Donovan v Electricity Supply Board

• Jurisdiction: Ireland
• Judge: Mr. Justice Costello
• Judgment Date: 12 May 1994
• Neutral Citation: 1994 WJSC-HC 2539
• Docket Number: No. 6452P/1992,[1992 No. 6452P]
• Court: High Court
• Date: 05 May 1994

1994 WJSC-HC 2539

THE HIGH COURT

No. 6452P/1992

DONOVAN v. ESB

BETWEEN

DERMOT DONOVAN AND OTHERS

PLAINTIFFS

AND

ELECTRICITY SUPPLY BOARD

DEFENDANT

Citations:

COMPETITION ACT 1991 S4

COMPETITION ACT 1991 S5

ELECTRICAL (SUPPLY) ACTS 1927 – 1988

COMPETITION ACT 1991 S7

TREATY OF ROME ART 85

TREATY OF ROME ART 86

COMPETITION ACT 1991 S4(1)

TREATY OF ROME ART 85(1)

COMPETITION ACT 1991 S4(2)

COMPETITION ACT 1991 S5(1)

COMPETITION ACT 1991 S6

COMPETITION ACT 1991 S6(7)

COMPETITION ACT 1991 S4(4)

COMPETITION ACT 1991 S4(3)

COMPETITION ACT 1991 S6(6)

COMPETITION ACT 1991 S7(2)

COMPETITION ACT 1991 S5(2)(a)

COMPETITION ACT 1991 S7(1)

COMPETITION ACT 1991 S8(1)

COMPETITION ACT 1991 S5(2)

SARABAX CASE, (NOTE) 8TH REPORT OF COMMISSION ON COMPETITION POLICY PARAS 35–37

Synopsis:

STATUTORY INTERPRETATION

Enactment

Purpose - Treaty - Terms - Implementation - Treaty of Rome (EEC) - Construction of articles 85 and 86 of treaty - Established principles - Same principles to be applied in interpretation of enactment - (1992/6452 P - Costello J. - 5/5/94) 1994 2 ILRM 325

|Donovan v. Electricity Supply Board|

TRADE

Competition

Restriction - Prohibition - Statute - Interpretation - Electricity - Equipment - Installation by contractors - Standards and safety rules established by trade organisation - Monopoly of electricity supply granted to statutory corporation - Adoption by that corporation of such standards and rules - Whether corporation abused dominant position in trade - Statute - Interpretation - Competition Act, 1991, ss. 4–7 - Treaty of Rome (EEC), articles 85, 86 - (1992/6452 P - Costello J. - 5/5/94)

|Donovan v. Electricity Supply Board|

1 JUDGMENT of Mr. Justice Costello delivered this5th day of May 1994.

INTRODUCTION

2 The Plaintiffs are electrical contractors carrying on business in the South West of Ireland. They bring this claim on their own behalf and on behalf of an Association known as the "Association of South Western Electrical Contractors" which has about 70 members. Their claim is that the Electricity Supply Board (a) entered into agreements, made decisions and engaged in concerted practices prohibited by Section 4 of the Competition Act 1991and (b) it abused its dominant position in the market for the supply of electrical contracting services, contrary to Section 5 of the Act. They seek appropriate declaratory and injunctive relief. The claim arises from the introduction in September 1992 by the E.S.B. of new conditions regulating the supply by the E.S.B. of electricity to customers of contractors after they have carried out installation and other work to their customers' premises.

3 I can summarise the background to this dispute as follows.

4 The Electro Technical Council of Ireland (E.T.C.I.) was established in the year 1972 by a number of organisations concerned with electrical standards and electrical safety. It has now a membership of 20 bodies drawn from the Government and semi-State sector, the private sector, local authorities, the Universities and the industry itself. Its objects, according to its Constitution, include the promotion of safety in electrical equipment and installations and the co-ordination of standardisation in all branches of electro technology in harmony with international agreements. It is a voluntary body and has been recognised as the body suitable to advise the Institute of Industrial Research and Standards and the Government on matters relating to standards and codes of practice. In 1976 it adopted and promulgated the first National Rules for Electrical Installations and published an up to date edition in 1991. Its Rules (generally known as the "Wiring Rules") contain a form of certificate which electrical contractors should complete when an installation has been effected. The first paragraph of this "Completion Certificate" contains a declaration by the contractor that the installation complies with the National Rules for Electrical Installation.

5 The Electricity Supply Board is a statutory corporation endowed with wide powers and duties under the Electrical (Supply) Acts 1927- 1988 relating to the generation, transmission and supply of electric power. In the course of their business electrical contractors necessarily are required to arrange for the connection to the national grid maintained by the E.S.B. of installations plant and equipment on the premises belonging to persons on whose behalf they have carried out electrical contracting work. The E.S.B. will make a connection to the national grid and supply power to their customers only pursuant to its "General Conditions Relating to Supply". Prior to 31st of August 1992 its "general conditions" provided that electrical contractors who had carried out electrical installation work should complete the E.C.T.I.'s Completion Certificate and thereby certify that installation had been carried out in accordance with E.C.T.I.'s National Rules for Electrical Installations. The completed certificate together with an application for supply signed by the owner or occupier of the premises was then brought to the local office of the E.S.B. and, subject to an inspection on behalf of the E.S.B., supply would then be effected. It was however made clear that the purpose of the inspection was to ensure that the E.S.B.'s network would not be adversely effected by the installation work and condition 4 of the Board's "General Conditions" made it clear that the Board took no responsibility for testing the customer's electrical installation - in common parlance it was not responsible for the wiring "on the customer's side of the meter". These procedures came to an end on the 1st of September, 1992 and were replaced by new procedures. It is these which have given rise to the present action.

6 The Association of Electrical Contractors of Ireland (A.E.G.I.) is a trade association comprising electrical contractors in the segment of the market for the supply of electrical services in which the Plaintiffs also are mainly engaged, that is the market for low voltage contracts. Currently it has about six hundred members. None of the Plaintiffs are members of A.E.G.I.. The Electrical Contractors Association of Ireland is also a trade association, its members being mainly engaged in electrical contract work in the middle voltage segment of the market. It has currently a membership of about 300. None of the Plaintiffs are members of the Association. For some considerable time the absence of an adequate system of verification and certification of safety in electrical installations had been a source of concern both to the E.C.T.I., the E.S.B., and the relevant Government department. In 1989, at the instigation of the Department of Trade, the E.C.T.I. established a working group with a view to the establishment of a body which would promote and protect the interest of the public as users of electrical services. The working group comprised representatives both of the E.C.T.I., the E.S.B., A.E.C.I. and A.C.I. Its Chairman was a former Chairman of the E.S.B. and a retired senior civil servant.

7 The Department had made clear its opposition to a system which involved legislation and a statutory inspectorship and indicated that it favoured the establishment of a self-regulatory system. In accordance with these guidelines the working party drew up a report. The report proposed the establishment of a private company limited by guarantee, that its members would be the E.T.C.I., the E.S.B., A.E.C.I. and E.C.A., that the composition of the company would be based on an equal partnership of the participating organisations, that the Directors of the company would comprise eight persons, two being nominated by each of the participating organisations. It proposed that the company would establish a register of electrical contractors. These proposals were accepted and implemented and a company was established known as the "Register of Electrical Contractors of Ireland Limited" and incorporated on the 18th of June 1991. This company has since been known by its acronym "RECI". It set about organising the establishment of a register of electrical contractors and as part of the new self-regulatory regime it appointed inspectors. They were to fulfil two functions, (a) to carry out spot-check inspections on the work of registered contractors and (b) to inspect installations carried out by non-registered contractors and certify (if such be the case) their compliance with the wiring rules. In 1992 the E.S.B. announced changes in its Conditions of Supply. From the 1st September, 1992 it stated that it would only supply electrical power to installations carried out by electrical contractors on the production of an E.C.T.I. Completion Certificate signed either by (a) an electrical contractor on RECI's register or (b) an inspector employed by RECI, in the case of installations completed by non-registered contractors.

8 The Plaintiffs do not object in principle to a system of inspection of electrical contractors nor to the adoption by the industry of a self-regulatory system of inspection. There are however specific features of the new regime (detailed hereunder) and to the manner in which it has been implemented to which strong objection is taken and which, the Plaintiffs say, infringed the 1991 Act.

9 I propose to continue to use the acronym "RECI". But it is a source of potential confusion as it has been used both to refer to the limited company known as the "Register of Electrical Contractors of Ireland Ltd" and the register of electrical contractors which that company maintains. I will use it to denote the company. The "Rules of RECI" are the rules which the company drew up dealing with its register and it is of importance to bear in mind that originally contractors who were enrolled on the register did not thereby become members of the company. The "RECI regime" is a...