Easy Readers Ltd. & Anor v. Bord na Radharcmhastori & Ors [2003] IEHC 67 (15 October 2003)
1998/11802p
BETWEEN
PLAINTIFFS
DEFENDANTS
JUDGMENT of Mr. Justice T.C. Smyth delivered the 15th day of October, 2003
This case concerns the entitlement of the first named plaintiff ("the Company") to sell ready-made spectacles. The second named plaintiff ("Dr. Rynne") formed or set up the Company with a view to selling ready-made specs or reading glasses on a commercial basis. The first defendant (the Board) was established by the Opticians Act, 1956 to provide for the registration and control of opticians and other related purposes. The second defendant (the Minister) is the Minister referred to in the Act aforesaid. The Act of 1956 defines spectacles thus –
"Spectacles includes pince-nez, contact lenses and monocles but does not include sunglasses, goggles or similar articles".
Part VI of the Act of 1956 deals with the prescription and sale of spectacles and s. 49 in particular provides for restriction on selling spectacles in these terms:-
"49 (1) A person shall not, on or after the appointed day, sell spectacles unless –
(a) in case the person is not a body corporate, the person is a registered medical practitioner or a registered optician or, if the sale is conducted on behalf of the person by another person, that person is a registered medical practitioner or a registered optician, or
(b) in case the person is a body corporate, the sale is conducted by a registered medical practitioner or a registered optician."
Subsection (4) of the section provides for the imposition of a fine on summary conviction of an offence under the section. At the hearing Mr. Hogan stated that amending legislation was imminent.
Since the hearing of this action, certain amendments have been made to the Act of 1956 by the Opticians (Amendment) Act, 2003 which in particular amended by substitution the definition of spectacles in this way –
"2. Section 2 of the Principal Act is amended –
(b) by substituting the following for the definition of "spectacles":
'spectacles' includes –
(a) Contact lenses whether afocal or focal lenses,
(b) Pince-nez, and
(c) Monocles,
But does not include –
(i) Afocal goggles or similar articles,
(ii) Afocal sunglasses or similar articles, or
(iii) Ready-made reading spectacles."
While this amendment is not and cannot be taken into account in determining lis between the parties placed before the Court: this decision is very much limited in its application.
Dr. Rynne became aware from his own medical knowledge and reading that on the European continent ready-made specs were becoming available as a common article for sale. Specifically he had such a knowledge in 1998 and to exploit what he considered to be a commercial market for the goods set up the company and sourced a supply through a cousin of his who was resident on the continent and who was au fait with the market. Dr. Rynne invested in stock and related equipment to the extent of about £40,000. He intended to and in effect did for a while through the aegis of the Company act as a wholesaler and sought out retailers, initially targeting chemist shops. From such beginnings he had hoped the market might develop in Ireland as apparently it had on the continent where ready-made specs were available in bookshops at airports, supermarkets and the like. I am satisfied and find as a fact that -
1. Dr. Rynne was specifically aware of s. 49 of the Act of 1956 and its restrictive provisions, and that while he personally was a permitted person – he was not interested in selling in that capacity, but was interested in supplying through the Company, chemists and others who were not permitted persons. [T.1 p. 78 Q. 158-159]
2. While Dr. Rynne was aware in 1998 that deregulation of the provisions on the sale of ready-made specs was being considered, it had not come about and the law was as provided in the Act of 1956. He also received copy of a circular from the Pharmaceutical Union of Ireland (not the Pharmaceutical Society of Ireland) indicating that his proposal was contrary to the prohibition in the Act of 1956.
3. That of the stock imported approximately £15,000 worth, representing some 5000 pairs of ready-made specs were unsold. His evidence was that if deregulated he would be able to sell off the rest of his stock [T.1 p. 96
Q. 220]
4. That sales never totally ceased – but did diminish over the period 1998 to 2002.
The historical background which is the context of the dispute between the parties is that in 1995 the Board and the Minister were in communication concerning the amendment of the Act of 1956 and in particular reading glasses (the ready-made specs). In 1996 the Minister's Department recognised the need to amend the law on the basis of European harmonisation and deregulation. Correspondence or communications between the Board and the Department continued in 1997, during which in May of that year there was a change of administration. In June 1998 the Board through its then President expressed the view to the Minister's Department that "the present position is indefensible [T.2 p. 40 Q. 196-197]: notwithstanding that prior to the Ministerial decree in France in summer of 1998 the position was similar to that in this State [T.2 p. 25 Q. 116]. In 1999 an inquiry was begun by the European Commission concerning the fact that deregulation had not taken place and in or about the year 2000 the Commission appear to have been satisfied that the appropriate commitment to amend the legislation was available.
Much was made, in the plaintiff's case, that the Board, as the prosecuting authority for enforcement of the Act of 1956 had resolved on 28th September, 1998 not to issue warning letters to persons (selling ready-made specs) who were not authorised under the Act of 1956. The plaintiff's submission in this regard was that "the debate" of entitlement to sell ready-made specs was effectively concluded by the decision of the Board (with its professional skill and judgment), and that the Minister ought to have followed the view of the Board and brought in amending legislation. The plaintiffs further submitted that the State is prohibited by the Treaty of Rome as amended and extended at Maastricht and Amsterdam in particular from creating or maintaining any commercial advantage or exclusively or any special right to undertakings which are in conflict with the competition in a free market rules under the Treaty (originally Articles 85 and 86, now Article 81 and 82).
Dr. Rynne accepted in evidence that there was a public health dimension to deregulation, but in his opinion there were no public health considerations [T.1 p. 94 Q. 218]. Furthermore literature relied upon by the plaintiffs as indicative of the experience of deregulation in France in particular recorded public health concerns as well as the public health dimensions [T.2 p. 26/27 Q. 127-130]. In short up to the point of deregulation in France there was a serious body of professional opinion that considered that the free sale of ready-made specs was not without an element of public health risk.
Dr. Alphonsus Walsh was appointed by the Minister to the Board, and its President between 1995-2000 and was aware of a range of proposals and considerations to amend the Act of 1956 but the issue of the free sale of ready-made specs was quite a minor matter and other issues were regarded as much more important [T.2 p. 32 Q. 149-150]. Dr. Walsh accepted that there were indirect public health implications and consequences in deregulation [T.2 p. 42 Q. 206-209]. It is clear that the Board had considered the desirability of deregulation and "a decision to create greater freedom in the availability of ready made reading glass must be a political one". While it is true that there was broad agreement on the Board regarding deregulation and Dr. Walsh was not only in favour but saw no merit in attaching notices or warnings to ready-made specs, Dr. Davidson a man of formidable specialist qualifications and an optometrist, expressed his opinion that there was a "cogent public health grounds for the restriction in s. 49 of the Act of 1956 and that it is a question of balance between public health and consumer pressure as to the way the legislature chooses to deal with the situation" [T.2 p. 73 Q. 278]. His opinion was that there was a very important health consideration –
"In that if a patient, a member of the public is not to have their eyes properly examined at any stage, and rely throughout their life on the Easy Readers, there is no opportunity for detection of a variety of, shall we say, hidden eye conditions which would not be evident to the patient." [T.2 p. 66 Q. 251]
There was evidence from Mr. Peyton whose business (Eye Wear Ireland) which sells and distributes ready-made specs that three people in Galway received a warning attached to such goods they had purchased and went to have their eyes tested. In my judgment the figure three is insignificant to the stated existing or potential market for ready-made specs.
The evidence establishes that there is a real potential recognisable market which might very well avail of the free sale of the ready-made specs: Mr. Peyton believed that with deregulation sales would increase "drastically" [T.3 p. 19 Q. 100].
There was much interesting, if conflicting, evidence from economists concerning objective justification for the provisions of s. 49 of the Act of 1956. This was led to prove that s. 49 was anti-competitive and so in breach of European Law as from 1995 onwards. In terms other than economic, I am satisfied and find as a fact that there was at all material times objective justification for the provisions of the statutory provision. Segregating the relevant from the interesting the plaintiff's economist accepted that there was no quantative restrictions in s. 49 but contended that there was in effect a qualitative restriction which had the effect of restricting the market – he was careful to confine this reply solely to economic criteria. Mr. Massey the defendant's economist averred that where there was a public health market argument and such would be consistent with an information asymmetry justification for regulating the market. In my judgment the public health argument is valid and significant and was so at all material times. I am satisfied and find as a fact that the mere fact that by legislation individual opticians have the rights conferred by s. 49 does not mean that he/she/they are in a dominant position in the market: even as a class they are not in a dominant position because they are in competition with each other in the market, as expressed by Mr. Massey –
"Once they are acting independently in the provision of services and in offering services to the public they are not collectively dominant" [T.3 p. 102 Q. 329].
There was no evidence before the Court that the persons with rights under s. 49 acted or act collectively or in concert. I am satisfied and find as a fact on the evidence that none of the defendants is an undertaking (which is to be distinguished from a regulatory authority) and the evidence does not sustain that any of them or the specific categories of persons in s. 49 is in a dominant position. Further I am satisfied that at the material time the provisions of s. 49 were a proportional response to the perceived public health argument.
In this case the plaintiff knew of the restrictions of s. 49 and did not wait for amending legislation, but sought to anticipate it on the basis of the freer regime that existed in other countries and of an awareness that professional opinion in this country was moving in the same direction. Things did not move as quickly as he would have liked and he issued these proceedings. While one may have an opinion as to the pace of change – the change in the law was a matter for the Oireachtas. It is clear even from the plaintiff's own witnesses that there were serious and complex matters to be dealt with in amending legislation. Given the issues involved and their gravity the time taken to bring about the amendments – the concern of this action – may seem long, but if delay existed it was neither inordinate or inexcusable: further it was not unreasonable that comprehensive amending legislation rather than single issue piecemeal legislation should have been undertaken.
The argument of the plaintiff that the issue was dead as a public health concern in 1995 or 1998 ignores the fact that it is the will of the Oireachtas not of a professional body or persons, however distinguished, that must predominate, and that notwithstanding the 1991 Regulations the appropriate measures to ensure fulfilment of obligations required by Article 10 of the Treaty invoked by the plaintiffs must be construed in the context of the facts of a public health concern. If none existed clearly the plaintiff's position would be quite different and the evidence on the economics would be very much more persuasive. Compliance with Treaty provisions cannot be ignored – but each State within the context of its own laws must be permitted a fair and reasonable time within which to accomplish compliance and no definitive time frame can be cast in stone. I do not accept that 'public health concern' was used as a mantra or excuse for what might be considered by the plaintiffs a dilatory response. Mr. Hardiman in his submissions accepted "that one cannot snap fingers and change the law" [T.4 p.-13]. In my judgment the defence on constitutionality is unassailable and Mr. Hardiman without any concession acknowledged his difficulties in this regard [T.4 p. 52 l. 28-30].
Detailed submissions were made by both parties on European Law and on the cases of Hofner and more particularly on Crespelle (Case C323/93). Notwithstanding the very able arguments made on behalf of the plaintiffs and the evidence of the plaintiff Mr. Peyton and Dr. McDowell I am satisfied that the submissions of Mr. Hogan are to be preferred as being more correct in legal application and interpretation and applicable to the facts, as I find them. Paragraph 20-22 of the judgment in Crespelle 'reinforces most strongly the point that the mere grant of what was referred to as the section 49 privilege in itself cannot be a ground for complaint. In my judgment the evidence adduced by the defendant shows that s. 49 does not create a situation in which the result is inevitably abuse stemming directly from s. 49: there is no suggestion that s. 49 mandates or requires or encourages an abuse of a dominant position – even if such existed which in my view it did not and does not.