The Supreme Court has ruled that West Wood Club Ltd may argue in the Circuit Court that Dún Laoghaire-Rathdown County Council’s use of rates to support competing leisure facilities amounts to unlawful State aid. The court did not decide whether the claim is established or whether it would defeat the Council’s demand for unpaid rates.
In a judgment delivered by Mr Justice William McKechnie on 29 May 2019, the court answered three legal questions arising from the Council’s rates recovery proceedings. It held that the Circuit Court has jurisdiction to entertain the State aid argument and that, as framed, it is not a general challenge to the validity of the rates. Any successful defence would be personal to West Wood and would not invalidate the rate for other ratepayers.
The Council is seeking unpaid rates for 2011, 2012 and 2013 in three proceedings. It claims €176,800 for each of the first two years and €173,264 for 2013. West Wood operates a leisure and fitness club in Leopardstown. It alleges that the Council competes with it through its own leisure facilities and uses rates revenue, alongside other public funding, to support those facilities. West Wood contends that this amounts to State aid that should have been notified to the European Commission.
The Supreme Court stressed that its decision concerned jurisdiction only. It did not find that the Council’s funding arrangements constitute State aid, that any aid was unlawful, or that West Wood had made out a defence. Those questions remain for the Circuit Court.
The court also ruled that any damages counterclaim is subject to the Circuit Court’s ordinary monetary limits. The unlimited jurisdiction that applies to rates recovery claims does not extend to a separate claim for damages. The judgment noted that the High Court may be a more appropriate forum for examining the State aid defence and any remedies, but did not order that the case be transferred there.
The Supreme Court remitted the matter to the Circuit Court for hearing in light of its judgment.