Supreme Court allows appeal on locus standi where no real alternative remedy exists under Competition Act.

THE SUPREME COURT

256/2006

370/2006

Hardiman, J.

Kearns, J.

Macken, J.

Between/

DAVID PIERCE TRADING AS T/A SWORDS MEMORIALS

AND ANDREW PIERCE MONUMENTS

Plaintiff/Appellant

-and-

DUBLIN CEMETERIES COMMITTEE

GLASNEVIN CEMETERY MONUMENT WORKS LTD

GLASNEVIN CREMATORIUM LTD

Defendants/Respondents

Judgment delivered the 28th day of May, 2009 by Macken, J.

This is the appellant’s appeal from the judgment of the High Court (Laffoy, J.) delivered on the 11th May 2006 and

the order made thereon on the 23rd May 2006.

This judgment however concerns only one issue of locus standi and arises against the following background. The first

defendant (“the Committee”) is a body corporate established by a private Act of the Oireachtas, the Dublin Cemeteries

Committee Act 1970 (the “Act of 1970”). It replaced a body corporate which had been established by the Dublin

Cemeteries Act 1846, a public Act. The proceedings brought by the plaintiff seek, inter alia, a declaration that the Act

of 1970 does not empower the first defendant to sell monuments or headstones, or to offer inscription services and

similar activities, operated through the medium of the second defendant, and alleges that such activities are ultra vires

the first defendant’s powers. The plaintiff contends that the manner in which the first defendant conducts its business

in the above areas, although operating in effect through the second defendant, is unfair to persons like him who are

engaged in monumental sculpting and installation businesses, and is damaging to him. The defendants, and in particular

the first defendant, defended these proceedings on the basis, inter alia, that the plaintiff had no locus standi to seek

any of the reliefs he claims, but in particular relief by means of declaratory orders that the activities carried on are ultra

vires the powers of the first defendant. This was a matter addressed by the learned High Court judge in considerable

detail in her judgment.

In that judgment the learned High Court judge considered the relevant jurisprudence, commencing with Cahill v

Sutton [1980] IR 269 and the other case law following on from that case, and found that since the appellant had no

other remedy in law to resolve his complaint, he had locus standi to bring the proceedings. This conclusion supported

the plaintiff’s contention that there was no alternative remedy available to him. The learned High Court judge, having

resolved the issue of locus stand, on the above jurisprudence, then dealt with the interpretation of the Act of 1970, and

found against the plaintiff/appellant, from which finding he appeals. The defendants/respondents served a Notice to

Vary, and they contend that the learned trial judge erred, inter alia, “in finding that the plaintiff had sufficient locus

standi to bring the proceedings”.

At the commencement of the hearing of this appeal this court took the view that it would be appropriate to consider

the issue of locus standi as a preliminary matter in the context of a possible alternative remedy under the Competition

Act 1991, not dealt with specifically by the parties in the High Court and my judgment is confined to that single issue.

Essentially, on behalf of the appellants, Mr Hogan, senior counsel, contends that the learned High Court judge’s

finding on locus standi was correct. He argues that the true position in the present case is that there is no other or no

real alternative to the proceedings which have been instituted and certainly no real one under the Act of 1991. Because

there is no other alternative by which he can have the relief he actually seeks, the learned High Court judge’s reasoning

cannot be faulted, as it followed an established line of jurisprudence.

On behalf of the defendants/respondents, Mr Allen, senior counsel, argues that the plaintiff, in order to establish that

he has locus standi was obliged first to “sue out” any possible alternative remedy and – it must be assumed – fail in

doing so. He contends on the specific issue of locus standi in particular that the plaintiff had a full remedy before the

commencement of these proceedings, and continues to have a remedy, under the provisions of the Competition Act

1991, submitting that because there is such an alternative remedy the case law invoked on behalf of the

plaintiff/appellant in fact favours his client.

The possible alternative remedies in the context of this application, and as acknowledged by all parties, comprise the

following:

(a) A formal complaint to the Competition Authority requesting the Competition Authority itself to take action against

the defendants alleged to be in a dominant position or competing unfairly with the plaintiff;

(b) A private action by the plaintiff against the defendants pursuant to the provisions of the Competition Act 1991;

(c) A formal complaint to the European Commission alleging impermissible or unlawful State aid.

Conclusions:

In the course of the submissions it became clear that certain complaints had been made by the appellant, or by other

persons loosely associated with the appellant, both to the Irish Competition Authority and to the European

Commission, although the exchange of correspondence was not available during the oral hearing before this court on

the 18th day of March 2009. Mr. Hogan contended that the responses of these parties made it clear that the alternative

remedy now invoked by the respondents was not, in reality, available. For the purposes of considering the attitude of

those parties to the complaints made as expressed in the correspondence, the court agreed a short adjournment, a

bundle of correspondence was thereafter furnished and the parties were heard further at a resumed hearing on the 25th

March 2009.

I can deal very simply and briefly with any possible complaint alleging State Aid in favour of the appellant, because a

letter was written to the European Commission – State Aid Registry, apparently on the 12th February 2007 and

responded to on the 14th February 2007 and on the 21st February 2007. The court has not been furnished with the

letter of 12th February 2007 to the Commission, and the letter of the 14th February 2007 is simply an

acknowledgement of the former. However by its letter of the 21st February 2007 the European Commission rejected

the appellant’s contention that the first named defendant would be cross-subsidised by unlawful State support which

would harm competition in the retailing of headstones business, even if it had the vires in law to operate as it does. In

the letter, the Commission stated that “on the basis of the information available the competent departments in the

Directorate General for Competition have concluded that sufficient grounds do not exist for continuing the

investigation”. The letter points out the conditions necessary before State Aid can be considered to exist, and expresses

the view that two at least of the necessary criteria are not met by the appellant’s complaint. The reasons for these two

criteria not being met are also set out in the letter. Clearly therefore such a complaint mechanism in the present appeal

does not constitute an alternative remedy for the appellant.

As to complaints to the Competition Authority on grounds of alleged anti competitive activity or behaviour, or of abuse

of a dominant position, the exchange of correspondence with the Authority needs more careful review as is not entirely

clear. The position of the Competition Authority appears to have changed midway between 1998 when the first

complaint was lodged, and 2007 when the above complaint was sent to the European Commission on the State Aid

aspect. For the purposes of this judgment I make no distinction between the correspondence between the appellant and

the Competition Authority, and correspondence written on behalf of another company, Fingal Memorials and

Monuments Limited, or by a group called Dublin Sculptors Alliance (of which the plaintiff is and was a member). All

deal with the question of complaints in relation to the activities being carried on by the first named defendant either

itself or through limited companies established by it. The relevant correspondence spans the period from the 14th July

1998 to the 8th January 2004.

The initial correspondence disclosed a complaint to the Competition Authority mentioning only the first named

defendant and was responded to on the 19th August 1998 when the Authority indicated it proposed “to close this case”

on the basis that the first named defendant is not “an undertaking” within the meaning of the Competition Act 1991,

setting out the definition of an undertaking as being:

“A person being an individual, a body corporate or an unincorporated body of persons engaged for gain

the production, supply or distribution of goods or the provision of a service.”

The Authority invoked s.19 of the Act of 1970 to support its view that the first defendant was not an undertaking

because it stated:

“The income and property of the committee shall be used towards the promotion of the objects of the

committee and no portion thereof shall be paid or transferred directly or indirectly by way of dividend,

bonus or otherwise how so ever by way of a profit to members of the committee.”

The Authority concluded that the first defendant could not be said to be “engaged for gain” in the provision of any

service. That letter was responded to within a week. The complainant drew the Authority’s attention specifically to the

existence of the second defendant and another limited company, each of which, it was alleged, clearly constituted

“undertakings” within the meaning of the Competition Act 1991, and requested the Authority to take up the complaint.

That in turn was responded to in September 1998, in terms slightly modified from the original letter from the

Authority. The Authority continued to rely on s.19 of the Act of 1970 but in relation to the second defendant, it stated

as follows:

“If as you say Glasnevin Monument Works is one and the same as the committee, then it is not an

undertaking. If however it is a separate entity, benefiting from its own profits, that may be another

matter. If you think that this may be the case, and if you wish to submit a new complaint against this

company, please do so, but please include with your complaint any information which you have to

indicate that it is not a charitable organisation, ie, that the company benefits from its income.”

The plaintiff himself made a formal complaint on the 1st February 2000 to the Competition Authority, again limited to

the first defendant, contending that the Authority’s view that it was not an undertaking engaged for profit was

incorrect, and stating “our legal opinion indicates otherwise … (enclosed)”. Obviously the court has not been furnished

with the legal advice. That letter to the Authority was followed by a lengthier letter written on behalf of Dublin

Sculptors’ Alliance by Messrs Matheson Ormsby & Prentice, Solicitors, on the 9th February 2000 in which the author

expressed the legal opinion that the first plaintiff “and most certainly its subsidiary Glasnevin Works” constitute

“undertakings” within the meaning of the Competition Act 1991, and pointed out that the earlier conclusion reached by

the Authority may have been based on an incomplete picture of the background facts. The author then set out the

background facts and drew particular attention to the second defendant, the wholly owned subsidiary of the first

defendant, and to the judgment in Deane & Ors v Voluntary Health Insurance [1992] 2 I.R. 319.

The plaintiff again wrote to the Competition Authority on the 15th February 2000 pointing out certain further matters,

and claiming that there was an abuse of a dominant position. With that letter was delivered to the Competition

Authority a chart showing the first named defendant and its various subsidiaries, both limited companies and a list of

what appear to be Business Names used by the subsidiary companies. The Authority responded to the 1st February

letter by repeating that the matters alleged in the complaint do not come within the scope of the Competition Act 1991

because “the parties about whom the complaint is being made” are not undertakings within the definition of section 3

of the Competition Act 1991. No correspondence appears to have been received in response to the letters of the 8th

February, the 9th February, or the 15th February 2000.

Matters appeared to lie dormant until the plaintiff wrote again to the Competition Authority on the 5th February 2003

making a further complaint in relation to the first named defendant. That letter was responded to on the 19th May

2003 by the Competition Authority. The letter acknowledges the complaint made on the 5th February 2003, but makes

no reference to the earlier correspondence mentioned above or to that sent in 2000. It sets out certain matters which

had been clarified by the plaintiff, and a final response was sent by the Competition Authority on the 8th January

2004, again in response to the letter of the 5th February 2003 and - it must be assumed - the additional material

referred to in the Competition Authority’s letter of the 19th May 2003.

The letter of the 8th January 2004 marks, to my mind, a significant change in the approach by the Competition

Authority. It acknowledges that the complaint concerned “anti competitive practices” by the first named defendant. It

is assumed by me that this anti-competitive activity includes activities carried out by the second defendant, in light of

the letter of the 19th May 2003 and the material furnished in accordance with that letter. The important content of the

letter of the 8th January 2004 is found in the following extract:

“The Competition Act 2002 (“the Act”) prohibits anti-competitive arrangements between undertakings

and abuses of dominant positions by undertakings. The Authority has carefully considered the issues

raised and all of the information gathered by its authorised officers in pursuing your complaint and

proposes taking no further action for the reasons outlined below:

1 In order for an undertaking to breach the Act, it must first be shown to be dominant in the relevant market. With

respect to the your allegation that the DCC charges an excessive price for the provision of monument foundations in

the cemeteries under its management, the Authority does not consider the DCC to be dominant in the market for the

provision of cemetery and burial services in the greater Dublin area, including inter alia, laying foundations for

headstones in its cemeteries.

2 With respect to your allegation that the DCC only allows its own monuments sales outlets to display and sell

headstones in the cemeteries under its management, the Authority does not consider this to be in breach of the Act,

this is because:

(a) the Authority is satisfied that access to the cemeteries managed by the DCC is not an indispensable element in

allowing manufacturers of headstones to provide their services to customers. In effect the cemeteries managed by

the DCC cannot be considered an essential facility in the provision of headstones. In your letter to the Authority

dated February 5 2003 you claim that consumers “are not aware that they can buy headstones elsewhere than from

the cemetery outlet”. It is up to headstone providers to make consumers aware of the availability of alternatives to

the DCC’s monumental sales outlets.

(b) As the DCC does not appear to be dominant in the relevant market, it has the right to refuse to allow any

monument sales outlets apart from its own subsidiaries to display and sell headstones in the cemeteries under its

control.” (emphasis added)

The conclusion to be drawn from the letter of the Competition Authority of the 8th January 2004 is that in its opinion,

as then stated, and having regard in particular to the first paragraph of the above extract, the Competition Authority

then considered or was of the opinion that the first and/or second defendant was, after all, an undertaking within the

meaning of the Competition Act 1991.

Of importance however is the fact that this is an opinion of the Competition Authority, not expressly stated, but to be

drawn by inference. It does not have as its automatic legal consequence that the first or any defendant is conclusively,

in law, “an undertaking” for the purposes of the 1991 Act, it being open to these defendants to claim and establish that

they are not an undertaking within the meaning of the Act of 1991. The statements nevertheless are to be taken into

account on the basis that they are the only pronouncement on the issue by the designated competent authority in the

State in the area of competition law. It would be a very foolish litigant who did have regard to, or who failed to take

into account the views of the Competition Authority in deciding on his appropriate course of action. That view was to

the effect that no cause of action arose, so far as the Authority was concerned, against the defendants. That view is

expressed, notwithstanding the private right existing under the provisions of the Competition Act 1991. In all of the

correspondence from the Competition Authority the attention of the plaintiff is drawn to the entitlement of a party to

bring proceedings under one or other provisions of the Competition Act 1991, although the Authority neither

encourages nor dissuades a party in that regard. Its position is entirely neutral.

With the foregoing information, that is to say, the rejection by the Competition Directorate of the European

Commission and the rejection by the Irish Competition Authority of the complaints made by the plaintiff, is the

defendant’s contention that the plaintiff nevertheless has an alternative remedy under the Competition Act 1991

correct? It is undoubtedly correct, as the Competition Authority mentioned on several occasions, that there a private

right of action may exist against another party pursuant to the provisions of the Competition Act 1991. Such a cause of

action arises, inter alia, in respect of abuse of a dominant position, if that is what is claimed, or in respect of some

other anti-competitive activity which is prohibited by the provisions of that Act, which Act mirrors or reflects

provisions of the European Union Treaties and of Community legislation in that regard. In theory, the appellant could,

even in the teeth of the above decisions or views, nevertheless seek a remedy pursuant to the provisions of the

Competition Act 1991. It has to be recognised however, that he would be doing so against the clear views, both of the

European Commission and of the Irish Competition Authority, to the contrary, and as an individual, would be

embarking on what is recognised as extremely expensive, even cripplingly expensive, litigation, a very precarious

position for any party.

On the other hand the applicant has framed his cause of action, not on the basis of infringements of the Competition

Act 1991 whether for an alleged abuse of a dominant position or otherwise, but rather on the basis, as the learned High

Court judge said, of asserting that his constitutional right to earn a living is being interfered with by reason of the first

named defendant engaging in an activity which the plaintiff alleges the first named defendant has no power to do. The

learned High Court judge found as follows in relation to the defendants’ argument in that regard:

“The basic flaw in the defendants’ argument on locus standi is their analysis of the plaintiff’s purpose in

bringing these proceedings. They suggested that the object of the plaintiff’s challenge is not to ensure

that the powers of the committee are exercised so as to advance the objects of the committee, but rather

to deprive the committee of a source of revenue, which it was submitted was not a legitimate interest in

the operation and management of the committee, which would give the plaintiff the necessary standing to

maintain his action. In short they say that his objective is not to ensure that the committee operates

within the confines of its powers.

The correct analysis in my view of the plaintiff’s objectives is that he avers that his constitutional right

to earn his living is being interfered with by reason of the committee engaging in an activity which he

alleges is ultra vires its powers. There being no other way in which the plaintiff can protect the right he

asserts and contends is being, and will continue to be, infringed, in my view, he has locus standi to bring

an action for declaratory and injunctive relief. To succeed he must establish that the committee is acting

ultra vires. I now turn to that issue.”

I am satisfied that the learned High Court judge was correct when she found that the particular right which the plaintiff

has sought to invoke, is a right to be indemnified in respect of the defendants’ alleged interference with his

constitutional right to earn his living. This is not a right which is so self evidently to be remedied solely or exclusively

or most appropriately within the confines of the Competition Act 1991 such that that Act provides a real alternative

remedy or a more appropriate one for the cause of action asserted. It has not been suggested – correctly in my view –

that the appellant’s only cause of action lies under the Competition Act, 1991. That being so, he is entitled to plead the

cause of action which he considers best reflects the alleged wrongdoing of the respondents and provides the most

appropriate remedy for him.

As in the case of the long line of authorities where the question of an alternative remedy has been considered in the

context of judicial review proceedings, in particular certiorari, many of which are cited in the context of the other

aspects of locus standi dealt with in the judgment of the learned High Court judge, the true question which arises in

cases of this nature and which allows the court to exercise an appropriate discretion in the matter, is which is the more

appropriate remedy in the context of common sense and the ability to deal with the questions raised and the principles

of fairness. That is subject to the proviso, of course, that a party has not gone too far down one road to be estopped

from changing his or her mind. Here the latter consideration does not arise, but the particular cause of action upon

which the appellant has commenced these proceedings is not precluded by the existence of a possible at least

theoretical remedy in law under the Competition Act 1991.

Another reason why I consider that a claim under the Competition Act, 1991, is not a real alternative remedy, is that

orders made in competition cases, especially those commenced by the Competition Authority but also private ones,

pursuant to the provisions of the Competition Act 1991, are geared predominantly towards declaratory relief, even if it

is also possible for a party to seek an injunction and damages arising from the declaratory order.

For the reasons set out above I find that no real alternative remedy exists under the Competition Act, 1991, in the

present set of circumstances, and the appellant is therefore entitled to proceed in his appeal.