The High Court has refused requests by Aer Lingus and Ryanair for separate liability and damages trials in a group of disputes over Ireland’s former differentiated air travel tax. It also rejected State applications seeking directions about airline expert reports and tax pass-on evidence, while allowing Aer Arann to amend its defences in State aid recovery proceedings.
In a judgment delivered on 17 April 2018, Mr Justice Max Barrett said the proceedings should be heard as unitary trials. He said the airlines’ claims and the State’s recovery cases involved overlapping legal and economic issues, including whether the tax burden was passed on to passengers and what loss, if any, the airlines suffered. The court said it lacked sufficiently detailed figures and particulars to decide key questions separately, and the proposed trial modules were not defined precisely enough to show clear savings in time or cost.
The disputes stem from a tax introduced in 2009 that charged airlines €2 per departing passenger for flights to destinations within 300 kilometres of Dublin Airport and €10 for other flights. The European Commission later found the lower rate constituted unlawful State aid, with recovery calculated as the €8 difference per passenger. The airlines’ restitution claims and the State’s recovery actions remain to be determined; this judgment did not decide their underlying liability or the merits of the claims.
The State parties had sought orders requiring airlines to provide commissioned expert reports, identify materials supplied to experts and their selection methods, and swear affidavits quantifying how much tax had been passed on to passengers. The judge refused those applications. He considered that the requests would effectively require the airlines to quantify the State’s unjust-enrichment defence, and found no adequate basis in the cited court rules for the orders sought.
Aer Arann sought permission to add a set-off defence, among other proposed amendments. The State opposed parts of the application, arguing that they were barred by the settlement agreement or statute. The judge allowed the amendments, finding that their ultimate merits were not for determination on a procedural application to amend pleadings. Those objections may be addressed later in the proceedings.
The court declined Aer Arann’s request to postpone its recovery action until after the airlines’ restitution cases were decided, and declined to sequence the trial at that stage. It said recovery could not be postponed for the reason advanced, given the EU law requirement for recovery without delay. The court aimed to list the cases for hearing in the first half of 2019, with late 2018 possible if matters progressed faster than expected.