D. P. P. -v- Duffy & Anor, [2009] IEHC 208 (2009)

Docket Number:CC 0034/2008
Party Name:D. P. P., Duffy & Anor
Judge:McKechnie J.
 
FREE EXCERPT

THE CENTRAL CRIMINAL COURTC.C. 0034/2008

BETWEEN

THE DIRECTOR OF PUBLIC PROSECUTIONSPROSECUTOR AND

PATRICK DUFFY AND DUFFY MOTORS (NEWBRIDGE) LIMITEDDEFENDANTS

JUDGMENT of Mr. Justice William M. McKechnie delivered on the 23rd March, 2009

The Charges:

1. Arising out of an investigation conducted by the Competition Authority into the activities of an association describing itself as the "Citroen Dealers Association", Duffy Motors (Newbridge) Limited ("Duffy Motors") of Naas Road, Newbridge, Co.Kildare was charged with a number of offences including those listed at Counts 5 and 6 of Bill No. CC0034/2008. These charges were in the following terms:-

* "Count No. 5

Statement of Offence

Entering into an agreement which had as its object the prevention, restriction or distortion of competition contrary to s. 4(1) of the Competition Act 1991, and s. 2 of the Competition (Amendment) Act 1996.

Particulars of Offence

Duffy Motors (Newbridge) Limited, trading as P.G. Duffy & Sons, between the 24th June, 1997, and the 18th June, 2002, both dates inclusive, within the province of Leinster within the State, being an undertaking within the meaning of s. 3 of the Competition Act 1991, did enter into an agreement with other undertakings, also within the meaning of s. 3 of the Competition Act 1991, which had as its object the prevention, restriction or distortion of competition in the trade of motor vehicles in the province of Leinster by directly or indirectly fixing the selling price of Citroen motor vehicles." (emphasis added)

* "Count No. 6

Statement of Offence Implementing an agreement which had as its object the prevention, restriction or distortion of competition contrary to s. 4(1) of the Competition Act 1991, and s. 2 of the Competition (Amendment) Act 1996.

Particulars of OffenceDuffy Motors (Newbridge) Limited, trading as P.G. Duffy & Sons, between the 24th June, 1997, and the 18th June, 2002, both dates inclusive, within the province of Leinster within the State, being an undertaking within the meaning of s. 3 of the Competition Act 1991, did implement an agreement with other undertakings, also within the meaning of s. 3 of the Competition Act 1991, which had as its object the prevention, restriction or distortion of competition in the trade of motor vehicles in the province of Leinster by directly or indirectly fixing the selling price of Citroen motor vehicles." (Emphasis added)

2. As part of the same investigation Mr. Patrick Duffy, who is the joint owner and a co-director of Duffy Motors, was also charged with a number of offences including those outlined at Count No's 1 and 2 on the same indictment. These counts read as follows:-

* "Count No.1Statement of Offence

Being a director of an undertaking which entered into an agreement which has as its object the prevention, restriction, or distortion of competition contrary to s. 4(1) of the Competition Act 1991, and ss. 2 and 3(4)(a) of the Competition (Amendment) Act 1996.

Particulars of Offence

Patrick Duffy between the 24th June, 1997, and the 18th June, 2002, both dates inclusive, within the province of Leinster within the State, were a Director of Duffy Motors (Newbridge) Limited, trading as P.G. Duffy & Sons, an undertaking within the meaning of s. 3 of the Competition Act 1991, which said company committed an offence namely entering into an agreement with other undertakings, also within the meaning of s. 3 of the Competition Act 1991, which had as its object the prevention, restriction or distortion of competition in the trade of motor vehicles in the province of Leinster by directly or indirectly fixing the selling price of Citroen motor vehicles and the doing of the Acts constituting that offence will authorise or consented to by you." (Emphasis added)

* "Count No. 2

Statement of Offence

Being a director of an undertaking which implemented an agreement which had as its object the prevention, restriction or distortion of competition contrary to s. 4(1) of the Competition Act 1991, and ss. 2 and 3(4)(a) of the Competition (Amendment) Act 1996.

Particulars of Offence

Patrick Duffy between the 24th June, 1997, and the 18th June, 2002, both dates inclusive, within the province of Leinster within the State, were a Director of Duffy Motors (Newbridge) Limited, trading as P.G. Duffy & Sons, an undertaking within the meaning of s. 3 of the Competition Act 1991, which said company committed an offence namely implementing an agreement with other undertakings, also within the meaning of s. 3 of the Competition Act 1991, which had as its object the prevention, restriction or distortion of competition in the trade of motor vehicles in the province of Leinster by directly or indirectly fixing the selling price of Citroen motor vehicles and the doing of the Acts constituting that offence will authorise or consented to by you." (Emphasis added)

3. In layman's terms the following allegations were made against the company:-

(1) That between the 24th June, 1997, and the 18th June, 2002, it entered into an agreement with others, to fix the selling price of Citroen motor vehicles throughout the province of Leinster, with the object of interfering with competition contrary to s. 4(1) of the Competition Act 1991, and s. 2 of the Competition (Amendment) Act 1996, and

(2) That between the same dates, it implemented such an agreement with others, to fix the selling price of Citroen motor vehicles throughout the province of Leinster, with the object of interfering with competition, contrary to s. 4(1) of the 1991 Act s. 2 of the 1996 Act.

And as against Mr. Duffy

(3) That as a Director of the company he consented to and authorised that company to enter into the aforementioned agreement contrary to s. 4(1) of the Competition Act 1991, and ss. 2 and 3(4)(a) of the Competition (Amendment) Act 1996, and

(4) That as a director of this company he consented to and authorised that company to implement such agreement contrary to the same provisions of both the principle and the amending Act.

4. On the 26th January 2009, Mr. Duffy pleaded guilty to counts No's 1 and 2 on the indictment and as a director of the company pleaded guilty on its behalf to the aforesaid counts 5 and 6. On these pleas being entered the D.P.P., indicated that he would enter a nolle prosequi on the other charges.

5. Having heard evidence and having received submissions from both the D.P.P. and the defendants, I reserved my view on what the appropriate sentence should be. I now give a ruling in respect thereof.

The Investigation:

6. The background evidence relating to these prosecutions was given by one Mr. Thomas Fitzpatrick, an authorised officer with the Competition Authority. It appears that in March, 1995 an association known as the Citroen Dealers Association (the "C.D.A.") was established. It was geographically divided into three regions, namely Dublin/Leinster, the South and the North/West. It held its first meeting in April, 1995 and operated at least until February, 2004. This association, whose members consisted of the authorised dealers for Citroen motor vehicles in this State, appointed officials such as a Secretary, Treasurer and President, and kept detailed minutes of its activities.

7. From the outset it set in place a comprehensive scheme which had the following as its objects:-

(i) The setting of maximum discounts from the retail dealers recommended price list for new Citroen motor vehicles;

(ii) The setting of delivery charges in respect of such vehicles;

(iii) The setting of accessory prices;

(iv) The setting of prices for metallic paint;

(v) The setting of prices for trade-ins and for used stock; and,

(vi) The setting of export prices and parts.

8. At meetings of the Association, of which about 48 were minuted, prices were agreed in respect of each of these items and then recorded. Thereafter a new revised price list would be printed and distributed by the Secretary to each member of the association. In addition, the Secretary produced a pocket card for internal use by individual dealers showing what price should be asked for. This became known as the "card price". This routine was followed on every occasion upon which there was a price change.

9. To underpin adherence to the objectives of the scheme, the association employed two independent companies to police its members so as to ensure compliance. These monitors carried out so called "mystery shopping surveys", during which, disguised as genuine members of the public, they attended at a dealer's premises and obtained a quote or price for any one or more of the products above mentioned. A report would then be submitted to the Secretary. Fines, which were specified for any breach, were originally set at £500 and later increased to £1,000 (1,270).

10. It appears that the initiation of the Authority's investigation was triggered by the association's attempt to sanction a defaulting dealer who refused to pay the imposed fine. Instead, the individual in question, who was later joined by two other dealers, made himself known to the Competition Authority, and his co-operation with the investigation led him to make thirteen statements and to produce over 160 relevant documents. Armed with these documents, Mr. Duffy was approached in March, 2004. He was interviewed under caution and in the resulting statements made to the investigating officers, he confirmed that he was the sole representative of Duffy Motors on the association, that he had attended virtually all of the association's meetings and that for about a three year period he had acted as its treasurer. In that capacity he was responsible for discharging the outgoings of the association including the expenses of the Secretary and the costs of employing the so-called independent monitors. He continued to be a member until, as previously stated, early in 2004.

11. As part of the Authority's engagement with Mr. Duffy, he produced a computer printout showing how the delivery charge of 500 was calculated. Mr. Fitzpatrick took strong issue...

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