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You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Framus Ltd. & Ors v. C.R.H. plc & Ors [2004] IESC 25 (22 April 2004) URL: http://www.bailii.org/ie/cases/IESC/2004/25.html Cite as: [2004] 2 IR 20, [2004] IESC 25, [2004] 2 ILRM 439

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Framus Ltd. & Ors v. C.R.H. plc & Ors [2004] IESC 25 (22 April 2004)

 
THE SUPREME COURT

Record No. 412/02

Murray, J.

McGuinness, J.

Geoghegan, J.

FRAMUS LIMITED, AMANTISS ENTERPRISES LIMITED (IN VOLUNTARY LIQUIDATION) AND WILBURY LIMITED (IN VOLUNTARY LIQUIDATION)

Plaintiffs/Appellants

And CRH PLC, IRISH CEMENT LIMITED, ROADSTONE PROVINCES LIMITED, ROADSTONE DUBLIN LIMITED, TRADBURN LIMITED, READYMIX PLC., KILSARAN CONCRETE PRODUCTS LIMITED AND CPI LIMITED

Defendants/Respondents

Judgment of Murray, J. delivered on the 22^nd day of April, 2004 [Nem Diss].

The plaintiffs, who are the appellants in these proceedings, appeal against the terms of an order for discovery granted by the High Court requiring that the defendants make discovery of an extensive range of documents for the purposes of the litigation between the plaintiffs and the defendants. The nature, or extent, of the documents to be discovered varied in respect of the various defendants, but the broad thrust of the appellants appeal is that the learned High Court judge should have made more extensive orders for discovery and that he was wrong in law in limiting the documents to be discovered to those specified in his order.

The plaintiffs also appeal from the separate judgment and order of the High Court requiring them to pay €77,000 as security for costs to the first five named defendants in respect of the discovery which those defendants were ordered to make in favour of the plaintiffs. This appeal is considered after I have addressed the issues raised in the appeal concerning the High Court order for discovery.

Background

The first named plaintiff commenced business in March, 1991 and was involved in the importation of cement and the manufacture and sale of concrete products including ready-mix concrete. It ceased trading in February, 1994.

The second named plaintiff commenced business in 1986 and was involved in the importation and sale of cement. Its sole supplier was Lagan Cement Ltd. It ceased trading in March, 1991 and went into creditors' liquidation on 1^st April, 1994.

The third named plaintiff commenced business in 1988 and was engaged in the manufacture of concrete products, in particular ready-mix concrete and concrete blocks. It ceased trading in March, 1991

The first named defendant, CRH Plc, is the holding company of the second, third, fourth and fifth named defendants. The plaintiffs allege that the second named defendant, Irish Cement Limited, is the sole or principal supplier of cement to each of the other defendants. The plaintiffs claim that the third named defendant, Roadstone Provinces Limited, is engaged in the production and supply of aggregates, concrete products and the production, delivery and laying of bituminous materials in Ireland, in particular the market outside Dublin. The principal activity of the fourth named defendant, Roadstone Dublin Limited, is alleged by the plaintiffs to be the production and supply of aggregates, concrete products and the production, delivery and laying of the bituminous materials in the Dublin market. It is further alleged by the plaintiffs that the fifth named defendant, Tradburn Limited, is what they described as a vehicle used by the first named defendant to enter into agreements with the plaintiffs, restricting them from continuing or recommencing trade in areas competing with the defendants. The sixth named defendant, Readymix PLC, is engaged principally in the production and delivery of sand, stone and gravel and the manufacture and delivery of ready-mix concrete, ready-mix mortar, concrete blocks, pipes and pavers, as well as bituminous material. It is a subsidiary of a publicaly quoted company registered in England and Wales. The seventh named defendant, Kilsaran Concrete Products Limited, is alleged by the plaintiffs to be engaged in the manufacture and sale of concrete products throughout Ireland, but in particular in the Dublin market. It also engages in the production, delivery and laying of bituminous materials and in the supply of aggregates. Finally, the eighth named defendant, CPI Limited, is a subsidiary of a publicly quoted company and is principally engaged in the manufacture and supply of concrete blocks, ready-mix concrete and concrete mortar. It is also engaged in the supply of aggregates for the concrete manufacturing industry.

The essential claim of the plaintiffs is damages for losses sustained by them arising from unlawful and anti-competitive practices engaged in by the defendants in the markets for cement and related products in the State. It is alleged that the defendants had been party to agreements, decisions and/or concerted practices between some or all of them which had as their object or effect the distortion of competition in the market for specified cement products in particular geographic markets within the State, in breach of s.4 of the Competition Act, 1991 and/or article 81 of the Treaty establishing the European Economic Community. The first five named defendants, have been conveniently referred to as the CRH defendants and it is alleged that those defendants, with other defendants, have a dominant position in the relevant markets, which they abused contrary to article 82 of the Treaty and s.5 of the Act of 1991. It is alleged that the agreements or decisions or concerted practices of the defendants were ones which concerned the fixing of selling prices and other trading conditions, the control of production, market share and sources of supply for the goods in question. The plaintiffs also claim that a number of agreements entered into by them and certain of the CRH defendants in February, 1994 contain certain non-compete conditions in contravention of article 81 of the Treaty and/or s.4 of the Act of 1991. It is also alleged that the defendants, all or some of them, unlawfully conspired to injure the plaintiffs in their trading operations. Exemplary damages are also claimed.

The product markets

The product markets are, first of all, alleged to be the cement market, in respect of which the plaintiffs also assert that cement is an essential constituent of concrete products and that therefore, the activities of those in the cement market have a very significant impact on 'downstream concrete product markets', which are also the subject of these proceedings. The second product market referred to by the plaintiffs in their statement of claim is the aggregates market. Aggregates are said to be pieces of crushed stone or gravel used in the making of concrete, tarmac and asphalt used in a variety of construction activities. It is claimed that the availability of a good reliable supply of aggregates is essential to any ready-mix concrete, concrete products or black-top producer and to the construction market in general. Thus the supply of aggregates has a very significant impact for other concrete products.

The plaintiffs claim is next concerned with the ready-mix concrete market. Ready-mix concrete is a concrete mixed to a fresh condition, whether in a central mixer or truck mixer, and batched elsewhere than the site where it is required for use. It is liable to deteriorate to an unacceptable state if not placed within approximately two hours of mixing. Accordingly, it is alleged, the geographic markets for this product are limited to a series of local markets, often overlapping, in a relatively small geographic area.

The final and fourth product market referred to by the plaintiffs in their statement of claim is the specialty concrete products market. They say that there are a number of connected but discrete submarkets within the concrete products market, including dense masonry block and various other products, such as concrete pavers, pipes, flooring systems, tanks and other pre-cast concrete products.

The geographic markets

For the purposes of their claim, the plaintiffs allege that the relevant geographic market affected by the alleged wrongful acts of the defendants, as regards cement and specialty concrete products, other than blocks, is the State. It claims that the relevant geographical market for blocks is a local market within a radius of 40 miles of production. As regards the relevant geographical market for aggregates, this is claimed to be, in the context of the plaintiffs claim, the market in or around the greater Dublin region and in or around Galway city. These are said to be two distinct markets with which the plaintiffs claim is concerned.

As regards concrete products, it is alleged that there are several local markets in the State and that the relevant local markets for the purposes of these proceedings are those in the greater Dublin area and a local market in or around Galway city.

The High Court Order

The discovery ordered by the High Court covers an extensive range of documents and, in order to consider the appeal in its appropriate context, it is necessary to set out fully the terms of that order which was as follows: -

"IT IS ORDERED

1. that the 3^rd Defendant Roadstone Provinces Limited do make discovery on

oath the following documents and records pertaining to Galway City and the surrounding area as outlined in red on the map attached hereto at Schedule 3

1) All documents and records relating to quoted or confirmed prices

and terms and conditions of sale for the sale and for the sale and supply of readymixed concrete, cement blocks and mortar in that area in the period 1^st October 1989 to 31^st March 1991 inclusive

2) All documents and records relating to the offer or actual or

indicated withholding of any special terms and trade inducements in that area in the period 1^st October 1989 to 31^st March 1991 inclusive, including but not limited to price rebates, credit terms, discounts, bonuses, waivers, multi product package deal arrangements or agreements, or loyalty schemes in respect of the sale and sale and delivery of readymixed concrete, concrete blocks and mortar

3) All documents and records relating to price, product specifications, quantities, terms and conditions, including any special terms or trade discounts or inducements in respect of the sale and sale and delivery of readymixed concrete, mortar and cement blocks offered sold or delivered to Michael McNamara & Company Limited at any time during the calendar year 1990 for the construction of residences for students at University College Galway and to James Stewart Limited at any time during the calendar year 1990 for work at Galway Racecourse

2. that the 1^st four Defendants do make discovery on oath of all documents and records containing or relating to any communication from or with any other of the first four named Defendants or more of them or any officer agent or employee of them or of any of them concerning the matters set out in the proceeding paragraphs and numbered 1) to 3) inclusive or any such matters in the period 1^st October 1989 to 31^st March 1991 inclusive, including but not limited to, intercompany memoranda, board minutes, internal reports, policy directives, external advices and opinions, and the appointments books, diaries and travel records within the State of the senior executives of each of the first five named Defendants

3. that each Defendant other than the 3^rd Defendant do make discovery on oath of all documents in their possession, custody or power or in the possession, custody or power of their solicitors or agents relating to quoted or confirmed prices and terms and conditions of sale including special sales arrangements, price rebates, multi product purchase agreements or arrangements, credit terms, discounts, bonuses, waivers, loyalty schemes, and purchase incentives, for the sale and sale and supply of 35 newtons concrete in the south west area of Dublin City and the proximate areas of adjoining counties in the last quarter of each of the years 1990 to 1993 inclusive and in the second quarter of the year 1994, but excluding documents and records relating only to physical supply and delivery, credit control, debt management and recovery, product performance, complaints or claims, such discovery to be made by the first, second, fourth, fifth and eighth Defendants by reference to the area outlined in black on the map attached hereto at Schedule 4 and by the sixth and seventh Defendants by reference to the area outlined in red on the map attached hereto at Schedule 5

4. that the 4^th Defendant Roadstone Dublin Limited do make discovery on oath of all documents and records in its possession, custody or power or in the possession, custody or power of its solicitors or agents relating to the following:-

Furlong Carpets Limited contract – Ballymount Road – High Degree Construction Limited, Builder, - start March or April 1991 approximately

Manor Kilbride Bridge Construction contract for Wicklow County Council, - John Craddock Limited, Builder, - start August 1992 approximately

Dublin – Naas Motorway, Flyover Bridge at Citywest or Brown's Barn - Coffey Construction Limited, Builder, - start October or November 1992 approximately

Dublin Airport – Multi-Storey Car Park contract, - P.J.W. Walls Limited, Builder, - start 29^th October 1992 approximately

5. that the 7^th Defendant Kilsaran Concrete Products Limited make discovery on oath of all documents and records in its possession, custody or power or in the procession, custody or power of its solicitors or agents relating to the following:-

Intel Corporation contract, Ascon – Rohcon Limited, Builder, - start January or February 1991 approximately

Ballyboggan Road Housing Project contract, - Jackie Greene

Construction Limited, Builder, - start June 1992 approximately

Dublin Civic Offices Woodquay Phase 2 Construction contract, -

Pierse Contracting Limited, Builder, - start March 1993 approximately

6. that the 6^th Defendant Readymix Plc to make discovery on oath of all documents and records in its possession, custody or power or in the possession, custody or power of its solicitors or agents relating to the following: -

Guinness Brewery Construction contract, Walsh Maguire and

O'Shea Limited, Builders, - start October 1991 approximately

Croke Park Construction contract, - Swift Structures Limited,

Builders, - start July 1993 approximately

7. that the 1^st Defendant CRH Plc do make discovery on oath of all documents and records in its possession, custody or power or in the possession, custody or power of its solicitors or agents relating to the agreement between Hudson Brothers Limited and the first and third named Plaintiff for the supply of aggregates and relating to the alleged meeting between Mr Declan Doyle of CRH Plc and Mr Seamus Maye of the third named Plaintiff in respect of the same on or about the 12^th January 1993, including briefing notes, appointments books, diaries, memoranda and reports

8. that all eight Defendants do make discovery on oath of all documents and records in its possession, custody or power or in the possession, custody or power of its solicitors or agents containing or relating to any communication from or with the other Defendants or any of them or any officer agent or employee of them or any of them or with any other person or persons whatsoever legal or actual concerning the matters set out in the immediately preceding paragraphs and numbered 4-7 inclusive or any of them

9. that CRH Plc Irish Cement Limited and Roadstone Dublin Limited should make discovery on oath of all documents and records in their possession, custody or power or in the possession, custody or power of each of their solicitors and agents relating to the meetings or any of them alleged to have taken place on 5^th February 1991, 12^th December 1991, 25^th May 1992, 22^nd June 1992, 9^th July 1992, 28^th July 1992, 8^th December 1992, 5^th January 1993, 27^th January 1993 and 24^th June 1993 between Mr. Declan Doyle and Mr. Gilmore of CRH plc, Mr. O'Loghlen of Irish Cement Limited and Mr. Martin McAodh of Roadstone Dublin Limited or any of them and officers and then employees of the third named Plaintiff in particular Mr. Seamus Maye including briefing notes, appointments books, diaries, memoranda and reports.

10. that CRH Plc should make discovery on oath of all documents and records in its possession, custody or power or in the possession, custody or power of its solicitors or agents relating to any communication with Lagan Cement or any officer, agent or employee of Lagan Cement in the months of September and October 1993

11. that all eight Defendants should make discovery on oath of all documents and records in its possession, custody or power or in the possession, custody or power of its solicitors and agents containing or relating to any communication from or with the other Defendants or any of them or any officer, agent or employee of them or any of them concerning the alleged treats by or on behalf of CRH Plc Irish Cement Limited and Roadstone Dublin Limited referred to at paragraph 9 above and concerning the alleged approach by or on behalf of CRH Plc to Lagan Cement referred to at paragraph 10 above."

No issue arises in the appeal concerning the geographical markets concerned, the limits of which are set out and delineated in maps attached to schedules to the said order. Neither does any issue arise on the appeal in relation to the product markets.

The Appeal

There were essentially five grounds relied upon by the plaintiffs in their appeal against the High Court order.

The first ground of appeal is that the learned High Court Judge erred in law in limiting the discovery of communications between each and all of the defendants relating to the purchase/sale and pricing of concrete products and, where relevant, cement and aggregates, to the specific incidents or events of anti-competitive conduct expressly pleaded by the plaintiffs. It was submitted that since the plaintiffs did not limit their allegations of a breach of s.4 of the 1991 Act or article 81 of the EC Treaty to the particular breaches set out in the schedule to their statement of claim, they were entitled to discovery of all documents generally relating to communications between the defendants concerning such matters, even if they did not concern the specific contracts or customers referred to in the said particulars.

In a second ground of appeal, the Plaintiffs claim that the learned High Court Judge was wrong in law in failing to grant discovery of documents relating to communications between the defendants and certain specified customers of the plaintiffs, who were known to have been substantial purchasers of relevant products from them.

In the third ground of appeal, the plaintiffs claim that the learned trial judge erred in law in failing to grant discovery related to the business activities of the second named plaintiff, Amantiss Enterprise Ltd (in liquidation), and an alleged decision of businesses in the market not to buy cement from it.

Fourthly, the plaintiffs submitted that the time period in respect of which discovery was ordered should be extended to include periods before and after the period during which the plaintiffs were trading.

Finally, in its fifth ground of appeal the plaintiffs submit that the learned High Court Judge erred in law in failing to direct that discovery be made of all documents relating to direct, or indirect, ownership or control by the defendants of companies involved in the concrete or aggregates business.

Decision

As can be seen from the order of the High Court, the range of documents which the defendants were ordered to discover is very extensive. Although the category of documents to be discovered under the High Court order have been limited in various ways, such as by reference to particular customers, or contract, or regional market, or product market, they are nonetheless described in broad terms such as those relating to "prices and terms and condition of sale including special arrangements, price rebates, multi-product purchase agreements or arrangements, credit term, discounts, bonuses, waivers, loyalty schemes, and purchase incentives, …" Such a broad description of the category of documents to be discovered is understandable in the circumstances of a case of this nature, where the very nature of a plaintiff's claim gives rise to issues in respect of which specific documents relevant to those issues are peculiarly within the knowledge of the defendant and would be unknown to a plaintiff. This is the kind of situation which may arise in claims based on allegations of illicit anti-competitive agreements or practices, although it is not exclusive to such claims. Such a situation is a factor to be taken into account, and I put it no higher than that as part of the circumstances in deciding the appropriate kind of order for discovery to be made.

First ground of appeal

In their first ground, the plaintiffs submit that they had sought, against all the defendants, the discovery of documents relating to communications between them relating to the purchase/sale and pricing of the relevant products, except for documents relating to quality or credit control. They complain that the learned trial judge refused this category of discovery by limiting it, in paragraphs 8 and 11 of the order, to discovery of communications as between the defendants concerning only the specific instances of anti-competitive conduct pleaded by the plaintiffs in the schedule to their statement of claim. The plaintiffs submit that the case is not limited to the particulars of breach set out in their statement of claim. They rely on the fact that they have sought a declaration to the following effect: -

"that the defendants individually and collectively are in breach of Article 85 of the Treaty and/or Section 4 of the 1991 Act arising out of the manner in which they have decided or agreed or adopted a concerted practice as between themselves with regard to the acquisition of sources of supply and/or the terms of pricing and/or the imposition of other purchase requirements in a substantial part of the State …"

The plaintiffs submit that they provided detailed particulars of the alleged anti-competitive actions of the defendants in respect of specific contracts of which they were aware, but that it is manifest that there may well be other instances of such actions by the defendants which affected the plaintiffs business and contributed to the fact that they went out of business. Such actions are of a kind that a plaintiff would often not be aware of them because, as they put it, cartel activity, by its nature, is disguised and hidden. They submit that to limit discovery only to those incidents of breach of which the plaintiffs have become aware would deny to them the fair disposition of these proceedings. In the circumstances, the plaintiffs submitted that the learned High Court Judge should have ordered discovery of documents generally relating to communications between the defendants relating to the pricing and conditions of sale of the relevant products, as such documents were relevant to the issues between the parties and necessary for the fair disposal of the action.

So far as the submissions of the defendants are concerned, I think it is sufficient at this point to summarise their submissions by stating that, first of all, they relied upon the reasoning of the learned High Court Judge, more specifically cited below, for limiting the order for discovery as he did and in particular his conclusion, at page 3 of his judgment, where he stated that discovery in this case must be confined to "matters strictly relevant to these [the plaintiffs'] pleaded acts and occasions, the circumstances in which they came about and the involvement, (if any), of the defendants or any of them with each other concerning them, to permit a more general discovery would amount to permitting the plaintiffs to search about for a case and would be oppressive of the defendants."

It was also submitted that to permit the plaintiffs to seek discovery of documents beyond the specific allegations of wrongdoing set out in their statement of claim would be to allow them to use those allegations as a spring board to obtain general discovery of the defendants business records and business activity unrelated to the case pleaded by the plaintiffs, with a view to ascertaining whether there may be grounds for making further allegations against the defendants. This, it was submitted, would amount to permitting the plaintiffs to engage in a fishing expedition, which established case law has consistently ruled as impermissible. The documents which are now sought in this appeal by the plaintiffs, it was submitted, were not material or relevant to the issues between the parties and, therefore, not necessary for the fair disposal of the proceedings.

Principles applicable:

Although there was a divergence between the plaintiffs and the several defendants on specific points as to the principles applicable in determining the issues in this case concerning discovery of documents, there was also a great deal of common ground regarding the applicable principles (with both sides citing the same authorities), the differences between the parties being centred, as so often happens in discovery cases, on how the principles should be applied to the particular case. The point of departure for both sides concerning the applicable principles is O.31, r.12 of the Rules of the Superior Courts, introduced by Statutory Instrument No.233 of 1999, in substitution for the previous provisions of that rule. The relevant terms of 0.31, r.12 as it now stands is as follows: -

"(1) Any party may apply to the Court by way of notice of motion for an order directing any other party to any cause or matter to make discovery on oath of the documents which are or have been in his or possession or power, relating to any matter in question therein. Every such notice of motion shall specify the precise categories of documents in respect of which discovery is sought and shall be grounded upon the affidavit of the party seeking such an order of discovery which shall:

(a) verify that the discovery of documents sought is necessary for disposing fairly of the cause or matter or for saving costs;

(b) furnish the reasons why each category of documents is required to be discovered.

(2) 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 subrule 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.

(3) An order shall not be made under this rule if and so far as the Court shall be of the opinion that it is not necessary either for disposing fairly of the cause or matter or for saving costs.

…"

In Swords –v- Western Proteins Ltd [2001] 1 I.R. 324 Morris P. referred to the purpose and background of the rule in its new format in the following terms: -

"… …I am satisfied that the amendment to O.31, r.12 was made for the purpose of addressing a problem which had given rise to delays and potential injustices over a number of years. A practice had developed whereby orders for discovery were obtained unnecessarily and such orders delayed litigation. As has been pointed out by the courts on a number of occasions discovery before the advent of the photocopying machine, fax, e-mail and word processors would probably involve the discovery of a dozen documents. In recent years the number of documents discovered can amount to many thousands and the process has become unmanageable.

Accordingly, I believe that Rule of the Superior Courts (No. 2)(Discovery), 1999, imposed a clearly defined obligation upon a party seeking discovery to pinpoint the documents or category of documents required and required that party to give the reasons why they were required. Blanket discovery became a thing of the past. The new rule was brought into being to ensure in the first instance that the party against whom discovery was being sought would, upon receipt of the preliminary letter, be in a position to know the document or category of documents referred to and be able to exercise a judgment on whether the reasons given for requiring these documents to be discovered was valid. He would then be in a position to know if he was required to comply with the request. If he disputed his obligation to make discovery the court would know by reference to this letter precisely why the moving party sought the documents in question and the grounds upon which the moving party believed that the documents sought to be discovered, might help to dispose fairly of the cause or save costs."

This statement was expressly approved by this Court in the judgment of Keane C.J. in Burke –v- D.P.P. [2001] IR 760 when he stated that "the learned President said that the new rule imposed a clearly defined obligation upon a party seeking discovery to pinpoint the documents or category of documents required and require that party to give reasons why they were required: blanket discovery had become a thing of the past. I have no doubt that the learned President was entirely correct in his view as to the object of the new rule and indeed its importance." As Geoghegan, J. pointed out in Taylor –v- Clonmel Health Care Limited (Unreported, Supreme Court, 11^th February, 2004) what was specifically approved by Keane C.J. was the statement of the former President of the High Court as to the object and purpose of the new rule.

The parties also referred to the oft cited statement of Brett L.J. in the Peruvian Guano Company case (1882) 11 QBD 55 (see for example Sterling-Winthrop Group Ltd –v- Farbenfabriken Bayer [1967] I.R. 97) to the effect that "every document [relating] to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose contains information which may – not which must – either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary" should be discovered. As I pointed out in Aquatecnologie Limivit v. N.S.A.I, Minister for the Environment, Ireland and the Attorney General (Unreported, Supreme Court, 10^th July, 2000) "there is nothing in that statement which is intended to qualify the principle, that the document sought on discovery must be relevant, directly or indirectly, to the mattes in issue between the parties in the proceedings. Furthermore, an applicant for discovery must show it is reasonable for the Court to suppose that the documents containing information which may enable the applicant to advance his own case or to damage the case of his adversary. An applicant is not entitled to discovery based on mere speculation or on the basis of what has been traditionally characterised as a fishing expedition."

In addition, I think that certain principles to which the court must have regard in an application for discovery of documents were succinctly set out by McCracken, J. in Hannon –v- The Commissioner of Public Works and Ors (Unreported, High Court, 4^th April, 2001) on the following terms: -

"(1) The Court must decide as a matter of probability as to whether any particular document is relevant to the issues to be tried. It is not for the Court to order discovery simply because there is a possibility that documents may be relevant.

(2) Relevance must be determined in relation to the pleadings in this specific case. Relevance is not to be determined by reason of submissions as to alleged facts put forward in Affidavits in relation to the application for further and better discovery unless such submissions relate back to the pleadings or to already discovered documents. It should be noted that Order 31, Rule 12 of the Superior Court Rules specifically relates to discovery of documents "relating to any matter in question therein.".

(3) It follows from the first two principles that a party may not seek discovery of a document in order to find out whether the document may be relevant. A general trawl through the other party's documentation is not permitted under the rules.

(4) The Court is entitled to take into account the extent to which discovery of documents might become oppressive, and should be astute to ensure that the procedure of discovery is not used as a tactic in the war between the parties."

…

One point focused on by the parties concerned the meaning or importance of the term "necessary" in r.12(1)(a), where it is provided that the parties seeking discovery must "… verify that the discovery of documents sought is necessary for disposing fairly of the cause or matter or for saving costs." From the defendants side, it was submitted that under the new rule the requirement of necessity is to be given much greater weight. It is submitted that the rules now require a party seeking discovery to demonstrate that the documents in question are not only relevant, but are necessary for the purpose of disposing fairly of the issues in the case. In support of their submissions in this regard, the defendants relied on the judgment of Kelly J. in Cooper Flynn –v- R.T.E. and ors [2000] 3.I.R. 344. It was submitted that the plaintiffs in this action had not discharged the burden of establishing that the documents which they now sought, in addition to those provided for in the order of the High Court, were necessary within the meaning of the rule.

The plaintiffs, for their part, also relied upon the judgment of Kelly, J. in Cooper Flynn –v- R.T.E. and Ors and submitted that, in the circumstances, this case came within the criteria set out in the judgment of Kelly J. and, in particular, that they had established that the additional documents of which discovery is sought would confer a 'litigious advantage' upon the plaintiffs and therefore were necessary for the fair disposal of the action. Both parties also alluded to the judgment of the High Court in Ryanair Plc –v- Aer Rianta C.P.T. (Unreported, High Court, 25^th July, 2002).

The implications which may be said to flow from the use of the phrase "necessary for disposing fairly of the cause or matter" in r.12(1)(a) were fully argued by the parties having regard to the existing case law and, in particular, the judgment of Kelly J. in the Cooper Flynn case. Therefore, I do not consider that I will be doing any injustice to the parties in referring to a judgment of this court on this point delivered by Fennelly J. in Ryanair Plc –v- Aer Rianta C.P.T. (Unreported, Supreme Court, 2^nd December, 2003) delivered subsequent to the hearing of this appeal. In his judgment, Fennelly J. stated as follows: -

"In the great majority of cases, discovery disputes have revolved around the issue of relevancy. There are fewer cases concerning necessity. There are good reasons for this. If there are relevant documents in the possession of one party, it will normally be unfair if they are not available to the opposing party. Finlay C. J., in his judgment in Smurfit Paribas Bank Limited v. A.I.B. Export Finance Limited. [1990] 1 I.R. 469 emphasised "the full disclosure both prior to and during the course of legal proceedings which in the interests of the common good is desirable for the purpose of ascertaining the truth and rendering justice." The overriding interest in the proper conduct of the administration of justice will be the guiding consideration, when evaluating the necessity for discovery.


The issue of "necessity" for discovery has, consequently, usually been debated in cases where some other interest is involved, particularly the confidentiality of documents, especially where they involve the interests of third parties. To that extent, the arguments advanced on behalf of Aer Rianta on this appeal, effectively that Ryanair does not need the documents, because they have alternative means of establishing the relevant facts, has rarely arisen.


In order to establish that discovery of particular categories of documents is "necessary for disposing fairly of the cause or matter, "the applicant does not have to prove that they are, in any sense absolutely necessary. Kelly J considered the matter in his judgment in Cooper Flynn v Radio Telefís Eireann [2000] 3 I.R. 344. He derived the useful notion of "litigious advantage" from certain English cases. He adopted the following statement of Bingham M.R. in Taylor v Anderton [1995] 1 W.L.R. 447 at 462:

"The crucial consideration is, in my judgment, the meaning of the expression 'disposing fairly of the cause or matter'. Those words direct attention to the question whether inspection is necessary for the fair determination of the matter, whether by trial or otherwise. The purpose of the rule is to ensure that one party does not enjoy an unfair advantage or suffer an unfair disadvantage in the litigation as a result of a document not being produced for inspection. It is, I think, of no importance that a party is curious about the contents of a document or would like to know the contents of it if he suffers no litigious disadvantage by not seeing it and would gain no litigious advantage by seeing it. That, in my judgment, is the test."


It may not be wise to substitute a new term of art, "litigious advantage," for the words of the rule. Nonetheless, the discussion gives guidance as to the context in which the matter has to be considered. Within that context, the court has to reach a conclusion as to the likely effect of the grant or refusal of the discovery on the fair disposal of the litigation.


The change made in 1999 exemplifies, however, growing concern about the dangers of unnecessarily costly and protracted litigation and, in particular, the burdens on parties and the courts arising from excessive resort to automatic blanket discovery. The public interest in the proper administration of justice is not confined to the relentless search for perfect truth. The just and proper conduct of litigation also encompasses the objectives of expedition and economy.


The court, in exercising the broad discretion conferred upon it by Order 31, rule 12, sub-rules 2 and 3, must have regard to the issues in the action as they appear from the pleadings and the reasons furnished by the applicant to show that the specified categories of documents are required. It should also consider the necessity for discovery having regard to all the relevant circumstances, including the burden, scale and cost of the discovery sought. The court should be willing to confine categories of documents sought to what is genuinely necessary for the fairness of the litigation."

I consider that Fennelly, J. very succinctly and clearly set out the considerations which a court should to take into account in determining whether the documents sought in an application for discovery are necessary for the fair disposal of a cause or matter.

I think it is generally accepted that the introduction of the current rule was prompted by observations of Lynch, J. in Brooks Thomas Ltd –v- Impac Ltd [1999] 1 ILRM 171 where, having adversely commented on the excessive burden which 'blanket orders' for discovery could impose on parties, suggested that consideration be given to amending the existing rule. The concerns of Lynch J. reflected a degree of unease which had been expressed in a number of judgments concerning the excessive burden which wide ranging orders for discovery could impose on parties. Murphy J. in Irish Nationwide Building Society –v- Charlton (Unreported, Supreme Court, 5^th March, 1997) observed "discovery of documents is an extremely valuable legal procedure. On the other hand it can be a very burdensome one. Perhaps this burden has been accentuated by the proliferation of documentary records and the improvement in recent years of the photocopying equipment. There is a danger that this valuable legal procedure may be invoked unnecessarily or applied oppressively. It will always involve delay and expense. In virtually every commercial case it is the greatest single cause of delay in obtaining a judicial determination on the real issues between the parties." These concerns are reflected in the observations of Morris P. in Swords –v- Western Proteins Ltd and indeed the judgments of McCracken J. and Fennelly J. cited above. In Murphy –v- J. Donohoe Ltd [1996] 1 I.R. 123, at 129, Johnson J. cited with approval a statement in Halsbury's laws of England (4^th ed. para. 38) that "Each case must be considered according to the issues raised; but where there are numerous documents of slight relevance and it would be oppressive to produce them all, some limitation may be imposed."

It seems to me that in certain circumstances a too wide ranging order for discovery may be an obstacle to the fair disposal of proceedings rather than the converse. As Fennelly J. pointed out the crucial question is whether discovery is necessary for 'disposing fairly of the cause or matter.' I think it follows that there must be some proportionality between the extent or volume of the documents to be discovered and the degree to which the documents are likely to advance the case of the applicant or damage the case of his or her opponent in addition to ensuring that no party is taken by surprise by the production of documents at a trial. That is not to gainsay in any sense that the primary test is whether the documents are relevant to the issues between the parties. Once that is established it will follow in most cases that their discovery is necessary for the fair disposal of those issues.

The High Court Judgement

In the course of his judgment, the learned High Court Judge ruled that the discovery of documents "in this case must be confined to matters strictly relevant to those pleaded acts and occasions, the circumstances in which they came about and the involvement, (if any) of the defendants or any of them with them or with each other concerning them." Here the learned High Court Judge was referring to specific instances of alleged anti-competitive practices on the part of the defendants, or some of them, and, in particular, by reference to particular contracts or projects. The learned High Court Judge went on to say "to permit a more general discovery would amount to permitting the plaintiff to search about for a case and would be oppressive of the defendants." Also relevant to this issue in the appeal were the conclusions of the learned High Court Judge where he stated "In my judgment the business practices of the defendants generally are not relevant to the issues which the court has called upon to determine in these proceedings. Even if a system of market control by the defendants could be established by evidence it would amount in essence to a detriment to the purchaser of their products specifically and to the public generally and only incidentally, if at all, to potential competitors and then only to the extent to which the specific activities were particularly directed against them." Subsequently he went on to say "In the present case I do not see the necessity for the widespread discovery sought by the plaintiffs as a means of saving costs at the hearing of the action. Evidence of general non-competitive dealings by the defendants or the manner in which business was conducted by them with a wide selection of major companies in the building industry in this State would not in my judgment afford any pertinent or sufficient proof of combination or agreements directed at the plaintiffs or overt acts committed pursuant to such alleged combinations or agreements resulting in damage to the plaintiffs. In my judgment non-competitive business practices on the part of the defendants, except where they can be alleged to have an identified and specific impact on the plaintiffs, are a matter for the Competition Authority or the European Commission and are not matters with which this court can be concerned in litigation inter partes."

While I consider there is some substance in the plaintiffs arguments that in a case of this nature, that is to say where the wrongful activities alleged against a party are ones which by their nature are likely to be concealed, thus making it difficult for an opposing party to identify particular documents or specify categories in a limited way, it may indeed be appropriate for a court to order discovery of documents relating to anti-competitive agreements or practices, which are not directly related to particular acts or conduct which a party, perhaps fortuitously, is in a position to set out in their pleadings. However, the extent of a discovery must be confined to what is necessary for the fair disposal of the case and this can only be decided in the context of the actual issues in, and facts of, the case itself. I think the statements of the learned High Court Judge have to be read in the context of this particular case and the extensive discovery which he did in fact order. The plaintiffs complain that they were effectively put out of business by the abuse of a dominant position on the relevant markets by the defendants and in particular by their concerted action in relation to such matters as the terms and conditions of sale of the products in question to buyers of those products. The fact is that they have been in a position to plead specific contracts and projects which were the subject of these alleged anti-competitive practices and which affected their businesses. However, what the plaintiffs in effect seek in this context is access to all documents concerning all transactions (within the relevant periods for the relevant markets) because they believe that among them that they will find evidence of the anti-competitive practices of which they suspect the defendants. Apart from its speculative element, this particular application is more akin to an investigative process rather than a discovery process and perhaps more appropriate to, as the learned High Court Judge pointed out, the exercise of a public investigatory power by a competent authority.

While I do not exclude the possibility of granting discovery for a specified class of documents which did not relate directly to a specific event pleaded but which was nonetheless relevant to the issues, whether such an order should be made and the extent to which it would be made must depend on the particular circumstances of the case.

This is in fact what the learned High Court Judge did at paras. 1(1),1(2), 2 and 3 of his order. However, it seems to me that to extend the discovery provided for in paras. 8 and 11 of the High Court order to the business activities generally of the defendant would be of marginal advantage in addition to that which will accrue to the plaintiffs on the basis of the order as it stands. Also, to extend the ambit of the order in such an open ended way as suggested by the plaintiffs, would, in my view, be so burdensome on the defendants as to be oppressive (which I consider to be a consequence of its broad investigatory nature). It also seems to me that such an extended order would be disproportionate and I am not satisfied that it is necessary for advancing the plaintiffs case in these circumstances.

Subject to one clarification (to which I refer below), I am of the view that the learned High Court Judge, even where he limited the documents to be discovered by reference to certain contracts, projects or customers (being the specific acts pleaded by the plaintiffs), as in paras. 8 and 11 of his order, he ordered discovery of all documents that were necessary for the fair disposal of the issues between the parties. In a number of respects, the High Court order for discovery goes beyond the bounds simply of the specific matters pleaded where the learned High Court Judge considered that such a wider order for discovery related to documents which were relevant and necessary to the issues in the case. This was a matter for his discretion and I do not find in the submissions of the plaintiffs any grounds with interfering with his discretion in that respect.

There is one matter which I would like to refer to for the purposes of clarification, if clarification is needed. Paras. 8 and 11 of the High Court order directed all eight defendants to make discovery and oath of documents containing or relating to any communications from or with the other defendants concerning the matters set out in paras. numbered 4 to 7 of the order and relating to the matter referred to at para. 9 of the order. It is clearly inherent in the order that included in the documents covered by those paragraphs are any communications or agreements between the eight defendants or any of them concerning conditions of sale of the relevant products or any alleged 'treats' in connection with their sale and supply, if they relate directly, or indirectly to those matters irrespective of when any such agreements were concluded or communications made. Thus, for example, if there had been an agreement or communications between any of the defendants concerning special conditions of sale or other practices in relation to the sale of the relevant products which related to other transactions with different customers and unrelated to the matters referred to in paras. 4 and 7 of the High Court order, they would nonetheless fall within the ambit of that order, if any such agreement or practice was a basis or a reference point for the conduct of the defendants in relation to such matters.

Second ground of appeal

The plaintiffs also submit the learned trial judge should have acceded to their application to make an order for discovery in respect of all documents relating to communications between any of the first five defendants and each of a list of 16 customers, or the associate companies of those customers or any persons on their behalf between February, 1987 and February, 1995, and which relate directly or indirectly to the purchase/sale and pricing of concrete products (except for documents relating only to quality or credit control).

The reason advanced for seeking this particular order in the grounding affidavit of Seamus Maye, a Director of each of plaintiff companies, was that they may be relevant to the plaintiffs' claim that the defendants in question have engaged in anti-competitive practices in the concrete products market with these other customers. In the course of the appeal, it was submitted that such documents could provide evidence of anti-competitive conduct and also evidence of the movement of prices on the market, which would provide the basis for economic analysis allowing the plaintiffs to demonstrate, for example, that there was a differential in prices in a particular geographical market and an adjoining market without any objective justification. The plaintiffs also submitted that, in order to avoid an application for discovery which might be considered too onerous, they limited their discovery to 16 chosen customers, whom they were aware had purchased significant volumes of concrete products in different geographic locations, some of which operated in areas in areas where the plaintiffs did not carry on business and others in which they did.

As regards this particular ground of appeal, I would first note that the learned High Court Judge has ordered discovery of all documents concerning pricing and terms and conditions of sale without limit as to particular customers against the third defendant (see para. 1 of the High Court order) and discovery against all other defendants of documents concerning prices and conditions of sale in the relevant Dublin region, Dublin city. Apart from the fact that the plaintiffs were granted extensive discovery concerning prices and conditions of sale in respect of the relevant products in the relevant markets in the two respects just referred to (and it would seem inevitable that much of the other documentation discovered under other heads would also relate to prices and conditions of sale), this request for discovery is couched in extraordinarily broad terms, notwithstanding that it is confined to sixteen customers. It is sought that the defendants should discover all documents relating to all communications between any of the first five named defendants and each and every of sixteen customers, plus their associated companies, plus any person who communicated on their behalf over a two year period where those communications related directly, or indirectly, to the purchase, or sale, or pricing of concrete products. The only other limitation which the plaintiffs seek to put on the foregoing is that documentation or communications related to quality or credit control would be excluded. It is not at all clear who is meant by associated companies of the named customers, nor indeed how the defendants could be assumed to be in a position to identify such companies, if they exist, or the court itself, if it was called upon to enforce such an order. A reason given for choosing the customers in question is, according to the plaintiffs, that they are known to have been substantial customers for the products in question. In seeking discovery of communications between all these companies and the defendant of documents relating directly, or indirectly, to price and selling conditions in relation to all transactions between the relevant parties, it seems to me that there would inevitably be a great deal of documentation with repetitive information, whether or not it related to the issues between the parties in these proceedings.

There is also a large degree of speculation involved, since it is not alleged that the defendants actually engaged in non-competitive practices with these specific defendants, but rather they are likely to have done so because they are among their substantial customers.

Another feature of the application in this context is that it is sought, at least in part, with a view to carrying out a market analysis of pricing trends. I am not at all satisfied that the seeking of information for the purpose of carrying out a market analysis of such trends is an appropriate basis for an order of discovery, particularly of such a wide ranging nature. In any event, I am of the view, firstly, that price trends in a market may be the subject of expert evidence and that the range of documents sought to be discovered under this heading is so broad in its scope as to fail to comply with 0.31 r.12(1), which requires that the motion for discovery "specify the precise categories of documents in respect of which discovery is sought." In certain circumstances, the court may grant discovery on a more limited basis than that sought where it considers it appropriate to do so. On the other hand, it is not for the court to re-draft an applicant's motion where it in effect amounts to a form of blanket discovery, which I consider this particular request to be. It may be appropriate to do so where a more limited category can be readily defined and it is in the interests of fairly disposing of the application. I do not consider this an appropriate case to try and fashion some limited order that might suit the plaintiffs, even if this could be done. Secondly, I am of the view that to grant the order sought under this head of the application, having regard to the discovery already granted to the plaintiffs, would be, at once, too speculative, disproportionate and unduly burdensome on the plaintiffs. Accordingly, I do not consider this ground of appeal well founded.

Third ground of appeal

On foot of this ground of appeal the plaintiffs submit that the learned High Court Judge was incorrect in law in refusing to order discovery of a range of documents in relation to the second named plaintiffs, Amantiss Enterprises Ltd (in voluntary liquidation). The genesis of this ground of appeal would appear to be the statement of the learned High Court Judge to be found at page 3 of his judgment where he noted that the second named defendant commenced trading in June 1986 and ceased trading in March 1991 and went on to add "Its sole business was the importation into this State of cement powder. Its sole customer was Wilbury Limited (in voluntary liquidation) because it is alleged the other cement powder users in the State decided en bloc not to purchase from it. This pleading in my judgment is of such a general nature and so devoid of any specific allegations of conspiracy or of anti-competitive behaviour on the part of the defendants or of any of them that to grant any form of discovery on foot of it would be wholly vexatious and oppressive and permit the plaintiffs to fish for a case."

In support of their appeal on this particular ground, the plaintiffs pointed to an additional plea concerning Amantiss contained in para. 5 (ii) of their replies to particulars dated 18^th December,1988, where they pleaded that the first named defendant had acquired the assets of Lagan Cement in late 1986 "specifically for the purpose of eliminating competition and thereby keeping the price of cement artificially high in the State." They also refer to a second set of replies to a notice for further particulars, where it was pleaded that the intention of CRH in purchasing the assets of Lagan Cement was "To cease the importation of competitive cement through Belfast port so as to undermine the ability of Amantiss to source cement." They also refer to an allegation in the same particulars that following the purchase by CRH of certain assets of Lagan Cement Ltd "the importation of cement by Lagan Cement through Belfast ceased for a period of six months, thus depriving Amantiss Enterprises of its sources of high quality, low-priced cement."

As regards this ground of appeal, I think it is first of all important to note that an examination of the particulars furnished by the plaintiffs discloses that they allege that CRH purchased some equipment or assets from Lagan Cement Ltd in 1986. Subsequent to this purchase, Lagan Cement ceased importing cement from approximately October, 1986 to February, 1987. This, the plaintiffs say, deprived the second named plaintiffs of their sole source of cement and damaged their business during that period.

It is clear that these additional particulars referred to in the plaintiffs submissions do not relate to, and are different from, the generalised allegation referred to by the learned trial judge namely that "other cement powder users in the State decided on bloc not to purchase" from it. So far as that particular allegation goes, in my view, the learned High Court Judge was entirely correct in holding that it was too broad and general a statement so as to be properly susceptible to an order for discovery. The additional pleadings in the particulars referred to neither relate to, nor limit in any way, this generalised allegation.

As regard the other matters pleaded in those particulars and specifically referred to by the plaintiffs in their appeal, they relate first of all to a 1986 agreement, whereby CRH purchased the assets or equipment of Lagan Cement, their alleged motivation in doing so and subsequently the possible reasons for which Lagan Cement ceased importing cement during the period of October, 1986 to February, 1987. In that regard, the plaintiffs simply state that any documentation relevant to that issue should be discovered by the defendants. They have not in any way sought to be more specific or to categorise the documents that should be the subject of a discovery. If necessary, I would hold that this is too generalised and blanket an approach to the discovery of documents relating to those matters. However, it is to be noted that in their motion for discovery against the first five named defendants, no specific mention is made of Amantiss Enterprises Ltd (in liquidation) and, more particularly, the discovery sought against the first five named defendants is expressly confined as regards to the purchase/sale and pricing of cement (and indeed all the other products), to the period February, 1987 to February, 1995, subsequent to the matters alleged concerning the acquisition of assets of Lagan Cement and its temporary cessation of importation. Finally, no reasons are set out in the affidavit grounding the motion for discovery in support of discovery in this respect.

In the circumstances, I conclude that this ground of appeal is unfounded and indeed misconceived and should therefore be refused.

Fourth ground of appeal

As regards this ground of appeal, the plaintiffs submit that between them they operated in business over a combined period from 1986 to 1994. They submitted that any documents which are ordered to be discovered should not only relate to the period during which the plaintiff to whom the discovery pertains was in operation, but also for one year prior to the commencement of business and one year subsequent to the cessation of business. This, it was submitted, is of particular importance in relation the movement of prices since price levels and the markets in which the plaintiffs were operating prior to their entry and subsequent to their exit will be particularly revealing. Alternatively, it was submitted that some lesser period prior to the commencement and cessation of business by the respective plaintiffs should have been included in the order for discovery.

As the learned High Court Judge pointed out in his judgment he was obliged "to balance the requirements of affording the plaintiffs a sufficiently comprehensive discovery relevant [to the issues] with avoiding an unduly wide discovery which would be oppressive to the defendants." In my view, in determining the relevant dates for the discovery of documents, the learned High Court Judge exercised his discretion in the manner envisaged by Fennelly J. in his judgment, as cited above, when he stated that the court "… should also consider the necessity for discovery having regard to all the relevant circumstances, including the burden, scale and cost of the discovery sought. The court should be willing to confine categories of documents sought to what is genuinely necessary for the fairness of litigation." Moreover, to extend discovery so as to ascertain the movement in market prices, to which experts can often attest relates more to the seeking of information rather than discovery related to the actual anti-competitive practices alleged against the defendants. In my view, this ground of appeal also fails.

Fifth ground of appeal

On the basis of this ground of appeal the plaintiffs seek documents of the following nature: -

"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 their way of loans, loan guarantees or otherwise), of or over sources of concrete products, aggregates or special de-concrete products in the State."

According to the submissions of the plaintiffs, this relates to the acquisition or control over companies in the ready-mix concrete industry, which enabled the defendants, or some of them, to control the market in those products. In my view, this is so broad and vague a category of documents as to offend against the letter and spirit of O.31, r.12. Moreover, the identification of companies owned directly, or indirectly, by the defendants, or any of them, seems to me to be matter of information and not documentation and therefore not an appropriate subject for discovery. The plaintiffs had other procedural options available to them to elicit this information, whether by interrogatories or otherwise. This ground of appeal must also fail.

Other submissions: -

Before concluding on this aspect of the appeal, there are two discrete matters which I think can be briefly dealt with. In the course of their submissions, in particular their written submissions, the plaintiffs argued that special consideration should be given to their application for discovery by reason of the fact that the claim in the substantive proceedings was based on alleged illicit non-competitive practices by the defendants. This was in large part based on the premise that in such cases plaintiffs must seek to establish conduct and practices, which of their nature are likely to be concealed. However, the plaintiffs expressly acknowledge in their submissions that they were not making the case that different rules apply in relation to discovery in competition cases. That, in my view, is the correct position in law. At the outset of my conclusions, I express the view that where discovery is sought in a case where the wrongful acts alleged against a defendant are likely to be acts that are peculiarly within his or her knowledge and are ones of which the plaintiff would be unlikely to have knowledge because of a propensity to conceal them, that this was a factor to be taken into account in determining the categories of documents in respect of which discovery may be granted. I am reassured in this view by the statement of

McCracken J. in Ryanair Plc –v- Aer Rianta where he stated "the situation in a competition case is very different from that in a personal injuries action, and any reference to precision in categories of documents must be considered in the light of the particular cause of action and the likely knowledge of the party claiming discovery as to what documents exist." Thus, as previously indicated, this is a factor to be taken into account, but no more than that.

Although the learned High Court Judge made some observations to the effect that specific allegations of anti-competitive conduct cannot be a basis for discovery in respect of the business practices generally of the defendants, I consider that, in his overall approach, and in granting what is in the end, in my view, a reasonable and generous order for discovery, the position of the plaintiffs having regard to the nature of the case and the allegations made was fully taken into account by him. I would just add in passing that I do not find the case-law of the United States Courts relied upon by the plaintiffs in this context particularly pertinent, given the indigenous traditions and practices of United States Courts in the whole area of discovery which are very much different from ours.

Finally, the plaintiffs also sought to argue that the principles governing the grant of an order for discovery in proceedings grounded on alleged anti-competitive practices contrary to articles 81 and 82 of the E.C. Treaty should be applied having regard to the well established principle of community law that national rules or remedies and procedures must meet the principles of effectiveness and equivalence in order to be compatible with community law. Assuming that the plaintiffs are seeking to enforce rights accorded to them under community law, they do acknowledge, as they were bound to do, that there are no community rules or procedures governing these proceedings before the national courts. Quite a number of judgments of the Court of Justice have laid down the principles to be applied as regards national procedures relating to remedies available to litigants before national courts. In Van Schjindl (C- 430/1993 and C-431/1993 1995 1 ECR 4705) it was stated "In the absence of community rules governing the matter, it is for the domestic legal system of each member state to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from the direct effect of Community law. However, such rules must not be less favourable than those governing similar domestic actions nor render virtually impossible or excessively difficult the exercise of rights conferred by community law…" The court went on to state "For the purpose of applying those principles, each case which raises the question whether a national procedural provision renders application of community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before various national instances. In the light of that analysis the basic principles of the domestic judicial system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure, must, where appropriate, be taken into consideration."

The principles relating to discovery of documents apply equally to proceedings in which it is sought to enforce rights under national law or community law. The fundamental principles governing the making of an order of discovery are set out in O.31, r.12, whereby discovery is granted in respect of documents relevant to the issues in the proceedings and which are necessary for disposing fairly of the cause or matter of for saving costs. Having regard to these principles, the plaintiffs have been granted an order granting them extensive discovery of documents. They are not discriminatory and I do not see any basis whatsoever for suggesting that the application of the relevant principles could be considered as rendering the remedies available to the plaintiffs in these proceedings "virtually impossible or excessively difficult". Having regard to the foregoing conclusions I would dismiss the plaintiffs appeal from the High Court order for discovery.

The appeal against security for costs

Order 31, rule 12(2) of the Rules of the Superior Courts, 1986 as amended by S.I. No. 233 of 1999 provides, in relation to an application for discovery as follows:

"On the hearing of such application the Court may either refuse or adjourn 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." (emphasis added).

It is evident that this rule confers on the High Court, when making an order for discovery, a wide discretion, having regard to all the circumstances of the case, as to whether an order for security of costs should be made, as well as the nature and extent of such an order.

In his judgment the learned High Court Judge set out very carefully the matters which he considered were appropriate to take into account, although he was careful to add that those matters were not intended to be a definitive list of what a court may take into consideration. He explained his approach in the following terms:

"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 event (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 for document 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 the 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 in fact conducting the proceedings in the name or on behalf of that body is or unable to provide or 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 principal cause of that party's lace 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 of 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 rule 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 coasts 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 cost 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 (13) would ordinarily apply."

I have no difficulty in agreeing generally with the learned High Court Judge that the matters to which he referred are factors which may be taken into account in considering an application for security for costs, their relevance and the weight to be attached to them in deciding whether to grant or refuse the application, to be determined according to the circumstances of each case. I would add some comments on those observations. As regards the circumstances in which the party seeks to resist such an application on the grounds that they are impecunious and that this impecuniosity has been caused or substantially contributed to by the wrongful acts of the other party which are the subject matter of the proceedings, I agree that such impecuniosity must be established as a matter of probability. Where an application is made for security of costs on the basis that the other party would be unable to meet the relevant costs because of its impecuniosity in the event of the applicant being successful in the substantive proceedings, and satisfies the court of that fact, that may be sufficient to establish impecuniosity without the other party having to call any further evidence. As already indicated, the next step for the party resisting the application for security for costs is to show that the impecuniosity was caused by the wrongful acts of the applicant. The learned High Court Judge was correct in stating that this causal connection should be established prima facie and not simply by mere assertion. (See judgment of Finlay C.J., in O'Toole Ltd –v- MacEoin Kelly Associates [1986] I.R. 277 at 283). In his judgment the learned High Court Judge makes reference at one or two points to the causal connection being established as a matter of probability, although reading his observations on this matter in their totality I think it is clear that he did not intend to hold that the party concerned had to prove, on the balance of probabilities, that the wrongful acts of the other party had caused their impecuniosity. Taken literally, this would suggest that the party resisting the application for security for costs had to prove the substance of their case on its merits. I think it is clear that the learned High Court Judge did not intend this and that he addressed this issue on the correct principle, according to which, the party concerned is only required to establish a prima facie causal connection.

The High Court estimated that the costs to the first five named respondents of making discovery on foot of the order would amount to €89,375. This finding is not in issue in the appeal. The learned High Court Judge concluded that "the balance of justice in this case" required that security for the costs of discovery should be allowed, not for the full amount, but for the sum of €77,000.

The appeal against the order for security for costs

The plaintiffs appeal from the order of the High Court on the following grounds:

(a) that, in the circumstances, no security for the costs of discovery should have been ordered or, in the alternative, it should have been for a lesser amount;

(b) this security should not have been required in respect of certain categories where no claim for security was made in respect of those categories;

(c) the learned High Court Judge pre-judged the application for security of costs;

(d) the High Court erred in holding that the plaintiffs bore the burden of establishing an inability to furnish security where they had raised the defence that their impecuniosity was caused by the defendants actions given that they had already established impecuniosity.

(e) The High Court erred in holding that Mr Seamus Maye and Mr Frances Maye were obliged to satisfy the court that they were unable to provide or procure for the plaintiffs a means of giving security of costs for discovery.

Second, third and fourth grounds of appeal

A number of these grounds can be addressed relatively briefly and I will deal with those first. In their second ground of appeal the plaintiffs assert that as regards most of the categories of documents ordered to be discovered the defendants did not seek an order for security for costs. They are categories in respect of which no claim for significant expenditure was made by the plaintiffs. They referred to an averment in the affidavit filed on behalf of the defendants which stated that the estimates concerning the costs to them of making discovery referred to two specific categories and did not include any allowance in respect of the other categories of discovery which the defendants must make. However, as the plaintiffs acknowledge, the defendants did not in any sense state or convey that no costs would be incurred in relation to those particular categories. What they did do was to specify the significant costs in respect of two categories. It is clear that the defendants' affidavit grounding the application sought security for costs in respect of the entire discovery which they were required to make, but that they were content that the costs incurred by discovering documents in categories other than those specified be subsumed in the global figure which they had itemised as being substantial costs in respect of the specified categories. Although the defendants submitted that O.31, r.12(2) does not contemplate the making of an order for discovery on terms as to security for costs limited to certain classes of documents, I do not think it is necessary to address that particular point because, in my view, the learned High Court Judge, insofar as he ordered security for costs, was entitled, both on the facts of the case and within the bounds of his discretion, to make the discovery of all categories of documents contingent on the payment of the amount in question.

As regard the third ground of appeal that the High Court Judge prejudged the application for security of costs, this is based on the indication said to have been given by the learned trial judge at the close of the defendants submissions, and before the plaintiffs had commenced making their submissions, that he had "made out the heads of an ex-tempore judgment". This the plaintiffs say indicated that he had arrived at certain conclusions prior to hearing the plaintiffs. I do not see any rational basis for this ground of appeal. It should not need to be said that in an application for discovery involving complex categories of documents in relation to a multiplicity of issues concerning multiple defendants, it is entirely logical that a trial judge would prepare for his own benefit headings of matters which would have to be addressed in a judgment, ex-tempore or otherwise, subject always to what the parties may submit concerning the issues to be decided. There is of course the self evident distinction between heads of a potential judgment and conclusions. I have to say I am surprised that it was sought to impugn the learned High Court Judge's decision on such an unfounded basis.

In my view, the fourth ground of appeal on this issue is based on a misreading of the learned High Court Judge's judgment. The plaintiffs say that the High Court erred in holding that they bore the burden of establishing an inability to furnish security where they had raised the defence that their impecuniosity was caused by the defendants actions, given they had already established impecuniosity. The High Court did not decide the issue as to security for costs on that basis. The plaintiffs, erroneously in my view, seek to rely on the more abstract statements made by the learned High Court Judge when he was setting out in general terms the factors which a court could take into account in an application of this nature. In the context of this ground of appeal, I do not think it is necessary to cite and analyse those observations, because it is quite clear from page 18 of the judgment, where it was stated "it was accepted by both sets of parties that the named parties are without money or free assets", that the learned High Court Judge did not decide the issues on the basis of the plaintiffs having to prove their impecuniosity. The plaintiffs sought to contrast that statement with the observations of the trial judge at page 21 of the judgment where, in the written submissions, they say "… it is stated that the plaintiffs have failed to establish that they are unable to provide security for the costs of the permitted order as to the discovery of documents." That reference is not accurate because the statement of the trial judge does not end there but goes on to say "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 CRH companies." In the immediately preceding paragraph before that sentence the learned High Court Judge was addressing the question as to whether the plaintiffs had established "…a prima facie case on the balance of probabilities of a causal connection between the alleged lack of funds and free assets and the pleaded alleged actions of the defendants." I do not think in any sense that it can be understood that the learned High Court Judge was approaching this issue of security for costs on the basis that the plaintiffs in these proceedings had not established that they were without funds and free assets and therefore impecunious. In the passage referred to, he was clearly dealing not with the impecuniosity of the plaintiffs but with the alleged causal link between it and the alleged wrongdoing. Certainly, the learned High Court Judge had previously concluded that Mr Seamus Maye and his brother Mr Frances Maye had not satisfied him that they were unable to provide or procure for the plaintiffs a means of giving security for costs of discovery. He went onto add, "to this extent I am unable to accept that the plaintiffs are unable to provide security for the costs of discovery." That is an entirely different question and is the subject of the fifth ground of appeal with I will address, so far as is necessary, later.

First ground of appeal

I now turn to the first and substantive ground of appeal, namely, that the learned High Court Judge ought not to have made an order for security of costs or, alternatively, should have done so for a lesser amount. In summary, the plaintiffs submit that the order for security of costs would amount to a denial of the plaintiffs' rights of access to the court, which include the right to avail of the procedure concerning discovery which is designed to ensure the fair conduct of litigation. It was submitted that the likelihood is that the order for security for costs would prevent the plaintiffs from obtaining any discovery and deny them an effective remedy. Moreover, it was submitted, insufficient account was taken of the fact that discovery is particularly important in competition and/or conspiracy cases where the behaviour complained of is, by definition, covert or hidden. It was also submitted that the saving of costs is one of the matters to be taken into account by the court when ordering discovery and that preventing discovery by imposing security for costs could defeat the objective of the current rule by adding to the costs of the action. As regards the amount of the security, the plaintiffs relied on Thalle –v- Soares [1957] I.R. 182 for their submission that the court has a wide discretion in regard to the making of an order for security of costs presumed to its jurisdiction under the rules of court and if it is appropriate to award security, that amount should not be more than one third of the costs.

The defendants submit that the fact that the impecuniosity of the plaintiffs may prevent them from seeking discovery is not something which in itself can protect them from an order requiring them to give security for costs. In this respect, they rely on Lismore Holmes Ltd (in receivership) –v- Bank of Ireland Finance Ltd [1992] 2.I.R. 57. They also expressly rely on the following passage of the judgment of the learned High Court Judge "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 of 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 principle benefit of the other party. There is 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 burden on the other party to the proceedings." They also submit that a failure to provide a security under O.31, r.12 does not deprive a party of the right to litigate nor does it defeat its claim. It really deprives a party of the opportunity of availing of the procedural remedy of discovery.
As regards the amount of the security to be provided, the defendants submitted that the decision in Thalle –v- Soares was developed in the quite different context of O.29 of the Rules and there was no reason why the approach taken in that case should be applied to the exercise of the course of discretion pursuant to Order 31, rule 12.

As the learned High Court Judge pointed out, there is a dearth of authority on the application of O.31, r.12. There are decisions of this court and other courts concerning the application of O.29, which concerns the provision of security for costs of proceedings before the High Court. Like the learned High Court Judge, I am of the view that these decisions, along with the decisions of the courts concerning the application of s.390 of the Companies Act, 1963, which also concern the provision of security for costs in cases where the assets of a company will be insufficient to meet the costs, deal with issues similar to those which arise here and are therefore relevant in deciding an application pursuant to Order 31, rule 12.

In Thalle –v- Soares, Kingsmill Moore J. in delivering the unanimous judgment of this court considered and contrasted the principles to be applied in the exercise of a discretion whether or not to grant security of costs in relation to an application for such security pursuant to s. 278 of the Companies Act, 1908 (now replicated in s.390 of the 1963 Act) and an application made on foot of the Superior Court Rules, in that case, O.29. In distinguishing between the origin and history of the two jurisdictions to grant an order for security for costs, he pointed out that that under the Rules, it is inherent and discretionary, the other statutory. He pointed to certain distinctions between the two jurisdictions but emphasised that "The deciding factor, to my mind, is the wording of the section when contrasted with the rule. The statute lays down reasonably precise instructions as to the measure of security while the rule makers and the judges seem studiously to have avoided any such approach to definiteness, leaving each case to be decided by an uncontrolled discretion. Those judges who have considered the matter appear to have realised that different considerations applied to cases under the statute from the considerations relevant to cases under the inherent jurisdiction" (at page 192). He subsequently went on to observe that a significant feature of the High Court rule is "… its careful avoidance of any indication as to a measure whereby the amount of security is to be gauged." He subsequently observed that "Security for costs must be so fixed as to advance the ends of justice and not to hinder them. If the amount is too small a plaintiff with a speculative or even dishonest case may be able to force a defendant into an unfavourable settlement by the threat of expensive litigation whose costs may be irrecoverable; if too large a defendant may be able to defeat an honest and substantial claim because the plaintiff cannot find the necessary security. Somewhere between Scylla and Charybdis, a way has to be found but there can be no Admiralty chart, no succinct sailing directions." He had contrasted this position with the statutory provision which expressly made provision, as the current statutory provision does, for "sufficient security" for the costs of the proceedings, which at first sight would mean security for such an amount that would be equal to the probable amount of the costs payable. The current statutory jurisdiction of the court is expressly granted by s.390 of the Companies Act 1963. Pursuant to that section the court may require security for costs for the full amount of the estimated costs of the proceedings although it has a residual discretion as to the order which it should make. (S.E.E. Company Ltd trading as South East Electric Company –v- Public Lighting Service Ltd and Anor [1987] I.L.R.M. 255 and Lismore Holmes Ltd (in receivership) –v- Bank of Ireland Finance Ltd (cited above).)

Kingsmill Moore, J. cited a number of discrete applications of O.29 in only one of which was security ordered for the full amount of the estimated costs. He also alluded to a prevailing practice in this jurisdiction according to which it was customary to require as security, "… an amount not more than about one third of the costs which would probably be incurred by the defendants." Kingsmill Moore, J. also approved an observation of Fitzgibbon, J. in Perry –v- Stratham [1928] I.R. 580, which he considered to be of general application, even though it was made under the rule concerning security for the costs of an appeal, in the following terms "It must be borne in mind that security is not intended either as an indemnity against all costs which may be incurred or as an encouragement to luxurious litigation …"

In my view, the principles and the scope of the discretion to be exercised by the court in an application for security for costs pursuant to O.31, r.12, being an exercise by the court of its inherent jurisdiction pursuant to the rules of court are the same as those outlined by Kingsmill Moore J. in relation to Order 29. The discretion to be exercised is, as he stated, a very broad one and certainly, where it is appropriate, account may be taken of any particular factors which might arise because one relates to the procedural remedy of discovery and the other to the security for costs of proceedings. Different considerations may arise where an application is made pursuant to s.390 of the Companies Act, 1963, where the discretion in relation to the amount for which security should be ordered is more constrained by reason of the express provisions of the section.
Accordingly, in my view, the learned High Court Judge was correct in stating in his judgment, a passage relied upon by the defendants, that the 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 the security for the costs of discovery in making an order for the discovery of documents on oath." That is clearly consistent with the approach set out by Kingsmill Moore J.

On the other hand, the defendants also rely on a passage from the judgment of the learned High Court Judge, which I have cited above, where he stated, inter alia, that "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 … 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."

I do not fully subscribe to this approach by the learned High Court Judge. Certainly there are distinctions to be made between the effect of an order for security for costs where this might amount to an obstacle to a party having access to the courts in respect of his or her substantive proceedings and one which may have the apparently more limited effect of simply being an obstacle to obtaining discovery. This may be a material distinction in the circumstances of a particular case, but in a case where discovery was essential to a party's ability to make a claim or to defend an action the implication may be substantially the same. In those circumstances, it would be a distinction without a difference. In short, while it is a matter for the party concerned to choose whether or not they seek discovery it may be the only choice open to them if they are to establish their case. Moreover, discovery is granted on the premise, as it was in this case, that discovery is necessary for the fair disposal of the issues between the parties. That is also an important consideration in whether or not to grant an order for security for costs and if so the amount of same. That is not to say that the sole fact that the granting of an order for discovery would be an obstacle to a party proceedings with its action or its defence would in itself be a bar to an order for discovery, but it is a factor to be taken into account, at least in fixing the amount of the security, because, as Kingsmill Moore J. pointed out, if too large it may defeat an honest and substantial claim because the plaintiff cannot find the necessary security.

Although, it may not be impossible in the circumstances of this case for the plaintiffs to proceed with their action in the absence of discovery, in my view, having regard to the facts averred to in the affidavits filed in support of their application for discovery and opposing the application for security for costs it is prima facie evident that they would be significantly handicapped in having a fair opportunity to establish their case, if they were unable to enforce their order for discovery. In my view, the learned trial judge failed to attach sufficient weight to this factor in deciding on the amount of discovery.

As indicated earlier, it is not in issue that the plaintiffs in these proceedings do not have sufficient assets or resources which would enable them to meet the costs of the defendants should they be unsuccessful in their action. In these circumstances and having regard to the extensive discovery which has been ordered, I am of the view that the defendants have established reasonable grounds for the making of an order for discovery in their favour. The plaintiffs for their part have relied upon special circumstances namely, that their impecuniosity has been caused by the acts of the defendants, for resisting the order for discovery to which the plaintiffs might otherwise be entitled. For reasons which I will explain when dealing with the fifth ground of appeal, I do not consider that they have established this ground as a basis for resisting any order for security, therefore the outstanding matter under the first ground of appeal on this issue is whether the amount of security ordered to be paid should be for a lesser amount than that provided for in the order of the of the High Court.

One of the factors which the learned High Court Judge properly stated that a court may take into account is the proportion which the costs of the discovery of documents are likely to bear to the probable total costs of the entire proceedings, regardless of the ultimate outcome. He added, "The greater this is the stronger it would appear to be for the security of costs of discovery."

I think it is evident that the estimated cost of discovery in the sum of €89,375 is likely to be a very small proportion indeed of the costs of these proceedings, involving as they do complex issues relating to the conduct of the parties in the commercial market for cement and cement products.

Although the learned High Court Judge mentioned in a neutral or abstract sense the relevance of the proportionality between the costs of discovery and the overall costs of the action, it is not a factor to which he had any regard when he came to his conclusions as to the amount of security and in deciding where the balance of justice lay between the parties on this issue.

As regard the amount of the security to be ordered, I think it is helpful to recall that Finlay, C.J. in Fannon –v- An Bord Pleanála [1992] 2 I.R. 380 at 389 stated "I would accept the statement of Mr Justice Fitzgibbon quoted with approval by the court in Thalle –v- Soares and Ors [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 to be so high as to be an indemnity nor to be so low as to be a mere token." While in that case the former Chief Justice was in the minority as to how the discretion was to be applied on the particular facts of that case his views on the nature of the discretion to be exercised by the court are also reflected in the judgment of Hederman J. in the same case (who along with McCarthy, J. dismissed that appeal) where he stated "Both prior to and subsequent to the decision in Thalle –v- Soares and Ors … the customary order when fixing the amount for security for costs was one third of the costs to be incurred by the party against whom the order for security had been obtained. No case had been brought to the attention of the Court where a sum greater than one third was in fact ordered by the courts. I do, however, accept there is a discretion in the Court as to the amount of the security to be fixed and that that amount would be fixed having regard to the individual facts of each case based on the balance of justice arsing in that particular case." As previously indicated, I consider that this approach is equally applicable to an application for security of costs under Order 31, rule 12.

I think the authorities also demonstrate that the plaintiffs were incorrect when they submitted that security for costs pursuant to the inherent jurisdiction of the court should be confined to a maximum of one third of the estimated costs. In my view, the practice, and the expressions of approval of that practice, reflect what the courts have found to be a good compass point between Scylla and Charybdis in seeking generally to achieve a balance of justice between the parties with a view to ensuring that the security is not a mere token and at the same time not an obstacle to a full and fair disposal of the issues between the parties. There may of course be circumstances which in a particular case would warrant different approach.

In my view, there are not such special circumstances which would indicate that this court should depart from the practice of awarding "an amount not more than about a third of the costs which would probably be incurred." (Fitzgibbon J.)

In the circumstances, I conclude that there were two important factors, as already indicated, to which in my view the learned trial judge did not give sufficient weight when taking all the circumstances into account. These were the fact that the plaintiffs will be seriously handicapped in making their claim if the amount of security is fixed at such a level that there is a real likelihood that they would be unable to proceed with discovery and the fact that the estimated costs of discovery are likely to be a relatively small proportion of the likely overall costs of the proceedings. I also take into account the acknowledged practice of providing for security of about one third of the cost, although, I would come to the same conclusion in the circumstances of the case even if one disregarded that practice. In my view, the appropriate balance to be arrived at in this case in order to do justice between the parties is to set aside the order of the High Court for the security of costs in the amount of €77,000 and substitute an order requiring the plaintiffs to pay, as security for costs, the amount of €27,000, which is approximately 30% of the estimated costs. Accordingly, I would allow the appeal on this ground.

Fifth ground of appeal

This ground relates to the impecuniosity of the plaintiffs and the submission that the High Court erred in holding that Mr Seamus Maye or Mr Francis Maye were obliged to satisfy the court that they were unable to provide or procure for the plaintiffs a means of giving security for the costs of discovery. Related to this is the assertion by the plaintiffs that the learned High Court Judge erred in failing to refuse security for costs because the impecuniosity of the plaintiffs was caused by the alleged wrongful acts of the defendants. This latter point was also a basis for resisting any order for security for costs, which I have indicated above I do not find to be a well grounded submission, but which I think is more conveniently dealt with under this head of appeal. Dealing with this matter first, it is quite clear from the authorities cited above (Lismore Homes Ltd (in receivership) –v- Bank of Ireland Finance Ltd, 0'Toole Limited –v- MacEoin Kelly Associates) that where a party pleads, as part of the special circumstances in which security should not be ordered, the fact that its impecuniosity is due to the wrongful acts of the other party, the onus is on that party to establish, prima facie, a causal connection between that impecuniosity and the wrongful acts. It is not sufficient to make a mere bald statement of the fact that the insolvency of the company has been caused by the wrong subject matter of the claim. In the case of O'Toole Limited –v- MacEoin Kelly Associates, Finlay C.J., albeit referring to the particular facts of that case, observed "…it seems to me that if the plaintiff company were to satisfy even the duty of establishing a prima facie special circumstances, it would be necessary for some accounts, even though they might be in an informal form, such as bank accounts or the state of a bank overdraft, of the plaintiff company to be produced. It seems to me that some information would necessarily have to be established as to what other sources of income the plaintiff company had at the material time when this contract was being concluded." That is illustrative of the kind of evidence which a party seeking to establish a causal connection might be expected to place before the court. In my view, the learned High Court Judge applied the correct principles in dealing with this matter, on the facts as put before the court by the plaintiffs in their affidavits, when he concluded "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." Having considered all the evidence placed before him, he concluded that it did not establish a prima facie case of a causal connection between the alleged impecuniosity of the plaintiffs and the alleged actions of the defendant.

Having reviewed all the material which was before the learned High Court Judge, I am of the view that he was entitled to find as he did and factually correct in doing so. He might, at most, be said to have understated to some extent the additional material concerning the alleged non-competitive practices of the defendants, particularly in relation to Wilbury Ltd (in voluntary liquidation) as set out in the affidavits of Mr Maye in the security for costs application. However, insofar as those affidavits may provide prima facie evidence of some illicit practices, which may have caused damage to at least one of the plaintiffs in respect of whom discovery has been ordered, what they do not do, in my view, is provide sufficient material establishing prima facie that the impecuniosity of the plaintiffs was actually caused by particular wrongful acts of the defendants. Although some evidence is provided in the affidavits of Mr Seamus Maye of financial loss having been sustained by the plaintiffs, or some of them, by reason of the alleged wrongful acts of the defendants, the evidence is not in my view sufficient to establish prima facie, in the absence of a more rounded or complete analysis of their financial affairs, that the actual impecuniosity of the plaintiffs was caused or substantially caused by the wrongful acts of the defendants. In short, while there may be evidence of some financial loss having been sustained by the plaintiffs as a result of the alleged wrongful acts, the claim that their impecuniosity was caused by those acts remains at the level of general assertion rather than prima facie proof.

The issue regarding the resources of Mr Seamus Maye and Mr Francis Maye really arose because the defendants, in answer to the plaintiffs reliance on their impecuniosity and the cause of it, asserted that they, as the "backers" of the plaintiff companies and their sole or principal shareholders would have the resources to pay the security for costs. The response of the plaintiffs was to say that this was not correct and that the two persons in question were not in a substantial way of business, but did not go into any great detail concerning their financial resources.

In the light of my conclusion that the plaintiffs do not have a valid ground of appeal in contending that the learned High Court Judge ought to have found a causal connection between their impecuniosity and the wrongful acts of the defendants and my conclusions as to the appropriate amount for which security should be granted, the financial position of both Mr Mayes' is irrelevant. I do not think it relevant, therefore, to consider whether or not, or to what extent, the learned High Court Judge ought to have had regard to their financial standing.

Order

In the light of my conclusions, I would dismiss the plaintiffs appeal as regards the order for discovery and allow their appeal on the question of the amount of the security for costs only and substitute the sum of €27,000 for the sum of €77,000 as the amount for the security for costs in the High Court order.