Competition Authority v Licensed Vintners Association and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice William M. McKechnie
• Judgment Date: 24 July 2009
• Neutral Citation: [2009] IEHC 439
• Court: High Court
• Docket Number: [No. 6687 P./1998]
• Date: 24 July 2009

Competition Authority v Licensed Vintners Association & Ors

BETWEEN

THE COMPETITION AUTHORITY

PLAINTIFF

AND

THE LICENSED VINTNERS ASSOCIATION, LORCAN LYNCH, FRANK TOWEY, EDWARD BYRNE AND VINCENT MURPHY

DEFENDANTS

[2009] IEHC 439

[No. 6687 P./1998]

THE HIGH COURT

PRACTICE AND PROCEDURE

Contempt

Attachment and sequestration - Undertaking - Alleged breach of undertaking - Rule of court - Whether any distinction between undertaking, injunction and court order - Whether defendant breached undertaking - Whether defendant guilty of contempt of court - Proper construction of undertaking in context of alleged breach - General principles regarding execution - Relevant factors - Standard of proof - Criminal nature of contempt proceedings - Whether facts must be proved beyond reasonable doubt - Interpretation of undertaking - Re Mileage Conference Group [1966] I WLR 1137; Hussain v Hussain [1986] 2 WLR 801; London & Birmingham Railway v Grand Junction Canal Co (1835) 1 Ry CA 224; Stancomb v Trowbridge UDC [1910] 2 Ch 190; Heatons Transport (St Helens) Ltd v Transport and General Workers Union [1973] 1 AC 15; Re Supply of Readymix Concrete (No 2) [1995] 1 AC 456; Redwing Ltd v Redwing Forest Products Ltd [1947] 64 RPC 67 and Dean v Dean [1987] 1 FLR 55 considered; Chelsea Man Plc v Chelsea Girl Ltd [1988] FSR 217 not followed; Re Bramblevale Ltd [1970] Ch 128 approved; National Irish Bank Ltd v Graham [1994] 1 IR 215 applied - Competition Act 2002 (No 14), ss 4(1), 4(5) and 14(2) - Treaty of Rome 1957, articles 81(2) and 81(3) - Rules of the Superior Courts 1986 (SI 15/1986) O 41, r 8, O 42, rr 7 and 32 - Finding that defendants breached undertaking and were guilty of contempt of court; matter adjourned (1998/6687P - McKechnie J - 24/7/2009) [2009] IEHC 439

Competition Authority v Licensed Vintners Association

Facts: The Competition Authority sought an order for attachment against the Chief Executive Officer of the first defendant and an order for sequestration of the assets of that defendant. Pervious proceedings initiated by the Competition Authority against the defendant had resulted in a settlement with undertakings given, in particular not to recommend increases in prices and not to breach s. 4 of the Competition Act 2002. In 2008, the defendant issued a press statement announcing a price freeze. The Competition Authority alleged that this action constituted a breach of the undertakings previously given. The issue arose as to the appropriate standard of proof. The issue also arose as to whether the defendants had made a recommendation on the prices earned on the sale of alcoholic drinks and how to apply this concept to the press release given.

Held by McKechnie J. that the defendants had breached their first undertaking and were guilty of contempt of court, considering Undertaking No. 1. No conclusions were drawn as to the legality or otherwise of the recommendations under the Competition Act 2002. The undertaking given was not restricted to a recommendation on specific pricing and its terms captured the press release. It related to the core of the communication.

Reporter: E.F.

COMPETITION ACT 2002 S14(2)

COMPETITION ACT 2002 S4

TREATY OF ROME 1957 ART 81

COMPETITION ACT 2002 S4(1)

TREATY OF ROME 1957 ART 81(1)

COMPETITION ACT 2002 S4(5)

TREATY OF ROME 1957 ART 81(3)

MILEAGE CONFERENCE GROUP OF THE TYRE MANUFACTURERS CONFERENCE LTDS AGREEMENT, IN RE 1966 1 WLR 1137 1966 2 AER 849

ARLIDGE EADY & SMITH ON CONTEMPT 2ED 1998 PARA 3.239

HUSSAIN v HUSSAIN 1986 1 AER 961 1986 2 WLR 801

LONDON & BIRMINGHAM RAILWAY CO v GRAND JUNCTION CANAL CO 1835 1 RY & CAN CAS 224

ARLIDGE EADY & SMITH ON CONTEMPT 2ED 1998 PARAS 12.170-12.172

LAW REFORM CMSN CONSULTATION PAPER ON CONTEMPT OF COURT 1991

STANCOMB v TROWBRIDGE URBAN DISTRICT COUNCIL 1910 2 CH 190

HEATONS TRANSPORT (ST HELENS) LTD v TRANSPORT & GENERAL WORKERS UNION 1973 AC 15 1972 3 WLR 431 1972 3 AER 101

SUPPLY OF READY MIXED CONCRETE (NO 2), IN RE; DIRECTOR GENERAL OF FAIR TRADING v PIONEER CONCRETE (UK) LTD & ANOR 1995 1 AC 456 1994 3 WLR 1249 1995 1 AER 135

CHELSEA MAN MENSWEAR LTD v CHELSEA GIRL LTD (NO 2) 1988 FSR 217

DEAN v DEAN 1987 1 FLR 517

NATIONAL IRISH BANK LTD & GRACE v GRAHAM 1994 1 IR 215 1994/5/1506

BRAMBLEVALE LTD, IN RE 1970 CH 128 1969 3 WLR 699 1969 3 AER 1062

ARLIDGE EADY & SMITH ON CONTEMPT 3ED 2005 PARA 15.53

REDWING LTD v REDWING FOREST PRODUCTS LTD 1947 64 RPC 67

Mr. Justice William M. McKechnie

1 The Competition Authority is a statutory body established by legislation, having as part of its functions, the power to enforce the provisions of the Competition Act2002 ("the 2002 Act"). Under s. 14(2) of that Act, the Authority has a right of action in respect of, inter alia, any agreement, decision or concerted practice prohibited by s. 4 of the Act or by Article 81 of the Treaty establishing the European Community (the " EC Treaty").

2 The Licensed Vintners Association is a trade association and representative body for the publicans of the greater Dublin area. It has approximately 700 members, and represents over 90% of publicans in that area. Its sister association, the Vintners Federation of Ireland, is the equivalent body for publicans, trading in the rest of the Country and has approximately 5000 members nationwide. Both are associations of undertakings for the purposes of s. 4 of the 2002 Act and Article 81 of the EC Treaty.

3 By way of Notice of Motion dated the 31^st March 2009, the Competition Authority seeks an order of attachment against the Chief Executive Officer of the first named defendant ("LVA"), and an order for the sequestration of the assets of that defendant. In parallel proceedings between the Competition Authority and the Vintners Federation of Ireland ("VFI") and others, similar orders are sought against the Chief Executive of that organisation and against the organisation itself. Notwithstanding the terms of these notices, however, no relief as a matter of fact is being sought against any personal defendant, with such persons being named solely because of the proceedings next mentioned. The actual relief which is sought on this application is, in essence, a declaration that both associations are in contempt of court, in the circumstances hereinafter described. As these issues were ventilated in the LVA motion, it is in that case in which judgment is given. As no distinction of materiality exists between either case, the decision applies equally and without distinction to the second set of proceedings involving the VFI.

4 On the 1^st June 1998, the Competition Authority instituted proceedings against both the LVA and certain of its officers and against the VFI and certain of its officers. Therein the Authority alleged that certain recommendations made, certain practices engaged in and certain activities carried on, by these associations, their servants or agents, were anti-competitive in a variety of ways and accordingly breached s. 4 of the Competition Acts 1991 to 1996. A full defence was filed by both associations. On the matter coming on for hearing, the parties compromised the disputed issues by entering into a settlement, the terms of which were received and filed in court pursuant to an order made on the 18^th December 2003 (erroneously dated 27^th June 2003). There were no admissions offered or acknowledgments of responsibility given and, save for the limited order made, the proceedings were struck out with no further order as to costs or otherwise.

5 The terms of settlement so agreed included three undertakings given,inter alia, by the LVA. That organisation undertook:-

6 i "(i) ....not to recommend to [their members] the prices, margins, increases in prices and increases in margins earned on the sale to the public of alcoholic beverages for consumption on licensed premises owned, managed or controlled by [their members]. ["Undertaking No. 1"]

7 (ii) …not to breach the provisions of s. 4 of the Competition Act2002, in relation to the sale of and the price at which alcoholic beverages are sold to the public for consumption on licensed premises owned, managed or controlled by [their members]. ["Undertaking No. 2"]

8 (iii) …to inform [their members] of the settlement of these proceedings and the undertakings provided herein…" ["Undertaking No. 3"]

9 It is alleged in the instant application that by reason of the press release hereinafter mentioned, the LVA has breached the aforesaid undertakings and accordingly is guilty of contempt of court.

10 6. On the 1^st December 2008, the LVA and the VFI published a joint press statement which stated, inter alia, that:-

"The two representative bodies for Irish publicans have announced a one year price freeze in drink prices in pubs with immediate effect. The unique joint announcement was made on behalf of over 5,500 publicans by the Licensed Vintners Association which represents publicans in Dublin and the Vintners Federation of Ireland representing publicans in the rest of the country."

"Speaking at a Special Press Conference in Dublin today, the two organisations said that the commitment was being made in light of the deteriorating economic situation and the growing pressure on consumer spending; 'In financial terms, 2009 is going to be a difficult and challenging year for everyone and we recognise that people are going to be under real pressure to tighten their belts. This commitment reflects our members' concerns that the pub trade should do its bit in terms of keeping costs down and providing value for money.'"

"The leaders of the two organisations … said that the initiative for the price freeze had come from members themselves; 'This initiative is very much member driven. In both organisations, publicans across the country have contacted us to express their concerns at the...