Landing charges and passenger load fees are payable by airlines using the facilities of airports, including Dublin Airport, operated by the Plaintiff, Aer Rianta. Pursuant to the provisions of Section 39 of the Air Navigation and Transport (Amendment) Act, 1998, Aer Rianta is entitled to recover these charges as a simple contract debt.

The factual background to the proceedings is set out in summary by the learned trial judge in his judgment as follows:-

“For some years now the Plaintiff has operated a discount scheme in respect of these charges. These are given under traffic growth incentives and the discounts allowable are very large, sometimes as much as 90% or even a 100%. These schemes were first introduced in 1994. The terms of the scheme involved in this action were set forth in a letter dated the 16th January 1997 and sent to all relevant airlines. The scheme has a term of five years and was notified to all of the Plaintiffs scheduled airline customers.

A dispute arose between the Plaintiff and the Defendant as to the operation of the scheme in question. In accordance with the terms of that scheme the dispute was referred to the Department of Public Enterprise. Whilst the scheme provides that the decision of that Department is final and binding it does not exclude the right of either party to have recourse to the Courts. Indeed, even though the Plaintiff contends that it was successful before the Department it does not seek in any way to argue that the view of the Department is binding on this Court and still less summarily enforceable by it. I will ignore the views of the Department for the purposes of this motion.

It is accepted by Counsel for the defence that in essence this is a single issue case. The defence which is proffered through the mouth of the Defendant’s chief executive Mr Michael O’Leary on affidavit is that there were discussions between him and a Mr Brian J. Byrne of the Plaintiff which resulted in either (a) a variation to the scheme for the benefit of the Defendant or (b) a collateral contract which gave the Defendant additional advantages under the scheme. It is said that in bringing this action account has not been taken of either of these matters. A third proposition is also made. It is said that the Plaintiff is estopped from pursuing this action successfully by reason of a promissory estoppel arising from representations made by Mr Byrne.

The Plaintiff denies in categoric terms that there was or indeed ever could have been such a variation as is alleged without specific Board approval on the part of the Plaintiff which was never given. The Plaintiff contends that this line of defence is, on the evidence adduced, not credible and/or that there is no fair or reasonable probability of the defendant having a real or bona fide defence.”

(a) Dublin-Paris-London

(b) Dublin-Brussels-London

(c) Dublin-Bristol-London.

In his judgment the learned trial judge referred to the matters set out in the affidavits of the Defendant’s chief executive Mr O’Leary. He then analysed a number of items of correspondence between Mr O’Leary and Mr Byrne of Aer Rianta exchanged during the period February to March 1997. I shall refer to this correspondence later. The learned trial judge concluded, in the main on the basis of the exhibited documents, that the Defendant had not satisfied him that there was a fair or reasonable probability of it having a real or bona fide defence and he therefore held that the Plaintiff was entitled to summary judgment.

The Defendant/Appellant has appealed against this decision. In the Defendant/Appellant’s notice of appeal it seeks that in lieu of the judgment and order of the High Court, this Court should make an order granting to the Defendant/Appellant leave to defend the Plaintiff/Respondent’s summary proceedings and that those proceedings should be remitted for plenary hearing before the High Court as if the proceedings has been originated by plenary summons.

Ten grounds of appeal are set out in the Notice. Of these, the most relevant to the written and oral submissions made by counsel to this Court are as follows:-

“(d) The learned trial judge erred in law and in fact in failing to look at the whole situation, as disclosed by the entirety of the affidavits and exhibits, to determine whether the Defendant/Appellant had satisfied the Court that there was a fair or reasonable probability of the Defendant/Appellant having a real or bona fide defence.

(e) The learned trial judge erred in law and in fact in failing to give appropriate evidential weight to the existence of written documents consistent with the Defendant/Appellant’s defence to the Plaintiff/Respondent’s proceedings, and the failure of the Plaintiff/Respondent to deny that certain specified oral variations operated in the past.

(f) The learned trial judge erred in law and in fact in reaching the conclusion that the evidence offered by the Defendant/Appellant was not credible, bearing in mind all of the evidence placed before the Court and the factual disputes in the affidavits which could only be resolved by plenary hearing.

(g) The learned trial judge erred in law and in fact in the manner in which he approached the conflict of fact in the affidavits and in particular in accepting the averments made on behalf of the Plaintiff/Respondent while criticising and rejecting the averments made on behalf of the Defendant/Appellant without having such evidence tested at plenary hearing and without any oral evidence on such disputed issues of fact being heard........

(i) The learned trial judge erred in law and in fact in reaching the decision he reached when issues of law and fact arose in the affidavits going to the Defendant/Appellant’s defence and which could not have been conclusively resolved in the absence of a plenary hearing and a closer and fuller examination of the facts, which a plenary hearing would provide.”

In order to appreciate fully the submissions made by Counsel it is necessary to refer briefly to the terms of the discount scheme operated by Aer Rianta and to the history of the routes in question.

The text of the scheme itself, as published to the relevant airlines on the 16th January 1997, is exhibited in the affidavit of Brian Hampson sworn the 21st September 1999 which grounds the Plaintiff’s original motion. The discount scheme applied both to passenger load fees (based on the number of embarking passengers) and to landing charges (based on the maximum permissible loaded weight of the landing aircraft).

The aim of the scheme was to provide an incentive for the growth of traffic into and out of Dublin Airport and, inter alia, to encourage airlines to operate new routes. The extent of the discount, therefore, was related to the overall increase in traffic on a particular route as compared with the traffic on that route in the previous year. Where more than one airline operated on a particular route, the discount allowable was divided among the operating airlines in accordance with their contribution to the increased traffic. It was essential to the scheme that new overall traffic on the route had to be generated; an airline could not get credit for discount purposes simply by “poaching” traffic from an airline already operating on the route.

Two intercity routes are in question in these proceedings - the Dublin-Brussels route and the Dublin-Paris route. Their history during the 1997 to 1999 period is as follows. Up to January 1997 two airlines operated on the Dublin-Brussels route - Aer Lingus/Sabena as a shared operation, and Cityjet. Cityjet withdrew from the route on the 5th January 1997. It

appears to be accepted that from the point of view both of the Irish Government authorities and from the point of view of Aer Rianta it was desirable that an alternative airline should operate this route in place of Cityjet.

On the Dublin-Paris route there were originally two airlines operating - Aer Lingus and Air Inter/Air France. In or about 1997 Air France had taken over Air Inter and no longer itself wished to operate the Dublin-Paris route. Air France then contracted with Cityjet to operate the Dublin-Paris route as a carrier for it. For the purposes of the discount scheme this raised the question as to whether Cityjet was a new carrier on the route or not.

On the 7th February 1997 Ryanair announced plans to operate on the Dublin-Brussels route, flying into Charleroi, and on the Dublin-Paris route flying into Beauvais. In his affidavit setting out Ryanair’s defence to the motion Mr O’Leary states that Ryanair was willing to embark on these new routes (which created new business for Dublin Airport) solely on the basis that Aer Rianta had agreed to a variation of the discount scheme in respect of both routes. This is categorically denied by Aer Rianta.

Senior Counsel for the Appellant, Mr Shipsey, set out the framework of the discount scheme. He referred to the history of the Dublin-Brussels route and submitted that, after the withdrawal of Cityjet from the route at the beginning of 1997, a specific variation of the discount scheme as it applied to that route was required in order to induce Ryanair to enter on to that route in 1997. The strict application of the scheme militated against any new airline from entering the route in that year because they would have to carry more than the 17,500 passengers that were carried in the previous year by Cityjet before they became entitled to any discount. Accordingly any new carrier on that route proposing to take the place of Cityjet would in effect be penalised by the 17,500 passengers Cityjet had carried in the previous year before obtaining the benefit of any growth discounts in relation to its own passengers. Ryanair was not prepared to commence its service on that route in 1997 unless it was specifically agreed that it would enjoy the full benefit of the growth discount in respect of all passengers carried on the route. Ryanair maintained that a specific oral variation was agreed between the chief executive of Ryanair, Michael O’Leary, and Aer Rianta’s assistant chief executive of operations, Brian J. Byrne.

On the Dublin-Paris route Mr Shipsey argued that if Aer Rianta treated Cityjet as a new carrier rather than as a “sub-contractor to Air France” it would thereby dilute the discount available to other carriers including Ryanair. Ryanair maintained that this route was also discussed between Michael O’Leary and Brian J. Byrne in January and February of 1997, and that it was expressly agreed that Cityjet would not be treated as a new carrier on that route.

Mr Shipsey also submitted that the documents exhibited by Mr O’Leary in his affidavit of 18th November 1999 bore out Ryanair’s contention that variations had been agreed. These letters and a memorandum written by Mr O’Leary to one of his executives are dated between 14th February 1997 and 11th March 1997 and are quoted in full in the judgment of the learned High Court judge.

Counsel for the Appellant accepts that there is no specific mention of a variation of the discount scheme in any of these documents. However, he points out that in his affidavit Mr O’Leary claims that it was a customary practice for oral agreements to be made with Aer Rianta providing for variations in the discount schemes operated by them. As an example Mr Shipsey submitted that it was accepted that a variation was agreed in respect of Ryanair’s commencement of the Dublin-Birmingham route. Such variations, on the affidavit evidence of Mr O’Leary, were always agreed orally and it was open to the Court to interpret the correspondence as being based on an orally agreed variation the details of which were being discussed and confirmed. He submitted that the learned trial judge had erred in his interpretation of the correspondence.

Mr Shipsey stressed that it would not have been in the interest of Ryanair to embark on the Brussels route in particular in the absence of the alleged variation of the scheme. If there was no variation Ryanair could without difficulty have postponed its entry onto this route until 1998, thus ensuring discount benefits in respect of virtually all its traffic.

Senior Counsel for the Plaintiff/Respondent, Mr McDonald, emphasised the lack of factual detail of the alleged variation agreement in Mr O’Leary’s affidavits. Had such an agreement existed Mr O’Leary would surely have averred to the date, location, terms, and other details of the conversations between himself and Mr Byrne during which such a variation was discussed and agreed. The averments in Mr O’Leary’s affidavits were quite remarkably vague. In addition it should be noted that the correspondence and memorandum on which the Defendant relied as establishing the agreement were all dated subsequent to Ryanair’s announcement launching their Brussels and Paris routes.

It would, he submitted, be quite extraordinary for a public body managing an airport to publish a well defined discount scheme to airlines in general and then proceed more or less in secret to vary such a scheme in favour of one particular airline. Such a procedure would cause chaos.

Ryanair had engaged in a number of disputes over the years in respect of earlier discount schemes and this was just such another dispute. The documentary evidence before the Court showed no basis for a real or bona fide defence by Ryanair - on the contrary the correspondence was consistent with the terms of the general scheme and inconsistent with the terms of the variation alleged by Ryanair.

The Law and Conclusions

It is accepted by both parties that the correct test to be applied in deciding whether to grant summary judgment in this case is that established by this Court in First National Commercial Bank Plc v Anglin [1996] 1 IR 75. In that case Murphy J. speaking for the Court said:-

“For the Court to grant summary judgment to a Plaintiff and to refuse leave to defend it is not sufficient that the Court should have reason to doubt the bona fide of the Defendant or to doubt whether the Defendant has a genuine cause of action (see Irish Dunlop Company Limited v Ralph (1958) 95 ILTR 70). In my view the test to be applied is that laid down in Banque de Paris v de Naray [1984] 1 Lloyd's Law Rep 21, which was referred to in the judgment of the President of the High Court and reaffirmed in National Westminster Bank Plc v Daniel [1993] 1 WLR 1453. The principle laid down in the Banque de Paris case is summarised in the headnote thereto in the following terms:-

‘The mere assertion in an affidavit of a given situation which was to be the basis of a defence did not of itself provide leave to defend; the Court had to look at the whole situation to see whether the Defendant had satisfied the Court that there was a fair or reasonable probability of the Defendant’s having a real or bona fide defence.’

In the National Westminster Bank case, Glidewell L.J. identified two questions to be posed in determining whether leave to defend should be given. He expressed the matter as follows:

‘I think it right to ask, in the words of Ackner L.J. in the Banque de Paris case, at page 23, ‘Is there a fair or reasonable probability of the Defendant’s having a real or bona fide defence?’ The test posed by Lloyd L.J. in the Standard Chartered Bank case Court of Appeal (Civil Division), Transcript No. 699 of 1990 ‘Is what the defendant says credible?’, amounts to much the same thing as I see it. If it is not credible then there is no fair or reasonable probability of the Defendant having a defence.’”

deciding whether Ryanair may have a “credible” defence the Court must concentrate its attention on the matters put forward in the defence itself. The Court does not ask whether Mr O’Leary’s account of events is probable, or likely to be true; nor does it ask whether Mr Byrne’s account of events is more likely. The question is rather whether the proposed defence is so far fetched or so self contradictory as not to be credible. The learned High Court judge, having referred to the correct test, held that, on his interpretation, the correspondence and other materials exhibited in Mr O’Leary’s affidavit were incompatible with the actual defence put forward. The defence, therefore, was not credible. Mr Shipsey, for the reasons set out in his submissions, argues that the correspondence may be interpreted differently and that the factual conflict disclosed by the affidavits is incapable of being resolved other than by plenary hearing.

In applying the test set out in First National Commercial Bank v Anglin, it may be of assistance to consider the facts of that case. As set out in the headnote, the Plaintiff issued a summary summons claiming payment on foot of a personal guarantee by the Defendant. The Defendant gave the guarantee as part of the security for a loan made by the Plaintiff to a company of which the Defendant was managing director. The guarantee was dated the 1st February 1989, which was the completion date of the loan transaction, and the date on which the first part of the loan was drawn down. The High Court held that the Defendant had failed to prove that what he said was credible to show that he had a real or bona fide defence. In his judgment in this Court (at page 78 of the report) Murphy J. refers to the nature of the defence put forward by the Defendant in the High Court and in this Court as follows:

“The agreed note of the ex tempore judgment of the President of the High Court identifies seven possible defences which the Court had distilled from the voluminous documentation submitted to it. Those suggested defences included the following:

1. Fraud by the Plaintiff.

2. Forgery by the Plaintiff of the guarantee.

3. The allegation that the guarantee was not executed until September 1989.

4. The defence of “non est factum”.

5. The absence of independent legal advice for the Defendant as to the effect of the guarantee.

6. That the bank was in breach of a duty to the Plaintiff in respect of security given by the principal debtor.

7. That the transaction was an improvident one.


On the appeal to this Court, Counsel on behalf of the Defendant relied exclusively on contention that his client had executed the guarantee not in February but in September 1989....Counsel - rightly in my view - abandoned the other grounds which had been relied upon before the President of the High Court. Not merely were those grounds wholly unsustainable but they involved an allegation that the Plaintiff was guilty of fraud and that the two distinguished firms of solicitors who acted in the matter were at least guilty of gross negligence if not actual fraud. I would like to think that the potential defence to the effect that the Defendant did not understand the nature of a guarantee or his potential liability on foot thereof was equally improbable.”

A similar situation applied in the Banque de Paris case [1984] 1 Lloyd's Law Rep 21 which also concerned the enforcement of a guarantee. Lord Justice Ackner (at page 23 ) summarises the facts as follows:-

“One starts this case with a guarantee signed by two experienced and competent businessmen who know what a guarantee is and what it involves. They are not naive in regard to raising finance; this was not the first visit they had ever made to a bank and they were not there asking for some small loan to assist them to buy a semi- detached house; they were asking for millions of dollars, and it is commonplace to find that where the loan is being made to a company which is run by a couple of individuals essentially on their own, some form of guarantee is sought.”

A number of other cases from this jurisdiction were provided to the Court by way of authorities on which the Appellant relied. In ACC Bank Plc v Elio Malocco (High Court unreported Laffoy J. 7th February 2000). Laffoy J. referred (at page 17 of her judgment) to the Anglin test, stating:

“The Court has to look at the whole situation to see whether the Defendant satisfies the Court that there is a fair or a reasonable probability of his having a real or bona fide defence, or, whether what the Defendant said is credible. In my view, looking at the whole situation must involve an assessment of the cogency of the evidence adduced by the Plaintiff in relation to the given situation which is to be the basis of the defence.”

In the Governor and Company of the Bank of Ireland v Educational Building Society [1999] 1 IR 220, a case which dealt with the issue of cheques in the course of a fraudulent scheme organised by a third party, the plaintiff sought summary judgment against the defendant. As set out in the headnote this Court, upholding the decision of Morris J. (as he then was) in the High Court, held that on a motion for summary judgment where issues of fact and law arose which could not be conclusively resolved, unless the Defendant’s affidavit did not disclose even an arguable defence to the Plaintiff’s claim, the matter should be sent for plenary hearing. It was also held that when the issue between the Plaintiff and the Defendant was solely one of law, the Court might determine that issue and give final judgment. If however, the legal issues would be better determined after a closer and fuller examination of the facts, then the Defendant should be given liberty to defend in a full oral hearing.

In his judgment in that case Murphy J. (at page 231 ) referred to Crawford v Gillmor (1891) 30 L.R. Ir. 238 where at page 245 Barry L.J. observed:-

“I am of opinion that...the mere length of time which has been occupied by the argument of this case - and I do not think one moment of our time was occupied unnecessarily - shows that it does not come within the rule which allows final judgment to be marked on motion.”

The motion before the Court is to be considered in the light both of First National Commercial Bank v Anglin and of the later cases in which the Anglin test was applied. It is clear that there are considerable weaknesses in the defence proffered by Mr O’Leary in his affidavits. As pointed out by Mr McDonald no detail whatever is provided as to the date, time, location or circumstances of the alleged agreement to vary the discount scheme. The correspondence exhibited, is to say the least, lacking in clarity, and may be open to the interpretation placed on it by the learned High Court judge. Nevertheless in my view the probability remains open, on the affidavit evidence now before the Court, that the Defendant has a real or bona fide defence, or that what is put forward by the Defendant is credible. In my view the matters which are so acutely at issue between the parties require to be resolved in a full hearing.

On that basis, therefore, I would allow the appeal and remit the proceedings for plenary hearing.