THE HIGH COURT

RECORD NO. 559P/ 2001

BETWEEN:

AER RIANTA CPT.

PLAINTIFF

AND

RYANAIR LIMITED

DEFENDANT

Judgment of The Hon. Mr. Justice Vivian Lavan delivered the 29th day of July 2003

THE PROCEEDINGS

By notice of motion filed 5th February 2003, Ryanair Ltd. (the defendant) seeks "an order pursuant to Order 19, rule 28 of the Rules of the Superior Courts 1986 (as amended) striking out paragraphs 15, 16 and 17 of the Statement of claim herein on the basis that the said pleading discloses no reasonable cause of action". This application is grounded upon an affidavit sworn by Alison Fanagan, a partner solicitor with A & L Goodbodys on 5th February, 2003.

While the proceedings taken by Aer Rianta comprise several causes of action, all arise from the manner in which Aer Rianta perceives Ryanair has chosen to characterise and deal with airport charges at Aer Rianta's airports. Aer Rianta contends that Ryanair has characterised the nature and extent of these charges (levied by Aer Rianta pursuant to section 39 of the Air Navigation and Transport (Amendment) Act 1998) in a false and misleading manner and has done so maliciously with the intent of causing damage to the business and reputation of Aer Rianta.

The relevant portions of the plaintiffs statement of claim in this respect are as follows:

8. On the 12th January, 2001, Ryanair falsely and maliciously published a press release headed "Ryanair Announces Increase in Air Fares Ex Ireland To Compensate for Cost Increases at the Irish Airport Monopoly" whereby Ryanair purported to announce an increase in the "passenger service charge" from IR£ 7.20 to IR£ 9.50 ...

9. Immediately following the publication of that press release, Ryanair increased to IR£ 9.50 per passenger the so-called "applicable taxes" levied by it in respect of passenger departures from the State and this said amount was so described on the website maintained by Ryanair, which was at the material time viewed by approximately 92% of Ryanair passengers and potential passengers.

10. The words comprising the press release, together with the words published on the Ryanair website, in their natural and ordinary meaning or, in the alternative, by innuendo, meant and were understood to mean (and were intended to be so understood) that:

I. Aer Rianta was exacting a "tax" or "taxes" amounting to IR£ 9.50 per passenger carried from Aer Rianta's airports;

II. Aer Rianta was exacting an amount of IR£ 9.50 in respect of passenger service charge, when its published rate-which was the rate approved by the Minister was IR£ 7.23 and was therefore acting in breach of its statutory obligations.

III. Aer Rianta's charges per passenger have increased by 32% as between 2000 and 2001.

IV. The amount of IR£ 9.50, although required to be collected by Ryanair, was collected on account of Aer Rianta and, accordingly, was remitted in full to Aer Rianta and was not retained, in whole or in part. by Ryanair.

In paragraph 11 of the statement of claim, Aer Rianta alleges that the statements of the press release were false and materially untrue and furthermore were made maliciously and were calculated to cause damage to Aer Rianta in respect of its business. In paragraph 12, Aer Rianta sets up a defamation claim in that it claims the consequence of the said representations was that Aer Rianta was seriously damaged in its character, credit and reputation and has been brought into public scandal, odium and contempt. In paragraph 13, Aer Rianta makes a claim for negligent misrepresentation.

The portion of Aer Rianta's claim which is the subject of the present application is the unjust enrichment claim in paragraphs 15-17 of the statement of claim. This aspect of Aer Rianta's claim is dealt with in the statement of claim as follows:

14. ... by reason of the foregoing statements, Ryanair passengers were induced to believe that Aer Rianta was exacting a "tax" or "passenger service charge" of IR£ 9.50 from them and were thereby induced to pay that amount to Ryanair in the belief that Ryanair would account in full to Aer Rianta for such payment, which in truth and in fact it neither did nor had any intention of doing. In the premises, the said passengers were materially misled by Ryanair.

Particulars

I. The published PSC payable by airline operators was at all material times IR £7.23 per adult passenger at Dublin, Cork and Shannon airports and not IR £9.50 as alleged.

II. The charges asserted by Ryanair and charged to and recovered from its passengers materially overstate the actual amount payable by it to Aer Rianta in respect of passenger charges.

III. Having regard to the discount scheme operated by Aer Rianta, the average net PSC payable by Ryanair was at all material times substantially lower than the published rates.

IV. Even if the so-called "tax" or "passenger service charge" levied by Ryanair is calculated as being the total charges paid to it by Aer Rianta (including landing fees and such other fees averaged out on a per passenger basis) - which is not an appropriate methodology - it materially over-states the actual amount payable by it.

V. No payment at all was made by Ryanair to Aer Rianta in respect of passengers who failed to fly as scheduled.

15. In the premises, Ryanair has unjustly enriched itself to the extent that it has levied a charge on its passengers on the basis that it is a "charge" or "tax" payable to Aer Rianta but have not paid over the full amount thereof to Aer Rianta.

16. In addition, Ryanair has further unjustly enriched itself by retaining for its own benefit the so-called "passenger service charge" or "tax" levied by it on its passengers where, for any reason, the passenger fails to fly as scheduled. In those circumstances, notwithstanding that no PSC is payable to Aer Rianta, Ryanair refuses to repay the passenger the amount levied by it.

17. In the premises, to the extent that Ryanair has unjustly enriched itself in the manner aforesaid, it must account to Aer Rianta therefore. Aer Rianta cannot quantify the extent to which Ryanair has been unjustly enriched until the making of discovery and/ or the delivery of interrogatories herein.

The plaintiff submits that in considering applications of this nature, it is well established that the court is confined to an examination of the four corners of the pleadings and no external evidence (such as affidavit evidence) is admissible in applications under Order 19, rule 28. In this regard, the plaintiff refers to the statements of Costello J in Barry v. Buckley [1981] IR 306 at 308; O'Higgins CJ in McCabe v. Harding [1984] JLRM 105 at 108-109; Costello J in DK v. King [1994] 1 IR 166 at 170 and Macken J in Supermacs Ireland Ltd. v. Katesan (Naas) Ltd. (unreported, High Court, Macken J, 15th March 1999). The plaintiff also points out that it is also clear that an application under Order 19, rule 28 must be determined on the basis that the allegations of fact contained in the plaintiffs statement of claim are true and will be established in evidence at the trial and in this regard refers to the decision of O'Sullivan J in O'Keefe v. Kilcullen (unreported, High Court, O'Sullivan J, 24th June, 1998) and Kelly J in Ennis v. Butterly [1996] 1 IR 426.

While the application to dismiss has been made under Order 19 rule 28 and accordingly the court's inherent jurisdiction over and above the rules to dismiss proceedings which disclose no reasonable cause of action or which are frivolous or vexatious, the plaintiff submits that the authorities in which the scope of the court's inherent jurisdiction has been considered provide some guidance on how the present application should be approached: specifically, the plaintiff submits that these authorities establish the extreme degree of reluctance with which the court should reach any decision to dismiss and in this regard refers to the decisions of McCarthy J in Sun Fat Chan v. Osseous Ltd [l992] 1 IR 425 at 428-9; Costello J in DK v. King [1994] 1 IR 166 at 172 and the decisions of the Supreme Court in Jodifern Ltd. v. Fitzgerald [2000] 3 IR 321 at 333 (per Barron J) and 334-35 (Murray J) and Supermacs Ireland Ltd v. Katesan (Naas) Ltd. [2000] 4 IR 273 (Hardiman J).

The plaintiffs also refer to the fact that an application under Order 19 rule 28 is not the appropriate means by which to determine difficult issues of law, especially in areas where the law is in a state of development. In this regard, the plaintiffs refer to the decision of Keane J in Irish Permanent Building Society v. Caldwell [1979] ILRM 273.

The plaintiff points out that the application to dismiss before the court relates to just paragraphs 15, 16 and 17 of the statement of claim and that therefore it is clear that Ryanair is not contending that the statement of claim (emphasis) discloses no reasonable cause of action against it: rather, the height of the defendant's application to dismiss is that paragraphs 15, 16 and 17 disclose no reasonable cause of action against the defendant. The plaintiff submits that as a matter of construction of Order 19, rule 28, the court does not have jurisdiction to "blue pencil" that part of the plaintiffs claim to which the application to dismiss relates, thereby allowing the balance of the claim to proceed to trial. The plaintiff submits it is clear from the words of Order 19, rule 28 that it may be only be properly relied upon by a defendant making an application to dismiss where and only where it contends that no reasonable cause of action whatsoever is disclosed against it by the pleadings and! or that the plaintiffs claim in its entirety is frivolous or vexatious. The plaintiff attaches significance to the fact that in none of the authorities to which it has referred or has been able to discover was any application under Order 19, rule 28 made in respect of only part of a plaintiffs claim. Accordingly, the plaintiff submits that the court has no jurisdiction to make the order sought by the defendant.

Without prejudice to the above arguments, the plaintiff submits that paragraphs 15, 16 and 17 disclose a clear cause of action against the defendant. Having referred to the relevant portions of the statement of claim- which the plaintiff points out must be assumed as true for the purposes of the present application- the plaintiff summarises the position as follows. At all times material to the proceedings, Ryanair systematically represented to members of the public flying on its services from Aer Rianta's airports that, in addition to their airfare, they were required to pay a fixed amount the passenger service charge which was not to the account of Ryanair but to the account of Aer Rianta. The plaintiff contends that this so-called passenger service charge was no more than an approximation of the total fees and charges payable by Ryanair to Aer Rianta calculated on a basis which significantly overstated the amount payable to Aer Rianta. Furthermore, when Ryanair passengers do not travel. Ryanair retains the passenger service charge to its own benefit, i.e. it neither refunds it nor does it account for it to Aer Rianta, notwithstanding that the amount is wrongly exacted as a charge or a tax. In essence, therefore, the plaintiff claims that, having extracted these passenger service charges or taxes fro the passengers on the representation that the amounts were to the account of Aer Rianta rather than Ryanair, the retention of some or all of these amounts by Ryanair involves unjust enrichment. The plaintiff acknowledges that in these circumstances a passenger would have a good cause of action for unjust enrichment. While also acknowledging that Aer Rianta is not in the same position as a passenger, the plaintiff contends that it has a sufficient interest to sustain a claim for unjust enrichment brought in its own name. Under the 1998 Act, Aer Rianta is responsible for the management and operation of the State airports and is the only entity empowered to require the payment of airport charges (though its power to do so is now subject to the Commission for Aviation Regulation. As such, the plaintiff contends that it has a vital interest because the charges/taxes by which it contends that Ryanair has been unjustly enriched have, in effect, been collected in its name and purportedly to its account: accordingly, the reputation and position of Aer Rianta is directly at issue.

Pointing to the fact that declaratory relief is sought on foot of paragraphs 15-17 of the statement of claim, the plaintiff points to the fact that a party may be entitled to declaratory relief even in circumstances where he has no cause of action in sense of any claim for damages or similar claims, and in this regard refer to Zamir and Woolf, The Declaratory Judgment (3rd edition, 2002), para 5.01. Having regard to this, the plaintiff contends that Aer Rianta clearly has standing to seek declaratory relief in relation to the unjust enrichment of Ryanair: if this is the case, it clearly follows that paragraphs 15-17 of the statement of claim should not be struck out.

Significantly, the plaintiff contends that in situations where, as here, money has been collected from a party (a passenger/ intending passenger in this case) by a second party (here, the defendant Ryanair) in the name of and purportedly to the account of a third party (here, the plaintiff Aer Rianta), and that money has been wrongfully retained by the second party, then, in default of a claim from the first party, the third party is entitled to bring proceedings to compel the second party to account to it for the money so collected on the basis that in these circumstances the third party has a better title to the money than the second party: the plaintiff contends that this contention sustains an entitlement to the reliefs sought at 5 and 11 on p.7 of its statement of claim. The plaintiff accepts that this aspect of its claim may be thought to give rise to difficult and novel issues, which do not yet appear to have been considered by the Irish or UK courts. The plaintiff contends that the law of restitution and unjust enrichment is in a state of development. The plaintiff contends that this is not a ground upon which the court should strike out the plaintiffs claim, but rather the reverse: in the words of Keane J in Irish Permanent Building Society v. Caldwell, the plaintiff contends that Aer Rianta's case in this regard is entitled to the "full and unhurried consideration ... by the High Court". It is also contended that in the words of Murray J in Jodifern, the case raises "legal issues that are sufficiently substantial as to ... be left to the trial of that action in [the] proceedings." Accordingly, Aer Rianta contends that a reasonable cause of action is disclosed by paragraphs 15-17 of the statement of claim.

SUBMISSION OF THE DEFENDANT

The defendant's central contention regarding why paragraphs 15-17 of the plaintiffs statement of claim should be struck out is that the unjust enrichment claim discloses no reasonable cause of action because it is not pleaded that the alleged unjust enrichment is at the expense of Aer Rianta, the plaintiff. The defendant points out that a fundamental aspect of a claim for restitution is that the cause of action only exists if the alleged unjust enrichment is in fact and law at the expense of the plaintiff. In this regard, the defendant refers to the judgment of Keane J in Dublin Corporation v. Building and Allied Trade Union [1996] 2 ILRM 547 at 558, where Keane J referred to "two essential preconditions for the application of the doctrine have been met - i.e. an enrichment of the defendant at the expense of the plaintiff". The defendant also refers to East Cork Foods Ltd. v. O'Dwyer Steel Company Ltd. [1978] IR 103 as the first modern Irish decision in which restitution was explicitly recognised as a separate and distinct cause of action from the law of tort and contract and in which it was stressed that a precondition of the claim of restitution was that the enrichment should be at the expense of the plaintiff. The defendant points to several major commentaries on the law of restitution, namely Goff and Jones The Law of Restitution (London. Sweet and Maxwell, 2002, 6th edition), para 1-016 Virgo, Principles of the Law of Restitution (Oxford Clarendon Press, 1999) at p.105; Birks, An Introduction to the Law of Restitution (Oxford: Clarendon Press, 1985) at p.132 and Hedley and Halliwell, The Law of Restitution (Butterworths, 2002) at p.426- as further authority for this proposition. The defendant also refers to the decision of the Court of Appeal in Kleinwort Benson Ltd. v. Birmingham City Council [1996] 3 WLR 1139 in which this requirement was emphasised. At p.1 149 of the report, Evans LJ stated as follows:

"At his expense", in my judgment, serves to identify the person by or on whose behalf the payment was made and to whom repayment is due.

The defendant contends that an analysis of the nature of "expense" in restitution law does not arise here as the plaintiff has failed to plead in its statement of claim that the alleged unjust enrichment on the part of Ryanair is at Aer Rianta's expense. Without prejudice, the defendant argues that should the court allow an amendment of the pleadings to reflect a claim that the defendant Ryanair unjustly enriched itself at Aer Rianta's expense, such an amendment would be futile as the statutory scheme with regard to airport charges means that the plaintiff never suffers any expense whatsoever when- s here, the defendant claims- all airport charges are being paid. The defendant contends that under the 1998 Act, Ryanair is liable to Aer Rianta for airport charges- Ryanair's passengers are not liable to Aer Rianta for those charges. The defendant points out that if Ryanair did owe Aer Rianta money with regard to airport charges, Aer Rianta presumably would have made a claim for these as it has done in the past (see Aer Rianta v. Ryanair [2002] 1 ILRM 381). The defendant submits that no such claim is made in these pleadings or elsewhere. The defendant submits that because the passenger has no liability to Aer Rianta with regard to airport charges, the passenger is not discharging his or her debt to Aer Rianta using Ryanair as an agent: the money the passenger pays is not Aer Rianta's. Accordingly, there is no interception of subtraction from Aer Rianta's assets. The defendant further contends that a fortiori, there is no subtraction from Aer Rianta's assets and therefore no unjust enrichment at Aer Rianta's expense when there is no plea that Ryanair has failed to discharge airport charges due to it by Ryanair. The defendant contends that the proper plaintiff in an action for unjust enrichment in the context of the present claim is the passenger himself/ herself and not Aer Rianta.

CONCLUSIONS

I accept the plaintiffs submissions as aforesaid and refuse the application.