Goode Concrete v CRH Plc

JurisdictionIreland
JudgeMs. Justice Costello
Judgment Date19 February 2020
Neutral Citation[2020] IECA 56
CourtCourt of Appeal (Ireland)
Docket NumberRecord Numbers 2017/513 2017/515 2017/516
Date19 February 2020
BETWEEN/
GOODE CONCRETE
PLAINTIFF/APPELLANT
- AND -
CRH PLC, ROADSTONE WOOD LIMITED

AND

KILSARAN CONCRETE
DEFENDANTS/RESPONDENTS

[2020] IECA 56

Birmingham P.

Baker J.

Costello J.

Record Numbers 2017/513

2017/514

2017/515

2017/516

THE COURT OF APPEAL

Discovery – Breach of s. 4 of the Competition Act 2002 – Conspiracy – Appellant seeking to appeal against orders for discovery – Whether the trial judge correctly identified and applied the relevant principles governing discovery of documents

Facts: The appellant, Goode Concrete, alleged that the respondents, CRH PLC, Roadstone Wood Ltd and Kilsaran Concrete, had been guilty of breaches of s. 4 of the Competition Act 2002 and/or Article 101 of the Treaty on the Functioning of the European Union (TFEU), or in the alternative breaches of s. 5 of the Competition Act 2002 and/or Article 102 of the TFEU. It sought various declaratory and injunctive reliefs as well as damages for breaches of ss. 4 and 5 of the 2002 Act and damages for conspiracy, inducement to breach contract, interference with contract and other relief. On 31 October 2017, Barrett J in the High Court made four orders for discovery in these proceedings following a lengthy judgment delivered on 7 September 2017 ([2017] IEHC 534). The appellant appealed to the Court of Appeal against the orders for discovery made in the case.

Held by Costello J that the trial judge correctly identified and applied the relevant principles governing discovery of documents to the four applications before him. She held that there was no difference in the application of those principles to applications for discovery in proceedings involving allegations of anti-competitive behaviour by reason of the fact that the High Court is designated as a competition authority for the purposes of Article 5 of Council Regulation 1/2003. She held that the trial judge had jurisdiction to order that the discovered documents should be subject to a confidentiality ring, confined to the legal advisers and experts instructed on behalf of the appellant, to the exclusion of personnel of the appellant. She held that such a device does not prevent, or unduly hinder, a party from properly pursuing a case alleging anti-competitive conduct. She held that the information to be discovered was confidential, both to the respondents and their customers, and commercially sensitive. She held that disclosure of the information had the potential to cause damage and to seriously prejudice the respondents, whereas the appellant did not satisfactorily explain why it would be prejudiced in the preparation and presentation of its case if it was subject to the limitations required by the trial judge. She held that it was a proper exercise of his discretion to order that the discovery be handled subject to a confidentiality ring. She held that the trial judge was correct to refuse to order discovery against CRH/Roadstone in respect of Categories 2, 4, 7, 8 and 11, and against Kilsaran in respect of Categories 2, 4, 7, 8 and 10. In relation to Category 5 sought against all respondents, she held that she would not interfere with the exercise of his discretion to award a more limited category of discovery than that sought, save that she would not confine the category to the average variable costs of the respondents, but would extend it to their average total costs. In relation to Category 6 sought against all respondents, she held that she would not interfere with the trial judge’s decision to order that the information sought be provided by way of a schedule verified on affidavit in lieu of an extremely costly and time-consuming discovery of the underlying documentation. She noted that the appellant pleaded that the respondents were engaged in collusive practices and were selling ready-mix concrete at below cost by reference to the fact that the prices set out in the schedule of the statement of claim were below the appellant’s own average variable cost (AVC); thus, the way it presented its case brought its AVC into the proceedings. Therefore, she held that it was appropriate to order that it make discovery in terms of Category 4 of the application by CRH/Roadstone. She noted that the reason for the collapse of the business of the appellant was an issue in the proceedings and that the appellant had pleaded that the respondents’ alleged anti-competitive behaviour had eliminatory intent, and that they succeeded in their unlawful intent; it follows that the trial judge would have to determine the reasons for the closure of the appellant’s business. She held that it was, therefore, necessary to order that the appellant make discovery to the respondents in terms of CRH/Roadstone’s Category 12, and Kilsaran’s Category 5

Costello J held that she would dismiss the appeals, subject to varying the order of the trial judge in relation to Category 5 of the discovery to be made by the respondents to the appellant. She held that she would hear the parties in relation to costs.

Appeal dismissed.

JUDGMENT of Ms. Justice Costello delivered on the 19th day of February 2020
1

On 31 October 2017, Barrett J. in the High Court made four orders for discovery in these proceedings following a lengthy judgment delivered on 7 September 2017 ( [2017] IEHC 534). The appellant alleges that the respondent has been guilty of breaches of s.4 of the Competition Act 2002 and/or Article 101 of the Treaty on the Functioning of the European Union (“TFEU”), or in the alternative breaches of s.5 of the Competition Act 2002 and/or Article 102 of the TFEU. It seeks various declaratory and injunctive reliefs as well as damages for breaches of sections 4 and 5 of the Act of 2002 and damages for conspiracy, inducement to breach contract, interference with contract and other relief. This judgment is concerned with the appeals against the orders for discovery made in the case.

Relevant legal principles

Not a rehearing

2

These appeals do not proceed by way of a rehearing. The onus is on the party who appeals an order for discovery to show where the trial judge erred in the identification, or application, of the applicable legal principles, or in the exercise of his or her discretion in applying them to the discovery sought.

3

Furthermore, when the litigation is under case management by a judge with an intimate knowledge of the issues involved, as in these proceedings where the trial judge was, and is, the judge in charge of the Competition Law List of the High Court, decisions as to discovery should involve a significant measure of appreciation by any appellate court reviewing a decision at first instance. See the decision of Clarke C.J. in Tobin v. Minister for Defence, Ireland and the Attorney General [2019] IESC 57, at para. 7.27.

Threshold for discovery

4

The categories sought by a requesting party must be shown to be both relevant and necessary to issues in the proceedings. Relevance is determined by reference to the pleadings: Hannon v. Commissioners of Public Works [2001] IEHC 59; Tobin v. Minister for Defence [2018] IECA 230. However, a requesting party cannot rely on a mere allegation or bare assertions to establish relevance and thereby justify a broad request for discovery. In Carlow/Kilkenny Radio Limited v. Broadcasting Commission [2003] 3 I.R. 528, Geoghegan J. in the Supreme Court held at p. 534:-

“It is not open to a plaintiff in a civil action, or to an application for judicial review, to make a series of bare unsubstantiated assertions and then call for discovery of documents by the other side in the hope that there may exist documents which will give colour to the assertion that the applicant, or the plaintiff, is otherwise unable to begin to substantiate. This is the proscribed activity usually described as ‘fishing’: the lowering of a line into the other side's waters in the hope that the net may enclose a multitude of fishes, the existence or significance of which the applicant has no rational reason to suspect.”

5

In Framus Limited v. CRH Plc [2004] 2 I.R. 20, Murray J. held that “An applicant is not entitled to discovery based on mere speculation or on the basis of what has been traditionally characterised as a fishing expedition.”

6

In O'Brien v. Red Flag Consulting Limited [2017] IECA 258, Ryan P. noted that while it was legitimate to seek discovery in support of a case, it was not legitimate to seek discovery “in order to make a case which otherwise did not exist” or by reference to a case which might potentially be made out if extensive discovery was ordered against the defendant. At para. 21 of the judgment he summarised various principles in relation to discovery and at point 6 he held:-

“6. In balancing procedural justice the court may require a party whose application is based on a mere assertion to satisfy a threshold criterion of establishing a factual basis for the claim. [ Hartside Ltd v. Heineken Ireland Ltd, para. 5.9.]”

The party requesting discovery must meet the “low threshold separating a genuine case perhaps lacking in evidence from one which was speculative and unsupported by facts.”

7

The reference to Hartside Ltd v. Heineken Ireland Ltd [2010] IEHC 3 was to a decision by Clarke J. where he held at para 5.9:-

“… a party may be required to pass a limited threshold of being able to specify a legitimate basis for their case before being given access to their opponent's relevant documentation. The need for such restriction seems to me to stem from the undoubted undesirability of allowing a mere allegation to give rise to an entitlement to access highly confidential information.”

8

Usually if documents are found to be relevant, discovery will be ordered (see Framus Ltd.). Where a party opposes discovery on the ground that it is not necessary for disposing fairly of the cause or matter, or for saving costs, the onus shifts to the requested party to put forward reasons as to why...

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