Re Supply of Ready Mixed Concrete (No 2)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE GLIDEWELL,LORD JUSTICE TAYLOR |
| Judgment Date | 25 June 1993 |
| Neutral Citation | [1993] EWCA Civ J0625-3 |
| Judgment citation (vLex) | [1991] EWCA Civ J0711-10 |
| Docket Number | 92/0247/B,91/0800 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 June 1993 |
In The Matter of the Restrictive Trade Practices Act 1976
and
and
[1991] EWCA Civ J0711-10
The Master of the Rolls
(Lord Donaldson)
Lord Justice Glidewell
Lord Justice Taylor
91/0800
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE RESTRICTIVE PRACTICES COURT
(MR. JUSTICE ANTHONY LINCOLN)
Royal Courts of Justice
MR. CONRAD DEHN Q.C. and MR. TIMOTHY HOWE (instructed by Messrs Gouldens) appeared for the Appellants (Smiths Concrete Limited).
MR. STEPHEN RICHARDS and MR. MATTHEW COLLINGS (instructed by the Treasury Solicitor) appeared for the Respondent (Director-General of Fair Trading).
Smiths Concrete Limited ("Smiths") appeal against an order of the Restrictive Practices Court (Lincoln J. and Professors Silberston and Stewart) on 24th September 1990 finding them in contempt of court by breaching orders of the Restrictive Practices Court dated 14th March 1978 and 29th March 1979, fining them £25,000 and ordering them to pay two-thirds of the trial costs (less £1,000) and one quarter of the pre-trial costs (less £1,000) of the Director-General of Fair Trading "The D-G") to be taxed on an indemnity basis. Section 13 of the Administration of Justice Act 1960 applies to such an appeal and the normal restrictions upon rights of appeal from the Restrictive Practices Court (see section 10 of the Restrictive Practices Court Act 1976 and R.S.C. Order 60) do not apply.
THE BACKGROUND
Smiths are in the ready mixed concrete business and were parties to certain agreements relating to its supply to which the Restrictive Trade Practices Act 1976 applied. On 14th March 1978 and 29th March 1979 the Restrictive Practices Court made orders restraining Smiths, amongst others, as being a party to agreements specified in the respective orders:-
"(a) from giving effect to or enforcing or purporting to enforce (whether by itself or by its servants or agents or otherwise) that agreement or those agreements in respect of the restrictions or information provisions accepted thereunder respectively, and
(b) from giving effect to or enforcing or purporting to enforce (whether by itself or by its servants or agents or otherwise) any other agreements in contravention of section 35(1) of the Act of 1976."
In this appeal we have been solely concerned with paragraph (b).
Hartigan Readymix Ltd. ("Hartigan"), Ready Mixed Concrete (Thames Valley) Ltd. ("RMC (Thames)"), Pioneer Concrete (UK) Ltd. ("Pioneer") with others were similarly restrained by orders made on 14th March 1978, and RMC (Thames) by a further order made on 29th March 1979 when Pioneer gave an undertaking to the like effect.
Section 35 of the 1976 Act is, so far as material, in the following terms:
"(1) If particulars of an agreement which is subject to registration under this Act are not duly furnished within the time required by section 24 above, or within such further time as the Director may, upon application made within that time, allow—
(a) the agreement is void in respect of all restrictions accepted or information provisions made thereunder; and
(b) it is unlawful for any person party to the agreement who carries on business within the United Kingdom to give effect to, or enforce or purport to enforce, the agreement in respect of any such restrictions or information provisions.
(2) No criminal proceedings lie against any person on account of a contravention of subsection (1)(b) above; but the obligation to comply with that paragraph is a duty owed to any person who may be affected by a contravention of it and any breach of that duty is actionable accordingly subject to the defences and other incidents applying to actions for breach of statutory duty.
(3) Without prejudice to any right which any person may have by virtue of subsection (2) above to bring civil proceedings in respect of an agreement affected by subsection (1)(b), the court may, upon the Director's application, make such order as appears to the court to be proper for restraining all or any of those mentioned in subsection (4) below from giving effect to, or enforcing or purporting to enforce—
(a) the agreement in respect of any restrictions or information provisions;
(b) other agreements in contravention of subsection (1) above;
and nothing in subsection (2) prevents the enforcement of any such order by appropriate proceedings.
(4) Those who may be restrained by an order of the court under subection (3) above are -
(a) any person party to the agreement who carries on business within the United Kingdom;
(b) a trade association or a services supply association of which any such person is a member; or
(c) any person acting on behalf of any such association."
"Agreement" is defined by section 43(1) as including:
"any agreement or arrangement, whether or not it is or is intended to be enforceable (apart from any provision of this Act) by legal proceedings, and references in this Act to restrictions accepted or information provisions made under an agreement shall be construed accordingly;—.
The nature of the agreements which are subject to registration under the Act is set out in sections 1(1), 6, 7, 11 and 12 of the Act, but for present purposes it suffices to say that they are restrictive of competition in one or more of various specified ways and are concluded "between two or more persons carrying on business within the United Kingdom in the production or supply of goods or in the application to goods of any process of manufacture" or, which is not this case, in the supply of certain services.
The Notices of Motion
On 15th February 1989 the D—G served notices of motion in the Restrictive Practices Court seeking sequestration orders against Smiths, Hartigan, RMC (Thames) and Pioneer. He also served notices of motion seeking committal orders against a Mr. Hayter, who was employed by Smiths, and a Mr. Hulett, who was employed by RMC (Thames). The D—G alleged that the corporate respondents to the notices were in contempt of court in that in breach of the undertaking and/or as the case might be the injunctions of March 1978 and March 1979:
"In or about March 1983 the said Companies made an agreement for the future allocation between themselves of opportunities to supply ready mixed concrete ('the Product') in the Bicester, Kidlington and Thame area of Oxfordshire in accordance with the following approximate percentages, namely: 43% to Smiths, 21% each to Pioneer and RMC (Thames) and 15% to Hartigan. (The said percentages were varied to 45% to Smiths, 15% each to Pioneer and RMC (Thames) and 25% to Hartigan in or about April 1984). The representatives of the parties involved in the making and/or implementation of the arrangement were as follows:
| RMC (Thames) | Mr. A. Hulett and Mr. A. Lewis |
| Pioneer | Mr. Stephen Gould, Mr. James Tomkies and Mr. K. Smythe |
| Hartigan | Mr. Colin Johanson |
| Smiths | Mr. Peter Hayter." |
The notice of motion then alleged, with particulars, that this agreement was implemented over the period March 1983—March 1984. In the case of the individual respondents the D—G alleged that they had aided and abetted these contempts.
The hearing before the Restrictive Practices Court
The D-G's contention was that representatives of the four companies, with Mr. Hayter representing Smiths, initially met in a public house in or about March 1983 and made the price fixing and allocation agreement referred to in the notice of motion. He conceded that the meeting together and the making of such an agreement did not of itself amount to a breach of the orders or undertaking, which for simplicity I will hereafter refer to simply, if inaccurately, as "the injunction", because that was rightly limited, in relation to new restrictive agreements, to a prohibition on giving effect to or enforcing or purporting to enforce such an agreement. However he alleged that there were further meetings in public houses during the ensuing 12 months at which the agreement was given effect to, enforced or purportedly enforced.
Pioneer, RMC (Thames) and Hartigan accepted that they had been in contempt of court and were only concerned to minimise any penalty. Mr. Hulett admitted that his actions had placed his employers RMC (Thames) in contempt but argued that he did not know that his actions were contrary to the orders of the court. The court rejected the factual basis of Mr. Hulett's argument. This did not advance the case against Smiths or Mr. Hayter because, as Mr. Conrad Dehn Q.C. appearing for Smiths rightly pointed out, Smiths and Mr. Hayter could only be found to be in contempt on evidence admissible against them. In fact there was considerable affidavit evidence and six days of oral evidence. The "whistle blower" and principal witness in support of the D-G's case was a Mr. Tomkies who, at the material time, was employed by Pioneer and responsible for that company's operations in the Bristol, Swindon, Chippenham and Oxford areas. He had attended some of the meetings in public houses during which, it was said, effect was given to the new agreement and it was enforced or purported to be enforced.
Lincoln J. said that the court accepted Mr. Tomkies as a witness of truth and on the basis of his and other evidence reached the following conclusions of fact:-
"The meetings at public houses began in March 1983 as described in Mr. Tomkies' affidavit. There were at least six of these meetings. They were attended by employees of...
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