HC 158/04
Record No. 2001/4862P
Between:
Plaintiff
Defendant
Judgment of Mr. Justice Herbert delivered 23rd day of April, 2004
By Order 19 rule 3 of the Rules of the Superior Courts, 1986, it is provided that:-
"Every pleading shall contain, and contain only a statement in summary form of the material facts on which the party pleading relies…but not the evidence by which they are to be proved."
Order 19 rule 7 (1) provides that a further and better statement of the nature of the claim or further and better particulars of any matter stated in any pleading may be ordered upon such terms as to costs or otherwise as may be just.
In the case of McGee v. O'Reilly and the North Eastern Health Board [1996] 2 I.R. 229 the Supreme Court per Keane J. (as he then was), at page 233, (Hamilton C.J., and Barrington J. agreeing) followed and applied the decision of the former Supreme Court in Mahon v. Celbridge Spinning Company [1967] I.R. 1, in holding that the whole purpose of pleading, "is that a party should know in advance, in broad outline, the case that party will have to meet at the trial".
In my judgment the effect of paragraphs 4 to 7 inclusive of the Statement of Claim delivered in the instant case on the 19th November, 2001 when read, together is that the plaintiff alleges that an oral agreement made between the plaintiff and the first named defendant in September, 1994 whereby the plaintiff agreed to produce, package and brand vegetable oil in accordance with sales estimates prepared by Princes Limited and communicated by the first named defendant to the plaintiff, and to deliver that oil to end users identified by Princes Limited and whereby the first named defendant agreed to pay the plaintiff the cost price of the oil together with a "filling Fee" for each twenty litre and fifteen litre container of oil, to include all packaging costs in addition to the plaintiff's profit, also contained an express term that the agreement could be terminated by either party by giving three months notice to the other party, which term is recorded in and evidenced by a letter from the managing director of the first named defendant to the managing director of the plaintiff dated the 23rd September, 1994.
The pleading at paragraph 7 of the Statement of Claim is in the following terms:-
"The said agreement is evidenced in writing and in particular by a letter dated 23rd day of September, 1994 from the managing director of the First Named Defendant to the managing director of the Plaintiff wherein it is expressly agreed that the agreement should be subject to three months notice of termination by either party."
Arising out of the use of the words, "in particular" in paragraph 7 of the Statement of Claim, the defendants contend that the plaintiff must identify and furnish to them a copy of any other writing which contains this term and any other alleged terms of the alleged agreement upon which the plaintiff intends to rely at the hearing of the action.
I am satisfied that paragraphs 4, 5, 6 and 7 of the Statement of Claim set out with sufficient particularity the terms of the alleged agreement asserted by the plaintiff and which it proposes to prove at the hearing of the action. I can see no reason why any further statement of the matters pleaded is necessary in order to sufficiently define the issues raised by these pleadings, to confine the evidence at the trial to matters related to these issues, to prevent the defendants from being taken by surprise at the hearing of the case by the introduction of matters not fairly to be ascertained from the pleadings, to save time at the hearing, or to save costs (McGee v. O'Reilly and the North Eastern Health Board [above cited] at page 233 and Cooney v. Browne and Others [1985] I.R. 185 at 191, Supreme Court per Henchy, J. (Finlay C.J., Griffin J., Hederman J., and McCarthy J. concurring).
A party to proceedings may not interrogate another party to those proceedings with regard to the documents and records intended to be relied upon in evidence by that party under the guise of seeking further and better particulars of a particular pleading. Neither is a party seeking particulars entitled to be furnished with copies of documents and records cited or referred to in the pleadings. If discovery upon oath of documents is made either voluntarily or pursuant to Order of the Court, the party making such discovery cannot rely upon a document or record at the hearing which is not disclosed in the Affidavit as to Documents, or may do so only upon such terms as to adjournment, costs and other matters as the Court of Trial may in justice to the other party impose.
By paragraph 14 of the Statement of Claim it is pleaded as follows:-
"Wrongfully and in breach of the said agreements, the First and Second Named Defendant ceased to operate the said agreements upon the giving of three months notice, thereby, in effect, terminating the said agreements without notice and so depriving the plaintiff of an opportunity to wind down its operations in an orderly fashion and to earn profits during the said period."
The Defendants seek further and better particulars of this pleading by requiring the plaintiff to identify the manner or manners in which it alleges that the defendants or either of them ceased to operate the agreements. The response of the plaintiff is that the pleading is perfectly clear and further and better particulars are not necessary or appropriate.
In my judgment, this pleading lacks the required specificity. It does not enable the defendants to know, even in broad outline, the breaches of these agreements upon which the plaintiff proposes to rely. The alleged failures in performance or breaches by non performance of the agreements are not identified even in a summary manner. Accordingly, the issues remain undefined and the evidence consequently unconfined. The defendants could very readily be taken by surprise at the trial of the action by the evidence led by the plaintiff. The defendants are left to speculate as to what the plaintiff claims were the acts or omissions of one or other or both of them which constituted the alleged breach or breaches of the agreements. Apart from this being wholly unfair to the defendants, it almost certainly would lead to time and costs being wasted at the trial of the action. I am therefore satisfied that the defendants are entitled to the further and better particulars sought of this pleading.
The defendants seek further and better particulars of the pleading in paragraph 14 of the Statement of Claim that the Plaintiff was deprived of an opportunity to wind down its operations in an orderly fashion and to earn profits during the alleged three month notice period. In my judgment, sufficient particulars are given by paragraph 14 of the Statement of Claim. I am satisfied that the particulars of loss and damage pleaded at paragraph 15 of the Statement of Claim are expressly related to the breaches of agreement on the part of the defendants alleged at paragraph 14,- namely, that the defendants ceased to operate, that is to perform their part of the agreements, and the plaintiff clearly and in my judgment sufficiently pleads that if the defendants had properly performed their obligations under the agreements during the three months termination period it would not be left with redundant packaging and surplus vegetable oil and would not have incurred unnecessary storage costs and would have realised a profit on sales of vegetable oil. The loss and damage claimed in respect of each of these items is specifically quantified in paragraph 15 of the Statement of Claim. The defendants are not in my judgment entitled to further or better particulars of this pleading.
It is pleaded at paragraph 19 of the Statement of Claim that:-
"In addition to purchasing, packaging and delivering vegetable oil pursuant to the contracts referred to above, the plaintiff acted as a self-employed intermediary having the authority of the First Named Defendant to negotiate the sale of Wesson Vegetable Oil to customers not supplied with the same by the Second Named Defendant and as such acted as a commercial agent within the meaning of the European Communities (Commercial Agents) Regulations 1994 and 1997 and the Council Directive thereby implemented which said agency contract is evidenced in writing."
By a Notice for Particulars dated the 2nd May, 2002 the first named defendant required the following further and better particulars of this pleading:-
"Arising from paragraph 19 of the Statement of Claim please furnish full and detailed particulars of the following:
(a) With regard to the contention that the plaintiff acted as a self-employed intermediary, please specify precisely:
(i) what is meant by the expression 'self-employed intermediary';
(ii) all facts, matters and circumstances relied upon to support this contention;
(iii) the period during which it is alleged that the Plaintiff acted as a self-employed intermediary.
(b) With regard to the contention that the plaintiff had authority of
the first named Defendant to negotiate the sale of Wesson Vegetable Oil to customers not supplied with the same by the second named defendant please specify precisely:
(i) all facts, matters and circumstances relied upon to
support this contention;
(ii) each and every customer in respect of whom it is
alleged that the Plaintiff had authority of the first named Defendant to negotiate the sale of Wesson Vegetable Oil;
(iii) whether it is alleged that the authority allegedly given
by the first named Defendant was express or implied;
(iv) the date or dates on which it is alleged that this authority was given;
(v) whether it is alleged that this authority was given orally or in writing;
(vi) if it is alleged that this authority was given in writing, please furnish a copy;
(vii) if it is alleged that this authority was given orally, please identify the person or persons on behalf of the first named Defendant whom it is alleged gave this authority and the persons on behalf of the Plaintiff whom it is alleged were given this authority.
(c) With regard to the contention that the Plaintiff acted as a commercial agent within the meaning of Council Directive 86/653/E.E.C. ('the Directive') and the European Communities (Commercial Agents) Regulations, 1994 and 1997, please specify precisely:
(i) all facts, matters and circumstances relied upon to
support this contention;
(ii) the period during which it is alleged that the Plaintiff
acted as a commercial agent within the meaning of the Directive and the Regulations;
(iii) whether it is alleged that the alleged commercial
agency contract was oral or in writing;
(iv) if it is alleged that the alleged commercial agency
contract was in writing, please furnish a copy;
(v) if it is alleged that the alleged commercial agency
contract was oral, please identify the person or persons on behalf of the Plaintiff and on behalf of the first named Defendant whom it is alleged made the agreement;
(vi) each and every term of the alleged commercial agency
agreement;
(vii) the alleged duration of the alleged commercial agency
agreement;
(vii) the commission earned by the plaintiff on sales
allegedly made and the basis on which the commission was calculated.
(d) With regard to the contention that the alleged commercial agency contract between the parties was allegedly evidenced in writing please specify precisely:
(i) all facts, matters and circumstances relied upon to support this contention;
(ii) each and every document which is relied upon as allegedly evidencing the alleged commercial agency contract in writing;
(iii) whether it is alleged that the alleged commercial agency contract was evidenced by the letter dated 23rd September, 1994 referred to in the Statement of Claim.)
The plaintiff's replies dated the 20th May, 2002 are as follows:-
"9(a)(i) the Plaintiff was requested by the First Named Defendant to sell the Wesson brand of oil to customers and potential customers of the First Named Defendant generally in the greater Dublin Area where it was uneconomic for the First Named Defendant to supply the Wesson Brand Oil. Agents would refer to copy letter from the First Named Defendant dated the 8th February, 1995 referred to at 1(a) (i) above, which sets out the details of this Agreement.
(ii) see answer to 9(a)(i) above.
(iii) the Plaintiff was to continue acting as a self-employed
intermediary, on an ongoing basis.
(b)(i) the First Named Defendants are referred to the reply to 9(a)(i) above.
(ii) the Plaintiff and the First Named Defendant are in
competition for business. It would not be appropriate
for the Plaintiff to furnish a list of its customers to the First Named Defendant.
(iii) see reply to 9(a)(i) above.
(iv) See letter dated 8th February, 1995 referred to at 9(a)(i) above.
(v) see reply to Particular 9(a)(i) above.
(vi) See reply to Particular 9(a)(i) above.
(vii) see reply to Particular 9(a)(i) above.
(c)(i) – (viii) The matters raised in this particular are all matters of
evidence.
(d)(i) – (iii) The First Named Defendants are referred to the documents already furnished with these replies.
The Plaintiff will rely on these documents and such other documents and evidence that they shall present at the Hearing of this action".
By letter dated the 18th October, 2002 the solicitors for the defendants advised the solicitors for the plaintiffs that their clients considered these replies to be deficient in a number of respects and went on to seek the following additional particulars:
"9(a)(2) we note that it is stated in your client's replies that the proof that the Plaintiff was self-employed intermediary is contained in a copy letter from the first named Defendant dated 8th February, 1995. Please confirm that your client will be relying solely on that letter to ground its claim that it was a 'self-employed intermediary'.
(b)(1) please confirm that the copy letter from the first named Defendant dated 8th February, 1995 is the only document on which the Plaintiff will be relying with regard to the contention that the Plaintiff had the authority of the first named Defendant to negotiate the sale of Wesson Vegetable Oil to customers not supplied with the same by the second named Defendant.
(b)(2) we note that you state that the Plaintiff and the first named Defendant are in competition for business and that it would not be appropriate for the Plaintiff to furnish a list of its customers to the first named Defendant. We ask for the Plaintiffs to specify precisely each and every customer in respect of whom it is alleged that the plaintiff had the authority of the first named Defendant to negotiate the sale of Wesson Vegetable Oil. Accordingly, if the Plaintiff is alleging that it had the authority of the first named Defendant to negotiate a sale with the customer then it follows that the first named Defendant would already have details of the customer as it would have allegedly given authority to the Plaintiff to negotiate the sale. Accordingly, please respond.
(c)(1) to (8) we note that you state that the matters raised in this particular are all matters of evidence. We would disagree with this interpretation. It is essential that our client is aware of your client's contentions with regard to the stated directive and regulations if it is to be in a position to defend the matter at trial. Accordingly, we would appreciate if you would respond to the request."
By letter dated the 22nd May, 2003 the solicitors for the plaintiff responded as follows:
"9. The allegations made in Paragraph 19 of the Statement of Claim are perfectly clear and your initial request for further Particulars was inappropriate. Nonetheless further information was supplied to you and the position is now that the First Named Defendant has in its possession sufficient information to enable it to deal with these allegations."
Regulation 2(1) of the European Communities (Commercial Agents) Regulations, 1994, [S.I. No. 33 of 1994], provides that:-
"in these regulations 'commercial agent' means a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person, hereinafter called 'the principal', or to negotiate and conclude such transactions on behalf of and in the name of the principal."
Regulation 2(5) of the Regulations of 1994 provides that,
"the agency contract shall not be valid unless it is evidenced in writing".
The term "self-employed intermediary" is not defined in the European Communities (Commercial Agents) Regulations, 1994 and 1997 or in Council Directive 86/653/E.E.C. of 18th December, 1986. The meaning of the term in the context of these Regulations and the Council Directive and whether the plaintiff acted as such at any material time is therefore a matter to be ascertained by the Court and is not in my view a proper matter for particulars.
At the hearing of this application the first named defendant contended that despite the replies to particulars furnished by the plaintiff, it was properly entitled to further and better particulars of how the plaintiff claimed it acted as a commercial agent of the first named defendant. The first named defendant also sought further and better particulars of how and for what period the plaintiff claimed to have acted as a self-employed intermediary.
In my judgment it is sufficient for the Plaintiff to plead, as it does on reading paragraph 19 of the Statement of Claim as a whole, that it was acting as a self-employed intermediary at all times while it was acting as a commercial agent of the first named defendant. The relevant period during which it claims to have been acting as a self-employed intermediary is therefore clearly confined to the period of the alleged commercial agency contract with the first named defendant. The burden of proving that it was a self-employed intermediary during the whole of this period lies on the plaintiff. However, the evidence by which it intends to establish this fact is not a suitable matter for particulars.
There is very considerable overlap between the various particulars sought at paragraph 9, sub-paragraphs A, B and C of the request of the first named defendant for further and better particulars dated the 2nd May, 2002. In my judgment, arising out of the pleading at paragraph 19 of the Statement of Claim, the first named defendant is entitled to have particulars of when, in what form and by whom the plaintiff alleges it was given the alleged continuing authority to act on behalf of the first named defendant and whether the authority alleged was solely to negotiate the sale of Wesson Vegetable Oil on behalf of the first named defendant or was to negotiate and also to conclude such transactions on behalf of and in the name of the first named defendant. The first named defendant is further entitled to particulars, - which need not be in the form of an exact recital, - of the material terms of the alleged agency contract and in particular of any alleged terms relevant to the plaintiff's claim for compensation or for damages pursuant to Article 17(3) of Council Directive 86/653/E.E.C., 18th December, 1986, for example, the alleged rate or rates of commission alleged to have been agreed. The first named defendant is also entitled to further and better particulars of any writing upon which the plaintiff intends to rely as "evidencing" the alleged agency contract including the date of and parties to that writing. References by the plaintiff to writings setting out "details" of the alleged agreement are not sufficient: the plaintiff must give particulars, as indicated, of the writing or writings upon which it intends to rely to prove compliance with the requirements of Regulation 2(5) of the European Communities (Commercial Agents) Regulations, 1994.
At paragraph 19 of the Statement of Claim it is pleaded that the plaintiff had alleged authority to negotiate the sale of Wesson Vegetable Oil to customers not supplied with the same by the second named defendant. The first named defendant seeks, by way of further and better particulars the name of each such customer. The use of the word "customers" in paragraph 19 of the Statement of Claim is ambiguous, but by paragraph 19(a)(i) of the replies to particulars dated the 20th May, 2002 the plaintiff makes it clear that it is intended to cover not only existing but also potential customers. In my judgment the pleading is sufficiently specific as to the nature of the agreement alleged. The identity of any existing customers of the first named defendant not supplied by the second named defendant must be a matter within the express knowledge of the first named defendant which could not therefore be taken by surprise at the hearing of the action. However, in my judgment, the first named defendant is entitled to be furnished with the names of any, "potential customers", which the plaintiff alleges it would have supplied with Wesson Vegetable Oil in the course of the alleged three month notice period. Without this information, the first named defendant would be at an enormous disadvantage in endeavouring to defend this claim. It must be clearly understood that the use of such information furnished at the direction of this court is strictly limited to the defence of these proceedings only and any other use whatsoever of this information without the express permission of the court would be restrained by injunction and in any event would be a most serious contempt of court with serious consequences for the contemnor.
At paragraphs 21 and 22 of the Statement of Claim it is pleaded as follows:-
"p.21 wrongfully and in breach of the terms of the said Council Directive the First Named Defendant, in effect, terminated the said agency contract without notice on or about the 31st day of October, 2000 thereby depriving the Plaintiff of commission on sales and preventing it from amortizing the costs and expenses incurred by it in the performance of the said agency contract.
p.22 in the premises, the Plaintiff is entitled to be compensated by the First Named Defendant pursuant to Article 18 of the said Council Directive."
It appears to me that the plaintiff's claim is made pursuant to the provisions of Article 17(3) of Council Directive 86/653/E.E.C., of 18th December, 1986 and not Article 18 as pleaded in paragraph 22 of the Statement of Claim. The plaintiff claims that because it was not given a termination notice of three months to which it claims it was entitled pursuant to the provisions of Article 15 of the Council Directive it was deprived of the commission to which proper performance of the agency contract would have entitled it during that period and was prevented from amortizing costs and expenses. In replies to particulars dated the 22nd May, 2003 the Plaintiff at paragraphs 11 and 12 stated as follows:-
"the plaintiff cannot be required to set out the evidence in which it proposes to rely on whether documentary or oral. The allegations made in Paragraph 21 is perfectly clear and wholly unjustified.
The factual basis for the claim made is set out in the Statement of Claim and the First Named Defendant can obtain its own advice in relation to whether the facts alleged give rise to an entitlement to compensation under Article 18 in terms of quantum, since the Plaintiff contends that the affect of the Directive was that it was entitled to a minimum of three months notice and was not given same and it follows that the claim under this heading replicates the claim made at Paragraph 14 of the Statement of Claim with the result that the Particulars set out in Paragraph 15 are applicable".
The defendants contend that the alleged loss of profits on sales during this period of three months, quantified by the plaintiff in the sum of IR£23,500, former currency, approximately, (€29,839.00) are "special damage" and capable of substantially exact calculation and accordingly the plaintiff must by way of further and better particulars set out the facts which make this calculation possible. Counsel for the defendants referred to the decision of the United Kingdom Court of Appeal, Civil Division in the case of Perestrello é Companhia Limitada v. United Paint Company Limited [1969] 3 A.E.R. 479. At page 486 of the judgment at paragraphs B to E, Lord Donovan, (Harman and Widgery L. J. J., concurring) held as follows:-
" 'the question to be decided does not depend on words, but is one of substance' (per Bowen L. J., in Ratcliffe v. Evans [1892] 2 QB 524).
The same principle gives rise to the plaintiff's undoubted obligation to plead and particularise any item of damage which represents out-of-pocket expenses and loss of earnings incurred prior to the trial, and which is capable of substantially exact calculation. Such damage is commonly referred to as special damage or special damages but is no more than an example of damage which is 'special' in the sense that fairness to the defendant requires that it be pleaded.
The obligation to particularise in this latter case arises not because the nature of the loss is necessarily unusual, but because a plaintiff who has the advantage of being able to base his claim on a precise calculation must give the defendant access to the facts which make such calculation possible.
The matter is clearly stated in Mayne and MacGregor on Damages (12th edition, 1961) in paragraph 970 where the learned editors write:
'Special damage consists in all items of loss which must be specified by [the plaintiff] before they may be proved and recovery granted. The basic test of whether damage is general or special is whether particularity is necessary or useful to warn the defendant of the type of claim and evidence or of the specific amount of claim which he will be confronted with at the trial'".
The Appeal Committee of the House of Lords dismissed the plaintiff's application for leave to appeal in that case.
Counsel for the defendants further argued that without their being in a position to check the facts upon which this alleged loss is based the defendants are in effect deprived of their right to make an offer of tender or a payment into court. Counsel for the plaintiff argued that all items of loss are clearly specified and quantified in paragraph 15 of the Statement of Claim so that defendants are on clear notice of the type of claim and the amount of each such claim which will confront them at the hearing of the action and any further information would amount to evidence.
As no contrary authority of the Superior Courts of this Jurisdiction was opened at the hearing of this application, and I am not aware of any such, and as no contrary judgment of the House of Lords of the United Kingdom was produced in argument, I propose to apply the above cited principle as stated by Lord Donovan which in my judgment accurately reflects the rule in this Jurisdiction also. I am satisfied that the defendants are entitled by way of further and better particulars to precise details of how this sum of IR£23,500 (former currency) is calculated. The plaintiff must, to borrow the words of Lord Donovan, "give the defendant access to the facts which make such a calculation possible". If this were not done the issues in the case could not be said to be fully defined and the defendants would be placed at an enormous disadvantage in preparing for and in advancing their defence at the hearing of the action. In addition any tender or payment into court offered or made by them would be reduced to little short of a wager.
The plaintiff alleges that because it was not given the three months notice of termination of the alleged commercial agency to which it alleges it was entitled by virtue of Article 15 of the Council Directive, it was unable to wind down its operation in an orderly fashion and amortize costs and expenses. As an alleged consequence, the plaintiff claims that it has been left with IR£35,000.00 approximately (€44,441.00) redundant packaging; IR£1,364.00 (€1,732.00) surplus vegetable oil and has incurred IR£7,250.00 (€9,206.00) in wasted storage costs. This is clear from a reading of paragraphs 11 and 12 of the replies to particulars dated the 22nd May, 2003.
I am satisfied that the same arguments and considerations arise with respect to the claim for further and better particulars of these items of alleged loss as arose with respect to the plaintiff's claim for alleged loss of profits. Counsel for the defendants contended that the defendants are entitled by way of further and better particulars to details of the alleged storage, redundant packaging and surplus oil, when, from whom and at what cost and on what terms each was obtained, how much of each was used and how much remains. I am satisfied for the reasons I have already given when addressing the claim for further and better particulars of the alleged loss of profits, that the defendants are entitled in each case, by way of further and better particulars to, "access to the facts which make such calculations possible". These would include, but are not necessarily confined to the matters instanced by Counsel for the defendants.
Other cases cited in argument
Hayward and Anor. v. Pullinger and Partners [1950] 1 A.E.R. 581
Williams v. Ramsdale [1888] 36 W. R. 125
Turquand and Capital and Counties Bank v. Fearon [1879] 48 L. J. Q. B. 703