The High Court has ruled that a business defending a commercial rates claim may argue in the Circuit Court that collecting the rates breaches its rights under EU State aid rules. The appeal concerned jurisdiction only; the court did not decide whether the rates or other funding amounted to unlawful aid.
Dún Laoghaire-Rathdown County Council brought three civil bills against West Wood Club Limited seeking commercial rates arrears for 2011 to 2013 relating to leisure premises operated by the company. West Wood alleged that the council operated competing leisure facilities and used rates and other State funding to support them, while its own facilities received rates relief. It argued that this amounted to unlawful State aid and sought to defeat the rates claims. It also counterclaimed for damages.
The Circuit Court had ruled that it had no jurisdiction to consider the State aid points. West Wood appealed that preliminary ruling. The High Court appeal was confined to that jurisdiction question, rather than the merits of the rates claims.
Justice Iseult O’Malley said a defendant in civil proceedings could put the lawfulness of the plaintiff’s claim in issue, including by arguing that an order would breach the defendant’s rights. She said the right to invoke EU law could not be subject to more restrictive rules, and the defendant could not be required to bring separate proceedings to raise applicable rights.
The judge’s view was that the Circuit Court could determine whether the rates amounted to State aid. It could not decide whether any aid was compatible with the internal market, a matter reserved to the European Commission. If a taxpayer’s own payment is challenged under the State aid notification rules, the payment must form an integral part of the alleged unlawful aid. Granting the defendant the same exemption as the council’s enterprises would not remedy an unlawful exemption, she said, but would compound the breach.
The judge also said EU law did not require damages to be available against a recipient of unlawful aid. The counterclaim was governed by national law, including rules on courts’ monetary jurisdiction. On the basis that the usual monetary limit applied, she considered the Circuit Court lacked jurisdiction to hear the counterclaim.
These conclusions were the judge’s view of the issues raised on appeal. She noted the significance of the legal questions and offered to state a case if either or both parties wished. If neither pursued that option, she proposed allowing the appeal and remitting the matter to the Circuit Court for hearing in light of her judgment. The judgment records that proposed next step; it does not state that the matter was remitted or that any final order was made.