Ryanair Ltd v Revenue Commissioners

JudgeMr Justice Max Barrett
Judgment Date15 December 2016
Neutral Citation[2016] IEHC 727
Date15 December 2016
CourtHigh Court
Docket Number[2012 No. 6736P] [2013 No. 7517P]

[2016] IEHC 727


Barrett J.

[2012 No. 6736P]

[2013 No. 7517P]

– AND –


– AND –



Administrative law – Imposition of airport travel tax – Challenge of validity – Triangulated proceedings – Order for discovery – Privileged information

Facts: Following the levy of airport travel tax for short-distance flights and long distance flight by the State and a complaint of the first named plaintiff to European Commission (EC) in that regard, the plaintiffs in both set of proceeding had filed motions for better discovery from the State parties in Ireland. The said motions were filed by the plaintiffs in two separate set of proceedings commenced by them to recover the difference between two taxes. The plaintiffs contended that the documents which were submitted by the State parties /defendants to the EC needed to be disclosed. The defendants asserted Commission privilege on those documents. The matter was being litigated at three levels namely, an action to recover difference in amount due by the airlines; an action to recover said amount by the State parties from airlines at behest of EC and challenge to validity of imposition of airport travel tax before Court of Justice pending outcome.

Mr. Justice Max Barrett refused the applications of the plaintiffs. The Court held that the since the matter was a triangulated matter, it was justified to claim privilege on the relevant documents. The Court found that since the EC had agreed to provide some of those documents after redaction, it was between the parties to sort out the matter with consensus. The Court found that since the subject matter of all the three proceedings was same; the defendants correctly claimed privilege as disclosure would possible affect the outcome of the case and damage the public interest.

JUDGMENT of Mr Justice Max Barrett delivered on 15th December, 2016.
I. Overview

These proceedings arise ultimately from the establishment of an airport travel tax pursuant to s.55(2)(b) of the Finance (No. 2) Act, 2008. This was a differentiated tax whereby certain short-distance flights were subject to a (per passenger) €2 air travel tax-rate, with longer-distance flights being subject to a €10 air travel tax-rate. This air travel tax was announced in Budget 2008; less than two months later, on 23rd November, 2008, the European Commission indicated an interest in whether this tax was valid by reference to European Union law. On 17th April, 2009, the European Commission gave warning that there was a possibility of formal proceedings against Ireland because of the free movement implications of the travel tax that had been imposed. Separately, on 21st July, 2009, Ryanair made a formal complaint to the European Commission that the tax amounted to State aid.


Arising from the foregoing, a number of broad issues are currently at play between the parties. From the perspective of the State parties, they are faced with a situation in which the European Commission at one point determined that Ireland did provide a State aid via the differentiated rates and directed Ireland to recover the difference between the high rate and the low rate from the various airlines. (This last task has seen proceedings commenced by the State against the airlines). So far as the airlines are concerned, their claims focus on allegations that: the tax was an attack on free travel and the freedom of the airlines to carry on their business; the tax was an illegal State aid; the €8 difference between the two tax rates should be refunded to the airlines by Ireland; and the Commission's direction to Ireland to collect the difference was invalid.


At the European level, as of the date of hearing of the within application, the Court of Instance had decided that the European Commission erred in finding that the two airlines had benefitted to the entire extent of the difference between the two taxes. On appeal, however, the Advocate General had issued an opinion which was more favourable to Ireland's point of view, with a final judgment from the Court of Justice still awaited.


The court has deliberately kept its analysis of the factual matrix of the within application at "headline level". For the purpose of the within application, what is of central importance is that the within proceedings do not simply involve two airlines suing Ireland. Quite the contrary. What presents is what counsel for the State referred to as, and what the court accepts is, ' a triangulated situation' in which Ireland is effectively fighting on two fronts. Thus it is fighting, on the one front, a challenge to the validity of the travel tax; meanwhile, on a separate front, it has been directed to recover the €8 difference between the two tax rates from the airlines and has instituted proceedings in which it seeks to do so. (Those proceedings are stayed pending the outcome of the European-level proceedings). Thus it cannot be said, or at least said properly, that the engagement between the State parties and the European Commission concerns some subject-matter separate to the above-mentioned engagements with the two airlines. The issues arising are related, and there is a triangulated relationship between the various parties, between Ireland and the airlines, and between Ireland and the Commission.


One further point that might neatly be juxtaposed with the foregoing is that when the European Commission investigates a possible breach of European Union law by a member state, case-law accepts that there is a public interest in both parties being able to engage in free dialogue. (See Case T-105/95 World Wide Fund for Nature v. Commission [1997] ECR II-313, para.63, Case T-309/97 Bavarian Lager v. Commission 61997TJ0309"> [1999] ECR II-3217, para. 46, Case T-191/99 Petrie v. Commission [2001] ECR II-3677, para. 68, and Case T-36/04 62004TJ0036">Association de la presse internationale ASBL (API) v. Commission [2007] ECR II-3201, paras. 120-1). The same applies when the European Commission is investigating possible State aid. (See Case C-139/07 P Commission v. Technische Glaswerke Ilmeneau 62007CJ0139"> [2010] ECR I-5885, para.61). The end-result of the foregoing is that a member state cannot take an adversarial role vis-à-vis the European Commission in the situations aforesaid. It cannot simply say to the European Commission, "I hear your case, and if that is what you think go prove it". Instead, Ireland has a duty of cooperation with the Commission. What arises then in the types of situation that have presented for the State vis-à-vis the European Commission in the umbrella of events that form the background to the within application is not the normal adversarial relationship that might, for example, exist between Ireland and the airlines in any one set of commercial proceedings; it is a fundamentally different process.

II. Reliefs Sought

Aer Lingus' application commenced by notice of motion of 1st March, 2016. That motion seeks, inter alia, (1) an order striking out the defendants' defence for want of compliance with their discovery obligations, (2) an order for further and better discovery, (3) certain orders concerning inspection of documentation, and (4) an order requiring the defendants to comply in substance and form with a previous order for discovery that has issued.


Ryanair's application commenced by notice of motion of 2nd March, 2016. That motion seeks, inter alia, (1) certain orders for further and better discovery, (2) an order for discovery and/or inspection in respect of the documents over which public interest immunity and/or Commission privilege has been claimed, (3) an order compelling the State parties to deliver a supplemental affidavit detailing the full and precise basis for each of the claims to litigation privilege and/or legal advice privilege claimed, and (4) an order for a supplemental affidavit of discovery in the prescribed form, containing full and proper descriptions of each of the documents listed in the State parties' discovery schedule.


What appears to have prompted the airlines to bring their respective motions was, inter alia: (1) delay that has presented as regards the production by the State parties of their affidavit of discovery; (2) a claim of litigation privilege made by the State parties, in particular a claim of litigation privilege made in respect of certain interactions with the European Commission, allied in certain instances with a public interest immunity claim (so-called "Commission privilege"); (3) the fact that a number of documents were the subject of a claim of Commission privilege (the European Commission later indicated that it was happy for these documents to be released, subject to minor redactions, so this particular issue is no longer live, though the more general issue of Commission privilege remains live); and (4) a concern, a lesser concern but still a concern, as to the form of the affidavit of discovery sworn for the State defendants, in particular as regards overly general claims of privilege and some inconvenience arising for the plaintiffs from the fact that there are some 45 schedules to the said affidavit of discovery, yielding associated difficulties of document management. It appeared at hearing that this last difficulty may not be as pressing a concern as it may previously have been.


For a variety of reasons there were some delays before the within applications came on for hearing. These delays in fact proved fruitful, yielding an eventual narrowing down of the issues arising between the parties, with the result that the net dispute which came before the court was one of litigation privilege. The issue is...

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2 cases
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    • Ireland
    • Court of Appeal (Ireland)
    • 22 June 2018
    ...appeal from the decision of the High Court (Barrett J.) delivered on the 15th December 2016: see Ryanair Ltd. v. Revenue Commissioners [2016] IEHC 727. 2 In his judgment Barrett J. held that the State was entitled to claim litigation privilege in respect of documents deployed by it in the ......
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