Framus Ltd v CRH Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Herbert
• Judgment Date: 10 December 2002
• Neutral Citation: [2002] IEHC 113
• Docket Number: RECORD NO. 1996/10658P
• Court: High Court
• Date: 10 December 2002

FRAMUS LTD, AMANTISS ENTERPRISES LTD & WILBURY LTD v. CRH PLC, IRISH CEMENT LTD & ORS

BETWEEN

FRAMUS LIMITED

AND

AMANTISS ENTERPRISES LIMITED (IN VOLUNTARY LIQUIDATION)

AND

WILBURY LIMITED (IN VOLUNTARY LIQUIDATION)

PLAINTIFFS

AND

C.R.H., PLC

AND

IRISH CEMENT LIMITED,

AND

ROADSTONE PROVINCES LIMITED,

AND

ROADSTONE DUBLIN LIMITED,

AND

TRADBURN LIMITED,

AND

READYMIX PLC,

AND

KILSARAN CONCRETE PRODUCTS LIMITED,

AND

C.P.I., LIMITED

DEFENDANTS

[2002] IEHC 113

RECORD NO. 1996/10658P

THE HIGH COURT

Synopsis:

PRACTICE AND PROCEDURE

Security for costs

Competition law - Discovery - Litigation - Company law - Security for costs of discovery process - Whether plaintiff should give security for costs of discovery - Competition Act, 1991 - 1999 SI 43/1999 Rules of the Superior Courts (No. 2) (Discovery), 1999 (1996/10658 - Herbert J - 10/12/02) - [2003] 1 ILRM 462

Framus v CRH

PRACTICE AND PROCEDURE

Discovery

Competition law - Tort of conspiracy - Exemplary damages - Agreements - Co-ordinated decisions - Concerted practices - Collective dominance - Predatory pricing - Competition Act, 1991 (1996/10658P - Herbert J - 10/12/2002) - [2003] 1 ILRM 462

Framus Ltd. v C.R.H. Plc

Facts: The second named plaintiff commenced trading in June 1986 and ceased trading in March 1991. Its sole business related to the importation of cement powder and its only customer was the third named plaintiff due to the fact that allegedly the other cement powder users in the State decided en block not to purchase from it. The third named plaintiff traded from March 1988 to November 1990 in Galway City and the surrounding area and from November 1990 to March 1991 in the South West area of Dublin City and the proximate areas of adjoining counties. Its business was the production and sale of readymixed cement and mortar and the manufacture and sale of concrete blocks. The plaintiffs alleged that the defendants were guilty of the tort of conspiracy and involved in the formation of agreements, co-ordinated decisions, concerted practices and abuse of collective dominace. Furthermore the plaintiffs allege that the defendants were engaged in predatory pricing and made threats of economic discrimination to potential customers of the third named plaintiff. The second and third named plaintiffs alleged that the defendants acted in combination in a cartel or conspiracy to prevent them from entering the market or forced them out of the market for readymixed cement, mortar and concrete blocks by using collusive tendering, predatory price cutting and price manipulation through offers of rebates and discounts or a combination of some or all of these. In this action the plaintiffs sought discovery of documents relating to the alleged acts of the defendants as a means of saving costs at the hearing of this action.

Held by Herbert J in allowing elements of the relief sought:

1. That Order 31 Rule 12 as substituted by Statutory Instrument 233 of 1999, relating to discovery of documents applies to the conduct of proceedings under Section 6 of the Competition Act, 1991 as it applies in the case of any other tort or civil wrong.

2. That the allegation that other cement users decided en block not to purchase from the plaintiffs was of such a general nature and so devoid of any specific allegations of conspiracy or of anti-competitive behaviour on the part of the defendants or of any of them that to grant any form of discovery on foot of it would be wholly vexatious and oppressive and permit the plaintiffs to fish for a case.

3. That evidence of similar conduct might be relevant in some cases, for example to prove a system of fraud where a single act might otherwise appear innocuous. However such a case must be specifically pleaded and a good ground for believing that such evidence exists must be made out on affidavit. Discovery in such cases must be strictly limited in time and as to area and to very specific matters.

4. That in the present case the plaintiffs failed to establish the necessity for such widespread discovery. Evidence of general non-competitive dealings by the defendants would not afford any pertinent or sufficient proof of combinations or agreements directed at the plaintiffs or of overt actions committed pursuant to such alleged combinations or agreements resulting in damage to the plaintiffs.

5. That to direct discovery of communications between the defendants and a non-party to these proceedings would be to give third party discovery against this body, without having given that body an opportunity of being heard and where its trade secrets or confidential business affairs might be involved.

6. That in relation to the alleged anti competitive representations and threats, these are matters to be established by oral evidence or perhaps by interrogatories and are not matters appropriate for discovery of documents.

7. That in relation to the allegations of conspiracy and anti-competitive practices the plaintiffs were entitled to limited discovery despite that fact that some of those matters could have been proved at the trial by calling oral evidence. The plaintiffs may have encountered difficulties in the context of business relations generally and in particular in persuading persons in the construction and building services industry to give evidence.

8. That the fact that documents may contain confidential trade information is not in itself a reason to refuse discovery. Issues of privilege against self-incrimination or loss of confidentiality should be addressed on an application for inspection of documents.

9. That on a motion for discovery the court does not have power to determine the issue of statutory time limits and whether a claim is statute barred or to make any assumptions as to whether or not this plea will be successful. However it would be oppressive on the defendants to require them to furnish discovery without first affording them an opportunity of having this plea on the statute of limitations determined by way of a trial on a point of law. Accordingly the court should adjourn the making of an order on this part of the motion with liberty to every party to re-enter the same.

10. That the court is obliged to balance the requirement of affording the plaintiffs a sufficiently comprehensive discovery relevant to the issue of predatory pricing with avoiding an unduly wide discovery which would be oppressive to the defendants. Evidence of prices charged immediately prior to the date the third named plaintiff entered the market is relevant to the issues of price movements in the period immediately after that date.

Reporter: L. O'S.

Citations:

STATUTE OF LIMITATIONS ACT 1957

STATUTE OF LIMITATIONS (AMDT) ACT 1991

EC COMMISSION V CEMBUREAU 1995 4 CMLR 327

CIMENTERIES CBR & ORS V EC COMMISSION 2000 5 CMLR 204

COMPETITITON ACT 1991 S4

COMPETITION ACT 1991 S5

RSC O.31 r12(2)

RULES OF THE SUPERIOR COURTS (NO 2) (DISCOVERY) 1999 SI 233/1999

RSC 1905 O.31 r12

RSC 1963 O.31 r12(1)

RSC O.29

RSC O.58 r17

COMPANIES ACT 1963 S390

RSC O.99 r37(14)

RSC O.29 r1

FALLON V BORD PLEANALA 1992 2 IR 380

THALLE V SOARS & ORS 1957 IR 182

PERRY V STRATHAM 1928 IR 580

Mr. Justice Herbert

1 Amantiss Enterprises Limited (in voluntary liquidation) commenced trading in June 1986 and ceased trading in March 1991. Its sole business was the importation into the State of cement powder. Wilbury Limited (in voluntary liquidation) trading as National Concrete was its sole customer. It is pleaded that other users of cement powder in the State decided en-block not to trade with it. It traded from March 1988 to November 1990 in Galway city and the surrounding area and from November 1990 to March 1991 in the South Western area of Dublin city and county and in the proximate areas of the joining counties. It produced and sold ready mixed cement and mortar and manufactured and sold concrete blocks. After Wilbury Limited (in voluntary liquidation) ceased to trade in March 1991 Framus Limited started and carried on a similar business until it ceased trading on the 28^th February, 1994. By a number of written Agreements all dated the 28^th February, 1994 Irish Cement Limited, Roadstone Provinces Limited and Tradburn Limited acquired the assets.

2 A plenary summons was issued by Framus Limited, Amantiss Enterprises Limited (in voluntary liquidation) and Wilbury Limited (in voluntary liquidation) as co-Plaintiffs on the 4^th December, 1996. Appearances was entered on behalf of C.R.H. Plc, Irish Cement Limited, Roadstone Provinces Limited, Roadstone Dublin Limited, and Tradburn Limited (which I shall hereafter refer to as "the C.R.H. Companies), on the 2^nd January, 1997. An amended Statement of Claim was delivered on the 3^rd February, 1998.

3 In the amended Statement of Claim the Plaintiffs claim that the C.R.H. Companies and the other Defendants, Readymix Plc, Kilsaran Concrete Products Limited and C.P.I. Limited or some of them, entered into an agreement of series or agreements and additionally or alternatively conspired together to cause damage to the Plaintiffs by preventing them from entering; or by forcing them out of the market for the above mentioned products in the above mentioned areas by the use of anti-competitive practices and by the abuse of a dominant market position. In very brief summary, - the amended Statement of Claim is twenty two pages long, - it is alleged that:

4 Customers and potential customers of the second and third named Plaintiffs were dissuaded from trading or continuing to trade with them by oral threats of trade discrimination and oral offers of advantageous prices and conditions made and offered to them by officers and employees of the C.R.H. Companies.

5 The second and third named Plaintiffs were excluded from all major public and private construction contracts in their sphere of operation by collusive tendering, predatory price cutting and offers...