Jersey Unreported Judgments

Damages - appeal against decision of the Master dated 20th June 2014.

[2014]JRC217

Royal Court

(Samedi)

11 November 2014

Before     :

W. J. Bailhache, Q.C., Deputy Bailiff, sitting alone.

 

Advocate A. D. Hoy for the Appellant.

Advocate F. B. Robertson for the Respondent/Defendant.

judgment

the deputy bailiff:

1.        This is an appeal against a decision of the Master on 10^th June pursuant to Rule 6/13(1) of the Royal Court Rules 2004 to strike out two of the three parts of the Appellant's claim which relate to claims for damages in the sum of £26,943 and £52,500 respectively and to claims for what the Master described as related declaratory relief.  The Respondent/Defendant cross appeals to have struck out the balance of the Appellant's claim, which the Master had declined to strike out and which was in the sum of £11,052.  The Respondent's application before the Master to strike out the different parts of the Appellant's claims was upon the basis that they were all prescribed and therefore brought out of time.  No affidavit has been sworn in support of the application, but there has been produced before me an agreed chronology. If the law is as Advocate Robertson contends, then there is no dispute of the facts that the claims are prescribed.  Advocate Hoy however contends that the Master was wrong to accept the contentions of the Respondent in relation to the first and third heads of claim, and that therefore the action should be reinstated.  I note that Advocate Robinson appeared for the Respondent before the Master. 

2.        The test for appeals from the Master in procedural matters is that the Court retains a free discretion to uphold, vary or reject his decision, giving all appropriate weight to the reasoning which has been set out at first instance.  The Master has given a fully reasoned decision in this case and I gratefully adopt paragraphs 6 - 27 inclusive of his judgment which are in these terms:-

"6.      The plaintiff's claim arises out of the defendant's status as a body established by statute pursuant to the Milk Marketing Scheme (Approval) (Jersey) Act 1954 ("the Scheme").  The Scheme was made pursuant to the authority of the Agricultural Marketing (Jersey) Law 1953     ("the 1953 Law").

7.        Article 2(1) of the 1953 Law provides as follows:-

"A scheme for regulating the marketing or the marketing and production of any agricultural produce may be submitted to the Minister by any persons (hereafter referred to as the "promoters") who satisfy the Minister that they are substantially representative of the producers of that produce:

8.        Article 2(6) provides as follows:-

"If the Minister, after making any such modifications as aforesaid, is satisfied that the scheme submitted will conduce to the more efficient production and marketing of the regulated produce, the Minister shall submit the scheme to the States, and the States may, by Act, approve or reject the scheme and, if approved by the States, the scheme shall come into force on the date prescribed by the Act.

9.        Article 4 of the 1953 Law provides for registration of producers under any scheme approved by the States.  Article 8 sets out a number of requirements for running a scheme including that no sale of any regulated produce shall be made by any producer who is not registered or exempt from registration (see Article 8(1)(a)). It is also a criminal offence to sell produce in breach of any scheme (see Article 23(1)). 

10.      Paragraphs 29 to 34 of the Scheme provide as follows:-

"PROHIBITION OF SALES BY UNREGISTERED PRODUCERS

29

Subject to the provisions of the Law with regard to existing contracts and to the provisions of this Part of this Scheme, a producer who is not a registered producer shall not sell any regulated produce either in Jersey or elsewhere.

GENERAL POWER TO REGULATE MARKETING

30

Subject to the provisions of paragraph 28, the Board may regulate sales of any regulated produce by any registered producer by determining by prescriptive resolution all or any of the following matters, that is to say, the quality of such produce which may be sold, and the prices at, below or above which, and the terms on which, such produce may be sold by registered producers:

Provided that the Board shall at no time determine the price at, below or above which any regulated produce may be sold without having first invited the opinion of the Minister and given consideration to that opinion as communicated to the Board within 28 days of such invitation.

31

The Board may regulate the manner in which any regulated produce is to be graded, marked, stored, adapted or transported, for sale by or on behalf of registered producers.

32

Subject to the provisions of paragraph 28, the Board may by prescriptive resolution require registered producers to sell any regulated produce, or such kind or description thereof as may from time to time be determined by the Board, only to or through the agency of the Board or to or through the agency of such persons as may be authorized by the Board for that purpose and, in such a case, the Board may determine the times at which, the days on which and the places at which delivery of such produce shall be made by registered producers or any of them.

33

If any registered producer contravenes any requirement made by the Board under paragraph 30, 31 or 32, the Board shall, subject to the provisions of paragraph 41, by resolution impose upon and recover from the registered producer such monetary penalty as the Board thinks just.

MISCELLANEOUS POWERS

34

The Board may -

(1) buy any regulated produce;

(2) produce from milk any products or by-products;

(3) sell, grade, pack, store, adapt for sale, insure, advertise and transport any regulated produce;

(4) buy and sell or let for hire to any registered producer, anything required, and to be utilized by the registered producer wholly or mainly, for the production, adaptation for sale or sale of any regulated produce;

(5) co-operate with any other person in doing any of the things which the Board is empowered to do by virtue of the foregoing provisions of this paragraph;

(6) encourage, promote or conduct schemes of co-operation among producers of any regulated produce, or research and education in connection with the production and marketing of any regulated produce."

11.      There are also powers to impose penalties on producers who act in breach of the Scheme (see Paragraph 41).

Factual Background up to 2005

12.      In January 1955 the defendant passed a resolution requiring all milk produced by registered producers to be sold to the defendant.  It was common ground between the parties that the effect of the Scheme and the 1955 resolution was to require a producer to register and to sell milk exclusively to the defendant.

13.      In June 2001 a second resolution was passed setting up a licencing scheme dealing with matters such as milk collection, sampling, testing procedures, payments to producers and the welfare of livestock.

14.      Around the same time a quota system was introduced by the defendant limiting the amount of milk products that each producer was permitted to produce.  Milk products produced up to the quota were guaranteed to be purchased by the defendant at a particular price.  Any products produced in excess of the quota were purchased only at a lower price of 10p per litre.

15.      In May 2003 the plaintiff informed the defendant that it wished to sell products directly to consumers as an independent business and sought an exemption from the Scheme to do so.  This led to discussions between the parties.

The Competition (Jersey) Law 2005

16.      On 1st May, 2005 the Competition (Jersey) Law 2005 ("the Competition Law") came into force apart from Parts 2 and 3.  Parts 2 and 3 came into force on 1st November, 2005.  The Competition Law is described as "A Law to promote competition in the supply of goods and services in Jersey". 

17.      The Competition Regulatory Authority (Jersey) Law 2001 had established the Jersey Competition Regulatory Authority ("JCRA") which body is now known as the Channel Islands Competition Regulatory Authority ("CICRA").  However, it was the Competition Law that gave the JCRA and the CICRA substantive powers to address issues of competition.

18.      For the purposes of this application the relevant provisions are found in Articles 8, 16 and 51 which provide as follows:-

"8 Prohibition on hindering competition

(1) Except as otherwise provided by this Part, an undertaking must not make an arrangement with one or more other undertakings that has the object or effect of hindering to an appreciable extent competition in the supply of goods or services within Jersey or any part of Jersey.

(2) ...

(3) An arrangement prohibited by paragraph (1) is in this Law referred to as an anti-competitive arrangement.

(4) An arrangement is void to the extent that it is, or contains or is tainted by an anti-competitive arrangement.

(5) The fact that an arrangement may have no legal effect, does not bind the parties to it or could not be enforced by action in any court or by any other means does not prevent the arrangement being prohibited by paragraph (1).

(6) An arrangement may be prohibited by paragraph (1) although not every party to it is an undertaking so long as at least 2 are.

16 Abuse of dominant market position

(1) Except as otherwise provided by this Part, any abuse by one or more undertakings of a dominant position in trade for any goods or services in Jersey or in any part of Jersey is prohibited.

(2) ....

(3) For the purpose of this Article an abuse of a dominant position may consist of a failure or refusal to do something.

51 Civil action

(1) A person has a duty not to breach Article 8(1), 16(1) or 20(1), or a direction.

(2) A breach of that duty is actionable by an aggrieved person.

(3) The Court may grant such relief as it considers appropriate, including awarding punitive or exemplary damages.

(4) If a breach of duty mentioned in paragraph (1) is committed by a commercial entity with the consent or connivance of, or is attributable to neglect on the part of an officer of the entity, that officer is also liable in the same manner as the entity for the breach of duty.

(5) The Authority or an aggrieved person may seek from the Court -

(a) an injunction to restrain any actual or apprehended breach of the duty mentioned in paragraph (1); or

(b) a declaration that a person has breached Article 8(1), 16(1) or 20(1), or a direction.

(6) If the Authority or an aggrieved person has reasonable grounds for suspecting that there will be a breach of the duty mentioned in paragraph (1) by a commercial entity the Authority or person may seek an injunction from the Court to restrain any action by an officer of the entity that could cause the breach of duty by the entity.

(7) The Court may grant an injunction under this Article on such terms as it considers appropriate.

(8) This Article has effect whether or not the Authority or aggrieved person has exercised or is proposing to exercise any other powers under this Law.

(9) In this Article, "aggrieved person" means a person who has suffered or is likely to suffer economic loss or damage as a result of an actual or apprehended breach or Article 8(1), 16(1) or 20(1), or of a direction."

Factual background from 2005 onwards

19.      By May 2005 the plaintiff and the defendant's negotiations about the plaintiff selling its products direct to consumers had resulted in heads of terms described in the order of justice as the "2005 Heads".  It is clear from the pleadings that in 2005 there were meetings between the parties and the then head of the JCRA, Mr. Charles Webb, about the 2005 Heads and possibly about the Scheme more generally.  Who was present at such meetings and what was said is not a matter that can be resolved for the purposes of this application.  What I do note is that the plaintiff alleges that the 2005 Heads are not binding on either party.  The defendant alleges they are binding.  The plaintiff further alleges that the 2005 Heads were void as a result of Article 8(4) of the Competition Law set out above.  The defendant denies this allegation.

20.      Discussions between the plaintiff and the defendant continued in 2006 and 2007.  The central thrust of those discussions was the plaintiff's desire to sell milk and milk products independently i.e. outside the Scheme.

21.      In 2007 the parties reached further heads of terms (referred to in the order of justice as the 2007 Heads) which were intended to replace the 2005 Heads.  The 2007 Heads were conditional upon the plaintiff's and the defendant's agreement on a sum of money that one of them would have to pay to the other in respect of the operation of the Scheme prior to July 2007.  No such agreement was ever concluded and therefore the plaintiff now alleges and seeks a declaration that the 2007 Heads have no effect.  The defendant in its answer specifically admits this allegation at paragraph 32 and as a consequence denies the necessity of the court needing to give any declaration to that effect.

22.      In its order of justice the plaintiff seeks three heads of damage as follows:-

(i)        £26,000 being the amount that the plaintiff claims to have lost by not being allowed by the defendant to sell surplus milk to other retailers between November 2006 and July 2007.

Paragraph 46 of the order of justice pleads as follows:

"In 2008, the defendant in purported reliance on its powers under the Scheme and in particular the First Resolution, refused to permit the plaintiff to sell surplus milk to other retailers, despite it having agreed in the 2007 Heads that the plaintiff could sell liquid milk to whosoever it wished commencing from July 2007."

Paragraph 50 pleads:-

"the plaintiff seeks a declaration that Articles 31, 32, 33 and 34 of the Scheme are incompatible with the Competition Law, further and/or alternatively the plaintiff seeks a declaration pursuant to Article 51(5) of Part 9 of the Competition Law that the defendant has breached Article 8(1) and/or Article 16(1) of the Competition Law."

(ii)       The second head of damage the plaintiff seeks is £11,052.00 being the amount the plaintiff says was wrongfully deducted by the defendant from amounts it paid to the plaintiff during 2006 and 2007.  The amount of deductions and the fact they were made is admitted by the defendant in its answer.  The deductions were made from the price paid for milk sold by the plaintiff to the defendant.  The plaintiff argues that these deductions were an abuse by the defendant of its powers under the Scheme.  The defendant denies this allegation and contends that the deduction was made on the basis of independent advice.

(iii)      The third amount claimed is the sum of £52,500 being losses suffered by the plaintiff by the plaintiff not being permitted by the defendant to sell its quota under the Scheme.  The plaintiff argues it was required to produce a quota of 350,000 litres but was not permitted by the defendant to sell to others and the defendant would not buy back the quota pursuant to the Scheme.  The defendant denies the allegation and argues that by this time the plaintiff had resigned as a registered producer under the Scheme. 

23.      Advocate Robinson on behalf of the defendant informed me that the plaintiff had ceased to be part of the Scheme since resigning in July 2007.  Although the terms of the Scheme have not been altered since they were approved in 1954, the reality is that the plaintiff is no longer subject to the Scheme and appears not to have been so since it resigned in July 2007. The plaintiff is therefore free to pursue its own activities and sell milk and milk related products direct to consumers.  I also note that on the defendant's website it now describes itself as a "voluntary cooperative".

24.      The matters pleaded in the order of justice were first raised in correspondence by Messrs. Voisin in a letter dated 5th February, 2009 on behalf of the plaintiff.  Messrs. Appleby responded on 22nd June, 2009.  There was a further exchange of correspondence in October and November 2011 and a letter before action sent by Voisins in June 2013 with proceedings being issued on 29th July, 2013.  The defendant's answer was filed on the 11th October, 2013.  Paragraph 4 of the answer expressly raised a limitation defence that both the matters complained of and any losses suffered had occurred more than three years prior to the claim being issued and therefore the whole of the claim was time barred.

25.      Paragraph 3 of the reply in response to the limitation defence is as follows:-

" it is denied that the plaintiff's claim is time barred either to the extent that it relates to any losses suffered more than three years prior to the date of issue of the claim or at all.  It is also denied that the prescription period for bringing tortious actions runs from the date when the plaintiff suffered the alleged loss.  The prescription period for actions founded on tort begins to run when all the necessary prerequisites for a cause of action to accrue are present."

26.      Paragraph 7 of the reply pleads-

"Accordingly, it is a necessary prerequisite for the activation of a suit under Article 51 of the Competition Law that the Court declare void the aspects of the Agricultural Marketing Law and the Scheme and the defendant's actions taken pursuant thereto as pleaded in the order of justice.  Until such time as the Court has made the declarations sought in the order of justice, the prescription period in respect of an action in damages under Article 51 of the Competition Law cannot, as a matter of law, have begun to run.  Accordingly, far from being time barred, the plaintiff's claims for damages as pleaded in the order of justice are not yet even subject to the effluxion of any prescriptive period applicable to them."

27.      The relief sought by the plaintiff in its order of justice is as follows:-

"WHEREFORE the plaintiff prays that after the proof of these facts that are alleged herein the Court might order the defendant to pay the plaintiff:

1.        Damages to be fully assessed;

2.        Interest on item 1 above for such a rate as the Court might deem just;

3.        The costs of this action.

WHEREFORE the plaintiff prays that after the proof of these facts that are alleged herein the Court declare the following that:

4.        The 2005 Heads are of no effect;

5.        By the 2005 Heads the defendant has breached Article 8(1) and/or Article 16(1) of the Competition Law;

6.        The defendant's decision to delay consent to the plaintiff to sell its milk to third parties is a breach of Article 8(1) and/or Article 16(1) of the Competition Law;

7.        The 2007 Heads are of no effect;

8.        The defendant's refusal to allow the plaintiff to take up the Buy Back Scheme was a breach of Article 16(1) of the Competition Law;

9.        The defendant's refusal to allow the plaintiff to sell its quota to third parties was a breach of Article (8(1) and/or Article 16(1) of the Competition Law; and that

10.      Articles 31, 32, 33 and 34 of the Scheme are incompatible with the Competition Law.""

3.        There was also placed before me a draft amended order of justice.  Both Advocate Hoy and Advocate Robertson were at pains to emphasise that no leave to file an amended order of justice had been given, but, as some of the older authorities put it, it is an important decision to drive a plaintiff from the seat of justice, and it has long been the practice both here and in the English courts that an action would not normally be struck out if it could be saved by an appropriate amendment.  I have therefore considered both the order of justice in its initial form and the draft amended order of justice in case the latter document removes any objections which could be validly maintained to the former.  In fact Advocate Hoy was anxious to emphasise before me that there was no real difference in substance between the order of justice and the draft amended order of justice.  The facts asserted by the Appellant were the same and the only real differences were the labels which were attached to those facts under the different documents.  Thus there are in the draft amended order of justice numerous references to a contract between the Appellant and the Respondent whereas under the order of justice which was considered by the Master, there was only reference to statutory duties owed by the Respondent and alleged to have been breached.  I record that Advocate Robertson emphasised that the Respondent denied having acted in breach of any of his obligations, however categorised. 

4.        In his skeleton argument, Advocate Hoy contended on behalf of the Appellant that the claims made by the Appellant are not prescribed "because the relationship between the parties created by the Scheme and subsequently varied is in contract or quasi contract to which a ten year limitation period applies and perhaps in the context of the public law actions of the [Respondent] no cause of action in tort has accrued unless and until the Court declares its actions to have breached the Competition Law.  Accordingly the Master erred in striking out parts of the order of justice". 

5.        This contention is somewhat different from paragraph 4 of the order of justice - maintained in the draft amended order of justice - that:-

"The [Respondent] is a statutory body, owing a statutory duty to all registered producers and in particular owing a statutory duty to the [Appellant] to deal with all and any matters between the [Respondent] and the [Appellant] in accordance with the Scheme."

6.        In his decision the Master determined that it was necessary for him to consider the effects of the Scheme and of the Competition Law 2005 ("the Competition Law").  In connection with the latter piece of legislation, he proceeded on the assumption for the purposes of a strike out application that the Respondent fell within the scope of the Competition Law, without actually making any finding to that effect.  I have proceeded on this same basis. 

7.        The Master also indicated that he considered that any claim which pleads a breach of the Competition Law amounted to a private law claim and not a public law claim.  I agree with that analysis provided it is limited to claims brought by persons other than the Channel Islands Competition Regulatory Authority ("the Authority").  The Authority has conferred upon it a statutory right to bring a claim for a declaration or an injunction under Article 51 of the Competition Law.  It seems to me to be clear that the Authority is a public body exercising public functions and without further argument I would not myself go so far as to say at this stage that all claims under the Competition Law were necessarily private law claims.  However, I agree with the Master that all claims brought by an aggrieved person other than the Authority pursuant to Article 51 of the Competition Law do fall to be treated as private law claims.  The fact that such claims are under the relevant Rules of Court brought by order of justice shows that no leave from the Court is required to bring them, which takes the action out of the territory of judicial review and into the territory of a private law claim. 

8.        In its order of justice, the Appellant seeks a number of declarations.  Some of them relate to actions by the Respondent which have particular reference to the Appellant.  One of them however is a declaration that Articles 31, 32, 33 and 34 of the Scheme are incompatible with the Competition Law.  In my judgment, the application for that declaration falls outside Article 51 of the Competition Law.  The aggrieved person under Article 51(5) is only entitled, as part of a private law action, for a declaration that there has been a breach of Article 8(1), 16(1), or 20(1), or a direction. 

9.        It is important to reach a decision on this point because the Master's judgment does not in my view address the main reason as to why the prayer for a declaration that the various articles in the Scheme are incompatible with the Competition Law should have been struck out.  In my judgment, it would be right to strike that prayer out, whether the remaining provisions in the order of justice stand or not.  That particular declaration would be a public law declaration, and it is not the type of declaration which is envisaged by Article 51 and should not therefore have been combined with an action brought pursuant to Article 51.  Even if that is wrong, however, I share the Master's view that this particular declaration is so subordinate to the other claims for relief that it does not in reality stand as a separate head of claim.  I am reinforced in that conclusion by the fact that, as Advocate Robertson contended, the claim that Articles 31, 32, 33 and 34 of the Scheme are incompatible with the Competition Law arises in the context of the claims in the order of justice for damages under the three particular heads of claim.  Accordingly, I do not find on a proper construction that the order of justice maintains the claim for a declaration that these articles are incompatible with the Competition Law as a separate matter.  For these two reasons, the claim for a declaration that the Scheme is incompatible with the Competition Law cannot stand in these private law proceedings.  This is an important conclusion because if I had considered the position to be other than as described, there might have been something to be said for the proposition that once that particular claim stood, the other claims might be run in parallel with it.  Once that claim goes, however, I take the view that all of the other claims are prescribed and I will go on to my reasons for that conclusion.  I note that had this been a judicial review application on the compatibility of the Scheme with the Competition Law, it has been brought far too late as far as the Appellant is concerned. 

10.      I also note that the Master distinguished between the claim under the second head and the claims under the first and third head.  In this context both Advocate Hoy and Advocate Robertson agreed when this question was put to them that there was no real distinction in principle to be drawn between the three heads of claim and that they would all stand or fall together. 

11.      The Master indicated in relation to the first head of claim that:- "I regard this complaint as one that directly arises out of the exercise of functions by the [Respondent] under the scheme.  However I do not regard the scheme as contractual.  Rather it imposed a regulatory regime on the [Appellant] . . . in my view therefore the complaints under this head are for a breach of statutory duty where the applicable limitation period is three years".  Having said that he reached the same view in relation to the third head of claim.  The Master then went on to the remaining head of claim in which the Appellant claims that the Respondent wrongfully made various deductions from the price of milk sold by the Appellant to it in the total sum of £11,052.00.  Here the Master said this:-

"The view I have reached in relation to this head of claim is that it is not a claim in tort unlike the other claims which I have struck out.  The complaint in summary is that the [Respondent] has wrongfully withheld monies due to the [Appellant] for milk sold by the [Appellant] to the [Respondent].  This sale in my view is a contract arising out of the scheme as distinct from a complaint relating to how the [Respondent] exercised its powers in relation to the scheme.  The contract is that the [Appellant] sold milk to the [Respondent] for an agreed price, part of which the price [sic] had not been paid by the [Respondent] to the [Appellant]". 

12.      I do not share the view that the sale of milk was a contract arising out of the Scheme but somehow distinct from the Scheme itself.  It is clear from Articles 30 - 34 inclusive of the Scheme that the Respondent had some very wide ranging powers:-

(i)        To determine the quality of the produce which might be sold and the prices at below or above which and the terms on which the produce might be sold. 

(ii)       To regulate the manner in which any regulated produce was to be graded marked stored adapted or transported for sale. 

(iii)      To require that any regulated produce be sold only to or through the agency of the Respondent. 

(iv)      To buy any regulated produce itself and to sell it. 

13.      These were powers conferred on the Respondent which were integral to the Scheme and it seems to me to be impossible to say that the relationship between the producer and the Board as purchaser of the milk was a contractual one.  In Selby v Romeril [1996] JLR 210, the Royal Court set out the four essential conditions for the validity of a contract - the consent of the parties to contract, the capacity of the parties to contract, an "objet" and a "cause".  Here there is no question of consent between the parties because the producers were required to sell to the Board, and not only required to sell but also required to sell at a particular price and if necessary to deliver at particular times.  In his opening submissions Advocate Hoy described this as a forced contractual arrangement, but in my judgment there is no such thing.  The will or volonté to make a contract is an essential prerequisite of the contract as a matter of Jersey law.  It is the basis upon which that maxim of Jersey law has long been established that la convention fait la loi des parties.  One cannot simply dispense with this essential requirement of a contract and assert that a contract remains.  By contrast, the proper analysis is that there is a statutory regime which contains a number of obligations on the part of the Respondent and on the part of all milk producers and if there is a breach of those obligations on the part of the Respondent, then the producer is able to sue for breach of statutory duty. 

14.      Although the order of justice makes no reference to a claim in contract, the draft amended order of justice does.  In my judgment, such a claim is hopeless and does not cure the difficulty which the Appellant faces in terms of prescription.  Advocate Hoy contended that the draft amended order of justice simply applied a label to the nature of the claim - but the corollary of that is that the label must be accurately applied if it is to deal with the criticism, on limitation grounds, of the claim as presently brought, and in my judgment one cannot construct a contract out of the arrangements made pursuant to the Scheme for the reason I have given.  It follows that I think the Master was wrong to do so when he found this to be the basis for preserving the second head of claim and that he was right to take the approach he did in relation to the first and third heads of claim. 

15.      In the skeleton argument which was advanced for this appeal, Advocate Hoy also contended that there might be a quasi contract.  As far as one can tell, this is the first time this contention has been raised, and Advocate Robertson was very critical of the Appellant's process in doing so.  However before driving the Appellant from the seat of judgment, it seems to me that I need to look at the matter not in terms of process but as to whether or not quasi contract provides a legitimate basis for making the claims which are made. 

16.      The Royal Court reached a decision in the case of Gale and Clark v Rockhampton Apartments Limited [2007] JLR 27 that the doctrine of voisinage, namely an obligation not to use one's property so as to damage neighbouring property, was part of Jersey law and gave rise to proceedings in quasi contract.  This decision was upheld in the Court of Appeal, reported in same volume of the Jersey Law Reports at page 332.  I note that in the Rockhampton case the obligation which was asserted was not to damage a contiguous neighbouring property, and while the two neighbours had no contractual relationship with each other, they clearly did have contracts individually by which their different properties had been acquired.  One can see how an action in voisinage might be characterised as a claim in quasi contract.  At paragraph 16 of the judgment of the Royal Court, Bailhache, Bailiff, said this:-

"It is true that there appears to be no reference to voisinage in the writings on the customary law of Normandy and one cannot therefore test the interpretation placed on the custom as stated by Terrien.  Counsel submitted that the doctrine of voisinage, and its quasi contractual basis, was derived from the civil law and incorporated into the customs of Paris and Orleans.  She contended that there was no evidence that this approach to relations between neighbours was ever adopted in Normandy or in Jersey.  There is no doubt, however, that quasi contract was known to the customary law of Normandy. There is a short definition to be found in Houard at 4 Dictionaire de Droit Normand 1st edition at 3 (1782) in the following terms:

"On donne le nom [quasi-contrat] à une obligation qui naît de l'équité, sans que la convention des parties y intervienne. Ainsi il se forme un quasi-contrat entre l'absent et celui qui, durant son absence, fait pour lui quelquechose d'utile; car l'absent, par seule équité, est tenu de la restitution des dépenses nécessaires et utiles faites pour lui." 

I translate that passage as follows:-

'the name [quasi contract] is given to the obligation which arises from equity, without the need for any agreement between the parties. Thus, for instance, a quasi contract is formed between an absent person and one who, during his absence does some necessary thing for him; for the absent person by reason only of equity, will be bound to reimburse any necessary and appropriate expenditure made on his behalf'.

17. Quasi contract is part of our law, but the customary law of Normandy is silent, or brief, on the meaning and extent of the term. In my judgment, it is legitimate in such circumstances to look at other customs, including the Coutume d'Orleans, to explain the force and effect of the expressions. The custom of Orleans is, indeed, a particularly appropriate source to explore in this context for the author of this commentary is the author upon whom very great reliance is placed in the context of the law of contract.

18. The word "equité" in the context of quasi contract is interesting.  The pleadings in the two cases cited at paras 11 - 13 above seemed to me to import the concept of reasonableness. In other words, the duty not to cause damage to ones neighbour is not absolute but is qualified by notions of what is reasonable in the context of neighbourly relations. All that is entirely consistent with the equitable foundation of duties arising in quasi contract." 

17.      I also note that in the same case in the Court of Appeal Gale and Clark v Rockhampton Apartments Limited [2007] JLR 332 at paragraph 165, reference was made to an extract from Pothier's Traité des Obligations, Section II at paragraphs 113 - 114.  The citation to the Court of Appeal was clearly the English translation of Pothier's work, and I prefer to look at the original, if only because it does not contain some of the punctuation marks which are to be found in the translation.  Paragraph 114 is in these terms:-

"Dans les contrats, c'est le consentement des parties qui produit l'obligation; dans les quasi - contrats, il n'intervient aucun consentement, et c'est la loi seule ou l'équité naturelle qui produit l'obligation, en rendant obligatoire le fait d'où elle résulte. C'est pour cela que ces faits sont appelés quasi contrats ; parceque, sans être des contrats, ni encore moins les délits, ils produisent des obligations comme en produisant les contrats."

18.      In my judgment, in the historical context in which this paragraph was written, in the expression "c'est la loi seule ou l'équité naturel le qui produit l'obligation", there is nothing disjunctive.  The natural construction of the paragraph is that there is a comparison between a contract, where it is the consent of a contracting party which produces the obligation, and a quasi contract where there is no consent but it is a matter of the customary law, which allows for the application of equity, which produces the obligation.  

19.      So in the present case therefore, I have considered whether, if the Appellant were to seek leave to amend the order of justice by pleading in quasi contract, that would cure the defect. 

20.      Claims in contract are prescribed by the lapse of 10 years after the breach.  In Rockhampton, the Royal Court concluded, as did the Court of Appeal, that the prescription period for a claim in voisinage was also ten years.  It was not really contended before me that any other limitation period would apply if this were legitimately a claim in quasi contract and without deciding it, I have assumed ten years to be the prescription period for such claims. 

21.      In my judgment however, the claim here cannot be regarded as a legitimate claim in quasi contract.  Such claims, like claims in unjust enrichment, are permitted because equité allows the Court to remedy what would otherwise be injustice arising out of the lack of contractual obligation.  Here however, there is no injustice because there is no lack of remedy and no need for the reach of equité.  There is a statutory obligation which is provided by the Scheme and in my judgment, the remedy is to sue for breach of statutory duty, if it is asserted that such breach has taken place.  It is because that remedy is available that it would be wrong to create a new quasi contractual cause of action. 

22.      That leaves me with the remaining ground of appeal that the Master erred in not finding that the declaratory remedy under Article 51(5)(b) of the Competition Law was a necessary prerequisite to the accrual of an actionable breach of statutory duty.  The argument in this respect has not been put entirely consistently by Advocate Hoy but it seemed to be that as there is a presumption of validity in relation to the actions of a public body such as the Respondent, those actions remain lawful until they are declared otherwise and accordingly time does not start to run until the declaration of unlawfulness has been made.  Accordingly Advocate Hoy submitted that one cannot assume that there has been any breach of the Competition Law until the Court says so and that the application for a declaration of unlawfulness is a necessary pre-requisite for the Appellant's claim.  In this respect he relied considerably on a passage from Lord Diplock's judgment in Hoffmann v La Roche and Co. A.G. -v- Secretary of State for Trade and Industry [1975] AC 295 where at page 365 Lord Diplock said this:-

"Under our legal system, however, the court as the judicial arm of government do not act on their own initiative.  Their jurisdiction to determine that a statutory instrument is ultra vires does not arise until its validity is challenged in proceedings inter-partes either brought by one party to enforce the law declared by the instrument against another party or brought by a party whose interests are affected by the law so declared sufficiently directly to give him locus standi to initiate proceedings to challenge the validity of the instrument.  Unless there is a challenge and, if there is, until it has been upheld by a judgment of the Court, the validity of the statutory instrument and the legality of acts done pursuant to the law declared by it, are presumed.  It would, however, be inconsistent with the doctrine of ultra vires as it has been developed in English law as a means of controlling abuse of power by the executive arm of government if the judgment of a court in proceedings properly constituted that a statutory instrument was ultra vires were to have any lesser consequence in law than to render the instrument incapable of ever having had any legal effect upon the rights or duties of the parties to the proceedings (cf Ridge -v- Baldwin [1964] AC 40).  Although such a decision is directly binding only as between the parties to the proceedings in which it was made, the application of the doctrine of precedent as the consequence of enabling the benefit of it to accrue to all other persons whose legal rights have been interfered with in reliance on the law which the statutory instrument purported to declare."

23.      In my judgment, this extract from Lord Diplock's judgment in Hoffman v La Roche does not assist the Appellant.  What the House of Lords was considering in that case was whether or not the judge at first instance was right to refuse to grant an interim injunction which would restrain the appellants from charging any prices in excess of those specified in an order made pursuant to the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948 without the Secretary of State giving an undertaking in damages so as to recompense the appellants if the order he had made was held to be invalid.  In my judgment there is a big difference between an assessment as to the factors which the Court should properly take into account in exercising a discretion to grant an interlocutory injunction - where the presumption of regularity applied to the Order made by the Secretary of State - and a case such as the present where the basis of the Appellant's claim is that there has been a breach of the Competition Law, which basis the Appellant would have to prove to the civil standard at trial.  If so proved, the Appellant would be entitled to claim damages if such damages are ascertainable.  If not ascertainable, it may be that the Appellant would apply for an alternative remedy of a declaration.  However it is a false reading of Article 51 of the Competition Law to construe it to require that there must be a declaration before there can be a claim for damages.  Article 51(3) contains the requirement that a person has a duty not to breach the various articles of the Competition Law and there is created by paragraph (2) a right of action by an aggrieved person in respect of any breach of that duty.  By paragraph (3) the Court can grant such relief as it considers appropriate - which obviously includes damages which are compensatory but is expressed to include damages which are punitive or exemplary.  The statutory provision at paragraph (5) allows equitable remedies to be applied as well, but these are permissive - the Court has a free jurisdiction to grant such relief as it considers appropriate.  It follows that as a matter of construction all that has to be proved is a breach of the respective articles or of a direction, and it is quite unnecessary that there should be a judicial declaration to that effect before any right of action arises for damages.  To construe the article in that way is to confuse the facts which need to be proved - the breach - from the remedy which might be afforded - damages, injunction or declaration. 

24.      It was agreed between the Appellant and the Defendant that the limitation period in respect of breaches of statutory duty claims was three years.  The question is three years from what?  The answer to that is that the three year period starts running from the occasion of the breach which is asserted.  On the facts in the present case, the claim, being properly categorised as a claim for breach of statutory duty, is prescribed.  The appeal is therefore dismissed and the cross appeal is allowed.  As a result the Plaintiff's order of justice is struck out in its entirety. 

Authorities

Royal Court Rules 2004.

Competition Law 2005.

Classic Herd Ltd-v-Jersey Milk Marketing Board [2014] JRC 127.

Selby v Romeril [1996] JLR 210.

Gale and Clark v Rockhampton Apartments Limited [2007] JLR N 27.

Gale and Clark v Rockhampton Apartments Limited [2007] JLR 332.

Pothier's Traité des Obligations.

Hoffmann v La Roche and Co. A.G. -v- Secretary of State for Trade and Industry [1975] AC 295.

Monopolies and Restrictive Practices (Inquiry and Control) Act 1948.