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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Framus Ltd. v. Amantiss Enterprises Ltd. [2002] IEHC 113 (10 December 2002) URL: http://www.bailii.org/ie/cases/IEHC/2002/113.html Cite as: [2002] IEHC 113 |
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THE HIGH COURT
RECORD NO. 1996/10658P
BETWEEN
FRAMUS LIMITED
AND
AMANTISS ENTERPRISES LIMITED (IN VOLUNTARY LIQUIDATION)
AND
WILBURY LIMITED (IN VOLUNTARY LIQUIDATION)
PLAINTIFFS
AND
C.R.H., PLC
AND
IRISH CEMENT LIMITED,
AND
ROADSTONE PROVINCES LIMITED,
AND
ROADSTONE DUBLIN LIMITED,
AND
TRADBURN LIMITED,
AND
READYMIX PLC,
AND
KILSARAN CONCRETE PRODUCTS LIMITED,
AND
C.P.I., LIMITED
DEFENDANTS
Judgment of Mr. Justice Herbert delivered the 10th day of December, 2002.
THE FACTS
1. Amantiss Enterprises Limited (in voluntary liquidation) commenced trading in June 1986 and ceased trading in March 1991. Its sole business was the importation into the State of cement powder. Wilbury Limited (in voluntary liquidation) trading as National Concrete was its sole customer. It is pleaded that other users of cement powder in the State decided en-block not to trade with it. It traded from March 1988 to November 1990 in Galway city and the surrounding area and from November 1990 to March 1991 in the South Western area of Dublin city and county and in the proximate areas of the joining counties. It produced and sold ready mixed cement and mortar and manufactured and sold concrete blocks. After Wilbury Limited (in voluntary liquidation) ceased to trade in March 1991 Framus Limited started and carried on a similar business until it ceased trading on the 28th February, 1994. By a number of written Agreements all dated the 28th February, 1994 Irish Cement Limited, Roadstone Provinces Limited and Tradburn Limited acquired the assets.
2. A plenary summons was issued by Framus Limited, Amantiss Enterprises Limited (in voluntary liquidation) and Wilbury Limited (in voluntary liquidation) as co-Plaintiffs on the 4th December, 1996. Appearances was entered on behalf of C.R.H. Plc, Irish Cement Limited, Roadstone Provinces Limited, Roadstone Dublin Limited, and Tradburn Limited (which I shall hereafter refer to as "the C.R.H. Companies), on the 2nd January, 1997. An amended Statement of Claim was delivered on the 3rd February, 1998.
3. In the amended Statement of Claim the Plaintiffs claim that the C.R.H. Companies and the other Defendants, Readymix Plc, Kilsaran Concrete Products Limited and C.P.I. Limited or some of them, entered into an agreement of series or agreements and additionally or alternatively conspired together to cause damage to the Plaintiffs by preventing them from entering, or by forcing them out of the market for the above mentioned products in the above mentioned areas by the use of anti-competitive practices and by the abuse of a dominant market position. In very brief summary, - the amended Statement of Claim is twenty two pages long, - it is alleged that:
Customers and potential customers of the second and third named Plaintiffs were dissuaded from trading or continuing to trade with them by oral threats of trade discrimination and oral offers of advantageous prices and conditions made and offered to them by officers and employees of the C.R.H. Companies.
The second and third named Plaintiffs were excluded from all major public and private construction contracts in their sphere of operation by collusive tendering, predatory price cutting and offers of rebates and special conditions in respect of the purchase of cement based products, aggregates and bitumen on the part of the Defendants or some of them operating together as a cartel.
The second and third named Plaintiffs were prevented from competing generally in the above indicated markets by the Defendants who, acting together, temporarily and strategically reduced the price of thirty five newtons concrete to a level which forced the second and third named Plaintiffs to sell their products at below production cost, which eventually forced them to cease trading altogether.
Suppliers of cement powder and aggregates were contacted with a view to persuading them to cease trading with the Plaintiffs or to alter the credit and other terms allowed by them to the Plaintiffs to the disadvantage of the Plaintiffs.
4. The reliefs claimed are declarations, an order directing the C.R.H. Companies to restore the assets, including good will, acquired under the Agreements made on the 28th February, 1994, an account, payment - over of the sums ascertained on taking an account, damages, including exemplary damages, interest, and further or other relief.
5. A notice of intention to proceed was served on behalf of the Plaintiffs on the 13th May, 1998. A very extensive notice for particulars, - fourteen pages in length, - was served by the C.R.H. Defendants on the 28th May, 1998. Replies to these particulars were furnished on the 18th December, 1998, - twenty three pages in length. Arising out of this a notice for further and better particulars, - sixteen pages in length, - was served by the C.R.H. Defendants on the 4th March, 1999. Replies to this notice, - eighteen pages in length, - were furnished on the 22nd October, 1999. A defence, - eleven pages in length, - was delivered on behalf of the C.R.H. Defendants on the 20th June, 2000. Apart from a general denial and a joinder of issue this defence specifically pleads the Statute of Limitations, 1957 to 1991 in respect of all causes of action which accrued on or before the 4th December, 1990, and raises the principle of laches in respect of the entire claim. Issue is joined with regard to the conclusions, relevance, admission into evidence and probative value, (if any) in these proceedings of a decision of the European Commission given on the 30th November, 1994 in the matter of Cembureau, as varied by the European Court of Justice of First Instance on the 15th March, 2000. The C.R.H. Companies plead that the agreements made on the 28th February, 1994 are valid and cannot be properly or fairly impugned by the Plaintiffs as substantial sums of money were paid on foot of these agreements by Irish Cement Limited, Roadstone Provinces Limited and Tradburn Limited to or to the Order of the Plaintiffs. The C.R.H. Defendants further plead that if any provisions of these agreements are contrary to the provisions of Section 4 or Section 5 of the Competition Act, 1991, (which is denied), these are severable from the agreements the remainder of which remain binding between the parties and of full effect in law.
6. By an Order of the High Court made on the 18th July, 2000 on an application by the C.R.H. Companies by a Notice of Motion dated the 21st June, 2000 heard on the 17th July, 2000, the Plaintiffs were ordered within six weeks from the date of the Order to furnish additional particulars of specified aspects of their claim. These particulars, - fourteen pages in length, - were furnished on the 14th September, 2000.
7. By Notices of Motion dated the 29th June, 2000 and the 19th February, 2001 the Plaintiffs sought discovery on oath, and subsequently further and better discovery on oath of documents from the Defendants. These applications were grounded on Affidavits of Mr. Seamus Maye of 6 Riversdale House, Glasnevin, Dublin, 1, sworn on the 18th June, 2000 and the 20th February, 2001 in which he states that he is a Director of each of the Plaintiff companies. A further Affidavit in support of the application was sworn on the 13th October, 2000 by Dr. Moore McDowell, senior lecturer in economics at University College Dublin. Affidavits in reply were sworn by Mr. John A. Glackin, Solicitor, of Gerrard Scallan and O'Brien, Solicitors, who appear on the record of the Court as representing the C.R.H. Companies. When these applications for discovery came on for hearing Counsel for the C.R.H. Companies indicated that if the Court should be disposed to making an Order for Discovery of documents on oath in favour of the Plaintiffs against the C.R.H. Companies, they would move the Court to make that order conditional upon the Plaintiffs' furnishing security for the costs of discovery pursuant to Order 31 Rule 12 (2) of the Rules of the Superior Courts as substituted by Statutory Instrument No. 233 of 1999. Counsel for each of the other Defendants also reserved their right to make similar applications. By consent of all the parties the Court proceeded to hear the application for discovery without prejudice to the right of any of the Defendants by cross motion after the determination of the application for discovery to seek security for the costs of any such discovery, (if any) as the Court might order.
8. By judgment dated the 12th April, 2002 the Court held that the C.R.H. Companies should make discovery on oath of the documents therein specified at page eight line seven to page nine line twelve; page twelve line fourteen to page fourteen line fifteen; page fifteen line fourteen to line nineteen, and page sixteen line two to line twelve.
9. This discovery is significantly less than that sought by the Plaintiffs against the C.R.H. Companies. The following passage from the judgment of the Court at page eighteen of the judgment will offer some view of the extent of the discovery sought by the Plaintiffs, addressing as it does a single paragraph of the Notice of Motion seeking discovery of documents.
"The Plaintiffs seek discovery of an enormous range of documents and records extending over a period of 8 years which it is claimed may establish a direct or indirect ownership or control by the Defendants and in particular the Cement Roadstone Group of Defendants, of companies or unincorporated businesses involved in the supply of concrete products, aggregates or speciality concrete products, or who own or control sources of aggregates, and so demonstrate the extent of the Defendants dominance in the market for aggregates, concrete products, tarmac and speciality concrete products such goods being effectively homologous.
The documents sought are:-
All correspondence, memoranda of conversations or minutes of meetings during the period February, 1987 to February 1995 inclusive between any of the first five named Defendants and any other parties (whether other Defendants, competitors, customers, suppliers, financial institutions, shareholders of competitors, companies office, accountants or persons on their behalf, or others) concerning any of the first five named Defendants (or their subsidiaries or associated companies or companies controlled by them) ownership, acquisition, control (including by way of loans, loan guarantees or otherwise) of or over sources of concrete products, aggregates or speciality concrete products in the State."
10. By Notice of Motion dated the 19th June, 2002 the C.R.H. Companies sought an Order pursuant to Order 31 Rule 12 of the Rules of the Superior Courts as substituted by Statutory Instrument No. 23 of 1999, Rules of the Superior Courts (No. 2) (Discovery) 1999, directing the Plaintiffs and each of them to furnish security for discovery in such form and in such amount as the Court should determine in respect of the costs which the C.R.H. Companies would incur in making discovery in accordance with the Judgment of the Court given on the 12th April, 2002. This application is grounded on the Affidavit of Mr. Anthony O'Loghlen, a Director of Irish Cement Limited, sworn on the 19th June, 2002. A replying Affidavit was sworn by Mr. Seamus Maye, a Director of each of the Plaintiff companies on the 27th June, 2002. In response to this a further Affidavit was sworn on behalf of the C.R.H. Companies by Mr. Brian Griffin, a Director of C.R.H. Plc on the 1st July, 2002. This was followed by an Affidavit sworn by Mr. Seamus Maye on the 3rd July, 2002.
THE LAW
11. Order 31 Rule 12 (2) of the Rules of the Superior Courts 1986 as substituted by Statutory Instrument No. 233 of 1999, Rules of the Superior Courts (No. 2) (Discovery), 1999, provides as follows:-
"On the hearing of such application the Court may either refuse or adjourn the same, if satisfied that such discovery is not necessary, or not necessary at that stage of the cause or matter, or by virtue of non compliance with the provisions of Sub-Rule 4(1), or make such Order on terms as to security for the costs of discovery or otherwise and either generally or limited to certain classes or documents as may be thought fit."
12. In my Judgment this Rule confers an unfettered discretion on the Court, to be exercised judicially on the facts of each particular application, whether or not to impose a term as to security for the costs of discovery in making an Order for the discovery of documents on oath. Though a similar provision was contained in Order 31 Rule 12 of the Rules of the Superior Court (Ireland), 1905 and Order 31 Rule 12(1) of the Rules of the Superior Courts, 1963, the industry of Counsel for the parties was unable to produce any authority with regard to the exercise by the Court of this discretion. There is no similar rule to be found in the Supreme Court Practice of the United Kingdom, (commonly referred to as "the White Book") though a similar rule is to be found in the County Court Rules in that Jurisdiction.
13. The many decisions of the Supreme Court and of this Court with respect to Order 29, and Order 58 Rule 17 of the Rules of the Superior Courts 1986, as regard the furnishing of security for costs of the proceedings in the High Court and for the costs to be occasioned by an Appeal to the Supreme Court are of assistance to the Court, as are the decisions relating to Section 390 of the Companies Act, 1963. However, in my Judgment in considering the principles stated in those cases the Court must be conscious of the different consequences for the litigants of an Order for security for the costs of the entire proceedings and a term imposed as a condition of allowing discovery of documents on oath, that the successful applicant should first provide security for the costs of the discovery allowed. Some of these principles might consequently not be applicable at all whereas others might apply but with a reduced or altered emphasises.
14. The principal, if not the sole reason, why the imposition of such a term would be urged by the party against whom an Order for Discovery of documents on oath is sought, would be the alleged impecuniosity and lack of free assets either within the State or within the European Union of the party seeking the Order for Discovery of documents. In my judgment an onus would lie on the party seeking the imposition of such a term, to establish a strong prima facie case by appropriate evidence of such a probable inability on the part of the party seeking discovery to pay the costs of that discovery in the event of those costs being awarded against that party. However, a lack of means or free assets could not, in my judgment, in itself constitute a sufficient reason for the Court to impose a term as to security for costs of discovery. This would amount to a discrimination on the basis of means alone as regards access to a valuable interlocutory remedy. Such a discrimination would be invidious and unjust and in the case of a natural person at least might be unconstitutional as an infringement of such persons right of access to the Courts as guaranteed by the Constitution of Ireland.
15. In exercising its discretion whether or not to make an Order for security for the costs of discovery the Court should in my judgment have regard to some one or more of the following matters. This is not meant to be an exhaustive list.
(a) Without attempting to prejudge in any way the ultimate outcome of the proceedings, - and I cannot over emphasise this warning - the apparent strength on the Pleadings and Affidavits of the case of the party seeking discovery of documents having regard to the probable ultimate incident of the costs of discovery, on the basis that costs, including costs of discovery generally follow the event.
(b) Such evidence as may be before the Court on Affidavit of the burden, in terms of time and expense which the making of the Order for Discovery of documents would impose on the subject party. The greater that burden the more favourably the Court should consider a request for security for discovery of documents.
(c) The probable extent (if any) of the detriment likely to be suffered by the party seeking discovery should that party be genuinely unable to provide security but bearing in mind that the sole purpose of discovery of documents is to enable the party seeking it to advance an existing case or to defeat the case of the other party and is not to enable the party seeking discovery to search for or to set-up a case.
(d) Where the party seeking discovery of documents but opposing an application for security for the costs of that discovery asserts that its inability to provide security is due solely or principally to the very actions of which complaint is made in the proceedings so that the party seeking security is in effect attempting to benefit from that party's own alleged wrong, the Court should require prima facie proof of both these matters from the party opposing the application for security. When such an argument is made it is not enough for the party opposing the imposition of a term as to security to simply "adopt" evidence offered initially by the party seeking security as to lack of means or free assets. Neither should the Court accept a mere statement to this effect nor broad and unsupported general assertions of such an inability. The party raising this argument must place sufficient evidence before the Court for the Court to be satisfied as a matter of probability that there is a genuine inability to furnish security. The nature and amount of evidence required will vary very much with the facts of each particular case so that it is not possible to state a rule of general application in this regard. If the party opposing an application to provide security for costs of discovery is an incorporated or unincorporated body the Court in my judgment is entitled to a proper and sufficient explanation as to why the person or persons in fact conducting the proceedings in the name or on behalf of that body is or are unable to provide or to obtain such security on behalf of that body. The party seeking to make that argument must further establish a prima facie case that the sole or the principal cause of that party's lack of means and lack of free assets are the actions of the other party the subject matter of the suit. A mere assertion to this effect will not suffice nor will a recital of the pleadings and arguments on Affidavit. Evidence must be put before the Court to support this contention. The type and the amount of evidence will vary with the facts of each particular case so that rules of general application cannot be annunciated. In all cases however, the weight of the evidence must be such that the Court can be satisfied on the balance of probability that the party's straightened financial circumstances were solely or principally caused by the activities of the other party as set out in the pleadings.
(e) The proportion which the costs of discovery of documents are likely to bear to the probable total costs of the entire proceedings regardless of the ultimate outcome. The greater this is the stronger would appear to be the case for security for the costs of discovery.
(f) The strength of the case for discovery and the stage of the proceedings at which discovery is sought. In some cases, for example, a party might be said to be entitled to some discovery of documents almost ex debito justiciae. In those cases the Court should be slow to direct security despite the burden of time and expense imposed on the other party. In other cases the party seeking discovery may barely convince the Court of the necessity for it. In a case of exceptionally early or unduly delayed discovery the case for security for the costs of the discovery would be stronger.
(g) Whether the case raises an issue of major public importance and the discovery sought is relevant to that issue. In such circumstances the Court should be very slow to make an order for security for costs of discovery lest it inhibit or delay the determination of the issue.
(h) Whether an order for security of costs has been made pursuant to the provisions of Order 29 of the Rules of the Superior Court, 1986 or Section 390 of the Companies Act, 1963. Though the normal practice of the Courts is to reserve the question of the costs of an application for discovery of documents the ultimate incidence of such costs almost invariably follows the event save in very exceptional circumstances in which case the provisions of Order 99 Rule 37 (14) would ordinarily apply.
16. Other matters which the Court would take into consideration in reaching a decision would be the location of the ordinary residence of the applicant for discovery; whether that party has assets in another member State of the European Union; whether there would be difficulty in enforcing an Order for costs in another member State of the European Union; evidence that the party seeking discovery of documents had deliberately contrived to be without means or free assets or was selected as someone without or of a very limited means to become a Plaintiff in the action. As I have already said this is not intended to be a definitive list of matters which the Court should take into consideration and other factors may from time to time require to be taken into account.
CONCLUSIONS
17. The Court is satisfied from what is stated in the Affidavit of Anthony O'Loghlen sworn on the 19th June, 2002 that the preparation of an Affidavit as to documents by the C.R.H. Companies, sufficient to properly comply with the terms of the judgment of the Court delivered on the 12th day of April, 2002 would require the expenditure of a very large amount of time on the part of employees and officers of the C.R.H. Companies. The estimate furnished by Mr. O'Loghlen was in excess of 2,375 hours, (which from the remainder of the Affidavit and despite what is averred at paragraph 25 appears to be equally divided between clerical time and managerial time). This amount of time he swears to be necessary to identify, source, retrieve, sort, consider, describe and apportion to schedules only such documents ordered to be discovered as I have designated the Roadstone Provinces Limited, "Galway Area" Discovery and the C.R.H. Plc, Irish Cement Limited, Roadstone Dublin Limited and Tradburn Limited, "thirty five newtons concrete South West Dublin city and county and proximate areas of adjoining counties", discovery.
18. No claim is being made by the C.R.H. Companies for security for the costs of making full and proper discovery of any Roadstone Dublin Limited documents relating to specific contracts, namely, - the Furlong Carpets contract, the Manor Kilbride Bridge contract, the City-West Flyover contract and the Dublin Airport Multi-storey Car-park contract. Similarly, no claim for security is made as regards any (if any), C.R.H. Plc, documents relating to the aggregates supply agreement between Hudson Brothers Limited and Framus Limited and Wilbury Limited (in voluntary liquidation) or relating to the meeting on the 12th January, 1993 between Mr. Declan Doyle of C.R.H. Plc, and Mr. Seamus Maye of Wilbury Limited (in voluntary liquidation), or any documents relating to inter-defendant communications in respect of any of the above mentioned matters. Similarly, no claim for security is made as regards any (if any), documents relating to the series of meetings at which oral threats are alleged to have been made to Mr. Seamus Maye by officers, employees or agents of C.R.H. Plc, Irish Cement Limited and Roadstone Dublin Limited. No claim for security is made as regard any documents relating to inter-defendant communications in respect of these meetings and alleged oral threats. Finally no claim for security is made as regards any C.R.H. Plc, documents relating to any (if any), communications with Lagan Cement in September and October, 1993 and any documents relating to inter-defendant communications in respect of any such communications.
19. This figure of 2,375 hours is admitted by Mr. O'Loghlen to be an, "informed estimate" only. The clerical part of the task of complying with the Roadstone Provinces Limited, "Galway Area" Discovery, is estimated to take 1,187.5 hours or 148.4, eight hour working days. Mr. O'Loughlen avers that in the relevant period of eighteen months of business approximately 150 large customers in the "Galway Area" each received approximately fifteen invoices and one statement per month and 520 smaller customers received approximately three invoices and one statement per month. This totals at 80,640 documents: almost all of which are stated to be held on microfiche. The C.R.H. Companies, may also have to consider and to deal appropriately with the issue of any relevant documents which were, but no longer are in their possession, custody or power or the possession, custody or power of their solicitors or agents. As regards the C.R.H. Plc, Irish Cement Limited, Roadstone Dublin Limited and Tradburn Limited, supply of thirty five newtons concrete in "south west Dublin city and county and the proximate areas of adjoining counties", - which area, and also the "Galway Area", this Court has defined after hearing argument from the parties by reference to an ordnance survey map, - Mr. O'Loghlen avers that invoices and statements for this ("south west Dublin city and county and the proximate areas of adjoining counties") area are retained on microfiche for the last quarter of the years 1990, 1991 and 1992 and that for the last quarter of 1993 and the second quarter of 1994, invoices, statements and computer records of quotations are available on computer disk. Each microfiche, he states, contains 208 documents and there are 270 microfiches covering invoices and statements for the entire period in respect of which an Order for Discovery of documents has been made. This gives a total of 56,160 invoices and statements on microfiche alone requiring to be considered for this area and amounts to a probable minimum of 136,800 probably relevant documents for both areas which require to be processed in order to ensure proper compliance with the two parts only of the judgment of 12th April, 2002 in respect of which the C.R.H. Companies are seeking security for costs of discovery. Each document will require to be considered to ascertain whether it falls within the relevant five quarter years; whether it relates to the sale of thirty five newtons concrete; whether it relates to the supply of the same in the relevant area; the price and conditions of sale quoted and other relevant matters.
20. On a random sample test carried out by Roadstone Dublin Limited, Mr. O'Loghlen avers that it took fifty minutes to check each invoice microfiche and twenty minutes to check each statement microfiche with an additional fifteen to twenty seconds to print-off each individual invoice. I infer, since no different time is specified that the printing-off of each statement would take a similar time. Mr. O'Loghlen estimated that it would require 187.5 man hours to check the approximate 56,160 C.R.H. Plc, Irish Cement Limited, Roadstone-Dublin Limited and Tradburn Limited documents relating to the sale and supply of thirty five newtons concrete in the area "South West Dublin city and county and proximate areas of adjoining counties." On this basis, assuming Roadstone Provinces Limited, "Galway Area" microfiches to be the same, it would require approximately 468.75 man hours to check those documents, a total of 656.25 man hours for both areas excluding the fifteen to twenty seconds necessary to print-off each individual document. Taking the lower figure of fifteen seconds and assuming that it was necessary to print-off only half of the 138,800 invoices and statements the task would require approximately 285 man hours to complete. In such circumstances it is not possible to hold that the informed estimate of 1,187.5 clerical man hours considered necessary to deal properly with these two parts of the discovery alone is grossly inaccurate, excessive or exaggerated. Costing clerical time at 20 per hour, a figure which was not challenged by the Plaintiffs, the cost in lost man hours to the C.R.H. Companies of complying with these parts of the judgment of the Court will probably exceed 23,750.
21. There is no denying that due and proper compliance with the judgment of the Court as to discovery of documents will necessitate the involvement of persons at a senior management level in the C.R.H. Companies. In addition to exercising a general supervisory role, such persons, probably in consultation with legal advisors, would have to decide whether and if so and on what basis privilege from disclosure should, (if at all) be claimed in respect of certain documents. No indication was given to the Court as to the number or status within the C.R.H. Companies of these persons. At paragraph 18 of his Affidavit sworn on the 19th June, 2002, Mr. O'Loghlen states as follows:-
"Considerable further time is likely to be involved in considering whether any portions of these documents contain confidential information which is not relevant to any issue in these proceedings and which ought therefore to be redacted from the documents made available to the Plaintiffs. Again, given the importance of ensuring full and proper compliance with the Defendants' discovery obligations, a significant in-put in managerial time will be required. Again, I believe that the level of managerial time required for this aspect of the discovery will be approximately the same as the hours required for the process of identifying the documents, that is to say 187.5 hours approximately. Again, I emphasise that this is merely an estimate the time actually required may turn out to be lower or higher."
22. The specific issue raised in this paragraph 18 of the Affidavit of Mr. O'Loghlen was addressed at page 10 of the judgment of this Court delivered on the 12th April, 2002. The Court held that this is an issue relevant not to the discovery of documents but to the inspection of documents so discovered. Accordingly the time which might or might not be expended in ascertaining whether a document contained confidential information may not in my judgment be properly taken into account in considering the question of security for the discovery of documents.
23. A person or persons at senior management level in the C.R.H. Companies, cannot but be involved in deciding in which schedule in the Affidavit as to Documents any particular document will appear and in deciding whether privilege from disclosure is claimed in respect of any document and in an overall supervisory and consultative role. I am not prepared to accept on the evidence before the Court that any more time would be devoted to such tasks by such person or persons than the estimated 656.25 man hours devoted by clerical staff to identifying and checking the documents for relevance. Though no basis is given by Mr. O'Loghlen for the figure of 100 per hour at which this managerial time is costed, it is not challenged by the Plaintiffs as unreasonable or excessive and is not out of line with the levels of remuneration claimed for persons of this status in evidence constantly given to the Courts. In my judgment, a sum of not more than 65,625 would be an appropriate pre-estimate of the loss in senior management time to the C.R.H. Companies of complying with these parts of the judgment of the Court.
24. On this basis in my judgment the total minimum loss to the C.R.H. Companies of complying with these two parts only of the Judgment of the Court in respect of which they seek security of costs for discovery is more probably in the region of 89,375 and not the figure of 144,375 offered by Mr. O'Loghlen in his Affidavit sworn on behalf of the C.R.H. Companies on the 19th June, 2002.
25. In his Affidavit sworn on the 27th June, 2002, Mr. Seamus Maye on behalf of the Plaintiffs contended that no such expense would in fact be incurred by the C.R.H. Companies as the personnel involved were officers and employees of those companies who would be acting in the course of their paid employment. He further contended that the sum of 144,375 was, "negligible relative to the turnover of C.R.H. Plc alone which (he understood) was in excess of 10.5 million last year." The Court rejects these contentions. The time of the officers and employees of the C.R.H. Companies is properly employed only in the lawful pursuit of the business of the companies and insofar as it is diverted from this purpose there is a loss to the companies and ultimately to their shareholders. A diversion of this time whether it is valued at 144,375 or 89,375 must represent a material potential loss to the C.R.H. Companies regardless of their turnover.
26. The principal answer of the Plaintiffs to this claim for security for the costs of discovery is that, "the impecuniosity of the Plaintiffs has been solely caused by the Defendants' actions and, in those circumstances the Defendants ought not to be able to profit from their actions in barring or, in the alternative, seriously undermining the Plaintiffs' claim against them."
27. I do not accept the argument on behalf of the Plaintiffs that a failure to obtain discovery would amount to a bar on the Plaintiffs' claim against the C.R.H. Companies, nor do I accept that it would "seriously undermine" that claim. The Court was satisfied, as the provisions of Order 31 Rule 12 (1) requires it to be satisfied, that the discovery permitted was necessary for disposing fairly of the cause and for saving costs. However, the Court is also entitled to have regard to the fairness of imposing a term as to security for the costs of that discovery. Without the discovery permitted it would undoubtedly be more difficult for the Plaintiffs to establish their case but I do not accept nor has any sufficient evidence been put before the Court that it would be impossible for them so to do. I do not accept that the Plaintiffs access to the Court is seriously impeded so that it is unnecessary to consider whether the Constitutional guarantee of access to the Courts applies to a body incorporated in the State, an issue which in any event was not argued before this Court.
28. It was accepted by both sets of parties that the named Plaintiffs are without money or free assets. However, the Court in my judgment is entitled to have regard to the fact that this extensive and I believe that I may infer very costly litigation is being conducted by the sole or principle shareholders of the Plaintiff companies and so therefore to their probable financial advantage. In his Affidavit sworn on behalf of the Defendants on the 1st July, 2002 Mr. Brian Griffin a Director of C.R.H. Plc avers that he had been lead to believe, - he does not state by whom, - that Mr. Seamus Maye and his brother, Mr. Francis Maye, are both involved in business in a substantial way. He further states that Solicitors on behalf of Mr. Seamus Maye and Mr. Francis Maye had written to the Solicitors for the C.R.H. Companies advising them that the Maye brothers intended to re-enter the cement and concrete business in the near future. The necessity for this communication, Counsel for the C.R.H. Companies informed the Court, arose because of non-competition provisions in the agreements of the 28th February, 1994 whereby the second, third and fifth named Defendants acquired the business assets and good will of each of the Plaintiff companies and which agreements the Plaintiffs now claim are invalid. This notified intention to re-enter the cement and concrete business Mr. Griffin claims, "suggests that they must have considerable funds available to them, funds which could be used to provide any security which the Court might direct to be given in relation to the costs of making discovery."
29. In an Affidavit in reply sworn on the 3rd July, 2002 Mr. Seamus Maye states that these averments by Mr. Griffin are speculative and he continues as follows:-
"I am currently involved in a manufacturing business with my brother, Francis Mayes, specifically the business of one-off timber framed houses. However, to describe this business as "substantial" is a gross overstatement. We established this business with limited funds and privately secured finance. The business, reflecting the position of timber framed housing within the construction industry generally, is very much in the early stages of its development. In short, neither I nor my brother have access to funds to the extent suggested by Mr. Griffin."
30. This statement is in my judgment quite insufficient to satisfy the Court that Mr. Seamus Maye and his brother Mr. Francis Maye are unable to provide or to procure for the Plaintiffs a means of giving security for the costs of discovery. To this extent, I am unable to accept that the Plaintiffs are unable to provide security for the costs of discovery.
31. In my judgment the Affidavits of Mr. Seamus Maye sworn on the 27th June, 2002 and the 3rd July, 2002 do not establish by evidence a prima facie case on the balance of probability that the lack of funds and free assets in the Plaintiff companies was caused solely by the alleged actions of the C.R.H. Companies or that those alleged actions substantially contributed to that lack. I believe that I may justly describe these Affidavits as no more than a restatement on oath with some very limited elaboration of the matters already set out in the statement of claim and replies to particulars with the addition of the full alleged text of subsequently created memoranda of secret recordings of conversations between officers and employees of the C.R.H. Companies and Mr. Seamus Maye on behalf of the Plaintiffs, some graphs stated to show product haulage distances and profit and loss figures for National Concrete, an extract from the Irish Independent newspaper of the 12th March, 1994 and a copy of decision of the European Commission dated the 24th January, 1994 in the case of "Cembureau".
32. I accept that the type, amount and quality of evidence which may be put before the Court will vary from case to case. However, in my judgment it is simply not sufficient for the Plaintiffs to claim that because their case is based on the operation of an alleged cartel and on an alleged conspiracy to harm their interests, the evidence which they can put before the Court for the purpose of establishing a prima facie case that their lack of funds and free assets is as a matter of probability caused or substantially contributed to by the actions of the C.R.H. Companies and other Defendants must of necessity be extremely limited and that accordingly the Court should be more ready to accept a causal connection between the alleged loss and the alleged activities of the Defendants. In my judgment whatever the nature of the case, the onus lies on a party seeking to avoid a term as to security for the costs of discovery on this basis to provide sufficient evidence to establish the causal connection on a prima facie basis as a matter of probability.
33. In the present case, for example, no Affidavit or statement is exhibited from James Stewart Limited who it is alleged declined to continue its commercial relationship with Wilbury Limited (in voluntary liquidation) in the "Galway Area" because of alleged pressure exerted and inducements offered by Roadstone Provinces Limited. No Affidavit or statement is exhibited from Mr. Peter Hudson with respect to the alleged approaches to him in summer 1993 by Mr. MacAodha, Managing Director of Roadstone Dublin Limited. No Affidavit or statement is exhibited from Mr. Kevin Langan dealing with the alleged approaches made to him in or about September or October 1993 by Mr. Declan Doyle, a Senior Executive of C.R.H. Plc.
34. So far as the secret recording by Mr. Seamus Maye of conversations are concerned, it is accepted by all parties to this litigation that the officer or employee of the C.R.H. Companies involved was entirely unaware that these recordings were being made and therefore spoke openly and freely. In my judgment, considered as a whole the content of these secret recordings do not establish a prima facie case on the balance of probabilities of a causal connection between the alleged lack of funds and free assets in the Plaintiffs and the pleaded alleged actions of the Defendants. The same is true of the other material exhibited in these Affidavits, - the graphs, the newspaper report and the decision of the European Commission.
35. The Court is satisfied that the Plaintiffs have failed to establish that the Plaintiffs are unable to provide security for the costs of the permitted Order as to discovery of documents and that their inability to provide such security is due to a lack of funds and free assets caused solely or substantially by the pleaded actions of the C.R.H. Companies.
36. Counsel for the Plaintiffs argued that discovery was permitted, as appears from the judgment of the Court delivered on the 12th April, 2002, only after the question of the expense to the Defendants of that discovery had been taken into account by the Court so that it was not open to Defendants to raise the issue of this alleged expense again. It does not follow that by refusing discovery of various categories of documents and records on the basis that their probable probative value was disproportionate to the expense which their discovery, if permitted, would cause to the Defendants, the Court is thereby deciding that the probable expense of the permitted discovery cannot be a matter for further consideration in the context of an application for security for the costs of any discovery allowed. The Court rejects this argument.
37. Counsel for the Plaintiffs further submitted that the Court clearly accepted, by its judgment delivered on the 12th April, 2002 that such discovery was necessary for saving costs so that the imposition of a term as to security for the costs of the discovery with which the Plaintiffs are unable to comply would result in an increase in the costs of the action contrary to the purpose of Order 31 Rule 12 (1) of the Rules of the Superior Courts as substituted by Statutory Instrument No. 233 of 1999.
38. A finding that certain categories of documents are relevant and ought to be discovered does not mean that the parties seeking discovery thereby become absolutely and unconditionally entitled to such discovery. Order 31 Rule 12 (2) expressly provides that the Court though satisfied to make an order for the discovery of documents may impose such terms as it thinks fit as a condition of that Order including, where appropriate a term as to security for the costs of the discovery. The Court therefore also rejects this submission.
39. I do not consider that there has been any undue tardiness on the part of the Plaintiffs in seeking discovery of documents or on the part of the Defendants in seeking security for the costs of the discovery permitted. These proceedings commenced by plenary summons on the 4th December, 1996. The amended statement of claim was delivered on the 3rd February, 1998. The first notice for particulars was served on the 28th May, 1998 and the final replies to particulars, following upon the Order of this Court were furnished on the 14th September, 2000. The motions for discovery are dated the 29th June, 2000 and the 19th February, 2001. There may have been a certain lack of pace in the proceedings but having regard to the issues involved this could not justly be said to amount to excessive or unreasonable delay.
40. In my judgment there are no special circumstances in this case which would make the Plaintiffs' application for discovery any more meritorious than a similar application in any other civil action. No issue of public importance arises in these proceedings. The C.R.H. Companies have not sought an Order for security for the costs of the proceedings under Order 29 of the Rules of the Superior Courts or Section 390 of the Companies Act, 1963. They are seeking security for the costs of discovery only in respect of a limited part of the discovery permitted by the judgment of this Court delivered on the 12th April, 2002. It was accepted in the argument before me that the Plaintiffs had not deliberately disposed of funds or assets so as to deliberately render themselves immune from any order as to costs that might be made against them.
41. Order 31 Rule 12 (2) simply refers to, "on terms as to security for costs of discovery as may be thought fit." Section 390 of the Companies Act, 1963 by contrast uses the words, "sufficient security." Order 29 (1) of the Rules of the Superior Courts 1986 is in the terms, "where a party shall require security for costs from another party." In the case of Fallon v- An Bord Pleanαla (1992) 2 I.R. 380 at 389, Finlay C.J., addressing the issue of the measurement of security for costs of the proceedings (the emphasis is mine) said as follows:-
"I would accept the statement of Mr. Justice Fitzgibbon quoted with approval by the Court in Thalle v- Soares and Others (1957) I.R. 182, that in fixing security for costs whilst the discretion must necessarily be general and particularly dependant on the individual facts of each case and the balance of justice arising in it that, broadly speaking, the security is not either intended to be so high as to be an indemnity, nor to be so low as to be a mere token."
42. The learned former Chief Justice adverted to what he described as, "the existence of an observed practice, of fixing security for costs of the proceedings again the emphasis is mine at approximately one third of an estimated amount of costs)."
43. In his judgment in the same case Hederman J., held at page 392 of the report:-
"In my view, to depart from the well established practice of ordering a sum of one third of the estimated costs to be incurred by the party against whom security has been granted, as a prerequisite to proceeding with this case, the Court would have to be satisfied on the evidence that the interest of justice could only be served by increasing the amount for security for costs to a sum substantially in excess of one third of the costs to be incurred i.e. [in a case shown to be bordering on vexatious litigation and devoid of merit]."
44. While that case related to an application under Order 58 Rule 17 for security for costs in respect of an appeal to the Supreme Court, at page 388 of the Report, Finlay C.J., stated that he could see no reason why the principles applicable to the measurement of the amount of the security should not be the same as for an application to the High Court under Order 29 for security of costs for the original action.
45. Discovery is not available to parties as of right: the granting of an order for discovery is at the discretion of the Court and it is entirely a matter of choice for the parties to proceedings whether or not to seek discovery of documents. Discovery, if permitted, imposes a positive burden on the party affected for the principal benefit of the other party. There is in my judgment a significant difference between a right to litigate which should not be unduly fettered and a determination to litigate in a particular manner, especially in a manner which imposes a special and possibly onerous financial burden on the other party to the proceedings. The factors identified in the case of Thalle v- Soares and Others (1957) I.R. 182 and the case of Perry v- Stratham (1928) I.R. 580, which I believe, I may infer led to the, "observed practice" of measuring security for costs of the proceedings at one third of the estimated costs, do not in my judgment have the same degree of relevance to an application for security of costs of discovery so that the Court is less constrained from departing from that practice. I am not satisfied that the inflexible and universal application of a fixed fraction of estimated costs is an appropriate way of dealing with applications for security for costs of discovery.
46. The C.R.H. Companies have not sought security for the costs of the proceedings. They seek security for the costs of two parts only of the discovery permitted by the Court in its judgment of the 12th April, 2002. Proper compliance with an Order for Discovery, even if confined to these parts only will on the evidence before the Court undoubtedly result in very substantial expense to the C.R.H. Companies in the form of productive man hours lost and other outlays and expenses. An inability on the part of the Plaintiffs to avail of the permitted discovery due to an alleged inability to provide security for the costs of discovery would not in my judgment render them unable to prosecute their claim in these proceedings.
47. Extensive discovery in commercial litigation is capable of being employed as a means of forcing a party into an unfavourable compromise or settlement out of fear that the costs otherwise incurred would be irrecoverable. This is particularly so where the party seeking such discovery is impecunious or has limited resources and the other party is a large corporate entity with considerable resources which has carefully maintained extensive records over many years. There is no evidence of the use of such tactics in this case. However unlike the costs of proceedings generally the expense to the subject party as regards the costs of discovery is essentially dictated by the extent of the discovery sought by the other party.
48. Taking all these matters into account, in my judgment the balance of justice in this case requires that security for the costs of discovery should be allowed and should be measured at a substantial portion of so much of the total estimated costs of proper compliance by the party affected by the judgment of the Court delivered on the 12th April, 2002 as appears to the Court to be justified on the evidence placed before it on Affidavit. It appears to me that justice requires that any order that the C.R.H. Companies do make discovery on oath of the documents indicated in the judgment of the Court given on the 12th April, 2002 should be conditional upon the Plaintiffs providing security in the sum of 77,000 for the costs of that discovery and the Order of the Court shall accordingly contain such a term.
