Devenish Nutrition Ltd v Sanofi-Aventis SA (France) & others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lord Justice Longmore,Lord Justice Tuckey |
| Judgment Date | 14 October 2008 |
| Neutral Citation | [2008] EWCA Civ 1086 |
| Docket Number | Case No: A3/2008/0080 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 October 2008 |
Lord Justice Tuckey Lady Justice Arden
and
Lord Justice Longmore
Case No: A3/2008/0080
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)
LEWISON J
Royal Courts of Justice
Strand,
London, WC2A 2LL
Mr Christopher Vajda QC & Mr Andrew Burrows QC (instructed by Messrs Irwin Mitchell) for the Appellant;Mr Tom de la Mare & Mr Brian Kennelly (instructed by Messrs Ashurst) for the 1st, 2nd & 3rd Respondents;Mr Mark Hoskins (instructed by Messrs Freshfield Bruckhaus Deringer) for the 4 th & 5 th Respondents;Mr Mark Brealey QC & Mr Stephen Brown (instructed by Messrs Mayer Brown International LLP) for the 6 th, 7 th & 8 th Respondents.
Hearing dates : 17–18 June 2008
Lady Justice Arden :
Introduction
On this appeal, Devenish Nutrition Ltd (“Devenish”) seeks to set aside the decision of Lewison J ( [2008] 2 WLR 637) on a preliminary point of law and to establish the principle that in an action for breach of statutory duty the court can in appropriate circumstances make a restitutionary award, that is, a sum of money assessed by reference to the gain which the wrongdoer has made as a result of the wrong, in place of compensatory damages, that is, damages which compensate the claimant for loss suffered as a result of the wrongdoing.
This appeal involves a fundamental issue for the purposes of the law of tort, which may be summarised as follows. The aim of the law of tort is to compensate for loss suffered. The courts have exceptionally also awarded damages (commonly called “user damages”) by reference to the fair value of a right of which the defendant has wrongly deprived the claimant, and these awards have been made even if the claimant would not himself have sought to use that right and so incurred no loss. However, there is no question in this case of Devenish having been deprived of a proprietary right, that is, a right arising from property, to which such awards were formerly confined. Devenish relies on the recent case of Attorney General v Blake [2001] AC 268, in which a remedy of the type that it seeks in this case was awarded for a breach of contract not involving the deprivation of any property. It contends that compensatory damages will not be an adequate remedy. The respondents contend that this court cannot apply the principle established in Blake to a purely personal tortious claim, and in particular that this court is precluded by precedent, namely the decisions of this court in Stoke-on-Trent City Council v W & J Wass Ltd and Halifax Building Society v Thomas, from holding otherwise. The respondents accept that a restitutionary award could be made for a proprietary tort. (By a “proprietary” tort I mean a tort for which a claimant entitled to property or a property right is entitled to sue for interference on the basis discussed by Lord Nicholls in Blake. Thus the expression includes trespass to land or wrongful interference with goods. It is not necessary to be more precise than this. The only further point to be noted is that Devenish's claim is not on any basis a proprietary claim.) The respondents also contend that compensatory damages will be an adequate remedy.
I will call the issue, summarised above, “the Blake issue”. I will refer below to a restitutionary award, compensatory damages and user damages in the sense already given, which is based on the meanings used by the judge ([14]). These meanings are not to be treated like statutory definitions. They are not terms of art. They are more like labels for concepts, which I will have to explain in more detail below. These meanings are not therefore comprehensive, and it will be seen that the various types of damages identified by these meanings are in certain respects overlapping. Moreover, the concepts which they reflect are in some respects fluid. Additionally, the term “restitutionary award” covers the case where the purpose of the award of damages is to strip the defendant of his profit and the case where its purpose is simply to cause the reversal of a benefit conferred by the claimant. In some cases, such as breach of confidence (an example of the former) or trespass (an example of the latter), this distinction is clear. In this case, although the point has not been fully argued, the purpose of the award sought is largely the former purpose as opposed to the latter. Different considerations may apply where the purpose of the order is one, rather than the other, purpose.
My essential conclusion on the Blake issue is this. The overall holding in Blake is that the law on remedies for interference with property, damages in lieu of an injunction, damages for breach of fiduciary duty and breach of contract should be coherent and that the same remedies should be available in the same circumstances, even if the cause of action is different. On that basis, a restitutionary award is available in tort unless it is precluded by Wass or Halifax. In my judgment, it is precluded by Wass. However, if I am wrong in that conclusion, it is a condition of a restitutionary award that exceptional circumstances of the kind described in Blake should be shown. That condition is not satisfied in this case, principally because on the assumed facts damages would be an adequate remedy.
Devenish also has alternative arguments based on Community law, which I will call the Community law issues. The respondents contend that Community law does not require a claim for a restitutionary award to be recognised. For the reasons given below, I consider that Community law neither prevents nor requires the recognition in domestic law of a restitutionary award as a remedy for breach of statutory duty for a breach of competition law.
Accordingly, for the detailed reasons given below, I would dismiss this appeal.
Background to the present case
The issue of principle identified above arises in the context of competition law, in which domestic law and Community law are interwoven. Art 81 of the EC Treaty prohibits cartels and other agreements or concerted practices that restrict competition. The European Commission has power to impose substantial fines on cartelists for breaches of art 81. In addition, victims of the cartel have a right to damages for breaches of art 81 (see C-453/99 Courage Ltd v Crehan [2002] QB 507). Under s 47A of the Competition Act 1998 as amended by the Enterprise Act 2002, a victim of a cartel may bring a follow-on action to claim personal relief. He may do so by relying on the findings of the Commission.
As to the facts, in 2001, the Commission found that certain vitamin manufacturers, including some of the respondents, had participated in eight cartels relating to the supply of various vitamin products, and imposed fines totalling €855.22 million (though the fines imposed on one cartelist, BASF AG, the sixth respondent, were subsequently reduced on appeal to the Court of First Instance). The decision of the Commission was published in 2003 OJ L 6/1 dated 10 January 2003 (“the 2001 decision”). The size of these fines is an indication of the seriousness of the cartels in this case.
During the cartels' existence, Devenish purchased vitamins, or products containing vitamins, from the respondents. In general it mixed these vitamins with other ingredients to make animal feedstuffs which it then sold on to customers. In these follow-on proceedings, Devenish seeks damages or a restitutionary award. Devenish's case is that the restitutionary award should be in a sum equal to the “overcharge” or amount of the respondents' wrongful net profit. (Thus, Devenish claims the amount by which the prices it was charged for vitamins exceeded the price that would lawfully have been charged if there had been no cartels.) There is no issue about the availability (subject to proof of loss at trial) of a claim for damages. Moreover, notwithstanding the form of its pleading Devenish does not rely on any claim for restitution otherwise than arising out of the respondents' wrongful conduct.
The following preliminary issue was ordered by Master Moncaster on 2 October 2006:
'on the facts as pleaded in the Particulars of Claim and as found in the Commission Decision of 21st November 2001 (OJ 2003 L6, p.1) … whether the Claimants would be entitled to all or any of the following heads of relief as pleaded in the Particulars of Claim (including any subsequent amendments thereto):
a) an account of profits
b) restitution of unjust enrichment
c) exemplary damages.'
This was the preliminary issue heard by the judge. The facts assumed for the purposes of the trial of this issue are those pleaded in the particulars of claim and are found in the 2001 decision. The parties also made reference to further information supplied pursuant to part 18 of the CPR and to the expert economist's reports of Dr Cento Veljanovski. We are not, of course, concerned with whether the facts were proved. Devenish contends that a restitutionary award is available in law on the assumed facts and that it should be left open to the trial judge to decide whether a restitutionary award is in fact available in the light of matters that emerge in the course of the trial.
The judgment of the judge
The judge gave a lengthy and lucid judgment. The points on which this judgment will need to focus are as follows.
With respect to Devenish's claim for damages, the judge cited the dictum of Lord Shaw in Watson Laidlaw & Co Ltd v Pott, Cassells and Williamson (1914) 31 RPC 104...
To continue reading
Request your trial
-
Asda Stores Ltd CL-2012000299 and Others v MasterCard Incorporated and Others
...J at paragraphs 27–29 (cited with approval in Morris-Garner v One Step (Support) Ltd [2016] EWCA Civ 180); and Devenish on appeal [2008] EWCA Civ 1086, per Arden LJ at paragraph 110 and Tuckey LJ at paragraph 159. The "broad axe" metaphor appears to originate in Scotland in the 19 th centur......
-
Pell Frischmann Engineering Ltd v Bow Valley Iran Ltd, Bow Valley Energy Ltd, P.T. Bakrie Interinvestindo and Bow Valley International (Jersey) Ltd
... ... 1997) with some input of expertise from BVE and others; PFE entered into a conditional contract with NIOC, but ... 2079 (Ch); and Arden LJ in Devenish Nutrition v Sanofi-Aventis [2009] 3 All ER 27 ... 48 ... ...
-
The ECU Group Plc v HSBC Bank Plc
...an historic example, Siddell v Vickers, and also Blake at 278D–280F and Devenish Nutrition Ltd v Sanofi-Aventis SA [2008] EWCA Civ 1086; [2009] Ch 390, at [75] and [155], cf [144]). This may reflect the particular importance usually attached to property rights and the extent of protection ......
-
Marathon Asset Management LLP and Another v James Seddon and Others
...defendant's conduct. 180 This distinction also explains the decision of the Court of Appeal in Devenish Nutrition Ltd v Sanofi-Aventis SA [2009] Ch 390. The claimants in that case had purchased vitamins from one or more of the defendants, who were found to have participated in cartels relat......
-
Have The "Litigation Leviathans" Been Tamed Or Unleashed? The Court Of Appeal's Judgments In Trucks And Forex
...This obiter statement appears to be inconsistent with Court of Appeal authority on this issue, most notably Devenish v Sanofi-Aventis [2008] EWCA Civ 1086 which holds that an account of profits is not available for any non-proprietary tort (including in competition law Constitution of the T......
-
Damages In Private Cartel Actions: The Position In England
...Limited & Others -v- Sanofi-Aventis SA (France) [2007] EWHC 2394 (Ch). Devenish Nutrition Limited -v- Sanofi-Aventis & Others [2008] EWCA Civ 1086. Stoke on Trent City Council -v- W J Wass Ltd [1988] 1 WLR 1406. Rookes -v- Barnard [1964] 1 AC 1129 Literally, in Latin, "not twice for......
-
Let's Talk About Consumers: Competition Law Compensation for Indirect Purchasers' Losses-A United Kingdom Perspective
...Livingstone v. Rawyards Coal Co. [1879–80] L.R. 5 App. Cas. 25, 39 (Lord Blackburn). 87 Devenish Nutrition Ltd. v. Sanofi-Aventis SA [2008] EWCA (Civ) 1086 (Eng.); see Arundel MacDougall & Alexandra Verzariu, Vitamins Litigation: Unavailability of Exemplary Damages, Restitutionary Damages a......
-
Time is Money-But How Much Money Is Time? Interest and Inflation in Competition Law Actions for Damages
...Nutrition Ltd. v. Sanofi-Aventis SA [2007] EWHC 2394 (Ch), ¶¶ 54–55; upheld by Devenish Nutrition Ltd. v. Sanofi-Aventis SA (France) [2008] EWCA Civ. 1086; on this case, also see BREALEY & GREEN, supra note 15, ¶¶ 16.58–16.64; Farrell et al., supra note 210, at 237; Simon Holmes et al., Uni......
-
United Kingdom
...19, 5 July 2012. 1171. Section 47C(1) CA. 1172. Section 36 of the 2017 Regulations. 1173. Devenish Nutrition Ltd. v. Sanofi-Aventis SA [2008] EWCA Civ 1086 ¶¶ 27-29. United Kingdom-210 be awarded to BritNed by 10 percent because of a cap on its earnings imposed by regulators. 1174 The Court......
-
Proving Antitrust Damages in Jurisdictions Outside the United States
...for, for instance in GWB , supra note 12 at § 33(3), sentence 3. 48. Devenish Nutrition Ltd v. Sanofi-Aventis SA (France) & Ors, [2008] EWCA (Civ) 1086, [2009] Ch 390 (Eng. and Wales). 338 Proving Antitrust Damages prove not only that it has suffered loss as a result of the antitrust infrin......