COMPETITION
Anti-competitive practices - leniency programmes - penalties - horizontal price fixing - subjective consensus required for concerted practice - penalty guidance - non-discrimination - unequal treatment - retailers - suppliers - reciprocity - relevant product market
(1) Argos Ltd (2) Littlewoods Ltd v Office of Fair Trading; JJB Sports Plc v Office of Fair Trading: CA (Civ Div) (Lords Justice Chadwick, Wall, Lloyd): 19 October 2006
The appellant retailers appealed against decisions of the Competition Appeal Tribunal in respect of price-fixing investigations by the Office of Fair Trading (OFT).
The OFT had investigated agreements involving two retailers (X and L) fixing the price of Hasbro toys and games, and in a separate investigation had investigated agreements involving another retailer (J) fixing the price of Umbro football shirts. The OFT had imposed substantial penalties on the ground that there had been agreements in breach of section 2 of the Competition Act 1998. The tribunal had rejected appeals by X and L on liability (Argos v Office of Fair Trading [2004] CAT 24, [2005] Comp AR 588), but had reduced the penalties (Argos v Office of Fair Trading (Penalties) [2005] CAT 13, [2005] Comp AR 834). The tribunal had allowed J's appeal in part and had reduced the penalties ([2005] CAT 22).
The appellants appealed on liability and penalty. L and J submitted that, although there were agreements or concerted practices on a vertical basis with suppliers which infringed the section 2 prohibition, there was no horizontal element to the relevant dealings, contrary to the tribunal's finding.
X contended that the tribunal had been wrong to find a bilateral agreement between it and Hasbro. All the appellants submitted that the tribunal had failed to accord enough weight to the requirement of subjective consensus between all parties, if an agreement or concerted practice between them was to be found. X and L submitted that the tribunal had been wrong to allow Hasbro immunity and that equal treatment with Hasbro would lead to a reduction of their penalties.
Held, the tribunal had been entitled to find that J had provided confidential price information to Umbro, in circumstances in which it was obvious that it would or might be passed on to a competing retailer (S), in support of Umbro's attempt to persuade S to raise its prices in accordance with the pricing policy that J explicitly wanted all significant retailers to adopt; that Umbro did use the information in relation to S in that way; that S did raise its prices as it had agreed to do; and that Umbro did tell J of that, thereby making it clear to J that it could maintain its prices at that higher level.
The tribunal was right to hold that this sequence of events amounted to a concerted practice, to which J was a party, that constituted a breach of the section 2 prohibition (ICI v Commission [1972] ECR 619, Bayer AG v Commission (C-2/01 & C-3/01) [2004] ECR I-23, and Hasselblad (GB) Ltd v Commission (C-86/82) [1984] ECR 883 considered).
The tribunal had been entitled to find evidence of a price-fixing agreement between X and Hasbro that went beyond the exchange of price-fixing information.
If retailer A disclosed to supplier B its future pricing intentions in circumstances where A might be taken to intend that B would make use of that information to influence market conditions by passing that information to other retailers of whom C was or might be one; B did pass that information to C in circumstances where C might be taken to know the circumstances in which the information was disclosed by A to B; and C did use the information in determining its own future pricing intentions, then A, B and C were all to be regarded as parties to a concerted practice having as its object the restriction or distortion of competition. The case was all the stronger where there was reciprocity. The findings of fact made by the tribunal brought this case within that proposition, whichever of X or L was cast as retailer A.
The tribunal, unlike the OFT, was not bound under the Act to have regard to the guidance issued under section 38 but it was right for it to take account of the guidance, and to use it as a cross-check for the result otherwise arrived at from its own reasoning (Napp Pharmaceutical Holdings Ltd v Director General of Fair Trading [2002] CAT 1, [2002] Comp AR 13 approved). Neither at the stage of the OFT investigation, nor on appeal to the tribunal, was a formal analysis of the relevant product market necessary in order that regard could properly be had to step one of the guidance in determining the appropriate penalty. On the other hand, the OFT, and in turn the tribunal, did have to be satisfied, on a reasonable and properly reasoned basis, of what was the relevant product market affected by the infringement.
The assessment of penalties in the case of J was upheld. The tribunal had been entitled to review the OFT decision to grant Hasbro immunity on a judicial review basis, and the appeal of X and L on grounds of unequal treatment failed because it was not possible, on the facts, for them to show by inference from the available material that the grant of immunity was not objectively justified.
Appeals dismissed.
Mark Brealey QC, Mark Hoskins (instructed by Burges Salmon) for the appellant Argos Ltd; Nicholas Green QC, Marie Demetriou (instructed by DLA Piper) for the appellant Littlewoods Ltd; Paul Lasok QC, Mark Hoskins (instructed by DLA Piper) for the appellant JJB Sports plc; Brian Doctor QC, Jon Turner QC, Kassie Smith, Stephen Morris, Anneli Howard (instructed by the Solicitor to the Office of Fair Trading) for the respondent.
LOCAL GOVERNMENT
Cable - control - non-domestic rates - occupation - telecommunications networks - fibre optic networks - rateable occupation of leased fibres - hereditaments - units of property
Vtesse Networks Ltd v Alan Roy Bradford (Valuation Officer): CA (Civ Div) (Lords Justice Mummery, Sedley, Lloyd):
19 October 2006
A telecommunications company (V) appealed against a decision of the Lands Tribunal ([2006] RA 57) that the whole of a fibre optic telecommunications network operated by V constituted a rateable hereditament, of which V was in occupation, so that V was liable for non-domestic rates in respect of it.
The network extended over some 147 kilometres, of which about four kilometres were in cables and ducts owned by V and about 143 kilometres in cables and ducts belonging to third parties. V had entered into agreements with the third parties, under which V had exclusive use of particular pairs of fibres.
The tribunal held that V was in rateable occupation of the leased fibres and that its system constituted a single hereditament, since the leasing company provided specific fibres for V's exclusive use and it was V alone that activated the fibres for the transmission of signals.
It was V's case that the limits of the hereditament of which it was in occupation coincided with the limits of the area within which it had provided the fibres itself. V contended that the network could not be described as a 'unit of property' within the meaning of section 115(1) of the General Rate Act 1967; if the network was a 'unit of property', it could not be said that V had actual or exclusive occupation of the fibres.
V had no right to physical access to the fibres in question, and the third parties allocated them, maintained them, and effected the necessary connections with V's own fibres.
Held, the tribunal's conclusion that the network was a unit of property, so as to form a hereditament, was one that was open to it and was not reached as a result of any error of law (Gilbert (Valuation Officer) v S Hickinbottom & Sons Ltd [1956] 2 QB 40 considered). Cables had for many years been treated as separate hereditaments, and they could be seen as analogous to a fibre optic network. The matter of ownership was not a relevant factor in determining whether something was a unit of property, so it was not relevant that third parties had installed the largest part of V's network (Holywell Union v Halkyn District Mines Drainage Co [1895] AC 117 and Westminster City Council v Southern Railway Co Ltd [1936] AC 511 applied). The tribunal had correctly taken into consideration the fact that the leased fibres were connected to property owned and occupied by V.
It was clear that V had the right, under the agreements it had entered into with the third parties, to the exclusive use of particular pairs of fibres. V was the only person entitled to use the fibres for the purpose for which they were useful and valuable. It was possible to conclude that the party who had the sole right to use optical fibres for the sole purpose for which they were intended could, at the very least, be held to be in actual occupation.
The next issue for determination was whether that occupation was exclusive, or whether the third parties were also in occupation, and if so, whose occupation was paramount. It was open to the tribunal to conclude that V was in exclusive occupation. The third parties had no control over V's use of the fibres, and the third parties' rights to change the fibres in use for others were insufficient to deprive V of exclusive occupation.
Appeal dismissed.
Derek Wood QC, Robert Walton (instructed by Field Fisher Waterhouse) for the appellant; David Holgate QC, Timothy Morshead (instructed by the Revenue & Customs Solicitor) for the respondent.
PERSONAL INJURY
Contracts - agreements - claims - delay - interest - judges - jurisdiction - success fees - supervision - vibration white finger
AB & ors v Department of Trade & Industry s/a British Coal Corporation & ors; CA (Civ Div) (Lords Justice Pill, Rix, Arden): 19 October 2006
X appealed against a decision that a supervising judge, in respect of claims against the respondent (D) for damages for vibration white finger brought under a claims-handling agreement, had no jurisdiction to make an order for the payment of interest on an award from the date of the claim.
D appealed against the decision that the agreement permitted solicitors acting for X to recover a success fee. The agreement had been made between D and X to dispose of many outstanding claims for vibration white finger that X had allegedly suffered in the course of their employment without resorting to the courts.
Entitlement to an award and its amount were assessed in accordance with the terms of the agreement, which provided that an unsuccessful claimant would bear his own costs. The agreement did not prevent a claimant who failed to reach agreement with D from pursuing a claim in the courts.
The court was involved in the management of claims, which included practice directions by successive Lord Chief Justices and active management by successive supervising judges. Issues arose as to the extent of the powers of the supervising judge. The judge held that his powers were limited to the construction and enforcement of the agreement.
X submitted that the court was supervising a group litigation, albeit a stayed litigation, and that therefore the Civil Procedure Rules (CPR) were applicable; that the extent of the court's supervision as revealed in practice directions, judgments, and reviews demonstrated the intention of the parties to confer wide powers on the supervising judge; and that the judge had power to devise a scheme that was likely to involve money payments to dissuade D from delay in dealing with the claims. D submitted that the agreement prevented X from seeking success fees and that it provided that an unsuccessful claimant would bear his own costs, a provision that went against the rationale of success fees.
Held, the court had power to require a scheme, which involved money payments to claimants in case of default with the object of persuading the defendants, to deal with claims promptly. Although there was no formal group litigation, consideration as to ensuring that the claims were processed fairly and efficiently and promoting the just disposal of cases applied as if there was group litigation. In the circumstances, the agreement had to be read in light of the CPR and the overriding objective under CPR rule 1.1.
Under rule 1.1(2)(d), a case had to be dealt with justly, and so far as practicable, expeditiously. To give efficacy to the agreement, a means of ensuring that D did not delay in dealing with claims was necessary. Since the sanction of striking out a defence in default of progress was not available, because X had agreed to act under the agreement and not resort to the courts, the encouragement to proceed may include imposing financial consequences for delay. There was no need to categorise the proposed award as a penalty. The possibility of a payment constituted an encouragement to deal with claims promptly, and the compensation for being kept out of an award was the sanction for failure to do so.
However, it would be wrong for the instant court to make a general order for the payment of interest at the judgment rate or any rate. The parties should attempt to agree a procedure, and the judge may exercise his power in default of agreement.
The meaning of the word 'costs' in the agreement permitted the possibility of ordering a success fee, and arguments about whether success fees were needed by X under the agreement could not remove the power of the supervising judge to consider awarding them. There was no justification for a blanket ban on success fees. Principles were being developed in accordance with which success fees were paid, and these could be applied or adapted to cover the position of the solicitors under the agreement.
Judgment accordingly.
J Hendy QC, C Carling, G Wignall (instructed by Irwin Mitchell) for the appellants; RJ Walker QC, C Foster, M Friston (instructed by Nabbaro Nathanson) for the respondents.
ADMINISTRATIVE
Administration of justice - asylum seekers - court of session - forum non conveniens - immigration adjudicators - immigration appeals tribunal - judicial review - jurisdiction
Tehrani v Secretary of State for the Home Department: HL (Lords Nicholls of Birkenhead, Hope of Craighead, Scott of Foscote, Rodger of Earlsferry, Carswell): 18 October 2006
T appealed against a decision of the Court of Session ([2004] SLT 461), refusing his reclaiming motion against an interlocutor dismissing his petition for judicial review, and sustaining a plea of no jurisdiction by the respondent secretary of state.
T was an Iranian citizen who sought asylum in the UK. He had resided in Scotland since April 2001. His application for asylum was refused, and his appeal against that refusal was dismissed by an adjudicator.
The adjudicator sat in Durham for the convenience of T's solicitor, who lived in Sheffield. T then sought leave to appeal to the Immigration Appeals Tribunal (IAT). The IAT, sitting in London, refused his application.
The Court of Session held that it had supervisory jurisdiction where the immigration adjudicator had sat in Scotland and the IAT sitting in London had refused permission to appeal, but did not have jurisdiction in T's case because the adjudicator and the IAT had sat in England. T contended that the Court of Session had jurisdiction because T's petition for judicial review was a 'civil proceeding' for the purposes of section 20(1) of the Civil Jurisdiction and Judgments Act 1982, and schedule 8 to the Act had effect to determine in what circumstances a person might be sued in civil proceedings in Scotland. Paragraph 1 of schedule 8 provided that persons should be sued in the courts of the place they were domiciled; it was common ground that the secretary of state was domiciled in the UK, including Scotland, therefore the Court of Session had jurisdiction in T's case in which the secretary of state was the respondent.
Held, the nationwide nature of the legislation and the two-tier appeal structure of adjudicators and the IAT pointed to the conclusion that, just as the adjudicators and the IAT had jurisdiction throughout the UK, so the superior courts of the constituent parts of the UK had jurisdiction to review decisions made by them, wherever they were made.
In principle, the Court of Session had jurisdiction to review the decision of a UK body, such as the IAT, sitting in England in cases where there was no reason to believe that any decree pronounced by the court would be ineffective, and where the petitioner was someone in Scotland whose interests were materially affected by the decision and who could legitimately seek the assistance of the Scottish court. The Court of Session and the High Court had concurrent jurisdiction in respect of decisions made by
the IAT.
The exercise of jurisdiction was another matter. Save in exceptional circumstances, the appropriate forum for the judicial review of a refusal of leave to appeal by the IAT was the Court of Session where the adjudicator made his determination in Scotland, and the High Court where the adjudicator made his determination in England (R (on the application of Majead) v Secretary of State for the Home Department [2003] EWCA Civ 615, [2003] ACD 295, and R (on the application of Shah) v Immigration Appeal Tribunal [2004] EWCA Civ 1665, (2004) The Times, 9 December, applied; Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, Struk v Secretary of State for the Home Department [2004] SLT 468, Mfumu v Secretary of State for the Home Department (unreported, 27 April 2004), and R v Special Commissioners of Income Tax, ex parte RW Forsyth Ltd [1987] 1 All ER 1035 considered).
In this case, the circumstances were exceptional. T had been living in Scotland and by the time the plea of no jurisdiction was taken by the secretary of state, it was too late for him to apply as of right to the High Court for permission to apply for judicial review, as the three-month time- limit had expired.
It would be unconscionable if T were to be deprived of a remedy on jurisdictional grounds. Accordingly the Court of Session should exercise its jurisdiction in T's case as it was the only appropriate forum.
Schedule 8 to the 1982 Act did not affect the jurisdiction of any court in respect of appeals from or reviews of decisions of tribunals, pursuant to paragraph 12 of schedule 9. This applied to the procedure which was in use when the Act came into force, namely review of a tribunal's decision in an action of reduction, and it also applied to the modern procedure of a petition for judicial review. Schedule 8, accordingly, did not affect the instant proceedings.
Appeal allowed.
Mungo Bovey QC, Simon Collins (instructed by Clark Ferguson) for the appellants; Lord Davidson of Glen Cova QC, Ailsa Carmichael (instructed by the Solicitor to the Advocate General for Scotland) for the respondents.
CIVIL PROCEDURE
Agreements - claim forms - extensions of time - service - agreements to extend time for service - meaning of 'written agreement'
Ian Thomas v Home Office: CA (Civ Div) (Lords Justice Jacob, Neuberger, Lloyd): 19 October 2006
T appealed against the decision of the district judge that it was not open as a matter of principle to a claimant to rely on an agreement under rule 2.11 of the CPR to extend time for the service of a claim form under rule 7.5.
T was a prison officer who had suffered an accident at work. The liability of the respondent Home Office had been agreed on the basis of T having been 20% contributorily negligent. T's solicitors issued a claim form,
but did not serve it within the four-month period allowed by rule 7.5(2).
Before it was served, T's solicitors had agreed a number of extensions of time with the Treasury Solicitor on behalf of the Home Office. The extensions had been agreed orally and usually noted by each side in file notes.
After the form had been served, the Home Office applied to strike out on the basis that the form had been served some days after the expiry of the last extension; alternatively, that there had been no valid extension of time at all because that was not permitted by the rules.
Held, It was open to the parties to agree under CPR rule 2.11 to extend time for the service of a form under rule 7.5.
Any agreed extension and any extension of that extension had to be in writing as required by rule 2.11. The written agreement of the parties did not have to be in a single document and could be constituted by an exchange of letters.
An oral agreement that was then confirmed in writing by both sides was also within the concept of a written agreement. An oral agreement between two solicitors subsequently recorded in a letter sent by one solicitor to the other, but not answered by the other, could not be said to constitute a written agreement of the parties. What was required was a document or exchange of documents intended to constitute the agreement or to confirm or record the agreement. It was not sufficient for one solicitor merely to communicate to a third party what had allegedly been agreed. Nor was it sufficient for each side to note their oral agreement, unless the notes were exchanged.
The agreed extensions in this case did not constitute written agreements within rule 2.11. Furthermore, the district judge had been entitled to resolve in favour of the Home Office the issue of whether the final extension of time orally granted had expired before the claim form had been served. Accordingly, even if it had been open to T to rely on the extensions of time, the claim form had still been served out of time.
Appeal dismissed.
Tim Grover (instructed by Paul Watson & Co) for the appellant; Ashley Serr (instructed by the Treasury Solicitor) for the respondent.
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