A.S.I. Sugar Ltd. v. Greencore Group Plc & Ors  IEHC 131 (11 February 2003)
1996 No. 8200P
Judgment of Finnegan P. delivered on the 11th day of February 2003
The Plenary Summons in this matter was issued on the 19th September 1996. The endorsement of claim on the same reads as follows -
"The Plaintiff's claim is for:-(1) Damages for:-(a) Abuse of a dominant position in the granulated sugar market for both retail and industrial sale in Ireland.
(b) Infringing Article 85 of the EEC Treaty to the detriment of the Plaintiff.
(c) Infringing Article 86 of the EEC Treaty to the detriment of the Plaintiff.
(d) Infringing the provisions of the Competition Act 1991.
(e) Inducing suppliers, transporters and customers of the Plaintiff not to deal fairly and openly with the Plaintiff, thereby restraining the Plaintiff's right to trade.
(f) Breach of statutory duty.
(2) Interest thereon pursuant to statute.
(3) An Order directing the taking of accounts and the making of enquiries.
(4) Such other Order as to this Honourable Court seem right and fitting.
(5) An Order providing for the costs of these proceedings.
A Statement of Claim was delivered in May 1998. The Defendants by Notice of Motion dated 9th March 1999 sought an Order striking out the Statement of Claim upon the basis that the same was pleaded so imprecisely that the Defendant could not know the nature of the claim, that the events pleaded as giving rise to the claim occurred well outside the period prescribed by the Statute of Limitations 1957 and that the claim had in part been compromised. The Motion was disposed of by the High Court on the 2nd October 2000 (Kelly J.) by an Order that the Plaintiff deliver an amended Statement of Claim. The Learned High Court Judge made it quite clear that the Statement of Claim should contain relevant particulars so as to enable the Defendants to know the case they would have to meet.
An amended Statement of Claim was delivered on the 8th June 2000 and a further amended Statement of Claim was delivered on the 10th October 2000. By further Order of the High Court (Kelly J.) dated 24th October 2000 it was ordered that the Court did not require the Defendants to deliver a defence until a notice for particulars to be raised had been properly answered. The Defendant raised a notice for particulars dated 13th November 2000 which was replied to on the 11th December 2000 and the Defendants raised a notice for further and better particulars on the 12th February 2001.
The issue before me is whether at this time the Plaintiff has adequately replied to the notice for further and better particulars. Both the notice for particulars and the notice for further and better particulars are extensive and complex. However the Defendant before me limited its argument to the inadequacy of the replies to the particulars raised on paragraphs 15, 20, 21, 23 and 24 of the second amended Statement of Claim and in effect to six questions to which it contends that the replies are inadequate as illustrating the inadequacy of the replies. Essentially the Defendant claims that the manner in which the Plaintiff's alleged loss and the causal connection between the alleged loss and the alleged wrongful acts on the part of the Defendants are inadequately pleaded. I note that the second amended Statement of Claim does not set out the quantum of the Plaintiff's claim. The original Statement of Claim claims sums of £258,400 and £242,231 in each case per annum continuing and increasing: the second amended Statement of Claim under the Particulars of Special Damage provides "yet to be estimated".
The factual background to the claim is complex. The claim has its origin in facts set out in the findings of the European Commission in Decision 97/624/EC dated 14th May 1997 which was to the effect that the second named Defendant had infringed Article 86 of the EEC Treaty in the period 1986 - 1995. The facts found by the Commission set out in the Decision run to 167 paragraphs. The Decision was appealed to the Court of First Instance which gave Judgment on the 7th October 1999 and to the European Court of Justice which gave Judgment on the 10th July 2001. The Court of First Instance varied the Decision in part its Judgment running to some 307 paragraphs and the European Court of Justice dismissed the appeal of the first named Defendant against the decision of the Court of First Instance. The Statement of Claim adopts the device of relying upon specified paragraphs in the Decision.
I propose considering the matter against the relevant paragraphs of the Statement of Claim and the particulars sought in respect of that paragraph in the notice for particulars and the notice for further and better particulars against the relevant principles of law and provisions of the Rules of the Superior Courts.
The function of pleadings is to define with clarity and precision the issues of fact and law between the parties. Where issues are so defined each party will have given fair and proper notice to his opponent of the case he has to meet and each party will be enabled to prepare his own case for trial. Discovery can be directed to the issues and the delay and expense thereby incurred minimised: this is particularly important in a case such as the present where discovery even with the issues so defined will be extensive. Further this will enable the court to be aware of the issues before it and the Trial Judge will thereby be better enabled to control the hearing and confine the same within the limits of the pleadings. See McGee v O'Reilly 1996 2 I.R. 229.
The Rules of the Superior Courts seek to ensure that pleadings fulfil this function. Relevant on this motion are the following Rules –
Order 19 Rule 1
The Plaintiff shall, subject to the provisions of Order 20, and at such time and in such manner as therein prescribed, deliver to the Defendant a statement of his claim, and of the relief or remedy to which he claims to be entitled.
Order 19 Rule 3
Every pleading shall contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which they are to be proved.
Order 19 Rule 5(2)
In all cases alleging misrepresentation, fraud, breach of trust, wilful or undue influence and in all other cases in which particulars may be necessary, particulars (with dates and items if necessary) shall be set out in the pleadings.
Order 20 Rule 5(3)
In any case where the particulars, being of debt, expenses or damages, exceed
three folios that fact must be stated with a reference to full particulars already delivered or to be delivered with the pleadings.
Order 20 Rule 7(1)
A further and better statement of the nature of the claim or defence or further and better particulars of any matter stated in any pleading, notice or written proceeding requiring particulars, may in all cases be ordered upon such terms as to cost and otherwise as may be just.
Order 20 Rule 7(3)
Particulars shall not be ordered under this Rule to be delivered before defence or reply, as the case may be, unless the court shall be of opinion that they are necessary or desirable to enable the Defendant or Plaintiff, as the case may be, to plead or ought for any other special reason to be so delivered.
Order 20 Rule 8
Where the Plaintiff seeks relief in respect of several distinct claims or causes of complaint founded upon separate and distinct grounds they shall be stated, as far as may be separately and distinctly.
Order 19 Rule 21
Wherever the contents of any document are material it shall be sufficient in any pleading to state the effect thereof as briefly as possible without setting out the whole or any part thereof unless the precise words of the document or any part thereof are material.
I now deal with each of the relevant paragraphs in the Statement of Claim and the particulars and further and better particulars sought by the Plaintiff in relation thereto.
Statement of Claim Paragraph 15
"Contrary to Article 82(Ex Article 86) of the EC Treaty the Defendants acted in breach of statutory duty so as to abuse their dominant position. The best particulars that can be given by the Plaintiff prior to discovery and/or the administration of interrogatories are that the Plaintiff will rely upon the findings of the European Commission in Decision 97/624/EC communicated to the Defendants and in particular upon:
(a) Selective prices as described in paragraphs 78 - 84 and 151 - 154 of the Decision. A company in a dominant position has a special responsibility not to diminish further the degree of competition remaining on the market. By offering the customers of much smaller competitors prices which were not generally available. The second named Defendant was obviously flouting this requirement.
(b) Peripheral factor allowances, or export rebates, as described in paragraphs 70 - 72 and 136 - 144 of the Decision. The discriminatory nature of the export rebate scheme is emphasised by the fact that it is not in line with the objectives of the common sugar regime. As the second named Defendant has itself pointed out to the Commission in its investigation Ireland is treated as a deficit area by the sugar regime and the intervention price for sugar is higher in order to encourage imports of sugar. However, the second named Defendant's export rebates are likely to distort the regime by subsidising exports of sugar out of Ireland to other Member States, acting as a barrier to imports and increasing the isolation of the national market.
(c) Price discrimination against competing sugar packers as described in paragraphs 73 and 145 - 150 of the Decision. The said abuse affected both the granulated sugar market for retail and the granulated sugar market for industrial sale in the State. The second named Defendant's non transparent and variable system of rebates provided an easy opportunity for the second named Defendant to restrict the already limited competition on the industrial sugar market in Ireland.
(d) Target rebates as described in paragraphs 78 - 84 and 151 - 154 of the Decision. Granting discounts by a company in a dominant position which are conditional on a company meeting particular targets that are higher than previous purchase amounts is an infringement of Article 82(ex Art 86) because the practice is clearly aimed at tying customers closely to the dominant company and making it difficult for competitors to gain a foothold in the market.
(e) Selective pricing for industrial sugar as described in paragraphs 145 - 150 of the Decision. Up and until the introduction of a structured volume related price consequent upon the Commission's Decision the Defendants maintained a list price for sugar from which variable non transparent rebates were granted. The sheer lack of transparency of the second named Defendant's entire rebate system including export rebates in which neither the scale of rebates nor the volume to which they relate is either uniform or communicated in writing to customers may be seen as an abuse of its dominant position. A bonus and discount system that was fixed on an individual basis and hence not communicated uniformly to all dealers in advance made discrimination between them possible and was in itself an abuse of Article 82(ex Article 86). The second named Defendant's non transparent and variable system of rebates provided an easy opportunity for it to restrict the already limited competition on the industrial sugar market in Ireland."
Notice of Particulars -
"(e) Please furnish full and detailed particulars of how it is alleged the matters described in paragraphs 78 - 84 and 151 - 154 (selective prices) of the Decision concern the Plaintiff and explain precisely how it is alleged the matters referred to in the said paragraphs of the Decision confer a cause of action on the Plaintiff."
Reply to Notice For Particulars -
"(e) By abusing their position in the market place with the unlawful practice of selective pricing, the Plaintiff was hindered in expanding its business. For example the treatment of Topps Ireland Limited as set out at recital 75 and 76 of the Decision meant that it was not viable for the plaintiff to supply this undertaking. Similarly with M. J. Gleeson & Company Limited and Batchelors Ireland Limited referred to in recital 76 the same applied. The latter two undertakings were customers of the Plaintiff who were lost as a consequence of the Defendants' unlawful trading practices."
Notice for Further and Better Particulars -
"The Plaintiff's reply to the particulars sought in this sub-paragraph is also inadequate. The Plaintiff has failed to furnish particulars of how it is alleged that the matters described in paragraphs 78 - 84 and 151 - 154 of the Decision concern the Plaintiff and to furnish particulars of precisely how it is alleged that the matters referred to in these recitals to the Decision confer a cause of action on the Plaintiff. Furthermore, in its reply the Plaintiff failed to furnish particulars as to how it was allegedly hindered in expanding its business as a result of the matters referred to in these recitals. The Plaintiff has failed to furnish particulars of how it is alleged the alleged treatment of the named undertakings such as Topps Ireland, M.J. Gleeson & Company Limited and Batchelors Ireland Limited concern the Plaintiff and confer a cause of action on the Plaintiff. The Plaintiff has also failed to furnish particulars as to how it is alleged that the alleged unlawful trading practices of the Defendants caused the Plaintiff to lose the custom of two of the named undertakings (M.J. Gleeson & Company Limited and Batchelors Ireland Limited) and has failed to specify when it is alleged that the Plaintiff lost the custom of those undertakings and the loss allegedly sustained by the Plaintiff as a result. Accordingly the Defendants require the Plaintiff to furnish proper replies to the particulars sought in the Defendants' Notice for Particulars."
Insofar as the Defendant's seek particulars as to how the matters referred to in Recitals 78 – 84 and 151 – 154 of the Decision confer a cause of action on the Plaintiff this is a matter of law and the Plaintiff need not reply to the same. Again I am satisfied that the matter is sufficiently pleaded insofar as the manner in which the Plaintiff was hindered in expanding its business as a result of the matters referred to in the Recitals mentioned in the reply to particulars. Again particulars of how it is alleged that the alleged treatment of named undertakings concern the Plaintiff and confer a cause of action on the Plaintiff are a matter of law. However the reply to the notice for particulars is inadequate in that the second sentence therein commences with the words "for example": if the Plaintiff wishes to rely on the history of its trading with a company it must set out the name of that company and it will not be permitted to rely on the words "for example" to introduce the history of its trading with any other company. The Plaintiff must specify when it lost the custom of those undertakings mentioned in the reply to the notice for particulars.
Statement of Claim Paragraph 20
"In or about the month of November 1990 the Plaintiff again attempted to secure a presence in the granulated sugar market for industrial sale in the State. The Plaintiff was the sole importer of sugar from France and was in a position to offer competitive prices to the said market then overwhelmingly controlled and supplied by the Defendants. This market entry met a sustained and hostile response from the said Defendants through recourse to the abuses determined by the Commission. This included the targeting of substantial customers of the Plaintiff and abuses such as selective pricing, export rebates, price discrimination against competing sugar packers, target rebates and selective pricing for industrial sugar. While the Plaintiff has maintained a presence on the said Irish market it has only been with considerable losses. In or about the month of July 1994 the Plaintiff was driven from the granulated market for retail sale by the Defendants it had attempted to re-enter barely twelve months previously. The Plaintiff's market entry met a sustained and hostile response from the said Defendants through recourse to the abuses determined by the Commission including discriminatory pricing."
Notice for Particulars
"Please identify more particularly the alleged abuses determined by the Commission which it is alleged affected the Plaintiff."
Reply to Notice for Particulars
"This is repetitive and details are set out in the amended Statement of Claim and the replies therein."
Notice for Further and Better Particulars
"The Plaintiff has failed to furnish the particulars requested in this sub-paragraph and accordingly the Defendants repeat the request for the particulars originally requested."
The words "this included" and "such as" in the fourth sentence of the Statement of Claim render the reply inadequate. The Plaintiff is required to set out the abuses which it alleges. If that sentence contains all the abuses upon which it is intended to rely then the words "this included" and "such as" should be deleted. Should they not be deleted then the Plaintiff will be confined at the hearing of the action to the abuses therein set out and will not be allowed rely upon other abuses: if it is the Plaintiff's intention to confine itself to these abuses and it so confirms to the Defendants then this reply is adequate.
Statement of Claim Paragraph 21
"As a result thereof had it not been for the wrongful acts of the Defendants referred to above the Plaintiff would have established soon after the 20th September 1990 a significant percentage share in both the industrial and retail markets. It was not until 1997 and subsequent to the Commission Decision that the Plaintiff has been able to establish a modest percentage share in the industrial market. The Plaintiff has, therefore, by reason of the wrongful acts of the Defendants, suffered enormous loss and damage. The said damage includes the difference between the profits it would have made, had the Plaintiff the opportunity to enter the industrial and retail markets, subject only to legitimate competition from the Defendants and such other companies as might have sought to do so on the one hand and the profits which the Plaintiff in fact made or would have made from the Irish market on the other hand. The Plaintiff will also rely on the extreme trading losses it has incurred throughout the entire period which have not been ameliorated by profitable trading. Full particulars of the calculation of same will be furnished in due course."
Notice for Particulars
"(i) Please specify precisely how each and every alleged wrongful act on the part of the Defendants impacted on the Plaintiff and allegedly prevented the Plaintiff from establishing a "significant percentage share" in the granulated sugar market for industrial sale in Ireland.
(ii) Please specify precisely how it is alleged "enormous" loss and damage was caused by the alleged wrongful acts of the Defendants. In this regard please identify each and every alleged wrongful act on the part of each of the Defendants which it is alleged caused the alleged "enormous" loss and damage and specify precisely how it is alleged the alleged loss and damage was caused by those alleged wrongful acts."
Reply to Notice for Particulars
"(i) On the above basis the Plaintiff would but for the wrongdoing of the Defendants, as defined above, have achieved the sales set out in column 3 of the said table (the table referred to is annexed to the replies).
(ii) The Plaintiff's lost profits, by reason of the wrongdoing of the Defendants, as referred to above, is therefore, to be found by deducting from the aforementioned lost gross profit the additional costs of overheads which would have been required to have been expended by the Plaintiff in carrying on the additional business contemplated by the additional sales referred to above. The additional overheads referred to are to be found in column 8 of the said table. The net loss of profits is to be found by the deduction of those overheads from the lost gross profit that is to be found at column 9 of the said table."
Notice for Further and Better Particulars
"(i) The Plaintiff has not furnished the particulars requested in this sub-paragraph. The Defendants requested the Plaintiff to specify how each and every alleged wrongful act on the part of the Defendants impacted on the Plaintiff and allegedly prevented the Plaintiff from establishing a "significant percentage share" in the granulated sugar market for industrial sale in Ireland. The Plaintiff has not furnished those particulars. The table furnished with the Plaintiff's reply does not distinguish as between the granulated sugar market for retail sale and that for industrial sale. Nor can the table demonstrate the alleged causal connection between the alleged wrongful acts of the Defendants (in respect of which inadequate particulars have been furnished for the reasons set out above) and the alleged losses sustained by the Plaintiff. The Defendants repeat the request for the particulars originally requested. Please furnish the same particulars in relation to the granulated sugar market for retail sale in Ireland.
(ii) The Plaintiff has not furnished the particulars sought in this sub-paragraph. The Defendants repeat the request for particulars sought."
This reply must be expanded upon. It must distinguish in the table furnished
between the market for retail sale and the industrial market. It is however unnecessary for the
Plaintiff to establish a causal relationship between each individual abuse and the loss claimed:
the Plaintiff's claim is based on the cumulative effect of all the abuses alleged and it is
sufficient to claim on that basis. The abuses alleged are sufficiently pleaded (subject to what
I have said in relation to paragraphs 15 and 20 of the Statement of Claim)."
Statement of Claim Paragraph 23
"By reason of the foregoing the Plaintiff has sustained great loss, loss of market share, loss of business development, loss of profits, damage, inconvenience and expense."
Notice for Particulars
"Please specify precisely how it is alleged each and every alleged head of damage claimed by the Plaintiff was caused by the alleged wrongful acts of the Defendants and each of them. In this regard please identify each and every alleged wrongful act relied on and specify how it is alleged each and every such alleged wrongful act caused the alleged damage the subject of the heads of claim put forward on behalf of the Plaintiff.
The Defendants object to the fact that notwithstanding that these proceedings were commenced in 1996 the second amended Statement of Claim delivered on 10th October 2000 does not furnish any particulars of special damage."
Reply to Notice for Particulars
"The following are the replies to the particulars raised concerning paragraph 23 of the Statement of Claim.
See replies to paragraph 21 above.
In addition to the losses incurred, and to be incurred, full particulars of which are set out at paragraph 21 above the Plaintiff will further claim special damages in the amount of £27,830 legal costs and £5,172 expenses, which result from costs incurred by the Plaintiff in relation to dealing with the enquiries of the competent authorities within the European Union, which said costs would not have been incurred were it not for the wrongdoing as aforesaid of the Defendants in each of them."
Notice for Further and Better Particulars
"Arising out of the Plaintiff's replies to paragraphs 12 and 14 of the Defendants' notice for particulars, the Defendants note that the Plaintiff has failed to specify with regard to each and every head of damage claimed by the Plaintiff how it is alleged that such head of damage was caused or contributed to by reason of the alleged wrongful acts of the Defendants. Such particulars were sought at paragraph 14(g) of the Defendants' notice for particulars. Please furnish those particulars. In addition and arising from the reply to paragraph 14 of the Defendants notice for particulars please furnish the following further particulars:
(i) Please furnish a detailed breakdown of the sum of £27,830 and identify what precisely this claim is intended for.
(ii) Please furnish the same particulars as are sought at sub-paragraph (i) above with regard to the Plaintiff's claim for £5,472."
The position here is as in paragraph 21 of the Statement of Claim and it is not necessary to plead a causal relation between each wrongful act and each particular head of damage claimed and it is sufficient if the wrongful acts relied upon are pleaded and the cumulative effect of the same in terms of damage without relating any specific item of damage to any particular wrongful act. Particulars of the sums of £27,830 and £5,472 must be furnished.
Statement of Claim Paragraph 24
"Nothwithstanding the adoption of Decision 97/624/EC by the Commission of the European Community on the 14th May 1997 the said Defendants have acted in breach of the decision. In or about the month of April and May 2000 the Defendants further abused their dominant position by targeting substantial industrial customers of the Plaintiff in a manner prohibited and proscribed by the Decision. In the premises the Plaintiff claims aggravated or punitive damages."
Notice for Particulars
"With reference to paragraph 24 of the Statement of Claim please furnish the following particulars:(a) Please furnish full and detailed particulars of the alleged breach by:
(i) The first named Defendant;
(ii) the second named Defendant;
(iii) the third named Defendant.
of the Decision of the Commission.
(b) Please identify more particularly the "substantial industrial customers" of the Plaintiff which it is alleged were targeted by the Defendants and each of them.
(c) Please furnish the date or dates on which it is alleged the "substantial industrial customers" of the Plaintiff were targeted by the Defendants and each of them.
(d) Please furnish full and detailed particulars of the manner in which it is alleged the Defendants and each of them targeted the "substantial industrial customers" of the Plaintiff in a manner allegedly prohibited and proscribed by the Decision.(e) Please specify the basis for the Plaintiff's alleged entitlement to aggravated and/or punitive damages as a result of the matters pleaded at paragraph 24 of the Statement of Claim.(f) Please furnish full and detailed particulars of the alleged loss sustained by the Plaintiff as a result of the matters pleaded at paragraph 24 of the Statement of Claim.(g) Please specify precisely the manner in which it is alleged the alleged loss and damage sustained by the Plaintiff by reason of the matters referred to at paragraph 24 of the Statement of Claim was caused by the alleged or any wrongful act on the part of the Defendants or any of them."
Reply to Notice for Particulars
"(a) The Defendants breached the Commission's Decision by targeting the two largest industrial customers of the Plaintiff with selective prices and target rebates. This is in breach of Article 3 of the Decision. The allegation is made against each of the Defendants individually and collectively.
(b) The substantial and industrial customers were the following –(i) United Distillers and Vintners Manufacturing Operations (Ireland) Limited. This company is a member of the Diageo Group which is the name under which the merged Guinness Group plc with Grand Metropolitan plc are carrying on trade. This Group produces Baileys cream liquor which has a substantial requirement for sugar.(ii) Ferrero Ireland Limited. The name of this company controlled by its Italian parent is synonymous with chocolate. It has a substantial requirement for sugar.
(c) To the best of the Plaintiff's knowledge the targeting of the substantial industrial customers with selective prices/target rebates by and on behalf of the Defendants was in April and May 2000.
(d) The Defendants approached Ferrero Ireland Limited and the Diageo Group and targeted their business seeking to achieve approximately 80% of their requirement. Without any reference to increased volume, the Defendants (and the second named Defendant in particular) offered a discount by metric ton in return for 80% of their respective volume. This anti competitive conduct is wholly unlawful and proscribed by the Commission's Decision including Article 3 thereof.
(e) This is a matter for legal argument. If it is established that the Defendant acted in breach of the Commission's Decision their conduct is contumacious and a ground for aggravated or punitive damages.
(f) Losses are being quantified and will be furnished in early course. The Plaintiff was forced to reduce prices to retain the business from the Diageo Group. The Plaintiff initially lost Ferrero Ireland Limited as it was not in a position to match the Defendants' anti competitive behaviour. Following the making of a complaint to the Commission by the Plaintiff on the 25 May 2000 the Defendants have been forced to abandon the previous approaches and losses should be quantifiable in early course. It is estimated that losses in the region of £100,000 have been sustained.
(g) See replies already given in paragraph 24 of the Statement of Claim."
Different considerations apply to the further and better particulars sought by the Defendants here in that the conduct of the Defendants to be relied upon by the Plaintiff is conduct subsequent to the Decision of the Commission. The replies to sub-paragraphs (a), (b), (c), and (d) are sufficient. The reply to (e) is insufficient: the Plaintiff must set out the acts of the Defendants upon which it will rely in support of its claim for aggravated or punitive damages. The reply to paragraph (f) is also insufficient and the losses claimed in respect of the Defendants' conduct after the date of the Council Decision must be quantified. The reply to (g) is sufficient and the Plaintiff is not required to relate any specific item of damage to any particular wrongful act but is entitled to claim damages on the basis that they are the cumulative effect of the Defendants' wrongful conduct.
In the light of the foregoing I make an Order that the Plaintiff shall furnish further and better particulars in response to the following paragraphs in the notice for particulars.
(i) Paragraph 6(e) setting out the names of each of its customers in respect of whom it is alleged the Plaintiff was hindered in expanding its business.
(ii) Paragraph 11(f), setting out each of the wrongful acts upon which the Plaintiff intends to rely.
(iii) Paragraph 12(b),(d) and (g) distinguish in the table referred to in the reply to paragraph 11 of the notice for particulars between the granulated sugar market for retail sale and that for industrial sale.
(iv) Paragraph 14(i) and (ii).
(v) Paragraph 15(e) and (f)