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Cite as: [2005] 3 IR 457, [2005] IEHC 267

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Judgment Title: P J Carroll and Co Limited and ors -v- The Minister for Health and Children and ors

Neutral Citation: [2005] IEHC 267

High Court Record Number: 2004 4729P

Date of Delivery: 22/07/2005

Court: High Court

Composition of Court: Kelly J.

Judgment by: Kelly J.

Status of Judgment: Approved

2005 IEHC 267

THE HIGH COURT
COMMERCIAL

2004 No. 4729P

BETWEEN

PJ CARROLL AND COMPANY LIMITED, JOHN PLAYER AND SONS LIMITED, VAN NELLE (IRELAND), REEMTSMA CIGARETTEN FABRIKEN GMBH, GALLAHER (DUBLIN) LIMITED, SOCIÈTE NATIONALE D’EXPLOITATION INDUSTIELLE DES TABACS ET ALLUMETTES (SEITA), GERRY LAWLOR AND CONOR FULLER

PLAINTIFFS

AND
THE MINISTER FOR HEALTH AND CHILDREN, IRELAND AND THE ATTORNEY GENERAL AND THE OFFICE OF TOBACCO CONTROL

DEFENDANTS

JUDGMENT of Mr. Justice Kelly delivered on the 22nd day of July, 2005

Introduction
One hundred and six cases have been permitted to enter the commercial list of this court since it was created on 12th January, 2004. No party to any of those cases has, until now, ever sought to have such a case transferred out of the list. That is the order which the defendants now seek.
The order is sought more than a year after the case was admitted to the list and in circumstances where extensive activity has taken place pursuant to case management directions given by the court. It is now sought to expel the case from the list. In such event the case would fall to be dealt with in the chancery list. It would cease to be governed by the provisions of order 63(A) of the Rules of the Superior Courts. Instead it would proceed without any judicial involvement save that brought about by motions which might be brought by the parties. Once set down it would appear in a list to fix dates and take its place accordingly.
The Proceedings
These proceedings challenge several provisions of the Public Health (Tobacco) Act, 2002, (as amended by the Public Health (Tobacco) (Amendment) Act, 2004) and the European Communities (Manufacture, Presentation and Sale of Tobacco Products) Regulations, 2003. The basis for the challenge is the alleged invalidity of these legislative measures by reference to specific provisions of the Constitution, the law of the European Union and the European Convention on Human Rights.
If these legislative measures are put into force there can be little doubt but that they will restrict in a manner heretofore unknown the marketing and sale of the tobacco products produced and distributed by the plaintiffs. They assert that this will have what has been described on oath as “extremely serious commercial consequences” for them. They swear that the measures will –
(a) make it practically impossible for the corporate plaintiffs to distribute or launch new brands on the market,
(b) prevent any competition between the corporate plaintiffs,
(c) prevent the corporate plaintiffs increasing their share of the existing market,
(d) deprive the corporate plaintiffs of the benefit of their intellectual property in their respective tobacco brands,
(e) force the corporate plaintiffs to provide confidential proprietary information to the fourth defendant,
to mention just some of the commercial consequences for the plaintiffs.
This is not the first time that the plaintiffs have challenged the validity of certain provisions of the Public Health (Tobacco) Act, 2002. In proceedings which commenced in June, 2002, the validity of that Act and an order which had been made under it were impugned. Prior to the trial of those proceedings it was conceded by the defendants that they had failed to notify the European Commission of certain provisions of that Act as they were required to do by Directive 1998/34/EC as amended by Directive 1998/48/EC. As a consequence, an undertaking was given on behalf of the first defendant that certain sections of the Act would not be commenced in their original form. Those proceedings were struck out with costs to the plaintiffs. As a result of this failure by the relevant defendant to notify the European Commission a very substantial costs liability to the State was incurred.
The present proceedings were commenced on 16th April, 2004.
A statement of claim was delivered on 22nd April, 2004. This was followed by a notice for particulars of 13th May, 2004, which was replied to on 3rd June, 2004.
Entry into the Commercial List
By a notice of motion dated 9th June, 2004, the plaintiffs applied to enter this case into the commercial list. The application was grounded upon an affidavit sworn by Mr. Liam Kennedy, a partner in the firm of A & L Goodbody who act on behalf of the plaintiffs. The affidavit was lengthy and explained the basis upon which it was contended on behalf of the plaintiffs that the proceedings were appropriate for entry into the commercial list. The affidavit inter alia identified the commercial consequences (which I have already alluded to in short form above) for the plaintiffs should the legislation be brought into force.
A short replying affidavit was filed by the defendants on the morning of the hearing. It made no attempt to controvert the averments contained in Mr. Kennedy’s affidavit. It expressed the view that the proceedings did not constitute commercial proceedings within the meaning of order 63(A) and therefore that the defendants were not in a position to consent to the application for transfer. The affidavit exhibited a letter from the Chief State Solicitor dated 16th June, 2004, which was sent to the plaintiffs’ solicitors and read as follows:-
“Dear Sirs

We have noted that your motion to transfer these proceedings into the commercial list is listed for hearing on Friday, June 18th. We are not of the view that the proceedings come within the definition of commercial proceedings set out in order 63(A), rule 1 of the Rules of the Superior Courts. In particular, we do not agree with your contention that the proceedings come within order 63(A) 1(g). These proceedings are, in essence, a constitutional challenge to the validity of legislation. Our counsel will therefore indicate to the court that our clients do not feel it appropriate to consent to the transfer of these proceedings to the commercial list.

Nonetheless, our clients are of the view that these proceedings would benefit from case management. Our clients are also happy to facilitate the expeditious hearing of this action, although under separate cover, as you will be aware, we have confirmed that the impugned sections of the 2004 Act will not be commenced prior to 15th December, 2004.

As you are aware from the previous challenge brought in respect of the Public Health (Tobacco) Act, 2002, we are of the view that these proceedings will require a lengthy trial of perhaps four weeks.

We disagree fundamentally with your clients’ assertion that the necessity for evidence is limited. Our view is that, in order to permit the court to apply the proportionality test, it would be necessary for the court to hear evidence as to the factual basis for the public health objective of the legislation. We have clarified the availability of our expert witnesses, many of whom would have difficulty with a trial date before the end of this legal term. However, with sufficient notice, our experts could make themselves available for a date in the Michaelmas term.”

It is to be noted that the Michaelmas term there mentioned was Michaelmas 2004.
I decided to admit the case to the commercial list. It is true to say that the defendants opposed the application but by no stretch of the imagination could the opposition be described as strong, strenuous or vociferous. The opposition was entirely consistent with the phrase used in the final sentence of the first paragraph of the letter from which I have just quoted. The defendants “did not feel it appropriate to consent to the transfer of the proceedings”. They clearly recognised both in the letter and in the submissions of counsel the benefits that could be obtained for the litigation by the utilisation of the procedures which are encompassed in order 63(A) of the Rules of the Superior Courts.
The rather supine nature of the opposition to the transfer of the case into the commercial list is demonstrated not merely in the correspondence from which I have quoted and what happened in court but by the fact that no appeal was taken against the order which I made. Furthermore the defendants have fully participated in all of the case management procedures which were adopted thereafter. I will deal with these presently.
Case Management
Immediately prior to the case entering the commercial list the defendants delivered their defence. Pursuant to an order made on 18th June, 2004 a reply to that defence was delivered on behalf of the plaintiffs on 29th June, 2004; a rejoinder was delivered on behalf of the defendants on 6th July, 2004.
A further directions hearing took place on 2nd July, 2004. On that occasion the parties were directed to prepare and lodge in the Central Office, (a) a list of the issues in respect of which evidence was expected to be adduced; (b) an outline of the extent of the evidence and (c) a list of the witnesses or, alternatively, the type of witnesses who would give evidence on those issues.
On the basis of those directions, with which the defendants agreed, the matter was adjourned for further directions to 9th July, 2004. At no stage during the hearing of 2nd July or 9th July did the defendants give the slightest indication that they were dissatisfied with the order which had been made admitting the case to the commercial list and they fully co-operated and agreed to the steps proposed.
At the adjourned directions hearing on 9th July, 2004, submissions were made on behalf of the plaintiffs and the defendants concerning the entitlement of the defendants to adduce evidence in support of their defence of certain constitutional questions raised in the proceedings.
A major part of the defendants’ case is that the restrictions prescribed by the Acts and Regulations in suit are lawful and a proportionate response to the health hazards created by tobacco.
The exchange of pleadings which I have already described gave rise to a large number of admissions by the plaintiffs concerning the health hazards posed by tobacco.
In the light of those admissions the plaintiffs contended that the State should not be entitled to call evidence in relation to them on two bases. The first was narrow. It was said that the court ought not to permit evidence to be given in respect of facts which were not in dispute.
The second argument was wider. It amounted to a contention that the State should never be entitled to call evidence in support of the proportionality of a legislative measure which is being impugned for unconstitutionality.
I heard argument on these issues on 9th July and reserved my judgment. I delivered it on 29th July, 2004.
In the course of that judgment I expressly refused to adjudicate on the wide issue raised by the plaintiffs since I took the view that it was not necessary for me to do so and in any event I would have been reluctant to do so on a procedural motion of the type in question. However, I was of opinion that having regard to the admissions in the pleadings, it was not open to the State to call evidence on facts that were not in contest.
In essence, I found that evidence, to be admissible, must be relevant. Trials last long enough without spending time on evidence which is irrelevant. Relevance must, and can only, be judged by reference to the issue which the court is called upon to decide. If facts are admitted they are not in issue. Evidence is relevant if it is logically probative or disprobative of a matter which requires proof. Facts that are admitted require no proof.
The decision which I gave on 29th July, was the subject of an appeal to the Supreme Court, to which I will turn in due course.
At no time during the hearing on 9th July, the judgment delivered on 29th July, or the further directions which were given on 30th July, 2004, did the defendants evince the slightest dissatisfaction with the case being dealt with in the commercial list.
At the hearing on 30th July, 2004, I permitted the plaintiffs to deliver an amended reply on or before 15th September of that year. That was done.
The matter was next before this court on 8th October, 2004.
Prior to that date the defendants delivered a document called “Particulars re Advertising” and an amended rejoinder.
I was informed on 8th October that the defendants had appealed my decision of 29th July. However, it was agreed by both parties that irrespective of the outcome of that appeal evidence would have to be heard in the action. So they were agreeable to further directions being given in respect of exchanging summaries of evidence. By agreement of the parties I directed that they be exchanged on or before 3rd December, 2004 and a further directions hearing was listed for 17th December, 2004.
Again at this hearing of 8th October, 2004, no indication was given by the defendants that they believed that the proceedings were no longer suitable for the commercial list. In fact the very opposite impression was given because of their consent to the exchange of the summaries of evidence. The summaries were exchanged as agreed.
When the case came before me on 17th December, 2004, I was told that the Supreme Court had heard the appeal from my order of 29th July, 2004. That appeal was heard on 25th November, 2004 and judgment was reserved.
As there was no further progress which could be made pending the outcome of that appeal I adjourned the proceedings generally with liberty to re-enter pending the delivery of judgment by the Supreme Court.
The appeal to the Supreme Court
The appeal to the Supreme Court from my decision of 29th July, 2004 was made by a notice of appeal dated 7th September, 2004.
The notice of appeal raised no issue as to the appropriateness of the proceedings having been entered into the commercial list or remaining in that list.
Prior to the hearing of the appeal written submissions were exchanged between the parties. Nowhere in their written submissions did the defendants take issue with the proceedings having been entered into the commercial list or remaining in that list. It is accepted by both sides that the question was not raised by anyone at any stage during the oral submissions made before the Supreme Court.
That court reserved its judgment on 25th November, 2004.
The reserved judgment was delivered on 3rd May, 2005.
In bringing the present application the defendants place heavy reliance on certain observations made in the judgment of the Supreme Court on the question of the appropriateness of this case being in the commercial list.
The judgment of the Supreme Court
The following passages from the Supreme Court judgment are relied upon by the defendants.

“It is not clear from the order whether both sides had consented to the case being dealt with in the commercial list. One can well imagine that it might have suited both sides. It is easy to be wise after the event, but given the subsequent history of the case, it would seem to me to be highly doubtful that it was wise in practice, even if permissible in law, to have allowed this case enter the commercial list. In its essence it is not a commercial case. It is a constitutional action. I am not in any way suggesting that every case which challenges the constitutionality of a statutory provision should be precluded from being entered into the commercial list. Each case must depend on its facts. But I see a difference between a case which is fundamentally a commercial case but where there may be tagged on as a last resort relief a challenge to the constitutionality of a statutory provision on the one hand and an action which from the beginning is fundamentally a constitutional action. It may be appropriate to enter the former in the commercial list but caution should be exercised in admitting the latter. It would seem to me that this case clearly falls within the latter category.

Now that the case is for better or worse in the commercial court, I have come to the conclusion that if I am satisfied (as I am), that on at least one of the grounds of appeal put forward by the appellants, the order of the High Court ought to be set aside, I should not express any views on the other grounds raised.”

I have already had to consider this Supreme Court judgment in the case of Mulholland and Anor. v. An Bord Pleanála (Unreported, 14th June, 2005).
There I described it as both curious and puzzling.
I found it curious because the passage from the judgment of the Supreme Court relied on here dealt with a question which was neither in issue nor argued before the Supreme Court. All of that is accepted by the defendants. The defendants expressly concede that the view which I formed in Mulholland’s case to the effect that these observations of the Supreme Court were obiter dicta was correct.
Not merely that, but it is quite clear from the first sentence of the passage which I have just cited, that the Supreme Court was unaware of how the application to enter the commercial list had been dealt with before me. It was not aware of, and still less could have considered, the uncontroverted detailed evidence which was put before me setting forth the commercial aspects of the litigation which would render it appropriate for entry into the list pursuant to Order 63(A), rule 1(b).
Despite the obiter nature of the observations and the fact that they were made without knowledge of the sworn uncontroverted testimony that was placed before this court when it decided to admit this litigation into the commercial list, I nonetheless pay great attention to them and show them all due deference. They must, however, be of limited value as a support for the defendants’ application.
To complete this narrative I should record that the defendant’s appeal was allowed. But the Supreme Court did so by deciding on the wide argument of principle which I declined to consider. That court said little or nothing on the admissibility of evidence in respect of facts not in issue. That question appears to be open.
Events subsequent to the Supreme Court judgment
The case came back before the Commercial Court for further directions on 27th June, 2005. Without any prior warning to either the court or the plaintiffs, counsel for the defendants indicated that he proposed applying to transfer the proceedings out of the commercial list. I indicated that if such an application was to be made it would have to be done on notice to the plaintiffs and that it was inappropriate to expect them to deal with the matter then, it having been raised for the first time by counsel when on his feet before the court.
I directed that if such a motion were to be brought it should be returnable before the court for hearing on 11th July, 2005. I heard the motion on that day.

The application to transfer
A number of reasons are put forward which it is said would justify the case being transferred out of the commercial list. First, it is said that the number of constitutional issues in the case is very substantial and some of them are quite complex. Secondly, a large amount of time will be taken up in legal argument. Thirdly, the evidence is going to take a considerable time and its likely duration has been significantly extended by reason of the judgment in the Supreme Court. Fourthly, the case may come on for hearing too quickly for the defendants. Fifthly, reliance is placed upon the observations of the Supreme Court to which I have already alluded.
Jurisdiction
The defendants accept that there is no express provision of Order 63(A) which permits the court to make an order of the type sought. They therefore place reliance upon the inherent jurisdiction of the court.
The absence of an express jurisdiction conferred by Order 63(A) suggests that the Superior Court Rules Committee never envisaged an application of this sort. It clearly anticipated that once a case entered into the list it would remain there until completed. If a party is dissatisfied with an order transferring a case into the commercial list it can appeal. In the absence of a successful appeal however the Rules Committee seems to envisage that once in the list the case should remain there.
The plaintiffs accept however that there is an inherent jurisdiction which would enable the court to make an order of the type sought in an appropriate case. In making that concession I believe the plaintiffs are correct.
There is a jurisdiction inherent in the court which enables it to exercise control over process by regulating its proceedings, by preventing the abuse of process and by compelling the observance of process. It is a residual source of power which the court may draw upon as necessary wherever it is just or equitable to do so.
So, for example, if it became clear that an order transferring a case into the commercial list was obtained irregularly there would be power to order the removal of the case from the list. Should that inherent power be used in circumstances such as the present?
I will consider each of the propositions put forth by the defendants in seeking the exercise of this inherent power in turn.
Complexity of case
Of all the arguments made in favour of transferring the case out of the commercial list this is the most fatuous.
If this case is unsuitable for the commercial list because of its complexity then it is too complex for any list. The judges who serve in the Commercial Court are High Court judges. They can be asked to serve, and frequently do serve, in the other divisions of the court and in particular in the chancery list to which this action will be transferred if the defendant’s application is granted. So the same judicial personnel will be called upon to determine it.
The types of cases which are admitted to the commercial list are by their very nature complex. Indeed Order 63(A) is specifically structured so as to enable complex cases to be dealt with justly and expeditiously. So the judge in charge of that list is given a variety of powers which do not apply in other divisions of the court. Case management and pre-trial conferences (to mention but two of the many procedures available under Order 63(A)) all have as their object the marshalling of complex cases to a hearing and determination. Indeed, specific recognition of that fact is to be found in the provisions of Order 63(A), 6(1) (xii). That permits the judge in charge of the list to decide that a case should be subject to case management by virtue inter alia of its complexity.
No other list or division of the High Court contain provisions such as these. They exist because by their very nature cases in the commercial list are frequently complex.
I have seen a good deal of material in this case already. It is no more, and a good deal less, complex than many of the cases dealt with in the commercial list. I reject this ground.

Length
Regardless of the list in which this case is placed it is going to take up a considerable amount of judicial time. Whether the judge hearing it is sitting as a commercial list or chancery list judge will make no difference to the amount of judicial time which will be utilised. Whether that judicial time is spent hearing evidence or listening to submissions makes no difference.
Again, of all of the lists of the High Court it is the commercial list that is best geared by virtue of the provisions of Order 63(A) to hear lengthy cases. In fact the procedures prescribed can very often bring about a shortening of the length of cases because of the amount of pre-trial work and management that goes into them. Once again one finds uniquely in Order 63(A) an entitlement to order case management because of inter alia the volume of evidence likely to be given.
I likewise reject this ground.
Festina lente
It is suggested by counsel for the defendants that the court might proceed to fix a trial date rather too quickly for the defendants.
This argument holds no water.
At all times it was accepted that this will be a major trial. It will involve many witnesses, some of whom will be coming from outside the jurisdiction. The court never at any stage fixed a trial date. It did indicate that a rough date should be aimed at so as to ensure that parties would be able to make the necessary travel and other arrangements. Such a date was always discussed in the context of it being many months into the future. There was never any suggestion made of the case being brought on for trial in circumstances which would create logistical difficulties for either side. It is simply unfair of the defendants to make this case in the light of the way in which the court has dealt with the fixing (or not fixing, to be accurate) of a date so far.
Quite apart from that, any suggestion of problems for the defendants in this context is a rather extraordinary one when one considers the letter of 16th June, 2004, which I have already quoted. In that letter the defendants said:-

“We have clarified the availability of our expert witnesses, many of whom would have difficulty with a trial date before the end of this legal term. However, with sufficient notice, our experts could make themselves available for a trial date in the Michaelmas term.”

As I have already pointed out that was the Michaelmas term of 2004. It is difficult to see how, if the defendants could have been ready for a trial date at that stage (with them calling evidence on all issues), they could not be ready for a trial date in Michaelmas 2005 or Hilary 2006.
Counsel for the defendants said the courts approach should be one of festina lente. It has been to date. But there is an element of urgency about it. To date the defendants have given undertakings not to bring the impugned provisions into operation. The current undertaking expires in mid December. Counsel for the defendants had no instructions or authority to extend the undertakings beyond that date. In the absence of such, the plaintiffs are concerned that the provisions which they say are unlawful may be brought into effect from December 2005. They cannot afford to delay the case.
The Supreme Court judgment
I have already addressed the limited value of the observations of the Supreme Court given the context in which they were made.
Even giving those observations all due weight it does not appear to me that they support the notion that the case should now be moved out of this list. Indeed the Supreme Court appears to accept that, whatever its reservations, the case is “for better or worse in the Commercial Court”. That seems to me to be an acceptance of that fact rather than an invitation to the defendants to seek to move the case elsewhere.
In any event it is clear that the Supreme Court accepts that each case for entry into this list must be decided on its facts (and it was unaware of the uncontroverted factual evidence which was before this court). Even then all that the judgment counselled was the exercise of caution in admitting a case which it describes as “fundamentally a constitutional action”. Far from saying that such an action could not be entered into the list, it admits of that possibility but counsels the exercise of caution in so doing.
Disadvantages
During the course of the hearing I invited counsel for the defendants to indicate what disadvantages would be suffered by his clients should the case remain in the list. Apart from his citation of the counsel of festina lente which I have already dealt with, he was unable to point to any disadvantages. In truth there are none.
There are however very considerable advantages to the case remaining where it is. It has already had the benefit of all of the procedures which have resulted in the identification of issues for trial and the exchange of the summaries of witness statements. It may very well be subject to a formal case management conference as envisaged under Order 63(A). All of that should produce a hearing which will be focused on the issues with a shortening of trial time as a result.
I cannot see how any advantage would be gained by, in effect, setting all of this at nought.
This application has taken up further court time and is going to involve a further costs liability.
In view of the inept way in which the defendants dealt with the legislation which was the subject of the earlier proceedings and which visited an enormous liability for costs on the State, one would have thought that they would be seeking to minimise rather than increase such a liability. The bringing of this motion provides no support for such a view.
The motion is dismissed.