Ryanair Ltd v The Revenue Commissioners Aer Lingus Plc v The Minister for Finance

JurisdictionIreland
JudgeMr. Justice Gerard Hogan
Judgment Date22 June 2018
Neutral Citation[2018] IECA 222
Date22 June 2018
CourtCourt of Appeal (Ireland)
Docket NumberNeutral Citation Number: [2018] IECA 222 Record No. 2017/265 Record No. 2017/302

[2018] IECA 222

THE COURT OF APPEAL

Hogan J.

Dunne J.

Peart J.

Hogan J.

Neutral Citation Number: [2018] IECA 222

Record No. 2017/265

Record No. 2017/302

BETWEEN/
RYANAIR LIMITED
APPELLANT/ RESPONDENT
- AND -
THE REVENUE COMMISSIONERS, IRELAND, THE ATTORNEY GENERAL

AND

THE MINISTER FOR FINANCE
RESPONDENTS/ CROSS-APPELLANTS
BETWEEN/
AER LINGUS plc
APPELLANT/ RESPONDENT
- AND -
THE MINISTER FOR FINANCE, THE REVENUE COMMISSIONERS, IRELAND

THE

ATTORNEY GENERAL
RESPONDENT/ CROSS-APPELLANT

Litigation privilege – Documents – Discovery – Appellants seeking discovery – Whether the State was entitled to plead litigation privilege

Facts: The High Court (Barrett J), on the 15th December 2016, held that the State was entitled to claim litigation privilege in respect of documents deployed by it in the course of defending proceedings brought by the European Commission and that privilege endured for the purposes of defending separate proceedings subsequently brought by two major airlines who were the litigants in those proceedings. The appellants, Aer Lingus and Ryanair, both appealed to the Court of Appeal against that decision.

Held by Hogan J that the litigation privilege which the State enjoyed for the purposes of defending the Commission proceedings ended once those proceedings had themselves terminated. Hogan J held that, contrary to the view of the High Court judge, the State was not entitled to plead litigation privilege in respect of the documents.

Hogan J held that he would allow the appeal.

Appeal allowed.

JUDGMENT of Mr. Justice Gerard Hogan delivered on the 22nd day of June 2018
1

If, in proceedings between A. and B., B. can successfully claim litigation privilege in respect of certain classes of documents during the currency of those proceedings, does this mean that these self same documents are also automatically protected by litigation privilege in respect of separate, later litigation between B. and C.? That is essentially the issue which now arises in this 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 course of defending proceedings brought by the European Commission and that privilege endured for the purposes of defending separate proceedings subsequently brought by the two major airlines who are the litigants in those proceedings. Aer Lingus and Ryanair have both appealed to this Court against that decision.

Background facts
3

Before considering any of these issues, it is necessary first to set out the background to the proceedings. Section 55(2)(b) of the Finance (No.2) Act 2008 provided for the establishment of an airport travel tax. As Barrett J. noted in his judgment in the High Court 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.' He continued:

'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.'

4

The establishment of the tax certainly set in motion a series of litigation and counter-litigation. The Commission ultimately concluded on the 25th July 2012 that the tax amounted to an unlawful State aid: see Commission Decision 2013/199/EU, O.J. L 119/30.

5

That finding was, however, set aside on appeal to the General Court, but that latter decision was itself successfully appealed by the Commission to the Court of Justice: see Cases C-164/15 and C-165/15 Commission v. Aer Lingus plc. EU:C:2016:990. (As it happens, the Court of Justice delivered its judgment on the 21st December 2016, a few days after Barrett J. had delivered his judgment in this matter.) The net effect of that judgment is that the State is itself obliged to recover the difference between the lower rate of travel tax and the higher rate from both Aer Lingus and Ryanair Ltd. and it has issued proceedings for this purpose.

The present applications for discovery
6

Both Ryanair and Aer Lingus have brought motions seeking discovery of material generated by the State in its dealings with the Commission in relation to this issue. The State parties object to making discovery of this material on a number of grounds, including what might be termed a public interest privilege on the one hand and the other relating to straightforward litigation privilege on the other.

7

It may be observed at the outset that it is accepted that the proceedings between the Commission and Ireland are not purely adversarial. Article 4(3) TEU provides, after all, for a duty of loyal co-operation between the Member States and the institutions of the Union in the achievement of the Union's tasks: see, e.g., Case C-246/07 Commission v. Sweden EU:C:2010: 203. In these circumstances, it is clear that where the Commission investigates a possible breach of EU law by a Member State then, as Barrett J. put it:

'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.... The same applies when the European Commission is investigating possible State aid. (See Case C-139/07 P Commission v. Technische Glaswerke Ilmeneau [2010] E.C.R. 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'

8

While this is so, that question is not directly before this Court. In particular, while the question of whether the State can raise a public interest privilege by reason of its dealing with the Commission remains live, ultimately the question so far as this appeal is concerned is simply whether the State can raise a litigation privilege arising from the Commission proceedings in order to defend the motions for discovery in the separate Ryanair and Aer Lingus proceedings. It was apparently agreed before Barrett J. that the question of whether there was any public interest privilege would be stood over pending the resolution of the litigation privilege issue.

Litigation privilege: some general principles
9

This appeal accordingly brings into sharp relief the nature and rationale of litigation privilege. At one level litigation privilege shares some of the characteristics of legal professional privilege in terms of creating a zone of privacy and confidentiality whereby a litigant can safely consult his or her legal advisers....

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  • Legal Privilege Update: Part 2 Of 3
    • Ireland
    • Mondaq Ireland
    • 20 February 2019
    ...(See Parts 1 and Part 3). Litigation Privilege in subsequent proceedings In Ryanair Ltd v. The Revenue Commissioners & ors [2018] IECA 222, the issue before the Court of Appeal was whether a successful claim of litigation privilege in respect of certain classes of documents arising in a......

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