice pursuant to section 91(9) of the Utility Regulation and Competition Act (2021 Revision) on 18 August 2023 against C3.
By an Application for Leave to Apply for Judicial Review filed on 29 August 2023, C3 sought an interim stay of the Enforcement Notice if leave is granted, a declaration that the company was not liable to pay the “License Fee”, an order of certiorari quashing the Enforcement Notice, and a declaration that it is not liable to pay the License Fee and restitution of all License Fee payments it has made.
C3 also appealed against the Enforcement Notice under section 91(11) of the Utility Regulation and Competition Act (2021 Revision) (URCA) and applied for a stay of the Enforcement Notice pending an appeal, further or alternatively, pursuant to GCR Order 55, Rule 3(3).
The judicial review was requested on the grounds that the license fees charged by OfReg are unlawful unauthorized taxation and that the imposition of license fees is unlawful because of a failure of OfReg to publish them.
In the judgment, Hon. JusticeIan RC Kawaley declined to postpone determining the points of law raised by C3 to a further hearing, stating that the Court has received the benefit of full inter partes argument on two discrete points of law.
Justice Kawaley stated that leave was refused in relation to Ground 1 because OfReg has validly made regulations prescribing the License Fee.
The judge rejected C3's case that OfReg had no lawful constitutional or other lawful authority to impose the “tax” element of the license fees. According to the judgment, the requisite authority was conferred by the ICT Act, which itself contained a mechanism for OfReg to be subject to Ministerial oversight. When the ICT Act is read together with the Public Management and Finance Act, it is clear that Ofreg, in raising revenue, was subject to Parliamentary oversight as well.
Leave was refused in relation to Ground 2 because (1) publication of the Regulatory Fee to the world at large was not a condition precedent to liability to pay it, and/or (2) by notifying C3 of the amount of the Regulatory Fee, OfReg has complied with the requisite publication requirements, in any event, the judgment read.
The application for a stay of the Enforcement Notice pending appeal was granted. The judge said this is consistent with basic principles of fairness, notwithstanding the refusal of the judicial review leave application since the appeal is still before the Court.