Dunnes Stores loses appeal over €36.5m plastic bag levy

Supreme Court rejects company’s claim that levy did not apply to ‘flimsy’ plastic bags

Dunnes Stores had argued the plastic bags in relation to which assessments were made were not subject to the levy

Dunnes Stores had argued the plastic bags in relation to which assessments were made were not subject to the levy


Dunnes Stores has lost its Supreme Court appeal concerning the validity of laws under which the Revenue Commissioners later raised tax assessments of €36.5 million on the supermarket chain concerning certain plastic bags.

The five-judge court, while critical of the “overly complex” legislation, rejected the company’s claim the “flimsy” plastic bags at issue did not fall within the scope of the plastic bag levy.

The tax assessments were raised over a four-year period to November 2008 after Revenue alleged the levies due for certain plastic bags had not been collected.

Dunnes did not accept the assessments and argued the plastic bags in relation to which those assessments were made were not subject to the levy.

In its action against Revenue and the State, Dunnes claimed the levy relates only to larger bags given to customers at “point of sale” for their shopping. They argued the assessments wrongly included other bags used for wrapping for fruit and vegetables, or for hygiene purposes.

The definition of plastic bag in the relevant 2001 regulations was “so uncertain” as to render the regulations invalid, it argued among a range of claims.

After it lost in the High Court, it appealed to the Supreme Court where a five-judge court on Tuesday unanimously dismissed its appeal.

Giving the court’s main judgment, Mr Justice William McKechnie said the relevant sections of the Waste Management Act 1996, as amended in 2001, and of the regulations made under that Act, are difficult to construe.

Given the direct liability obligation imposed as a result of the measures, one would have thought they should be drafted with “due precision” and in a manner which gives “direct and clear” effect to the underlying purpose of the legislative scheme.

“That can scarcely be said in this case,” he said.

In a concurring judgment making brief observations on the relevant laws, Mr Justice John MacMenamin said they are “overly complex” and “surely capable of a much clearer definition”.

He said the provisions have an “entirely laudable” social purpose, to reduce use of plastic packaging which poses a hazard to the environment. However, the definitions of bag, such as those used at “point of sale”, are “not only awkward but unnecessary”.

“Neither public policy nor benign purposes should stand in the way of clarity,” he added.

In the main judgment, Mr Justice McKechnie, having applied the rules of statutory interpretation, found the Waste Management (Environmental Levy Plastic Bag) Regulations 2001 covered the type of bag at issue.

He rejected as “without substance” Dunnes’s claim the regulations were made by the Minister for the Environment in excess of the provisions of the parent Act, the Waste Management Act 1996.

He also dismissed Dunnes’s claims that Revenue acted in breach of fair procedures and/or natural and constitutional justice in not providing adequate details of the basis for calculating the tax assessments.

Dunnes had claimed the alleged failure of Revenue in that regard meant its appeal to the Appeals Commissioners against the assessments, which remains adjourned as a result of the legal proceedings, has been compromised.

The Appeals Commissioners is the most appropriate forum to address the fairness issue if it should remain alive, the judge said.

He dismissed a further claim that section 72 of the 1996 Act, conferring power on the Minister to make regulations concerning the plastic bag levy, is unconstitutional. He disagreed with Dunnes’s claims that section 72 constitutes an impermissible delegation of legislative power to the Minister and fails to set out the necessary principles and policies.