A payment made on a basis which fails can be recovered. So, if I pay for cigarettes, and the price includes an amount for a tax which is subsequently found unconstitutional, the basis for that excess amount has failed, and I can recover the tax amount that wasn’t due (see Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516;  HCA 68 (6 December 2001)). It follows that if I book to travel with an airline, and pay their fee plus taxes and charges, but if I then don’t travel, so that the charges are not incurred and the taxes are not due, the basis for those taxes and charges has failed, and I ought to be able to recover them. If the contract between me and the airline contains clauses making them irrecoverable, (or, what amounts to the same thing, imposing disproportionately high administration fees) such clauses are almost certainly unenforceable (on foot of the European Communities (Unfair Terms in Consumer Contracts) Regulations, 1995 (S.I. No. 27 of 1995), the English equivalent of which have recently been applied by the Office of Fair Trading (OFT) against an airline’s terms and conditions).
These musings are prompted by the following story in the Price Watch column in today’s Irish Times (sub req’d):
No guaranteed refund if you don’t take your Ryanair flight
We’ve Got Mail: Hats off to another reader who has bravely decided to take on Ryanair in order to get either a refund or a more detailed explanation as to what it has done with his money.
Recently, he booked flights for a number of people with this most parsimonious of airlines but it turned out that some of his party were unable to travel. He contacted Ryanair looking for a refund of the taxes which had been paid on the unused flights, something he is perfectly within his rights to do as the tax is payable only if the flights are actually taken.
“I received a mail back saying that the administration fee would cancel out any refund.” He has since written to the airline “again and again” in an effort to find out exactly how much their administration fee was and where on the Ryanair website he could find out more about it. “I have still to receive a reply. What now?” he asks.
We went on to Ryanair’s website and found this nugget. “Government taxes may be refunded. Ryanair apply an administration charge per person for tax refund requests. If the refund amount due to the customer is less than the applicable refund administration charge then no refund will be made.”
There was no mention of the actual costs that Ryanair incurs for carrying out this fairly basic piece of admin. In order to find out more we contacted the airline and were told that the only tax which was refundable in the case of a Dublin to London return flight was the British Government Air Passenger Duty (APD).
“The administration fee of €20 exceeds the amount paid in APD, €15.43,” Ryanair said in a statement, “and so a tax refund is not applicable in this case.” The airline’s terse statement did not say how it had arrived at this €20 per ticket fee, which seems a bit steep for a company that is expert at penny-pinching.
Incidentally, we did come across a number of disgruntled people on one online forum in Britain who were similarly miffed by Ryanair’s reluctance to return their taxes if flights had not been taken. It might be interesting to find out whether any other readers had experienced problems getting their taxes back from the airline.
It bears repeating: as a matter of law, taxes collected but not due must be refunded. And any charge for the return must not be “disproportionate”, which requires of course that Ryanair justify their charge as proportionate to the actual costs incurred in making the refund. Oh, and the airline on the receiving end of the OFT action? Why, Ryanair of course!
Update: Pricewatch now has an excellent blog (though it started after the above story ran).