Ipsofactoj.com: International Cases [2002] Part 9 Case 12 [SCIre]


SUPREME COURT OF IRELAND

Coram

Ryanair Ltd

- vs -

Aer Rianta CPT

DENHAM J

McGUINNESS J

HARDIMAN J

13 NOVEMBER 2001


Judgment

Mrs. Justice McGuinness J

  1. This is an appeal against the order of Kelly J. made in the High Court on 5th December 2000 whereby he granted summary judgment in favour of the Plaintiff/Respondent Aer Rianta CPT. The proceedings arose out of a disputed claim for the balance allegedly due by the Defendant/Appellant (“Ryanair”) to the Plaintiff/Respondent (“Aer Rianta”) in respect of landing charges and passenger load charges at Dublin Airport. The proceedings were heard by way of notice of motion grounded on the affidavits of the parties on 28th and 29th November 2000. The learned judge, having reserved his judgment, gave judgment on the 5th December 2000 and made an order that the Plaintiff should recover from the Defendant the sum of £356,777.00 together with interest in the sum of £76,963.00, making in total the sum of £433,740.00. The Plaintiff was also granted the costs of the proceedings.

  2. 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.

  3. 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.

  4. The proceedings were commenced by Aer Rianta in July 1999 to recover sums which they claimed were due by Ryanair in respect of landing charges and passenger load fees in respect of three routes operated by Ryanair during 1997 and 1998 namely:

    1. Dublin-Paris-London

    2. Dublin-Brussels-London

    3. Dublin-Bristol-London.

  5. In November 1999 Ryanair paid an agreed sum in respect of the landing charges and passenger load fees for the Dublin-Bristol-London route, with the result that in the proceedings before the High Court and in the present appeal only the charges for the Paris and Brussels routes were in question.

  6. 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.

  7. 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.

  8. 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.

    SUBMISSIONS OF COUNSEL

  9. 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.

  10. 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).

  11. 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.

  12. 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.

  13. 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.

  14. 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.

  15. 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.

  16. 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.

  17. 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.

  18. 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.

  19. 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.

  20. 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.

  21. 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.

  22. 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

  23. 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 Co Ltd 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.

  24. Thus it is for this Court to decide whether in the instant case the defence set out in the affidavits of Mr. O’Leary, together with the documents exhibited therewith, is credible, or in other words, whether there is a fair or reasonable probability of the Defendant having a real or bona fide defence. Since there had been no oral hearing and neither deponent has been cross-examined on his affidavit, it was not for the learned High Court judge to weigh the affidavit evidence of Mr. O’Leary and Mr. Byrne or to attempt to resolve the factual contradictions contained in it. Still less is it for this Court to attempt any such task. In 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.

  25. 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.

  26. Murphy J. went on to analyse the course of events as they occurred and concluded that there was “no question whatever” of the document having been executed subsequent to the 1st February 1989. The situation as regards the incredible nature of a defence put forward by the Defendant was very clear.

  27. A similar situation applied in Banque de Paris [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.

  28. The businessmen involved put forward a number of defences described by Lord Justice Ackner as “now accepted not to be worth the paper they are written on”. They then claimed that they had been assured by the bank that the guarantees were sought for cosmetic purposes only and would never be enforced. There was no evidence whatever to support this assertion. One of the businessmen went so far as to say that he did not read the terms of the guarantee before signing it. The Court of Appeal also had before it evidence which had not been before the High Court at first instance and which threw a most unfavourable light on the credibility of the Defendants. As in the Anglin case, the position was clear; there could be no credible defence.

  29. 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.

  30. Having regard to the totality of the evidence the learned trial judge was not satisfied that she could exclude a fair or reasonable probability of the Defendant having a real or bona fide defence. While a certain amount of documentary evidence had been produced to the Court, the learned judge was not satisfied that it clarified the intention of the settlement agreement which was in question in the proceedings; she accordingly was unwilling to draw any inference from that evidence and refused to grant summary judgment.

    In the Governor & Co. 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.

  31. 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.

  32. This observation, in my view, might well also be applied to the present case, in which both Mr. Shipsey and Mr. McDonald have provided the Court with the most careful analysis of the affidavit evidence, the disputed facts and the applicable law.

  33. 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.

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

    Mr. Justice Hardiman

  35. This is the Defendant’s appeal against the judgment and order of the High Court (Mr. Justice Kelly) made the 5th December, 2000. By this order the learned trial judge acceded to the Plaintiff’s motion for liberty to enter final judgment against the Defendant in the sum of £356,777.00 with interest in the sum of £76,963.00, making a total of £433,740.00.

  36. The proceedings were initiated by summary summons dated the 28th July, 1999 which claimed monies allegedly due for landing charges and passenger load fees in respect of the Defendant’s aircraft on the Dublin/Paris/Dublin and Dublin/Brussels/Dublin routes. A further claim incorporated in the proceedings, in respect of the Bristol route, was settled between the parties and was not the subject of argument in the High Court or in this Court.

  37. The proceedings came before the Court by way of motion for summary judgment, pursuant to order 37 of the Rules of the Superior Courts. This is amongst the best known of legal procedures and the criteria to be applied on such an application have been the subject of a number of much cited judgments in the Superior Courts here and in the neighbouring jurisdiction. Indeed, at the start of the hearing of the present appeal Counsel assured us that there was agreement between them that the test set out in the judgment of this Court in First National Commercial Bank Plc v Anglin [1996] 1 IR 95 was the correct test to apply. However, it transpired in the course of the argument that Counsel were no means agreed on what this test meant: each advanced an interpretation of it which, if accepted, would dictate a resolution of the present appeal in favour of his own client.

    THE PROCEDURE

  38. Ord. 37 of the Rules of the Superior Courts deals with the hearing of proceedings commenced by summary summons. Each relevant summary summons to which an appearance has been entered is to be set down before the Master, by the Plaintiff, on motion for liberty to enter final judgment for the amount claimed plus interest.

    Thereafter, by Ord. 37 Rule 6:-

    In contested cases, the Master shall transfer the case, when in order for hearing by the Court, to the Court list for hearing on the first opportunity ......

  39. Ord. 37 Rule 7 provides:-

    Upon the hearing of any such motion by the Court, the Court may give judgment for the relief to which the Plaintiff may appear to be entitled or may dismiss the action or may adjourn the case for plenary hearing as if the proceedings had been originated by plenary summons, with such directions as to pleadings or discovery or settlement of issues or otherwise as may be appropriate, and generally may make such order for determination of the question and issue in the action as may seem just.

  40. Rule 7 sets out the essence of the procedure. The last phrase expresses the overall principle: the Court must arrange for the determination of the issues in such manner as seems just. The Plaintiff, on a motion for summary judgment, may obtain liberty to enter final judgment but only for such sum or other relief as he, at this first stage, appears entitled to. Since it has earlier been provided (Ord. 37 Rule 3) that the Defendant may oppose the motion by affidavit, the Plaintiff’s apparent entitlement must subsist despite what the Defendant has deposed to. Since the order provides for alternative, more searching and elaborate, methods of resolving the issues, the Plaintiff’s entitlement must appear clearly enough to render these unnecessary.

    THE CRITERIA

  41. All the cases to which we have been referred feature formulations, in the context of particular facts, of the degree to which the Plaintiff’s entitlement must be established and of the nature of averment by the Defendant which will preclude summary judgment.

  42. Although some form of summary procedure seems to have existed from a remote time, the procedure in its recognisably modern form seems to date from the time of Judicature Acts. The criteria for its exercise appear to me to have been most clearly expressed in certain of the older cases.

    In Sheppards & Co. v Wilkinson & Jarvis 6 TLR 13, Lord Esher said:-

    .... The rule which had always been acted upon by this Court in considering cases under Ord. 14 was that the summary jurisdiction conferred by that order must be used with great care. A Defendant ought not to be shut out from defending unless it was very clear indeed that he had no case in the action under discussion. There might be either a defence to the claim which was plausible, or there might be a counterclaim pure and simple. To shut out such a counterclaim if there was any substance in it would be an autocratic and violent use of Ord. 14. The Court had no power to try such a counterclaim on such an application, but if they thought it so far plausible that it was not unreasonably possible for it to succeed if brought to trial, it ought not to be excluded.

  43. The Ord. 14 referred to in this extract was introduced in the United Kingdom subsequent to the passing of the Judicature Acts. An order in identical form existed in Ireland up to 1926. In Patrick J. Prendergast v Ann Bullitt Biddle (Supreme Court unreported 31st July, 1957), Lavery J. surveyed the history of the summary judgment procedure said:-

    The procedure by summary summons was provided in order to enable speedy justice to be done in particular cases where there is either no issue to be tried or the issues involved are simple and capable of being easily determined.

  44. This observation is perfectly consistent with that in Sheppards, quoted above. In an Irish case almost contemporaneous with Sheppards, Crawford v Gilmore [1891] IR 238, Sir Peter O’Brien C.J. said:-

    I think however that final judgment should not be given on a motion for final judgment in any case where any serious conflict as to matter of fact or any real difficulty as to matter of law arises.

  45. In the same case, two of the judges in the Irish Court of Appeal made observations which have often been the subject of approving comment.

    O’Brien CJ said:-

    I think the fact that this case has been so long at argument - and I do not think that it has been argued at unnecessary length - shows that it is not a case for final judgment upon an interlocutory motion of this sort.

    Barry L.J. said:-

    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.

  46. This is an aspect of the test to which further reference will be made when considering the facts of the present case, below.

  47. More recent Irish authority, in my view, supports the impression gleaned from authorities from the early days of the summary judgment jurisdiction, that the Defendant’s hurdle on a motion such as this is a low one and that the jurisdiction is one to be used with great care.

    In Bank of Ireland v Educational Building Society [1999] 1 IR 220 Keane J. (as he then was) said:-

    The issue before the High Court, and which has arisen again in this Court, is as to whether the affidavits disclosed a good defence to the Plaintiff’s claim which necessitates the case being sent for plenary hearing at this stage. The issues of law and fact which arise cannot be conclusively resolved in favour of either party unless, as submitted on behalf of the Plaintiff, the affidavits do not disclose even an arguable defence to its claim.

    In ACC Bank Plc v Malocco (High Court unreported 7th February, 2000) Ms. Justice Laffoy in refusing to give liberty to enter final judgment said:-

    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.

    Having regard to the course of proceedings since the inception of the summary summons proceedings .... I am not satisfied that I can exclude a fair or reasonable probability of the Defendant having a real or bona fide defence ....

  48. In light of these authorities, I believe that the test for obtaining summary judgment has not changed since the early days of the procedure in the late nineteenth and early twentieth centuries. The formulation used in Anglin and the cases cited in that judgment are useful and enlightening expressions of the test, but I do not believe that this formulation expresses an altered criterion which is more favourable to a Plaintiff than that derived from the other cases cited. The “fair and reasonable probability of the Defendants having a real or bona fide defence”, is not the same thing as a defence which will probably succeed, or even a defence whose success is not improbable.

  49. On the hearing of this appeal, Counsel on both sides emphasised the formulation of the criteria for summary judgment contained in the First National Commercial Bank v Anglin, cited above. This formulation was in turn derived from Banque de Paris v de Naray [1984] 1 Lloyds Law Rep.21, which decision was itself reaffirmed in National Westminster Bank v Daniel [1993] 1WLR 1453. It is 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 Defendants having a real or bona fide defence.

  50. This formulation was glossed by Glidewell L.J. in Daniels case as follows:-

    I think it right to ask, using the words of Ackner L.J. in the Banque de Paris case, at page 23, ‘Is there a fair or reasonable probability of the Defendants having a real or bona fide defence?’. The test proposed 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 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.

  51. Considerable differences of emphasis, at least, arose on the hearing of this appeal as to the meaning of the tests formulated above. Counsel on behalf of Aer Rianta emphasised the word “probability”. He resiled from the position that the Defendant had to show probability of successfully defending the action, and was surely quite correct to do so. He urged however “a fair and reasonable probability” obviously meant something more than a bare possibility and he urged that the adjective in the phrase “real defence” should be interpreted in a similar fashion. He urged that the overall test, accordingly, should be read as meaning that the Defendant had to show a probability that he had a defence which was not only bona fide but had a chance of success which was not improbable.

  52. Equally, Counsel for Aer Rianta urged the question “Is what the Defendant says credible?” does not involve giving the word “credible” its literal meaning. He conceded that this literal meaning meant no more than capable of rational belief, or not incredible. In its context, and in view of the previous formulation, however, Counsel submitted that the word “credible” should be given what he said is its more usual contemporary meaning of “not improbable” or at least not “seriously improbable”. He contrasted these shades of meaning with what he conceded to be the words proper or original connotation of “not incapable of rational belief”.

  53. In my view, the fundamental question be posed on an application such as this remains: is it “very clear” that the Defendant has no case?; is there either no issue to be tried or only issues which are simple and easily determined?; do the Defendant’s affidavits fail to disclose even an arguable defence?

  54. Anglin and the cases cited therein seem to me to focus on a specific aspect of these questions, that of credibility. It is indeed true that “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”. (Daniel). Equally, “it is not sufficient that the Court should have reason to doubt the bona fides of the Defendant or to doubt whether the Defendant has a genuine cause of action. (Anglin).

  55. In all of these cases, however, the issue of credibility arose rather starkly. In Daniels the defence affidavits were mutually contradictory. In de Naray the Defendant’s averments were flatly contradicted by those of the Plaintiff’s private detective which were accepted to be accurate. In Anglin, the indisputable documentation of a commercial transaction rendered the alternatively chronology proposed by the Defendant quite untenable.

  56. I consider that the references in these cases to credibility and to fair and reasonable probability may be misleading if read without reference to their own unique facts. Read in context, I do not consider that the passages quoted either alter the well established criteria for the granting of summary judgment.

    THE FACTS OF THE PRESENT CASE

  57. Counsel for the Plaintiff conceded that the Defendant’s factual contentions were neither logically impossible nor capable of outright contradiction by evidence which was itself unimpeachable. He submitted, however, that the Defendant’s contentions were utterly improbable at least when viewed in their commercial context. This may be summarised as follows:-

  58. The Plaintiff set up a scheme of charges and discounts which it says was unaltered and on the basis of which, applied to undisputed traffic figures, its claim can be readily computed in the amount stated. The defence is that the scheme was varied in discussions between the Defendant’s Chief Executive Mr. O’Leary and the Plaintiff’s representative Mr. Byrne, or alternatively that the said discussions constitute an estoppel against the Plaintiff. The terms of these discussions are set out in considerable detail in the Defendant’s affidavits and are rejected in very strong terms in a replying affidavit on behalf of the Plaintiff. The radical degree of factual dispute between the parties can be gathered from the terms of the Defendant’s affidavit of the 2nd December, 1999 where at paragraph 18 it is said:-

    There were no negotiations between the Plaintiff and the Defendant in early 1997 as contended by Mr. O’Leary in paragraph 19 of his affidavit. I reject everything that is said by Mr. O’Leary in paragraph 20 of his affidavit. I regret to say that none of the events described in paragraph 20 of Mr. O’Leary’s affidavit occurred.

  59. Again, at paragraph 25 of the same affidavit it is deposed:-

    For the avoidance of doubt, I wish to make it clear that in any event, there were no negotiations between the parties along the lines contended for by Mr. O’Leary. I regret to say that there is no basis for Mr. O’Leary’s contentions that any discussions took place between him and me, this deponent, relating to a variation of the discount scheme. No assurances of any kind were given by me to Mr. O’Leary in the terms alleged or in any like terms.

  60. It thus appears that there is conflict of evidence of a much more radical and downright sort than is usual in commercial actions. But the Plaintiff contends that this conflict must be considered in the context of what it says is the commercial impossibility of a variation of terms such as that claimed by the Defendant: such an arrangement would have to be reduced to writing and approved by the Plaintiff’s board. Still more importantly, the Plaintiff contends that what Mr. O’Leary says is not credible: in the words of the learned trial judge “..... his credibility is undermined by the very documents he exhibits, his assertion of an agreement when the exact opposite is indicated by those exhibits and the inconsistencies both as to the form of the agreement and when it was allegedly entered into”.

  61. It is undisputed that the scheme as it existed in January 1997 allowed discount only on new traffic, not on that which a carrier merely took from a competitor or former carrier. The Defendant says that this was a critical commercial disincentive to its entry to either of the two relevant routes. Another carrier had withdrawn from the Brussels route in January 1997. In the previous year this carrier had flown 17,500 passengers on the route. If the scheme were unaltered, Ryanair would attract no discount in respect of the first 17,500 passengers. The commercial impossibility of entering the route on this basis, combined with Aer Rianta’s need to entice a new carrier on to the route, claims Ryanair, led to the alteration of the scheme.

  62. The nub of the Defendant’s contentions in relation to the Paris route relates to the treatment of City Jet. The Defendant says that this carrier had previously acted as a sub-contractor on the route to Air France/Air Inter. It was now to carry its own right. The Defendant contends that it was agreed that City Jet would participate in the discount scheme only when its passenger numbers exceeded those carried by Air France/Air Inter in 1996. In other words, City Jet was to be identified with those carriers under whose umbrella it had previously flown on this route. Aer Lingus was the only other relevant carrier.

  63. In my view, it is clear that there is a very substantial conflict of fact in the averments of the respective parties. Their versions are set out in five affidavits sworn between the 21st September, 1999 and the 13th January, 2000. These affidavits and their associated exhibits amount to 181 pages in the Books of Appeal before us. Both parties claim that the commercial realities of their relations, properly understood, makes the other’s contentions implausible to the point of near impossibility. The affidavits deal with this aspect at great length and it was fully explored in argument before us.

  64. On the face of it, this case turns on a stark conflict of factual evidence. The alleged crippling implausibility which each side says afflicts the others account depends on the view taken of extremely complex dealings and background facts, some of which are themselves in dispute.

  65. The length, complexity, and subtlety of the competing arguments, factual and legal, on affidavit and in court, recall all the observations of O’Brien C.J. and his colleague in Crawford v Gilmore, quoted above. The length of time and volume of paper required by the Plaintiff to seek to demonstrate that the case is a clear one in itself suggests that it is not sufficiently clear for summary judgment. Reading the affidavits and listening to the case argued with considerable intensity on both sides has led me to the view that one cannot be confident where the justice of the case lies without hearing oral evidence and cross-examination. To me, at least, it is not “very clear indeed” that the Defendant has no case. It is clear in my view, that the issues are not “simple and capable of being easily determined”.

  66. In light of that view, and since it follows that the case should go to plenary hearing, it is not desirable for this Court to enter further into the merits. However, since the Plaintiff greatly emphasised its view that the correspondence and an internal memorandum quoted was quite inconsistent with the Defendant’s case, and were successful in this before the learned trial judge, I will make one observation. The correspondence is brief, consisting of a letter of the 14th February, 1997, the Defendant’s internal memorandum of the 17th February, the Defendant’s letter of the same date to the Plaintiff, the Plaintiff’s reply of the 11th March, the Defendant’s further reply of the same date. The second sentence of the Memorandum read:- “He (Mr. Byrne) also confirmed to me that to the extent that Aer Lingus’s passenger carryings do not decline on either the Paris or Brussels route, then most or all of Ryanair’s traffic will qualify for the growth rebates”. The purport of the third paragraph of the Defendant’s letter of the same date is similar, though not identical.

  67. In argument on the hearing of the appeal it was conceded, as it may not have been in the High Court, that the sentence quoted is consistent only with the view that there was some variation of the scheme. This is of course the Defendant’s view only, and the point may not be significant upon full hearing. But it seems to me to negative the Plaintiffs contention that the Defendants correspondence is actually inconsistent with the scheme having been varied, on which a significant part of its argument centered.

    CONCLUSION

  68. I would set aside the order of the High Court and remit the action for plenary hearing.

    Denham J

  69. Concurred


Cases

First National Commercial Bank Plc v Anglin [1996] 1 IR 75; ACC Bank Plc v Elio Malocco (High Court unreported 7th Feb 2000); Governor & Co of the Bank of Ireland v Educational Building Society [1999] 1 IR 220; Crawford v Gillmor (1891) 30 L.R. Ir. 238; Sheppards & Co. v Wilkinson & Jarvis 6 TLR 13; Patrick J. Prendergast v Ann Bullitt Biddle (Supreme Court unreported 31st July, 1957); Bank of Ireland v Educational Building Society [1999] 1 IR 220; Banque de Paris v de Naray [1984] 1 Lloyds Law Rep.21; National Westminster Bank v Daniel [1993] 1WLR 1453

Legislations

Rules of the Superior Courts: Ord.37 r.6, r.7


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