Rye Investments Ltd v Competition Authority

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 26 October 2012
• Neutral Citation: [2012] IESC 52
• Court: Supreme Court
• Date: 26 October 2012

[2012] IESC 52

THE SUPREME COURT

Clarke J.

MacMenamin J.

Hanna J.

[Appeal No: 139/2009 & No: 185/2009]

Rye Investments Ltd v Competition Authority

Between/

Rye Investments Limited

Appellant/Respondent

and

The Competition Authority

Respondent/Appellant

COMPETITION ACT 2002 S22(3)

COMPETITION ACT 2002 S24

RYE INVESTMENTS LTD v COMPETITION AUTHORITY UNREP COOKE 19.3.2009 2009/50/12557 2009 IEHC 140

COMPETITION ACT 2002 S18(1)

RSC O.58 r8

FITZGERALD v KENNY 1994 2 IR 383

OKUNADE v MIN FOR JUSTICE UNREP 2013 1 ILRM 1

EVIDENCE

Admissibility

New evidence - Appeal to Supreme Court - Application to admit new evidence of matters arising post High Court hearing - Whether special leave of court required to admit such evidence - Whether discretion of court to exclude such evidence - Grounds to exclude such evidence - Appropriate time to determine admissibility of such evidence - Whether evidence relevant - Whether possible to determine issue - Fitzgerald v Kenny [1994] 2 IR 383 and Okunade v Minister for Justice [2012] IESC 49, [2012] 3 IR 152 applied - Rye Investments Ltd v Competition Authority [2009] IEHC 140, (Unrep, Cooke J, 19/3/2009) considered - Rules of the Superior Courts 1986 (SI 15/1986), O 58 - Competition Act 2002 (No 14), ss 18, 22 and 24 - Direction to file further statement (139/2009 and 185/2009 - SC - 26/10/2012) [2012] IESC 52

Rye Investments Ltd v Competition Authority

Facts: The Competition Authority had refused to sanction a merger between the appellant (Rye) and two other companies. Ultimately Rye was successful in its appeal to the High Court [Rye Investments Ltd v. The Competition Authority [2009] IEHC 140]. The Competition Authority sought to appeal the decision to the Supreme Court. Rye sought to adduce evidence for the appeal hearing relating to the newly merged entity and measures it had taken to streamline the combined business (which Rye submitted would show that the appeal proceedings were now moot). On behalf of Rye it was contended that the Competition Authority had deliberately allowed the merger to go through without seeking a stay on the merger and in doing so had allowed the issue to become moot. The Competition Authority submitted that as a public body it could not have given the type of undertaking as to damages which might well have been required. Furthermore Rye must be said to have taken its chances by going ahead with the merger when it ought to have known that an appeal was likely and a possible reversal of the High Court decision. The Competition Authority also argued that evidence sought to be introduced could not be relevant to the appeal and should not, therefore, be admitted irrespective of whether leave was required. It was also contended that the appeal could not become a moot simply because a merger had taken place. To allow such an argument to stand would deprive the Competition Authority of the opportunity to bring an appeal.

Held by the Supreme Court (Clarke J delivering judgment) in making the following order: Unless there was some realistic basis on which it could be argued that the evidence in question could be relevant to the issues which the court had to decide on appeal, then the evidence should be excluded. The whole point of case management was to ensure that the issues which were to be considered at the appeal would be as refined as was possible in order to afford both sides a fair hearing. It would be premature to seek to determine, on a motion, that there were no circumstances in which the level of integration of two corporate entities that have merged might not be relevant to a mootness issue. If additional evidence of integration was to be permitted, then fair procedures would require that the Competition Authority be allowed to investigate the accuracy of the evidence tendered. The court was prepared to allow Rye, subject to certain limitations, to put before the court a statement setting out briefly the contentions on the integration question which would also deal with issues material to the mootness question. The Competition Authority would be allowed to file a similar statement relating to these issues. On that basis the court would at least have a broad overview of the kind of factual issues which might arise in the event that it became necessary to reach relevant findings of fact.

1. Introduction

2 1.1 This application concerns a question as to whether new evidence should be admitted in these appeals. The proceedings generally involve a decision made by therespondent/appellant ("the Competition Authority") to refuse to sanction (in accordance with s. 22(3) of the Competition Act 2002 ("the 2002 Act")) aspects of a proposed merger between the appellant ("Rye"), a wholly owned member of Kerry Group plc., and two companies being Breeo Foods Ltd. and Breeo Brands Ltd, both of which were ultimately owned by the Dairygold Co-operative Society and its shareholders.

3 1.2 The relevant legislation, being s. 24 of the Act of 2002, allows for an appeal to the High Court against such refusal. This Rye did. The form of appeal to the High Court is limited by statute and it will be necessary to make some brief reference to the parameters of such appeal in due course.

4 1.3 Rye was successful in its appeal which was determined by Cooke J. on the 19 ^th March 2009 (see Rye Investments Ltd v. The Competition Authority [2009] IEHC 140). The Competition Authority has appealed to this court against that decision of the High Court. It will be necessary to say a little more about the procedural history of the process before the Competition Authority, the appeal before the High Court, and the appeal to this court in due course. However, this case was one of those selected by the Chief Justice for the purposes of micro-management. In the course of that micro-management procedure, it emerged that Rye wished to place before the court evidence as to what had happened subsequent to the decision of the High Court. The context in which that evidence is said by Rye to be relevant is that, as already indicated, the High Court allowed the appeal against the Competition Authority's decision so that, as a result of the High Court order, the relevant merger was allowed to go ahead. No stay or injunction was sought or granted to prevent that happening. It is common case that the merger has gone ahead and it is at least, for reasons which Iwill explore in due course, accepted to a point on behalf of the Competition Authority that there would be some consequences for Rye in attempting to, as it were, "unscramble the egg". Against that background Rye wishes to place before the court evidence of what has happened since the decision of the High Court. The formal merger has, of course, occurred, and this is accepted by the Competition Authority. However, Rye wishes to place before the court evidence of the measures adopted by the merged entity to streamline the combined business. It is said on behalf of Rye that such evidence is potentially relevant to its contention that these proceedings are now moot by virtue of the fact that the merger has gone ahead. The Competition Authority resists Rye's application principally on the grounds that it said that the evidence in question is not relevant to this appeal, but also on other grounds.

5 1.4 In order to more fully understand the precise issues which have arisen it is necessary to say a little more about the procedural history to which I now turn.

2. Procedural History

2 2.1 The procedural history is relevant principally because it forms the backdrop to the suggestion and counter-suggestion made respectively by the parties as to why it is that this court is now faced with a statutory appeal against a decision of the High Court to allow a merger in circumstances where the merger has in fact already gone ahead.

3 2.2 Under s.18(1) of the 2002 Act, it is necessary that a merger, such as that with which this appeal is concerned, be notified to the Competition Authority. The relevant notification in this case took place on the 20 ^th March, 2008. The merger itself had a so-called "drop dead" clause, whereby if the merger did not go ahead by March, 2009 the agreement would be at an end and a substantial deposit (€20 million)would be forfeited. The Competition Authority determined the merger application on the 28 ^th August, 2008. Thereafter, Rye applied to the High Court by an initiating notice of motion on the 26 ^th September, 2008, seeking a declaration annulling the determination of the Competition Authority. Given the urgency of the matter (having regard to the "drop dead" date), Cooke J. gave the case a highly expedited hearing and gave his judgment on the 19 ^th March, 2009, with his order being perfected the following day, on the 20 ^th March. Some six days later, (on the 26 ^th March, 2009) the formal arrangements for the merger were put in place, that being the last day for completion of the merger on foot of a negotiated brief extension of the "drop dead" date.

4 2.3 Thereafter, an appeal was brought to this court. It is said on behalf of the Competition Authority that, while the relevant appeal post-dated the actual completion of the merger arrangements, nonetheless it would have been obvious to Rye at the time when the merger was completed that an appeal was likely.

5 2.4 No application in the nature of a stay or injunction was brought by the Competition Authority. It is said on behalf of the Competition Authority that, in the light of the form of order made by Cooke J., a stay might not have been appropriate and, thus, that the only form of restraint that could have been imposed would have been by way of injunction. In those circumstances, it is said that the Competition Authority, as a public body, could not have given the type of undertaking as to damages...