Goode Concrete v CRH Plc Roadstone Wood Ltd and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Cooke
• Judgment Date: 21 March 2012
• Neutral Citation: [2012] IEHC 116
• Court: High Court
• Date: 21 March 2012

[2012] IEHC 116

THE HIGH COURT

[No. 10685 P./2010]

Goode Concrete v CRH plc Roadstone Wood Ltd & Ors

COMPETITION

MR JUSTICE COOKE

APPROVED TEXT

BETWEEN

GOODE CONCRETE

PLAINTIFF

AND

CRH plc, ROADSTONE WOOD LIMITED AND KILSARAN CONCRETE

DEFENDANTS

COMPETITION ACT 2002 S4

COMPETITION ACT 2002 S5

TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION ART 101

TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION ART 102

COMPANIES ACT 1963 S390

RSC O.29

COMPANIES ACT 1963 S2

COMPANIES ACT 1963 S5(2)

COMPANIES ACT 1963 S20

COMPANIES ACT 1983 S52

COMPANIES ACT 1983 S53

USK DISTRICT RESIDENTS ASSOCIATION v EPA 2006 1 ILRM 363

CARLISLE TRUST LTD v DUBLIN CORPORATION 1965 IR 456

COURTS ACT 1971

ILLEGITIMATE CHILDREN (AFFILIATION ORDERS) ACT 1930

O'B v W 1982 IRLM 234

POWER SUPERMARKETS LTD v CRUMLIN INVESTMENTS LTD UNREP COSTELLO 22.6.81 1981/11/2038

BRAY TRAVEL LTD & ANOR, IN RE UNREP SUPREME 13.7.1981

RSC O.29 r2

RSC O.29 r3

RSC O.29 r4

PROETTA v NEIL 1996 1 IR 100

PITT v BOLGER & BARRY 1996 2 ILRM 68

HARLEQUIN PROPERTY (SVG) LTD & HARLEQUIN HOTELS & RESOURCES LTD v O'HALLORAN UNREP CLARKE 19.1.2012 2012 IEHC 13

COMMON LAW PROCEDURE AMENDMENT ACT (IRELAND) ACT 1853 S52

SUPREME COURT OF JUDICATURE ACT (IRELAND) 1877 ORDER 55

RULES OF THE SUPREME COURT (IRELAND) 1891 ORDER 29

COURTS OF JUSTICE ACT 1924 S36

RULES OF THE SUPERIOR COURT 1926 O.12

KENEALY v KEANE 1901 2 IR 640

COOK v WHELLOCK 1890 24 QBD 658

RSC O.29 r5

COWELL v TAYLOR 1885 31 CH D 34

SYKES v SYKES LR 4 CP 645

AG (CAHILL) v ALLMAN & ORS 1906 1 IR 473

DANIELS CHANCERY PRACTICE 7ED

GREENER v E.KAHN & CO 1906 KB 374

BLAIR v CRAWFORD & MILLIKIN 1907 41 ILTR 5

SEMLER v MURPHY 1967 1 CH 183

RSC O.58 r17

FALLON v AN BORD PLEANALA 1992 2 IR 380

RSC O.29 r1

CONSTITUTION ART 40.3

MCCAULEY v MIN FOR POSTS & TELEPGRAPHS 1966 IR 345

O v M 1977 1 IR 33

DOME TELECOM v EIRCOM 2008 2 IR 726

BARRY v BUCKLEY 1981 IR 306

KENNY v BORD PLEANALA UNREP COOKE 23.7.2010 2010/25/6267 2010 IEHC 321

COMPETITION ACT 2002

COLLINS v DOYLE 1982 ILRM 495

PRACTICE & PROCEDURE

Security for costs

Competition law - Unlimited company - Incorporated in state - Purposive approach - Corporate veil - Right of access to courts to vindicate and defend legal rights - Whether jurisdiction to order security for costs - Whether inherent jurisdiction - Whether s 390 applied to unlimited company using purposive approach - Whether s 390 ambiguous or unclear - Whether O 29 applied to company ordinarily resident within jurisdiction - Whether defence to claim - Whether inability to pay caused by wrongdoing of plaintiffs - Whether special circumstances - Usk District Residents Association v EPA [2006] 1 ILRM 363; Carlisle Trust Ltd v Dublin Corporation [1965] IR 465; Power Supermarkets Ltd v Crumlin Investments Ltd (Unrep, Costello J, 22/6/1981); Re Bray Travel Ltd (Unrep, SC, 13/7/1981); Poroetta v Neil [1996] 1 IR 100; Pitt v Bolger [1996] 2 ILRM 68; Harlequin Property (SVG) Ltd v O'Halloran [2012] IEHC 13, (Unrep, Clarke J, 19/1/2012); Stad v Williams 5 CB 528; Kenealy v Keane [1901] 2 IR 640; Cook v Whellock (1890) 24 QBD 658; Cowell v Taylor [1885] 31 Ch D 34; Sykes v Sykes (1869) LR 4 CP 645; AG (Cahill) v Allman [1906] 1 IR 473; Greener v E Kahn (1906) KB 374; Blair v Crawford [1907] 41 ILTR 5; Semler v Murphy [1967] 1 Ch 183; George Bell Ltd v Nethercott [1988] NI 299; Fallon v An Bord Pleanála [1992] 2 IR 380; McAuley v Minister for Posts and Telegraphs [1966] IR 345; Re Illegitimate Children (Affiliation Orders) Act 1930; Dome Telecom Telecom Ltd v Eircom [2007] IEHC 59, [2008] 2 IR 726; Barry v Buckley [1981] IR 306; Kenny v An Bord Pleanála [2010] IEHC 321, (Unrep, HC, Cooke J, 23/7/2010) and Collins v Doyle [1982] ILRM 495 considered - Competition Act 2002 (No 14), ss 4 and 5 - Companies Act 1963 (No 33), ss 2, 5, 20 and 390 - Companies (Amendment) Act 1983 (No 13), ss 52 and 53 - Courts Act 1971 (No 36) - Common Law Procedure Amendment (Ireland) Act 1853 (16 & 17 Vict), s 52 - Supreme Court of Judicature Act (Ireland) 1877 (40 & 41 Vict) - Courts of Judicature Act 1924 (No 10), s 36 - Rules of the Superior Courts 1986 (SI 15/1986), O 29 - Rules of the Supreme Court (Ireland) 1891 - Supreme Court (Ireland) Rules 1905 - Treaty on the Functioning of the European Union, arts 101 and 102 - Constitution of Ireland 1937, Art 40.3 - Limited security granted (2010/10685P - Cooke J - 21/3/2012) [2012] IEHC 116

Goode Concrete v CRH plc

1 1. By a plenary summons issued on the 19 ^th November, 2010, the plaintiff commenced this action seeking a large number of declaratory orders together with damages (including exemplary damages), based on claims of infringement by the defendants of ss. 4 and 5 of the Competition Act 2002 (as amended) and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). A statement of claim was delivered on the 5 ^th April, 2011.

2 2. Those claims of infringement of those provisions are made in respect of agreements and conduct alleged to have been made and taken place in the State in the markets for cement and for readymix concrete in the Dublin area. The plaintiff and the defendant companies are said to have been engaged in these markets at the times alleged to be relevant, that is, during the years 2007 to 2010. Further ancillary causes of action including conspiracy are also advanced in the statement of claim.

3 3. The plaintiff is an unlimited company incorporated in the State and claims that at the relevant periods it was engaged in the manufacture, sale and distribution of readymix concrete, concrete blocks, sand and gravel and quarrying products.

4 4. The first named defendant ("CRH") is a public company incorporated in the State, and the holding company of a large number of subsidiaries operating in the State, elsewhere in the European Union and in other countries, both in the above relevant markets and in other related markets. It is alleged by the plaintiff to be in a dominant position in the State as the dominant supplier of cement to the construction sector. The second named defendant ("Roadstone") is a wholly owned subsidiary of CRH.

5 5. The third defendant ("Kilsaran") is an unlimited company incorporated in the State and is said to be engaged in the production and supply of concrete and concrete products throughout the State and particularly in the Dublin area.

6 6. Although the plaintiff is described in the pleadings as carrying on an "independent family run business" the shares of the company are in fact held by Cliodna Limited, a limited company incorporated in Jersey in the Channel Islands, and by Magic Potion, an unlimited company also incorporated in Jersey, the share capital of which is held by Cliodna Limited. The shares of Cliodna Limited are apparently held by two further limited companies, Clarendon Nominees Limited and Portman Nominees Limited, also incorporated in Jersey. Thus, the ultimate beneficial owners of the plaintiff's business have put in place an elaborate off-shore corporate structure, the purpose of which would appear to be to limit accounting disclosure obligations in this jurisdiction, while preserving for themselves the protection of limited liability for their trading activities.

7 7. The plaintiff company ceased trading on the 18 ^th February, 2011. The Court has been informed that a receiver was subsequently appointed to the assets and undertaking of the company. It is not disputed that it is insolvent, but the claims made in the proceedings are based upon the allegation that it was forced out of business by the illegal activities of the defendants. It is in these circumstances that by notices of motion dated the 18 ^th January, 2011 and 2 ^nd February, 2011 respectively, CRH and Roadstone on the one part, and Kilsaran on the other, brought the present applications for orders directing the plaintiff to provide security for their costs in the proceedings under s. 390 of the Companies Act 1963, or in the alternative, under Order 29 of the Rules of the Superior Courts, or in the further alternative, under the inherent jurisdiction of the Court.

8 8. Whilst acknowledging that the plaintiff is no longer trading, and would be unable to meet the likely costs of a full plenary action in the event of the claims failing, the applications for security for costs are met by a straightforward assertion by the plaintiff namely, that the Court has no jurisdiction to make the orders sought. This proposition can be bluntly stated. First s. 390 applies only to "limited companies" and the plaintiff is an unlimited company. Second, Order 29 applies only to parties ordinarily resident out of the jurisdiction and the plaintiff is incorporated, registered and resident in this jurisdiction. Third, the defendants have not demonstrated the existence of any inherent jurisdiction of the High Court for this purpose.

Section 390 of the Companies Act 1963

9 9. It is appropriate to deal first therefore with the submissions made in relation to s. 390 of the Companies Act 1963 in the particular context of this action. That provision provides:-

"Where a limited company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs and may stay all proceedings until the security is given."

10 10. The plaintiff is an unlimited company. The word "company" is defined in s. 2 of the Act of 1963 as meaning "a company formed and registered under this Act, or an existing company" while the terms "company limited by guarantee" and "company limited by shares" have the distinct meanings...