Framus Ltd v CRH Plc

• Jurisdiction: Ireland
• Judge: Murray, J.
• Judgment Date: 22 April 2004
• Neutral Citation: [2004] IESC 25
• Court: Supreme Court
• Docket Number: [S.C. No. 412 of 2002]
• Date: 22 April 2004

FRAMUS LTD & ORS v. CRH PLC & ORS

FRAMUS LIMITED, AMANTISS ENTERPRISES LIMITED (IN VOLUNTARY LIQUIDATION) AND WILBURY LIMITED (IN VOLUNTARY LIQUIDATION)

Plaintiffs/Appellants

And

CRH PLC, IRISH CEMENT LIMITED, ROADSTONE PROVINCES LIMITED, ROADSTONE DUBLIN LIMITED, TRADBURN LIMITED, READYMIX PLC., KILSARAN CONCRETE PRODUCTS LIMITED AND CPI LIMITED

Defendants/Respondents

[2004] IESC 25

Murray, J.

McGuinness, J.

Geoghegan, J.

Record No. 412/02

THE SUPREME COURT

Synopsis:

- [2004] 2 IR 20 - [2004] 2 ILRM 439

The plaintiffs appealed the order for discovery granted by the High Court against the defendants. The plaintiffs contended that the High Court should have made more extensive orders. The plaintiffs also appealed from the separate order of the High Court requiring them to pay a sum as security for costs of the discovery which the defendants were ordered to make.

Held by the Supreme Court (Murray, McGuinness and Geoghegan JJ) in dismissing the plaintiffs' appeal as regards the order for discovery that the fundamental principles governing the making of the order were set out in O.31, r.12 and having regard to those principles the plaintiffs had been granted extensive discovery. As regards the plaintiffs' appeal on the question of the amount of the security for costs, the rules conferred a wide discretion. In order to do justice between the parties, the plaintiffs should be required to pay 30% of the estimated costs.

Reporter: R.W.

Notice: The page breaks of this judgment may not correspond with the hard copy. These will be inserted later.

Citations:

COMPETITION ACT 1991 S4

TREATY OF ROME ART 81

TREATY OF ROME ART 82

COMPETITION ACT 1991 S5

TREATY OF ROME ART 85

RSC O.31 r12

RSC (NO 2) (DISCOVERY) 1999 SI 233/1999 O.31 r12(1)

RSC (NO 2) (DISCOVERY) 1999 SI 233/1999 O.31 r12(2)

RSC (NO 2) (DISCOVERY) 1999 SI 233/1999 O.31 r12(3)

SWORDS V WESTERN PROTEINS LTD 2001 1 IR 324

BURKE V DPP 2001 IR 760

TAYLOR V CLONMEL HEALTHCARE LTD 2004 1 IR 169 2004 2 ILRM 133

COMPAGNIE FINANCIERE ET COMMERCIALE DU PACIFIQUE V PERUVIAN GUANO CO 1882 11 QBD 55

STERLING-WINTHROP GROUP LTD V FARBENFABRIKEN BAYER 1967 IR 97

AQUATECHNOLOGIE V NATIONAL STANDARDS AUTHORITY OF IRELAND UNREP SUPREME 10.7.2000 2000/1/209

HANNON V CMRS OF PUBLIC WORKS UNREP MCCRACKEN 4.4.2001 2001/11/3168

RSC (NO 2) (DISCOVERY) 1999 SI 233/1999 O.31 r12(1)(A)

COOPER FLYNN V RTE 2000 3 IR 344 2001 1 ILRM 208 2000/4/1394

RYAN AIR V AER RIANTA CPT UNREP LAVAN 25.7.2002 2002/24/6210

RYAN AIR LTD V AER RIANTA CPT 2003 2 IR 143

SMURFIT PARIBAS BANK LTD V AIB EXPORT FINANCE LTD 1990 1 IR 473 1990 ILRM 588

TAYLOR V ANDERTON 1995 1 WLR 447

BROOKS THOMAS LTD V IMPAC LTD 1999 1 ILRM 171

IRISH NATIONWID BUILDING SOCIETY V CHARLTON UNREP SUPREME 5.3.1997 1997/9/3049

MURPHY V DONOHOE 1996 1 IR 123

HALSBURYS LAWS OF ENGLAND 4ED V13 PARA 38

VAN SCHIJNDEL & VAN VEEN V STICHTING PENSIOENFONDS 1995 1 ECR 4705

COMPANIES ACT 1963 S390

RSC O. 99 r37(13)

JACK O'TOOLE LTD V MACEOIN KELLY ASSOCIATES 1986 IR 277

THALLE V SOARES 1957 IR 182

LISMORE HOMES LTD (IN RECEIVERSHIP) V BANK OF IRELAND FINANCE LTD 1992 2 IR 57

RSC O.29

COMPANIES ACT 1908 S278

SEE CO LTD V PUBLIC LIGHTING SERVICES 1987 ILRM 255

PERRY V STRATHAM 1928 IR 580

FANNON V AN BORD PLEANALA 1992 2 IR 380

1 Murray, J. delivered on the 22nd day of April, 2004.

2 The plaintiffs, who are the appellants in these proceedings, appeal against the terms of an order for discovery granted by the High Court requiring that the defendants make discovery of an extensive range of documents for the purposes of the litigation between the plaintiffs and the defendants. The nature, or extent, of the documents to be discovered varied in respect of the various defendants, but the broad thrust of the appellants appeal is that the learned High Court judge should. have made more extensive orders for discovery and that he was wrong in law in limiting the documents to be discovered to those specified in his order.

3 The plaintiffs also appeal from the separate judgment and order of the High Court requiring them to pay €77,000 as security for costs to the first five named defendants in respect of the discovery which those defendants 'were ordered to make in favour of the plaintiffs. This appeal is considered after I have addressed the issues raised in the appeal concerning the High Court order for discovery.

Background

4 The first named plaintiff commenced business in March, 1991 and was involved in the importation of cement and the manufacture and sale of concrete products including ready-mix concrete. It ceased trading in February, 1994.

5 The second named plaintiff commenced business in 1986 and was involved in the importation and sale of cement. Its sole supplier was Lagan Cement Ltd. It ceased trading in March, 1991 and went into creditors' liquidation on 1 ^st April, 1994.

6 The third named plaintiff commenced business in 1988 and was engaged in the manufacture of concrete products, in particular ready-mix concrete and concrete blocks. It ceased trading in March, 1991

7 The first named defendant, CRH Plc, is the holding company of the second, third, fourth and fifth named defendants. The plaintiffs allege that the second named defendant, Irish Cement Limited, is the sole or principal supplier of cement to each of the other defendants. The plaintiffs claim that the third named defendant, Roadstone Provinces Limited, is engaged in the production and supply of aggregates, concrete products and the production, delivery and laying of bituminous materials in Ireland, in particular the market outside Dublin. The principal activity of the fourth named defendant, Roadstone Dublin Limited, is alleged by the plaintiffs to be the production and supply of aggregates, concrete products and the production, delivery and laying of the bituminous materials in the Dublin market. It is further alleged by the plaintiffs that the fifth named defendant, Tradburn Limited, is what they described as a vehicle used by the first named defendant to enter into agreements with the plaintiffs, restricting them from continuing or recommencing trade in areas competing with the defendants. The sixth named defendant, Readymix PLC, is engaged principally in the production and delivery of sand, stone and gravel and the manufacture and delivery of ready-mix concrete, ready-mix mortar, concrete blocks, pipes and pavers, as well as bituminous material. It is a subsidiary of a publicaly quoted company registered in England and Wales. The seventh named defendant, Kilsaran Concrete Products Limited, is alleged by the plaintiffs to be engaged in the manufacture and sale of concrete products throughout Ireland, but in particular in the Dublin market. It also engages in the production, delivery and laying of bituminous materials and in the supply of aggregates. Finally, the eighth named defendant, CPI Limited, is a subsidiary of a publicly quoted company and is principally engaged in the manufacture and supply of concrete blocks, ready-mix concrete and concrete mortar. It is also engaged in the supply of aggregates for the concrete manufacturing industry.

8 The essential claim of the plaintiffs is damages for losses sustained by them arising from unlawful and anti-competitive practices engaged in by the defendants in the markets for cement and related products in the State. It is alleged that the defendants had been party to agreements, decisions and/or concerted practices between some or all of them which had as their object or effect the distortion of competition in the market for specified cement products in particular geographic markets within the State, in breach of s.4 of the Competition Act, 1991 and/or article 81 of the Treaty establishing the European Economic Community.The first five named defendants, have been conveniently referred to as the CRH defendants and it is alleged that those defendants, with other defendants, have a dominant position in the relevant markets, which they abused contrary to article 82 of the Treaty and s.5 of the Act of 1991. It is alleged that the agreements or decisions or concerted practices of the defendants were ones which concerned the fixing of selling prices and other trading conditions, the control of production, market share and sources of supply for the goods in question. The plaintiffs also claim that a number of agreements entered into by them and certain of the CRH defendants in February, 1994 contain certain non-compete conditions in contravention of article 81 of the Treaty and/or s.4 of the Act of 1991. It is also alleged that the defendants, all or some of them, unlawfully conspired to injure the plaintiffs in their trading operations. Exemplary damages are also claimed.

The product markets

9 The product markets are, first of all, alleged to be the cement market, in respect of which the plaintiffs also assert that cement is an essential constituent of concrete products and that therefore, the activities of those in the cement market have. a very significant impact on "downstream concrete product markets", which are also the subject of these proceedings. The second product market referred to by the plaintiffs in their statement of claim is the aggregates market. Aggregates are said to be pieces of crushed stone or gravel used in the making of concrete, tarmac and asphalt used in a variety of construction activities. It is claimed that the availability of a good reliable supply of aggregates is essential to any ready-mix concrete, concrete products or black-top producer and to the construction market in general. Thus the supply of aggregates has a very significant impact for other concrete products.

10 The plaintiffs claim is next concerned with the ready-mix concrete market. Ready-mix concrete is a concrete mixed to a fresh condition, whether in a central mixer or truck...