High Court of Ireland Decisions

1. The two Motions before me have been heard over the last two days. Although the facts differ in each of the actions, the principles of law which are applicable to them overlap to a considerable extent. I will draw attention to the differences in the issues in the two actions but it seems to me to be suitable if I give a single judgment in relation to them.

To a considerable extent, but not completely, the facts are agreed. The actions concern the provision of a service by the Defendant Company (Pandoro Limited) for the transport of livestock by ferry from Rosslare to Cherbourg. The Defendant Company is registered in England but carries on business in this country and complies with the relevant provisions of the Companies Act. The Defendant is part of a long established group in the freight business in England known as the P & O Group.

The Defendant wrote to transporters and operators in the livestock business by letter of 18 October 1993 announcing that it proposed to introduce what it termed as 'an exciting new development' on the 6 November of that year, namely, the transportation of livestock from Rosslare to Cherbourg.

The evidence of the Plaintiff is to the effect that the Department refused to sanction the Defendant's ship for use on its service until stabilizers were fitted. This work was done in Le Havre and the new service commenced in 1994 and ran until October 1994. The Defendant says that its service was stopped because of the failure of the EEC governments to bring in adequate regulations or, alternatively, the Community did not bring in proper regulations. In any event, the full service which had been operating until then was stopped. However, from October 1994 to July 1996 a limited service was maintained for the carriage of livestock for breeding purposes only.

There was some discussion in the affidavits as to whether or not a liberal interpretation was given to 'livestock for breeding purposes'. Be that as it may, the relevant decision was that the Defendant's service would be restricted.

Between August 1996 and November 1996 the Defendant's service was expanded slightly to include livestock for fattening as well as for breeding purposes, but not for slaughtering. From December of last year to March of this year the service reverted to the carriage of livestock for breeding purposes only. However, it would appear that as a result of negotiations between the Department of Agriculture and the Defendant, the Minister was able to write to the IFA in March pointing out that a full service was going to be re-introduced. This was done in March of this year when the carriage of livestock for slaughter, for fattening and for breeding purposes was re-introduced.

On 24 June of this year the Defendant Company informed the Minister that its service was going to be severely reduced and that livestock for breeding purposes only would thereafter be carried. When the Plaintiffs first became aware of this reduced service is not absolutely clear but early in July the Plaintiffs issued letters of remonstrance. The Defendant, however, decided not to reverse its decision and these proceedings were then instituted.

I should briefly sketch the very considerable background to these proceedings. What had become the traditional way of exporting livestock to continental Europe was from different ports here to different ports in England and Wales and thereafter across England to ports in the south of England and across the English Channel.

Opposition to the trade in live animals developed in the United Kingdom and became particularly strong in 1994. Since 1994, the evidence establishes, the campaign against the trade in live animals has been successful and all carriers from England to continental ports have refused to carry livestock with one exception, reference to which is not very relevant. The effect of the decision of the carriers in England is that livestock can only be exported direct to the Continent from Ireland. And whilst livestock can be exported to the United Kingdom, livestock is land-locked there and cannot go any further. In effect, the Rosslare-Cherbourg route became the only way in which livestock could be transported to continental Europe.

There were two carriers involved in this trade, the Defendant Company which carries a very high percentage of the trade (one estimate is 95 per cent and another is 85 per cent, but the exact percentage is not very important) and Irish Ferries Limited. For all intents and purposes it is accepted that the Defendant is in a dominant position in this particular market. Irish Ferries Limited operates primarily a passenger service in the summer months and carries only a small amount of livestock.

It is very relevant to these proceedings for the Court to indicate why the Defendant decided to restrict its service in the middle of this year and communicated its decision to the Minister on 24 June. After it was announced in March of this year that the full service was to be renewed, the evidence establishes that the persons concerned with animal welfare in the United Kingdom objected strongly. There has been exhibited a press release which indicates that campaigners for animal rights and the welfare of animals objected strongly to the re-introduction of the service between Ireland and Cherbourg. There was further adverse publicity in May of this year because of delays in the service due to stormy weather. Further opposition to the service was raised in May of this year at the Annual General Meeting of the parent company of the Defendant. The evidence satisfies me that it was this opposition which motivated the parent company and, in turn, the Defendant Company, in reaching its decision of 24 June.

I am, of course, expressing no views on the views advocated by the persons concerned with animal welfare. Indeed, I am expressing no views on whether or not the decision taken by the Defendant was correct. I am satisfied, however, that the decision taken by the Defendant was a bona fide one and was taken for the reasons given in Mr Barr's affidavit. The Defendant decided to terminate the service for commercial reasons, having concluded that the volume and profitability of the livestock trade was low and that the adverse publicity associated with the trade justified it in drastically reducing its service.

What I have to consider on these Motions are the legal issues. I am sure that the parties have been told by their Counsel and Solicitors that the Court gives no final judgment in relation to the issues raised on interlocutory applications; that what the Court has to do is to apply certain well-established principles as to the giving of interlocutory relief, that is to say, the granting of an injunction between now and the trial of the action. And the first matter which the Court has to decide is whether or not fair questions have been raised to be tried at the trial of the action. If the Court decides that fair questions have not been raised, then this initial hurdle is one which the Plaintiffs will have failed to jump.

The issues which have been raised are slightly different in the two actions. In the first action, that is to say, the action in which Hinde Livestock Exports Limited is the Plaintiff, Counsel on behalf of the Plaintiff has suggested that the Court should prohibit the Defendant from discontinuing the service because the Defendant had raised with the Plaintiff a legitimate expectation that it would continue its service. In this regard the Plaintiff places reliance on the letter of October 1993 to transporters and operators in the livestock trade and on the various actions taken by the Defendant to keep its service going, including the announcement by the Minister of the Defendant's decision to again operate the service in the early part of this year.

In my view the Plaintiff has not made out a fair question to be tried on this issue. The doctrine of legitimate expectation has been shown by the Courts to be a variation, if not a synonym, for the concept of promissory estoppel. Those words mean that the Court will not allow a party to resile from a position that it has taken up and induced another party to take up to its detriment if it would be unfair so to do. The facts on which the Plaintiff relies in this case fall far short of the application of the doctrine of legitimate expectation. I think that the Plaintiff was aware of the commercial reality of the situation. Whilst the introduction of a new service was indicated, new services come and go and there could be no guarantee from what was said that the new service was going to last for an indefinite period.

The second issue raised was raised by both Plaintiffs under Article 86 of the Treaty of Rome. As the case has been argued on the Rome Treaty, I need not refer to the Competition Act 1991. The Rome Treaty is directly applicable and the Court has to ensure that the provisions of Article 86 are applied. Article 86 prohibits any abuse of a dominant position and provides:

"Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States."

For the purpose of these Motions the Defendant has conceded that it is in a dominant position. There is some controversy as to what is the market in which the Defendant is in a dominant position but I do not think it matters very much whether it is referred to as a market in freight between Rosslare and Cherbourg or a market in the transport of livestock between Ireland and France.

Quite clearly, the Defendant is in a dominant position. But what has to be established is: Have the Plaintiffs raised a fair question that the Defendant has abused its dominant position? In my view they have failed to do so. I am satisfied that the Court should follow the well-established jurisprudence in this country and of the European Court of Justice in order to see if there is an objective justification for what the Defendant did. If the Court decides that there is objective justification for the Defendant's action, I do not think that the Court should hold that the Defendant has abused its dominant position.

In this connection it is of some relevance to refer to the arguments advanced on behalf of the Plaintiffs. In the second action the extreme case was accepted by Mr O'Reilly on behalf of the Plaintiffs. Mr O'Reilly says that it would be an abuse by the Defendant of its dominant position to stop the trade, even if the Defendant was losing money on the route. That statement has only to be made to see how wrong it is. The Defendant Company is entitled to take commercial decisions, which it did in this case. I am certain that the Defendant's commercial decision is going to cause loss to the Plaintiffs and it does not do the Plaintiffs much good for me to extend my sympathy to them. However, I have to apply the law. If, in fact, the Defendant has taken a commercial decision, I cannot grant an injunction to stop it doing what it is lawfully entitled to do. What I have to decide is whether or not the Defendant acted illegally. In my view, at this stage of the case the evidence establishes very clearly that the Defendant's decision was taken on an objective basis.

On behalf of the Plaintiff in the first action, Mr Hayden does not go so far as Counsel for the Plaintiffs in the second action. Mr Hayden says that it was a legitimate commercial decision if the share-holders bona fide thought that it was correct to stop the trade but argues that there was improper intimidation brought on the Defendant.

The facts before me include excerpts from the judgment in a case that was taken in England against the Port Authorities. The facts of this case indicate that in 1994 violence and intimidation were used bypersons who were objecting to the livestock trade. But on the facts before me I have no evidence that there was any improper intimidation brought against the Defendant and that the Defendant acted in some way improperly in giving way to wrongful intimidation. There was adverse publicity and there was opposition in March of this year to the re-introduction of the trade in livestock between Rosslare and Cherbourg. However, at the present time there is no evidence before me to support the contention that in some way the Defendant was wrong in its decision because it gave in to improper force or pressure.

The other issue raised on behalf of the Plaintiffs in the second action is raised under Article 34 of the Treaty of Rome. The Plaintiffs in the second action relied on many of the Articles in the Treaty and the regulations made thereunder to show that there had been established a legal regime of a free market in the transport of freight, including livestock. Article 34 of the Treaty provides:

"1. Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.

"2. Member States shall, by the end of the first stage at the latest, abolish all quantitative restrictions on exports and any measures having equivalent effect which are in existence when this Treaty enters into force."

I hope it will be understood that time constraints do not permit me to give a full explanation and examination of the arguments advanced on behalf of the Plaintiffs in the second action but I can now give my clear conclusion in relation to this issue.

Article 34, it seems to me, refers to national measures. It refers to measures taken by the State or by the State authorities and that this construction of the Article is borne out by the jurisprudence of the courts and by the comments of the commentators on the Article, with one exception to which I will refer in a moment.

Article 34 has direct effect in this country. It is the law of this country. What that means is that private individuals can claim in the Irish Courts that there has been a breach by the national authority of its obligations under Article 34. What the Plaintiffs submit is that private persons are bound by Article 34 and must not be involved in the imposition of quantitative restrictions or measures having equivalent effect.

The authorities to which I have been referred, with one exception, do not bear out this contention. The comment in Bellamy & Child, the leading textbook on the subject, quotes the Article at page 19, paragraph 1/035 and then gives a quotation from a decision of the Court of Justice (Case 15/79, Groenveld v Produktschap voor Vee en Vlees [1979] ECR 3409) as follows:

". . . national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market for the State in question."

The author goes on as follows:

"Article 34 thus applies to a national measure which directly restricts exports . . .".

This authority gives strong support for the view that Article 34 does not apply to private persons and it is supported by the quotation from Smith & Hertzog at paragraph 34.01 and by the cases referred to in that textbook, all of which refer to national measures. The exception is the work given to me by Mr O'Reilly of Oliver On The Free Movement of Goods In The EEC, Third Edition, at paragraph 426, which raises the possibility that Article 34 does not apply to national measures only. In my view the Plaintiffs have not made out a fair question that it does, notwithstanding the authority to which I have been referred. It also seems to me that, if my view is wrong, what the Defendant has done cannot be regarded as a quantitative restriction on exports or a measure having equivalent effect within the meaning of Article 34. The Defendant has, of course, refused to take exports of livestock with one minor exception but I do not think that Article 34 means that such a withdrawal from the trade amounts to a quantitative restriction by the person who so withdraws.

The conclusions which I have reached also gain support from the judgments in R v Chief Constable of Sussex, ex parte International Traders Ferry Ltd [1995] 4 All ER 364.

I have therefore come to the conclusion that the Plaintiffs have not made out a fair question on any of the issues raised by them and that in the circumstances it would be wrong to grant them an interlocutory injunction until the trial of the action.

If these cases go on and the trial judge takes a different view, the Plaintiffs will then have their remedy, a remedy which may not be of the same advantage to them as an injunction in damages.

For the sake of completeness I should add that, if the Plaintiffs had made out fair questions on the issues raised, damages would not be an adequate remedy and in my view the balance of convenience would rest with the Plaintiffs in both actions. But for the reasons already given I am refusing the relief sought.