Woodfab Ltd v Coillte Teoranta

JurisdictionIreland
JudgeMr. Justice Peter Shanley
Judgment Date01 January 1998
Neutral Citation[1997] IEHC 190
CourtHigh Court
Docket Number[1995 No. 1154P]
Date01 January 1998
WOODFAB LTD v. COILLTE TEORANTA & MEDITE OF EUROPE LTD

BETWEEN

WOODFAB LIMITED
PLAINTIFF

AND

COILLTE TEORANTA AND MEDITE OF EUROPE LIMITED
DEFENDANTS

[1997] IEHC 190

No. 1154P/1995

THE HIGH COURT

Synopsis

Practice and Procedure

Interrogatories; purpose of interrogatories; criteria governing leave to deliver interrogatories; whether interrogatories necessary for saving costs or disposing fairly of the cause; whether special necessity required that leave be granted; whether special necessity existed where interrogatories related to anti-competitive behaviour and internal workings of interrogated party; O. 31 r. 2 Rules of the Superior Courts Held: Party seeking leave to deliver interrogatories must establish special necessity; special necessity did not exist simply because interrogatories related to anti-competitive behaviour or internal workings of interrogated party( High Court: Shanley J.19/12/1997)

Woodfab Limited v. Coillte Teoranta - [2000] 1 IR 20

Citations:

COMPETITION ACT 1991 S4

COMPETITION ACT 1991 S5

TREATY OF ROME ART 85

TREATY OF ROME ART 86

TREATY OF ROME ART 92

RSC O.31 r2

MERCANTILE CREDIT CO & HIGHLAND FINANCE (IRL) LTD V HEELAN KENNY O'HIGGINS & PORTICO LTD 1994 2 IR 105

BULA LTD V TARA MINES LTD 1995 1 ILRM 401

HALL V SEVALCO LTD UNREP THE TIMES 27.3.1996

UCB BANK PLC V HALIFAX UNREP 10.6.1997 CA

1

JUDGMENT of Mr. Justice Peter Shanley delivered the 19th day of December. 1997

BACKGROUND
2

(a) This is an application by the Plaintiff for leave to deliver Interrogatories for the examination of the first named Defendant (Coillte) in the form of a draft annexed to a Notice of Motion dated the 14th July, 1997. There are 1068 Interrogatories set out in the draft. Coillte maintain that through the procedures of a Notice to Admit Documents it has effectively dealt with some 224 of the Interrogatories sought to be answered - but in any event Coillte takes the basic stance that the Plaintiff has not made out a case justifying the delivery of those Interrogatories and that the Interrogatories which are sought to be delivered are "prolix, oppressive, vague and imprecise" and have not been shown to be essential "in the interests of justice".

3

(b) Proceedings were commenced by plenary summons dated the 16th February, 1995. Medite of Europe Limited were added as a Defendant as matters proceeded. Ultimately, on the 10th October, 1995, the Plaintiff served a second amended statement of claim on the Defendants to which Coillte delivered a defence on the same date and Woodfab, the Plaintiff, in turn delivered a reply. As appears from a perusal of pleadings it is commoncase that Woodfab is a limited liability company which carries on the business of sawmills and suppliers of timber and that Coillte is a company formed pursuant to the Forestry Act, 1988and carries on the business of forestry and related activities on a commercial basis. Woodfab alleges (but Coillte denies) that Coillte owns some 90% of all forests and woodlands which have matured to such a stage as to be ready for commercial harvesting and that, Coillte is, in effect, the sole producer of standing timber in Ireland. Woodfab allege that of these forests and woodlands some 95% of the timber is softwood/roundwood. Woodfab allege that it is one of 180 sawmills in Ireland who purchase timber from Coillte. In practice there are only ten to twelve large sawmills (of which Woodfab is one) who between them purchases some 80% of the Coillte supply of timber in any one year. Woodfab purchases 14percnt; of such timber and is one of Coillte's largest customers.

4

(c) Woodfab contend that Coillte is in breach of Section 4 and 5 of the Competition Act, 1991 and Articles 85, 86 and 92 of the E.C. Treaty. In addition, it is claimed that Medite is also in breach of Sections 4 and 5 of the 1991 Act and Articles 85, 86 and 92 of the E.C.Treaty. The facts Woodfab rely upon in support of its allegation of infringements of Sections 4 and 5 of the 1991 Act and the various Articles of the E.C. Treaty are set out in detail in the Statement of Claim that it delivered in its amended form. As appears from that document the Woodfab case against Coillte is to a very large extent grounded upon allegations of breach of Section 5 of the Competition Act. 1991and infringement of Article 86 of the E.C. Treaty. The abuses that are complained of (which are denied by Coillte) are, broadly:-

5

(i) that Coillte has refused to supply pulp (which are smaller pieces of wood under 7 metres in diameter and branches) to Woodfab.

6

(ii) that when Coillte put softwood on to the market for sale they do so in one of two ways: firstly, either under a closed tendering system or. alternatively, a Coillte allocation system (CAS). The former (the tendering system) involves a tendering process where Woodfab allege that the highest tenderer will not necessarily be guaranteed the material tendered for, but is in fact required to further negotiate with Coillte on a price after he has been established as the highest tenderer. The CAS system is a system whereby (according to Woodfab) Coillte give a limited number of customers guarantees as to 50% of their prior year purchases of softwood, providing they are prepared to purchase at prices demanded by Coillte and provided certain details of the sawmill's business are provided to Coillte. The absence of open tendering, and the allocation system for timber, constitutes (according to Woodfab) an abuse by Coillte of its dominant position in the supply of felled softwood timber and undebarked softwood (standing or felled) timber in the State. Woodfab also complained that the refusal to supply pulp is an abuse of Coillte's dominant position in the market for the supply of that product in Ireland.

7

(ii) Coillte entered into a twenty year agreement with Medite of Europe Limited for the guaranteed supply to that company of all types of timber product (including pulp) at prices which, according to Woodfab, are unrelated to those to. the open market. Coillte also entered into a joint venture agreement with an American company called Louisiana Pacific. Under the terms of the joint venture agreement which Coillte entered into, it entered into a further series of agreements with Louisiana Pacific whereby it agreed to supply to that company timber at preferential prices and on preferential terms. The effect of these agreements, says Woodfab, is to restrict unfairly the supply of timber products and to discriminate against Woodfab by applying dissimilar conditions to equivalent transactions with other sawmills such as to place Woodfab at a competitive disadvantage.

8

(iv) The foregoing account identifies the main allegations of Woodfab against Coillte in so far as they relate to alleged breaches of the Competition Act, 1991and infringements of Articles 85, 86 and 92 of the E.C. Treaty: It is not, however, a complete account of Woodfab's allegation as they appear in the pleadings. Detailed particulars of the alleged abuses are indeed set out in the Statement of Claim at paragraphs 34 and 34 (A) of that document. These particulars are traversed in the Defence (see paragraph 49 of the Defence). I have set out the main allegations made by Woodfab against Coillte and the fact that Coillte have denied these allegations for the purposes of identifying what are the main issues which arise for determination in this Action.

9

(v) The Motion for Interrogatories is grounded on an affidavit of Frank Keane, a partner in William Fry, solicitors for the Plaintiff. A number of matters to which he avers are relevant in my consideration of the application of Woodfab. In his affidavit he states that discovery has been made by Coillte. He also states that a Notice to Admit Documents was served on Coillte by Woodfab and was answered by Coillte on the 18th April, 1997. In addition, a Notice to Admit Facts was served by Woodfab on Coillte on the 5th June, 1997 but has, as yet, not been answered. He states:-

"the delivery of Interrogatories is necessary .... for the purposes of disposing fairly of the cause of action herein". (Paragraph 19).

10

He also states:-

"It is of material importance for the fair disposal of this case and for the saving of time and expense that the matters in respect of which Interrogatories are sought to be raised are dealt with by way of Interrogatories". (Paragraph 21).

11

(v) Mr. Keane states that the matters in respect of which the Interrogatories are sought relate to the internal affairs of the Plaintiff and, says Mr. Keane, only Coillte can give direct evidence in relation to such matters. In such circumstances, Mr. Keane regards the Notice to Admit and the Interrogatories as "essential evidential aids for the Plaintiff".

THE SUBMISSIONS OF WOODFAB
12

Woodfab submit that this Court should give leave to deliver the Interrogatories because, they say, that it has been established on the basis of the affidavit sworn by Mr. Keane that the answering of such Interrogatories are necessary for disposing fairly of the action and for the purposes of saving costs. Counsel on behalf of Woodfab point out that Order 31 Rule 2 specifically sets out the principles by which a court should be guided in deciding whether or not to allow delivery of Interrogatories: Order 31 Rule 2 provides as to follows:-

"A copy of the Interrogatories proposed to be delivered shall be delivered with a notice of application for leave to deliver them unless the court shall otherwise order and the particular Interrogatories sought to be delivered shall be submitted to and considered by the court. In deciding upon such application the court should take into account any offer which may be made by the parties sought to be interrogated to deliver particulars, or to make admissions, or to produce documents, relating to any matter in question. Leave shall be given as to such only...

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