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Cite as: [1997] IEHC 190, [2000] 1 IR 20, [1998] 1 ILRM 381

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Woodfab Ltd. v. Coillte Teoranta [1997] IEHC 190; [2000] 1 IR 20; [1998] 1 ILRM 381 (19th December, 1997)

THE HIGH COURT

1995 No. 1154P

BETWEEN

WOODFAB LIMITED

PLAINTIFF

AND

COILLTE TEORANTA AND MEDITE OF EUROPE LIMITED

DEFENDANTS

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

BACKGROUND

(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".

(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, 1988 and 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 14% of such timber and is one of Coillte's largest customers.

(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, 1991 and infringement of Article 86 of the E.C. Treaty. The abuses that are complained of (which are denied by Coillte) are, broadly:-

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

(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.

(iii) 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 on 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.

(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, 1991 and 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.

(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).

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).

(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

1. 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

2. 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 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 of the Interrogatories as shall be considered necessary either for disposing fairly of the cause or matter or for saving costs".

3. Counsel for Woodfab relied strongly upon a decision of Costello J. (as he then was) in Mercantile Credit Company of Ireland Limited and Highland Finance Ireland Limited Plaintiffs -v- John Heelan, Joseph Kenny, James O'Higgins and Portico Limited Defendants 1994 ILRM 105 , in which Mr. Justice Costello considered the scope of Order 31 of the Rules of the Superior Courts 1986. My attention was drawn to pages 115 and 116 of the report of the case where Mr. Justice Costello set out what he considered to be his conclusions in relation to the matter. He concluded that:-

"[A] Interrogatories which seek admissions as to the existence of documents and signatures to documents identified in discovery documents will normally be allowed unless there are special reasons why in the interest of justice an Order should not be made.

[B] Interrogatories which seek admissions about the facts surrounding documents identified in discovery affidavits must relate to the issues raised in the pleadings and cannot be used as a means to prove the interrogating party's case.

[C] Interrogatories which seek information must, likewise, relate to the issues raised in the pleadings and not to the evidence to be adduced in the case.

[D] Although the rule allows Interrogatories to be served for the purpose of saving costs the interest of doing justice between the parties is the paramount consideration in applications under it and so an Order will be refused if a fair hearing of the issues between the parties might be prejudiced by it even if the costs of the proceedings could be reduced by making the Order".

4. In the course of his judgment Mr. Justice Costello made an observation which does not appear in any of the conclusions which I have set out above. He said:-

"Leave to deliver Interrogatories will only be given when they are necessary for 'disposing fairly' of the cause or matter or for saving costs. In considering the fair disposal of an action commencing by plenary summons the court must bear in mind that such actions are in principle to be heard on oral evidence (Order 1 Rule 2) and that the use of evidence on affidavit given in reply to Interrogatories is an exception which must be justified by some special exigenc y in the case which, in the interests of doing justice, requires the exception to be allowed". (emphasis added).

apart from the foregoing it was contended by Counsel for Coillte that regard should be had to the observation of Lynch J. in Bula Limited -v- Tara Mines Limited 1995 ILRM 401 where at p. 405 he stated:-

"Interrogatories to be allowable must be as to facts in issue or facts reasonably relevant to establish facts in issue. Interrogatories as to mere evidence as distinct from facts or as to opinions or matters of law such as the meaning or effect of documents or statements or conduct are not permissible."

5. The allowance of interrogatories on "facts reasonably relevant to establish facts in issue" is arguably a test of wider latitude than the equivalent tests of Costello J. at [B] or [C] above but the express exclusion by Lynch J. of questions relating to opinions, or as to the meaning or effect of documents, or as to statements or conduct is a qualification of the principles stated by Costello J at [B] and [C] above.

6. Counsel on behalf of Woodfab submits that it is necessary for the fair disposal of the present case that the court should require the delivery of Interrogatories: it is submitted that in the circumstances there is a special exigency which requires that in the interest of justice leave be granted. The Plaintiff says that this special exigency arises by reason of the fact that the Plaintiff's claim against Coillte is one of anti-competitive behaviour and that the Plaintiff for the purposes of establishing such behaviour must adduce evidence as to the internal workings of Coillte, its opinions and policy making processes. This, Woodfab says, cannot be established in the absence of leave being given to it to deliver Interrogatories. Apart from arguing that such a special exigency justifies the delivery of Interrogatories, it is also submitted on behalf of Woodfab that the answering of the Interrogatories which are sought to be delivered would undoubtedly result in a saving of court time and a saving of costs. Finally, it is submitted that the Defendant, Coillte, has not sought to make out on affidavit a case that it will be prejudiced in any way by having to answer the Interrogatories of the Plaintiff.

THE SUBMISSIONS OF COILLTE

7. Coillte, through their counsel, submit that Woodfab has not established the existence of any special exigency, of the kind identified by Mr. Justice Costello in the Mercantile case, supra; Competition Act cases, it is submitted, are no different from other commercial cases where the internal workings of companies are at the very heart of the cause of action. It was also submitted on behalf of Coillte that there was no need for any replying affidavit to be furnished on behalf of Coillte as the Plaintiff had not, on its own affidavit, made out any case of necessity to interrogate the Defendant. Coillte contended that the burden was on Woodfab to establish that the Interrogatories sought to be delivered were necessary either for disposing fairly of the cause or matter or for saving costs. Counsel for Coillte relied strongly on a dictum of Bingham M. R. in the English Court of Appeal in the case of Hall -v- Sevalco Limited Times Law Reports 27th March, 1996 , where the Master of the Rolls stated:-

"Interrogatories had to be necessary either for disposing fairly of the cause or matter or for saving costs. Necessity was a stringent test. It could not be necessary to interrogate to obtain information and admissions which were or were likely to be contained in pleadings medical reports discoverable documents or witness statements unless, exceptionally, a clear litigious purpose would be served by obtaining such information or admissions on affidavit."

8. Bingham M. R. went on to say (at page 183):-

"Interrogatories should not be regarded as a source of ammunition to be routinely discharged as part of an interlocutory bombardment preceding the main battle the Interrogator had to be able to show that his Interrogatories, if answered when served, would serve a clear litigious purpose by saving costs or promoting the fair and efficient conduct of the action."

9. Counsel for Coillte argued that whether the test was one of " stringent necessity " or " special exigency " or simple " necessity" the Plaintiff had failed to meet any of those standards and the court should refuse to direct the delivery of Interrogatories. Apart from making the submission that the Plaintiff had failed to satisfy the court that the delivery of Interrogatories were necessary for the fair disposal of the case or for the saving of time or costs, counsel on behalf of Coillte also submitted that a substantial number of the Interrogatories which were sought to be delivered suffered from a degree of prolixity which should disqualify them from being delivered as Interrogatories.

CONCLUSIONS

(a) No party has a right to have Interrogatories delivered and answered. Order 31 Rule 2 of the Rules of the Superior Courts, 1986 provides:-

"[L]eave shall be given as to such only of the Interrogatories as shall be considered necessary either for disposing fairly of the cause or matter or for saving costs."

10. Apart from the provision of Order 31 Rule 2 various authorities which have been opened to me indicating that a Plaintiff will not be permitted as of right to deliver Interrogatories but will have to satisfy the court either that a special exigency or some necessity exists which warrant the delivery and answering of Interrogatories. All of the cases to which I have been referred identify the delivery and answering of Interrogatories as an unusual step in an action commenced by way of plenary summons. Costello J. in Mercantile Credit Company of Ireland Limited -v- Heelan & Others , supra, stated at page 110 of the report, as I have already indicated, that:-

"Leave to deliver Interrogatories will only be given when they are necessary for disposing fairly of the cause or matter or for saving costs in considering the fair disposal of an action commenced by plenary summons the court must bear in mind that such actions are in principle to be heard on oral evidence (Order 1 Rule 2) and that the use of evidence on affidavit given in reply to Interrogatories is an exception which must be justified by some special exigency in the case which, in the interests of doing justice, requires the exception to be allowed.'

11. These cautionary words of Mr. Justice Costello are echoed in a recent case of UCB Bank Plc -v- Halifax unreported judgment 10th June, 1997of the English Court of Appeal, in which Butler-Sloss LJ, at page 5 of the transcript of the judgment in the case, stated as follows:-

"It is in my view clear that the administering of Interrogatories is not a normal step in the proceedings, and will not automatically be allowed at any stage. They have to be shown to be necessary in accordance with the requirements of Order 26 Rule 1 and have to serve a clear litigious purpose. Further a suitable time if at all for Interrogatories to be administered is after discovery and exchange of witness statements and to do so at an earlier stage will almost always be premature".

12. As I have indicated, the various decisions to which I have been referred have gone to some length to emphasise that giving leave to deliver Interrogatories must be regarded as an exception in any case to be heard on oral evidence and must be justified by the party seeking to deliver Interrogatories. That the party seeking leave to deliver Interrogatories must establish that they are necessary can be seen from Order 31 Rule 2 of the Rules of the Superior Courts. However it does appear that once the party seeking to deliver Interrogatories satisfies the court that such delivery would serve a clear litigious purpose by saving costs or promoting the fair and efficient conduct of the action in question then the court should be prepared to allow the delivery of the Interrogatories unless it is satisfied that the delivery and answering of the Interrogatories would work an injustice upon the party interrogated. What I have just said is, I believe, simply another way of restating what is said in Order 31 Rule 2 of the Rules namely that leave shall be given to serve Interrogatories where it is considered "necessary either for disposing fairly of the cause or matter or for saving costs". The Court must of course look at each and every Interrogatory for the purposes of determining whether or not it is necessary to be answered for the purpose of disposing fairly of the cause or matter or for saving costs. In doing so it will take into account a number of matters. Those matters have been summarised by Mr. Justice Costello in Mercantile Credit Company Limited -v- Heelan , which I have already referred to, but which bear repeating:-

"[a] Interrogatories which seek admissions as to the existence of documents and signatures to documents identified in discovery documents will normally be allowed unless there is special reasons why in the interests of justice an Order should not be made.

[b] Interrogatories which seek admissions about the facts surrounding documents identified in discovery affidavits and must relate to the issues raised in the pleadings and cannot be used as a means to prove the interrogating parties case

[c] interrogatories which seek information must, likewise, relate to the issues raised in the pleadings and not to the evidence to be adduced in the case.

[d] though the rule allows Interrogatories to be served for the purpose of saving costs the interest of doing justice between the parties is the paramount consideration in applications under it and so an Order will be refused if a fair hearing of the issues between the parties might be prejudiced by it even if the costs of the proceedings could be reduced by making the Order. "

13. I respectfully adopt the foregoing as criteria which should be applied by the Court in deciding whether or not to permit interrogatories to be delivered together with the view expressed by Lynch J. in bula Limited -v- Tara Mines Limited, supra , that questions as to opinions, the meaning or effect of documents or as to statements or conduct should not be permitted.

14. The questions which are here sought to be answered by way of Interrogatory can be divided into the following subject categories:-

(A) Market share.

(B) Agreements with other parties.

(D) Board meetings at which issues as to performance indicators, corporate plans and pricing and marketing were discussed.

(E) The tendering process and the sale of timber.

(F) Regional meetings.

15. I am satisfied that the questions which I propose to allow are all questions which meet the criteria spelt out by Costello J. in Mercantile Credit, supra , and which are not excluded on the basis of the observations of Lynch J. in the Bula case , supra, on the grounds that they relate to opinions, conduct, or the meaning or effect of documents. While I am satisfied that the information sought and the admissions sought relate to issues raised in the pleadings I must also be satisfied by the Plaintiff that the answers to the questions raised in the Interrogatories are necessary for fairly disposing of the matters in issue or, alternatively, that answering the questions will save costs. In that regard I should say that I do not accept that the fact that the case is a Competition Act case places it in any special category such as would justify by itself the delivery of Interrogatories: while Sections 4 and 5 of the Competition Act, 1991 and Articles 85 and 86 of the EC Treaty necessarily involve an assessment of the behaviour of the Defendant in the market place and may indeed involve a factual assessment of the Defendant's internally developed pricing policies over time, nonetheless, it may be said that many other causes of action will also necessarily focus on the behaviour of a company (whether in the market place or elsewhere) and its internal policy making for the purposes of establishing liability in that Defendant company. The fact that the case is a Competition Act case therefore does not constitute, in my view, a 'special exigency' warranting the delivery of Interrogatories. I am, however, satisfied that the answers to the Interrogatories which I propose to allow be delivered will undoubtedly save costs. I am also satisfied that by permitting the delivery of the Interrogatories (to which I shall refer later) I am ensuring that no injustice to the Plaintiff will result from having to call the Deponent (namely the person answering the Interrogatories) and being deprived of the right to cross-examine him. This is a matter which Mr. Justice Costello in the Mercantile Credit Company case, supra , regarded as a factor which the court was entitled to take into account in considering whether it ought to permit Interrogatories. Apart from the saving of costs and the possibility of an injustice being worked, I am also satisfied that the answering of the proposed Interrogatories will serve to save time during the course of the trial of the action rather than prolong the trial of the action. In all the circumstances, I am satisfied that the Plaintiff has made out a case for the court to conclude that leave should be given to deliver the Interrogatories set out below on the grounds that the delivery of such Interrogatories is necessary either for disposing fairly of the cause or matter or for the saving of costs.

16. While I propose to make an Order giving the Plaintiff leave to deliver Interrogatories, an analysis of the 1068 questions discloses that certain of the Interrogatories should not be required to be answered by the Defendant. The reasons differ. Hereunder I list the reasons. In the schedule annexed to this judgment I list the questions which need not be answered. The reasons are:-

(A) Certain of the questions are based upon an hypothesis i.e. a fact yet to be established in evidence at the trial.

(B) Certain of the questions are unnecessary; for example where there is a question asking if certain accounts are true and accurate, it is unnecessary (until a negative answer is given) to ask further questions as to the accuracy of particular facts in those accounts. Woodfab shall have liberty to apply in this regard.

(C) Certain of the questions relate to the opinions or policy positions held by Coillte at different times and by officers of Coillte. I believe that to require a single deponent to answer questions as to opinion or policy of Coillte or its officers or management might work an injustice on the Defendant and might result in the absence of a fair hearing. Accordingly I have determined that such questions need not be answered by the Defendant.

(D) Certain of the questions arguably require the Defendant in answering under oath to draw inferences from facts set out in a document which is clearly an undesirable use of the interrogatory provisions of Order 31.

SCHEDULE

QUESTIONS IN RELATION TO WHICH LEAVE TO DELIVER INTERROGATORIES IS REFUSED

17. Questions 16, 17, 27, 28, 31, 40, 45, 50, 62, 113-126 (inclusive),

130-146 (inclusive), 150-166 (inclusive), 170-184 (inclusive), 188-202 (inclusive), 206-221 (inclusive), 532, 535, 538, 541, 545, 604, 605, 618, 679/80, 684/85, 689/90, 694/5, 699/700, 704/05, 709/10, 714/15, 719/20, 724/25, 729/30, 734/35, 739/40, 744/745, 749/50, 754/55, 759/60, 764/65, 769/70, 774/75, 779/80, 784/85, 789/90, 794/95, 799/800, 804/5, 809/10, 814/15, 819/20, 824/25, 829/30, 830/35, 839/40, 844/45, 849/50, 854/855, 859/60, 864/65, 869/70, 874/75, 879/80, 884/85, 889/90, 894/5, 899/900, 904/5, 909/10, 914/15, 919/20, 924/25, 929/30, 934/5, 939/40, 945/5, 949/50, 954/5, 959/60, 964/65, 969/70, 974/75, 979/80, 984/85/ 989/90, 994/95, 999/1000, 1004/5, 1009/1010, 1014/15, 1019/20, 1024/25, 1029/30, 1034, 1038, 1042/43, 1047/48, 1052/53, 1057/58, 1062/63, 1067/68.