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Woodfab Ltd. v. Coillte Teoranta [1997] IEHC 190; [2000] 1 IR 20; [1998] 1 ILRM 381 (19th December, 1997)
THE
HIGH COURT
1995
No. 1154P
BETWEEN
WOODFAB
LIMITED
PLAINTIFF
AND
COILLTE
TEORANTA AND MEDITE OF EUROPE LIMITED
DEFENDANTS
JUDGMENT
of Mr. Justice peter Shanley delivered the 19th day of December, 1997
BACKGROUND
(a) This
is an application by the Plaintiff for leave to deliver Interrogatories for the
examination of the first named Defendant (Coillte) in the form of a draft
annexed to a Notice of Motion dated the 14th July, 1997. There are 1068
Interrogatories set out in the draft. Coillte maintain that through the
procedures of a Notice to admit documents it has effectively dealt with some
224 of the Interrogatories sought to be answered - but in any event Coillte
takes the basic stance that the Plaintiff has not made out a case justifying
the delivery of those Interrogatories and that the Interrogatories which are
sought to be delivered are "prolix, oppressive, vague and imprecise" and have
not been shown to be essential "in the interests of justice".
(b) Proceedings
were commenced by plenary summons dated the
16th
February, 1995. Medite of Europe Limited were added as a Defendant as matters
proceeded. Ultimately, on the 10th October, 1995, the Plaintiff served a
second amended statement of claim on the Defendants to which Coillte delivered
a defence on the same date and Woodfab, the Plaintiff, in turn delivered a
reply. As appears from a perusal of pleadings it is commoncase that Woodfab is
a limited liability company which carries on the business of sawmills and
suppliers of timber and that Coillte is a company formed pursuant to the
Forestry Act, 1988 and carries on the business of forestry and related
activities on a commercial basis. Woodfab alleges (but Coillte denies) that
Coillte owns some 90% of all forests and woodlands which have matured to such a
stage as to be ready for commercial harvesting and that, Coillte is, in effect,
the sole producer of standing timber in Ireland. Woodfab allege that of these
forests and woodlands some 95% of the timber is softwood/roundwood. Woodfab
allege that it is one of 180 sawmills in Ireland who purchase timber from
Coillte. In practice there are only ten to twelve large sawmills (of which
Woodfab is one) who between them purchases some 80% of the Coillte supply of
timber in any one year. Woodfab purchases 14% of such timber and is one of
Coillte's largest customers.
(c) Woodfab
contend that Coillte is in breach of
Section 4 and
5 of the
Competition Act,
1991 and Articles 85, 86 and 92 of the E.C. Treaty. In addition, it is claimed
that Medite is also in breach of
Sections 4 and
5 of the 1991 Act and Articles
85, 86 and 92 of the E.C.Treaty. The facts Woodfab rely upon in support of its
allegation of infringements of
Sections 4 and
5 of the 1991 Act and the various
Articles of the E.C. Treaty are set out in detail in the Statement of Claim
that it delivered in its amended form. As appears from that document the
Woodfab case against Coillte is to a very large extent grounded upon
allegations of breach of
Section 5 of the
Competition Act, 1991 and
infringement of Article 86 of the E.C. Treaty. The abuses that are complained
of (which are denied by Coillte) are, broadly:-
(i) that
Coillte has refused to supply pulp (which are smaller pieces of wood under 7
metres in diameter and branches) to Woodfab.
(ii) that
when Coillte put softwood on to the market for sale they do so in one of two
ways: firstly, either under a closed tendering system or, alternatively, a
Coillte allocation system (CAS). The former (the tendering system) involves a
tendering process where Woodfab allege that the highest tenderer will not
necessarily be guaranteed the material tendered for, but is in fact required to
further negotiate with Coillte on a price after he has been established as the
highest tenderer. The CAS system is a system whereby (according to Woodfab)
Coillte give a limited number of customers guarantees as to 50% of their prior
year purchases of softwood, providing they are prepared to purchase at prices
demanded by Coillte and provided certain details of the sawmill's business are
provided to Coillte. The absence of open tendering, and the allocation system
for timber, constitutes (according to Woodfab) an abuse by Coillte of its
dominant position in the supply of felled softwood timber and undebarked
softwood (standing or felled) timber in the State. Woodfab also complained
that the refusal to supply pulp is an abuse of Coillte's dominant position in
the market for the supply of that product in Ireland.
(iii) Coillte
entered into a twenty year agreement with Medite of Europe Limited for the
guaranteed supply to that company of all types of timber product (including
pulp) at prices which, according to Woodfab, are unrelated to those on the open
market. Coillte also entered into a joint venture agreement with an American
company called Louisiana Pacific. Under the terms of the joint venture
agreement which Coillte entered into, it entered into a further series of
agreements with Louisiana Pacific whereby it agreed to supply to that company
timber at preferential prices and on preferential terms. the effect of these
agreements, says Woodfab, is to restrict unfairly the supply of timber products
and to discriminate against Woodfab by applying dissimilar conditions to
equivalent transactions with other sawmills such as to place Woodfab at a
competitive disadvantage.
(iv) The
foregoing account identifies the main allegations of Woodfab against Coillte in
so far as they relate to alleged breaches of the
Competition Act, 1991 and
infringements of Articles 85, 86 and 92 of the E.C. Treaty: It is not,
however, a complete account of Woodfab's allegation as they appear in the
pleadings. Detailed particulars of the alleged abuses are indeed set out in
the Statement of Claim at paragraphs 34 and 34 (A) of that document. These
particulars are traversed in the defence (see paragraph 49 of the Defence). I
have set out the main allegations made by Woodfab against Coillte and the fact
that Coillte have denied these allegations for the purposes of identifying what
are the main issues which arise for determination in this Action.
(v) The
Motion for Interrogatories is grounded on an affidavit of Frank Keane, a
partner in William Fry, solicitors for the Plaintiff. A number of matters to
which he avers are relevant in my consideration of the application of Woodfab.
In his affidavit he states that discovery has been made by Coillte. He also
states that a Notice to admit documents was served on Coillte by Woodfab and
was answered by Coillte on the 18th April, 1997. In addition, a Notice to
Admit Facts was served by Woodfab on Coillte on the 5th June, 1997 but has, as
yet, not been answered. He states:-
"the
delivery of Interrogatories is necessary .... for the purposes of disposing
fairly of the cause of action herein".
(paragraph 19).
He
also states:-
"It
is of material importance for the fair disposal of this case and for the saving
of time and expense that the matters in respect of which Interrogatories are
sought to be raised are dealt with by way of Interrogatories".
(Paragraph 21).
(v) Mr.
Keane states that the matters in respect of which the Interrogatories are
sought relate to the internal affairs of the Plaintiff and, says Mr. Keane,
only Coillte can give direct evidence in relation to such matters. In such
circumstances, Mr. Keane regards the Notice to Admit and the Interrogatories as
"essential evidential aids for the Plaintiff".
THE
SUBMISSIONS OF WOODFAB
1. Woodfab
submit that this Court should give leave to deliver the Interrogatories
because, they say, that it has been established on the basis of the affidavit
sworn by
2. Mr.
Keane that the answering of such Interrogatories are necessary for disposing
fairly of the action and for the purposes of saving costs. Counsel on behalf
of Woodfab point out that Order 31 Rule 2 specifically sets out the principles
by which a court should be guided in deciding whether or not to allow delivery
of Interrogatories. Order 31 Rule 2 provides as follows:-
"A
copy of the Interrogatories proposed to be delivered shall be delivered with a
notice of application for leave to deliver them unless the court shall
otherwise order and the particular Interrogatories sought to be delivered shall
be submitted to and considered by the court. In deciding upon such application
the court should take into account any offer which may be made by the parties
sought to be interrogated to deliver particulars, or to make admissions, or to
produce documents, relating to any matter in question. Leave shall be given as
to such only of the Interrogatories as shall be considered necessary either for
disposing fairly of the cause or matter or for saving costs".
3. Counsel
for Woodfab relied strongly upon a decision of Costello J. (as he then was) in
Mercantile
Credit Company of Ireland Limited and Highland Finance Ireland Limited
Plaintiffs -v- John Heelan, Joseph Kenny, James O'Higgins and Portico Limited
Defendants
1994
ILRM 105
,
in which Mr. Justice Costello considered the scope of Order 31 of the Rules of
the Superior Courts 1986. My attention was drawn to pages 115 and 116 of the
report of the case where Mr. Justice Costello set out what he considered to be
his conclusions in relation to the matter. He concluded that:-
"[A] Interrogatories
which seek admissions as to the existence of documents and signatures to
documents identified in discovery documents will normally be allowed unless
there are special reasons why in the interest of justice an Order should not be
made.
[B]
Interrogatories
which seek admissions about the facts surrounding documents identified in
discovery affidavits must relate to the issues raised in the pleadings and
cannot be used as a means to prove the interrogating party's case.
[C]
Interrogatories
which seek information must, likewise, relate to the issues raised in the
pleadings and not to the evidence to be adduced in the case.
[D] Although
the rule allows Interrogatories to be served for the purpose of saving costs
the interest of doing justice between the parties is the paramount
consideration in applications under it and so an Order will be refused if a
fair hearing of the issues between the parties might be prejudiced by it even
if the costs of the proceedings could be reduced by making the Order".
4. In
the course of his judgment Mr. Justice Costello made an observation which does
not appear in any of the conclusions which I have set out above. He said:-
"Leave
to deliver Interrogatories will only be given when they are necessary for
'disposing fairly' of the cause or matter or for saving costs. In considering
the fair disposal of an action commencing by plenary summons the court must
bear in mind that such actions are in principle to be heard on oral evidence
(Order 1 Rule 2) and that the use of evidence on affidavit given in reply to
Interrogatories is an exception which must be justified by some
special
exigenc
y
in the case which, in the interests of doing justice, requires the exception to
be allowed".
(emphasis added).
apart
from the foregoing it was contended by Counsel for Coillte that regard should
be had to the observation of Lynch J. in
Bula
Limited -v- Tara Mines Limited 1995 ILRM 401
where at p. 405 he stated:-
"Interrogatories
to be allowable must be as to facts in issue or facts reasonably relevant to
establish facts in issue. Interrogatories as to mere evidence as distinct from
facts or as to opinions or matters of law such as the meaning or effect of
documents or statements or conduct are not permissible."
5. The
allowance of interrogatories on "facts reasonably relevant to establish facts
in issue" is arguably a test of wider latitude than the equivalent tests of
Costello J. at [B] or [C] above but the express exclusion by Lynch J. of
questions relating to
opinions,
or as to the meaning or effect of documents, or as to statements or
conduct
is a qualification of the principles stated by Costello J at [B] and [C] above.
6. Counsel
on behalf of Woodfab submits that it is necessary for the fair disposal of the
present case that the court should require the delivery of Interrogatories: it
is submitted that in the circumstances there is a
special
exigency
which requires that in the interest of justice leave be granted. The Plaintiff
says that this
special
exigency
arises by reason of the fact that the Plaintiff's claim against Coillte is one
of anti-competitive behaviour and that the Plaintiff for the purposes of
establishing such behaviour must adduce evidence as to the internal workings of
Coillte, its opinions and policy making processes. This, Woodfab says, cannot
be established in the absence of leave being given to it to deliver
Interrogatories. Apart from arguing that such a special exigency justifies the
delivery of Interrogatories, it is also submitted on behalf of Woodfab that the
answering of the Interrogatories which are sought to be delivered would
undoubtedly result in a saving of court time and a saving of costs. Finally,
it is submitted that the Defendant, Coillte, has not sought to make out on
affidavit a case that it will be prejudiced in any way by having to answer the
Interrogatories of the Plaintiff.
THE
SUBMISSIONS OF COILLTE
7. Coillte,
through their counsel, submit that Woodfab has not established the existence of
any special exigency, of the kind identified by Mr. Justice Costello in the
Mercantile case, supra; Competition Act cases, it is submitted, are no
different from other commercial cases where the internal workings of companies
are at the very heart of the cause of action. It was also submitted on behalf
of Coillte that there was no need for any replying affidavit to be furnished on
behalf of Coillte as the Plaintiff had not, on its own affidavit, made out any
case of necessity to interrogate the Defendant. Coillte contended that the
burden was on Woodfab to establish that the Interrogatories sought to be
delivered were necessary either for disposing fairly of the cause or matter or
for saving costs. Counsel for Coillte relied strongly on a dictum of Bingham
M. R. in the English Court of Appeal in the case of
Hall
-v- Sevalco Limited
Times
Law Reports 27th March, 1996
,
where the Master of the Rolls stated:-
"Interrogatories
had to be necessary either for disposing fairly of the cause or matter or for
saving costs. Necessity was a stringent test. It could not be necessary to
interrogate to obtain information and admissions which were or were likely to
be contained in pleadings medical reports discoverable documents or witness
statements unless, exceptionally, a clear litigious purpose would be served by
obtaining such information or admissions on affidavit."
8. Bingham
M. R. went on to say (at page 183):-
"Interrogatories
should not be regarded as a source of ammunition to be routinely discharged as
part of an interlocutory bombardment preceding the main battle the Interrogator
had to be able to show that his Interrogatories, if answered when served, would
serve a clear litigious purpose by saving costs or promoting the fair and
efficient conduct of the action."
9. Counsel
for Coillte argued that whether the test was one of "
stringent
necessity
"
or "
special
exigency
"
or simple "
necessity"
the Plaintiff had failed to meet any of those standards and the court should
refuse to direct the delivery of Interrogatories. Apart from making the
submission that the Plaintiff had failed to satisfy the court that the delivery
of Interrogatories were necessary for the fair disposal of the case or for the
saving of time or costs, counsel on behalf of Coillte also submitted that a
substantial number of the Interrogatories which were sought to be delivered
suffered from a degree of prolixity which should disqualify them from being
delivered as Interrogatories.
CONCLUSIONS
(a) No
party has a right to have Interrogatories delivered and answered. Order 31
Rule 2 of the Rules of the Superior Courts, 1986 provides:-
"[L]eave
shall be given as to such only of the Interrogatories as shall be considered
necessary either for disposing fairly of the cause or matter or for saving
costs."
10. Apart
from the provision of Order 31 Rule 2 various authorities which have been
opened to me indicating that a Plaintiff will not be permitted as of right to
deliver Interrogatories but will have to satisfy the court either that a
special exigency or some necessity exists which warrant the delivery and
answering of Interrogatories. All of the cases to which I have been referred
identify the delivery and answering of Interrogatories as an unusual step in an
action commenced by way of plenary summons. Costello J. in
Mercantile
Credit Company of Ireland Limited -v- Heelan & Others
,
supra, stated at page 110 of the report, as I have already indicated, that:-
"Leave
to deliver Interrogatories will only be given when they are necessary for
disposing fairly of the cause or matter or for saving costs in considering the
fair disposal of an action commenced by plenary summons the court must bear in
mind that such actions are in principle to be heard on oral evidence (Order 1
Rule 2) and that the use of evidence on affidavit given in reply to
Interrogatories is an exception which must be justified by some special
exigency in the case which, in the interests of doing justice, requires the
exception to be allowed.'
11. These
cautionary words of Mr. Justice Costello are echoed in a recent case of
UCB
Bank Plc -v- Halifax
unreported judgment 10th June, 1997of the English Court of Appeal, in which
Butler-Sloss LJ, at page 5 of the transcript of the judgment in the case,
stated as follows:-
"It
is in my view clear that the administering of Interrogatories is not a normal
step in the proceedings, and will not automatically be allowed at any stage.
They have to be shown to be necessary in accordance with the requirements of
Order 26 Rule 1 and have to serve a clear litigious purpose. Further a
suitable time if at all for Interrogatories to be administered is after
discovery and exchange of witness statements and to do so at an earlier stage
will almost always be premature".
12. As
I have indicated, the various decisions to which I have been referred have gone
to some length to emphasise that giving leave to deliver Interrogatories must
be regarded as an exception in any case to be heard on oral evidence and must
be justified by the party seeking to deliver Interrogatories. That the party
seeking leave to deliver Interrogatories must establish that they are necessary
can be seen from Order 31 Rule 2 of the Rules of the Superior Courts. However
it does appear that once the party seeking to deliver Interrogatories satisfies
the court that such delivery would serve a clear litigious purpose by saving
costs or promoting the fair and efficient conduct of the action in question
then the court should be prepared to allow the delivery of the Interrogatories
unless it is satisfied that the delivery and answering of the Interrogatories
would work an injustice upon the party interrogated. What I have just said is,
I believe, simply another way of restating what is said in Order 31 Rule 2 of
the Rules namely that leave shall be given to serve Interrogatories where it is
considered "necessary either for disposing fairly of the cause or matter or for
saving costs". The Court must of course look at each and every Interrogatory
for the purposes of determining whether or not it is necessary to be answered
for the purpose of disposing fairly of the cause or matter or for saving costs.
In doing so it will take into account a number of matters. Those matters have
been summarised by Mr. Justice Costello in
Mercantile
Credit Company Limited -v- Heelan
,
which I have already referred to, but which bear repeating:-
"[a] Interrogatories
which seek admissions as to the existence of documents and signatures to
documents identified in discovery documents will normally be allowed unless
there is special reasons why in the interests of justice an Order should not be
made.
[b]
Interrogatories
which seek admissions about the facts surrounding documents identified in
discovery affidavits and must relate to the issues raised in the pleadings and
cannot be used as a means to prove the interrogating parties case
[c]
interrogatories
which seek information must, likewise, relate to the issues raised in the
pleadings and not to the evidence to be adduced in the case.
[d]
though
the rule allows Interrogatories to be served for the purpose of saving costs
the interest of doing justice between the parties is the paramount
consideration in applications under it and so an Order will be refused if a
fair hearing of the issues between the parties might be prejudiced by it even
if the costs of the proceedings could be reduced by making the Order.
"
13. I
respectfully adopt the foregoing as criteria which should be applied by the
Court in deciding whether or not to permit interrogatories to be delivered
together with the view expressed by Lynch J. in
bula
Limited -v- Tara Mines Limited, supra
,
that
questions as to opinions, the meaning or effect of documents or as to
statements or conduct should not be permitted.
14. The
questions which are here sought to be answered by way of Interrogatory can be
divided into the following subject categories:-
(A) Market
share.
(B) Agreements
with other parties.
(C) Annual
financial reports.
(D) Board
meetings at which issues as to performance indicators, corporate plans and
pricing and marketing were discussed.
(E) The
tendering process and the sale of timber.
(F) Regional
meetings.
15. I
am satisfied that the questions which I propose to allow are all questions
which meet the criteria spelt out by Costello J. in
Mercantile
Credit, supra
,
and which are not excluded on the basis of the observations of Lynch J. in the
Bula
case
,
supra, on the grounds that they relate to opinions, conduct, or the meaning or
effect of documents. While I am satisfied that the information sought and the
admissions sought relate to issues raised in the pleadings I must also be
satisfied by the Plaintiff that the answers to the questions raised in the
Interrogatories are necessary for fairly disposing of the matters in issue or,
alternatively, that answering the questions will save costs. In that regard I
should say that I do not accept that the fact that the case is a Competition
Act case places it in any special category such as would justify by itself the
delivery of Interrogatories: while Sections 4 and 5 of the Competition Act,
1991 and Articles 85 and 86 of the EC Treaty necessarily involve an assessment
of the behaviour of the Defendant in the market place and may indeed involve a
factual assessment of the Defendant's internally developed pricing policies
over time, nonetheless, it may be said that many other causes of action will
also necessarily focus on the behaviour of a company (whether in the market
place or elsewhere) and its internal policy making for the purposes of
establishing liability in that Defendant company. The fact that the case is a
Competition Act case therefore does not constitute, in my view, a 'special
exigency' warranting the delivery of Interrogatories. I am, however, satisfied
that the answers to the Interrogatories which I propose to allow be delivered
will undoubtedly save costs. I am also satisfied that by permitting the
delivery of the Interrogatories (to which I shall refer later) I am ensuring
that no injustice to the Plaintiff will result from having to call the Deponent
(namely the person answering the Interrogatories) and being deprived of the
right to cross-examine him. This is a matter which Mr. Justice Costello in the
Mercantile Credit Company case, supra
,
regarded as a factor which the court was entitled to take into account in
considering whether it ought to permit Interrogatories. Apart from the saving
of costs and the possibility of an injustice being worked, I am also satisfied
that the answering of the proposed Interrogatories will serve to save time
during the course of the trial of the action rather than prolong the trial of
the action. In all the circumstances, I am satisfied that the Plaintiff has
made out a case for the court to conclude that leave should be given to deliver
the Interrogatories set out below on the grounds that the delivery of such
Interrogatories is necessary either for disposing fairly of the cause or matter
or for the saving of costs.
16. While
I propose to make an Order giving the Plaintiff leave to deliver
Interrogatories, an analysis of the 1068 questions discloses that certain of
the Interrogatories should not be required to be answered by the Defendant.
The reasons differ. Hereunder I list the reasons. In the schedule annexed to
this judgment I list the questions which need not be answered. The reasons are:-
(A) Certain
of the questions are based upon an hypothesis i.e. a fact yet to be established
in evidence at the trial.
(B) Certain
of the questions are unnecessary; for example where there is a question asking
if certain accounts are true and accurate, it is unnecessary (until a negative
answer is given) to ask further questions as to the accuracy of particular
facts in those accounts. Woodfab shall have liberty to apply in this regard.
(C) Certain
of the questions relate to the opinions or policy positions held by Coillte at
different times and by officers of Coillte. I believe that to require a single
deponent to answer questions as to opinion or policy of Coillte or its officers
or management might work an injustice on the Defendant and might result in the
absence of a fair hearing. Accordingly I have determined that such questions
need not be answered by the Defendant.
(D) Certain
of the questions arguably require the Defendant in answering under oath to draw
inferences from facts set out in a document which is clearly an undesirable use
of the interrogatory provisions of Order 31.
SCHEDULE
QUESTIONS
IN RELATION TO WHICH LEAVE TO DELIVER INTERROGATORIES IS REFUSED
17. Questions
16, 17, 27, 28, 31, 40, 45, 50, 62, 113-126 (inclusive),
130-146
(inclusive), 150-166 (inclusive), 170-184 (inclusive), 188-202 (inclusive),
206-221 (inclusive), 532, 535, 538, 541, 545, 604, 605, 618, 679/80, 684/85,
689/90, 694/5, 699/700, 704/05, 709/10, 714/15, 719/20, 724/25, 729/30, 734/35,
739/40, 744/745, 749/50, 754/55, 759/60, 764/65, 769/70, 774/75, 779/80,
784/85, 789/90, 794/95, 799/800, 804/5, 809/10, 814/15, 819/20, 824/25, 829/30,
830/35, 839/40, 844/45, 849/50, 854/855, 859/60, 864/65, 869/70, 874/75,
879/80, 884/85, 889/90, 894/5, 899/900, 904/5, 909/10, 914/15, 919/20, 924/25,
929/30, 934/5, 939/40, 945/5, 949/50, 954/5, 959/60, 964/65, 969/70, 974/75,
979/80, 984/85/ 989/90, 994/95, 999/1000, 1004/5, 1009/1010, 1014/15, 1019/20,
1024/25, 1029/30, 1034, 1038, 1042/43, 1047/48, 1052/53, 1057/58, 1062/63,
1067/68.
© 1997 Irish High Court
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