Monday 25 February 2008

Settlement with DAA precludes Ryanair from challenging plans for Terminal 2

Ryanair Ltd -v- An Bord Pleanála


Judgment was given by Mr Justice Clarke on January 11th, 2008.


Ryanair are prevented by the terms of a settlement of previous proceedings with the Dublin Airport Authority from challenging the granting of permission by An Bord Pleanála for Terminal 2 at Dublin Airport, and so their proceedings against the board should be dismissed.


The case concerned a long-running dispute between Ryanair and the Dublin Airport Authority about a second terminal at Dublin airport. An Bord Pleanála had granted planning permission for the terminal, and Ryanair wished to challenge that decision. The DAA sought to have such proceedings struck out on the grounds that Ryanair was precluded from bringing them under an agreement entered into arising out of previous proceedings. The issue was whether or not the proceedings now being brought by Ryanair fell under the terms of that agreement. An Bord Pleanála did not participate in the proceedings.

The settlement referred to resulted from proceedings brought in 2005 by Ryanair against the Taoiseach, the Minister for Transport, the DAA and the Attorney General, following a Government decision that a second terminal should be commissioned and built by the DAA. These arose out of a contention made by Ryanair that the costs associated with the operation of Dublin airport are too great.

In connection with the proposed second terminal, it contended that it would be built on too great a scale and to too high a standard, thus generating higher operating costs which would be passed on through operating airlines to their customers. Ryanair had its own alternative proposals for a second terminal.

Following the Government decision, the DAA appointed consultants Pascall and Watson to review previous planning work on a second terminal, including consulting with the main home-based carriers. The consultants made a series of recommendations in relation to the location, operation and capacity of the proposed new terminal, and their report was accepted by the DAA, which in September announced a plan for a 50,000 square metre passenger terminal, costing between €170 million and €200 million.

The settlement of the 2005 proceedings took place in March 2006, and Ryanair withdrew their challenge to the validity of the Government decision. Under the terms of the settlement, "Ryanair confirms and agrees with the Defendants not to bring any further challenges against or arising out of or connected with the Government's decision of the 18th May 2005 concerning T2 or in respect of any implementation in whole or in part of the Medium-Term Masterplan for infrastructural facilities prepared by Pascall and Watson in September 2005 (including the plan for the new Terminal and associated pier facilities) (Pier E) which the DAA may decide to effect."

A letter from the DAA's solicitors accepted this agreement, seeking confirmation that there were "no further terms or collateral agreements". This was agreed.

Mr Justice Clarke said that he had to decide whether those terms of settlement precluded the challenge which Ryanair now sought to bring to the decision of An Bord Pleanála. He had to consider the construction of agreements, the application of this construction to the facts of this case, and whether the proposed terminal was something entirely different from what had been proposed in 2005, which would mean it fell outside the terms of the agreement.


He dealt first with the principles of construction of agreements, which he said had to start with what the document actually stated. The context in which it was entered into could only be used as an aid to construction.

The agreement prevents Ryanair from bringing any challenge "arising out of or connected with" the Government's decision on Terminal Two (T2), which required it to be built by the DAA by 2009. Given that this deadline required planning permission to be obtained quickly, "it seems to me clear, therefore, that a challenge to a planning application for a second terminal is a challenge 'arising out of or connected with' the Government's decision," he said.

"I am, therefore, satisfied that any challenge to a planning application for a second terminal in Dublin airport is precluded by the first part of para. 2 of the settlement agreement."

However, in case he was wrong in that, Mr Justice Clarke went on to consider whether the challenge would also be precluded by the second part of that paragraph, which referred to "the implementation of the Medium-Term Masterplan for infrastructural facilities prepared by Pascall and Watson in September 2005".

This required examining whether or not the present proposals were in fact an implementation of the "Masterplan". The Pascall and Watson plan was quite general, he said. Despite this, Ryanair had signed up to a settlement containing it, and must therefore be bound by its terms, even if the DAA present proposals were somewhat larger than it anticipated.

"It difficult to avoid the conclusion that if Ryanair wished to free itself from being precluded from challenging a T2 proposal which was larger or more costly than what it believed it was signing up to, it should have insisted specific terms being included in the settlement agreement," he said.

The only way it could challenge the proposal was if what was proposed was so different from the parameters of the Pascall and Watson plan as to be something entirely different.

This was not the case, and the consultants' plan specifically suggested that it might "be prudent to oversize the initial build" to allow for later expansion.

Ryanair had also argued that, by permitting it to make observations to the planning authorities, the DAA had not sought implementation of the prohibition on a "challenge" to the development, so it was now estopped from seeking to have the present challenge dismissed.

Mr Justice Clarke said he was inclined to the view that a person making observations in the course of a planning application could not be regarded as challenging the proposed development.

He did not think, therefore, that the DAA was precluded from seeking the dismissal of Ryanair's challenge to An Bord Pleanála's decision, and, for the reasons he outlined earlier, he was satisfied that its proceedings should be dismissed.The full text of the judgment is available on

Solicitors: A & L Goodbody, Dublin (for the plaintiff); Chief State Solicitor (for the defendant)

The Irish Times

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