W.H. Newson Holding Ltd and Others IMI Plc and Another (First and Second Defendants / Part 20 Claimants) v (10) Delta Ltd (formerly Delta Plc) and Another (Part 20 Defendants)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Rose DBE |
| Judgment Date | 16 June 2015 |
| Neutral Citation | [2015] EWHC 1676 (Ch) |
| Docket Number | Case No: HC-12-B02085 |
| Date | 16 June 2015 |
| Court | Chancery Division |
[2015] EWHC 1676 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building
Fetter Lane,
London, WC2A 2LL
Mrs Justice Rose
Case No: HC-12-B02085
Consolidated with Case No HC-12-F03701
Paul Harris QC and Rob Williams (instructed by Pinsent Masons LLP) for the Part 20 Claimants
Brian Kennelly and Tom Coates (instructed by Addleshaw Goddard LLP) for the Part 20 Defendants
Hearing date: 6 May 2015
On 18 December 2014 I ordered that a preliminary issue be determined between the Part 20 Claimants ('IMI') and the 10th and 11th Part 20 Defendants ('Delta') in these proceedings. That issue was defined as:
"Whether section 1(4) of the Civil Liability (Contribution) Act 1978 precludes Delta from relying on any part of its defence to IMI's Part 20 claim, and in particular whether Delta is permitted to argue that the Claimants' claim was time barred for the reasons set out in paragraph 18 of Delta's Amended Defence dated 16 October 2014."
These proceedings concern liability for damages arising from a cartel relating to copper fittings. That cartel was the subject of a decision of the European Commission dated 20 September 2006 in Case COMP/F1/38121 — Fittings. The Commission found that a large number of manufacturers of copper fittings, including IMI and Delta, had operated a price-fixing cartel over many years in breach of Article 101 TFEU. The cartel was found by the Commission to have lasted from 31 December 1988 until 1 April 2004. On 21 May 2012 23 companies within the Travis Perkins group brought an action for damages against IMI and one other cartel participant, Legris Industries SA ('the Main Claim'). Travis Perkins is active in the building sector and had bought many copper fittings from cartel members during the operation of the cartel. Travis Perkins claimed damages under a number of heads against IMI and Legris. They alleged that the cartel members had agreed on price increases and allocated customers amongst themselves; they had agreed collusive tendering and exchanged confidential information on commercial strategies and sales volumes. It was further alleged that the effect of the cartel was, amongst other things, unlawfully to inflate prices leading to overcharges as compared with the competitive price. Travis Perkins alleged that they had suffered loss and damage as a result of the cartel and that IMI and Legris were each jointly and severally liable for the loss and damage caused. The total amount of overcharge damages claimed, with interest, was over £390 million.
IMI served a Defence on 14 February 2014 in which it denied that there was any recoverable loss suffered by the claimants. The penultimate paragraph of the Defence stated:
"37. In any event, the claim is time barred, the causes of action having accrued at the latest at the end of the pleaded Cartel Period, namely 1 April 2004"
Travis Perkins served a Reply to IMI's Defence on 12 March 2014 in which they said:
"17. Paragraph 37 is denied. IMI and the other Cartelists deliberately concealed the Cartel and the facts relating to it from (among others) the Claimants (see Recital 745 [of the Commission Decision]. The earliest date on which the Claimants could with reasonable diligence have discovered the concealment, and sufficient facts to plead a right of action, was the date on which the Summary Decision was published in the Official Journal of the European Union, namely 27 October 2007, alternatively the date of the European Commission press release announcing the Decision, namely 20 September 2006. Accordingly, pursuant to section 32 of the Limitation Act 1980, the period of limitation runs from that date and the claims were brought in time."
Section 32 of the Limitation Act 1980 provides as follows:
" 32 Postponement of limitation period in case of fraud, concealment or mistake.
(1) …. where in the case of any action for which a period of limitation is prescribed by this Act, either—
(a) the action is based upon the fraud of the defendant; or
(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
(c) …;
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.
References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent."
Section 10(1) of the Limitation Act provides that where under section 1 of the Civil Liability (Contribution) Act 1978 ('the 1978 Act'), any person becomes entitled to a right to recover a contribution in respect of any damages from another person, the action to recover the contribution by virtue of that right must be brought within two years of the date on which that right accrued. Section 10(4) provides that where a case is settled by the payment of damages, whether liability is admitted or not, the two years starts to run from the date on which the amount of damages is agreed between the Part 20 claimant and the claimant in the main action.
In July 2012 IMI brought Part 20 proceedings against 23 other cartel members who were all addressees of the Commission decision ('the Part 20 Claim'). In the Particulars of the Part 20 Claim, at paragraph 9, IMI asserted that it will deny the claims made by Travis Perkins but that to the extent that IMI may be held liable to Travis Perkins as alleged or at all on the basis of the infringement, the Part 20 Defendants were jointly and severally liable to Travis Perkins with IMI for the loss and damage caused. IMI accordingly claimed a contribution or indemnity from each of the Part 20 Defendants pursuant to section 1(1) of the 1978 Act.
Delta's Amended Defence to the Part 20 Claim was served on 5 May 2014 and amended on 16 October 2014. Delta admitted the Commission's infringement decision, though it challenged the period for which it was a party to the cartel. Delta denied that there had been any overcharge but admitted that Delta was jointly and severally liable for any damage caused by the infringement. Delta raised various defences on causation including alleging that Travis Perkins had passed on any overcharge to its own customers and had in fact made money from the cartel rather than lost money.
Delta pleaded the limitation period point at paragraph 18 of its Amended Defence which said:
"18. Further as to the first two sentences of paragraph 9, and as particularised below, it is averred that the Claimants' claim is time barred since the Claimants fail to satisfy the conditions of section 32(1)(b) of the Limitation Act 1980 as alleged, namely that prior to 12 May or 17 September 2006;
18.1 that they were unaware of, and could not with reasonable diligence have discovered, certain facts without which the cause of action against the Defendants would have been incomplete;
18.2 that such facts were being concealed from them by the Defendants; and
18.3 that any such concealment by the Defendants was deliberate.
PARTICULARS
(1) the Claimants were aware or could with reasonable diligence have become aware of the fact of price-coordination by at least Delta and IMI from 1988 for the reasons set out in the witness statement of David Pearce dated 5 September 2014.
(2) Delta did not conceal that fact from the Claimants but supplied it or permitted it to be supplied to the Claimants for the reasons set out in the witness statement of David Pearce dated 5 September 2014.
(3) The Claimants were also aware or could with reasonable diligence have become aware of the fact of price-coordination by at least IMI and/or Delta on the basis of the following publicly available information which the Claimants had or could with reasonable diligence have obtained.
[(a) – (e) particulars of Commission press releases and references to the investigation in IMI's and Delta's annual reports)]
(4) On the basis of the above, the Claimants were aware or could with reasonable diligence have become aware of the fact that such price-coordination between at least Delta and IMI had the object or effect of distorting competition, an effect on trade between Member States and could properly have pleaded damage as a result."
The Delta employee David Pearce referred to there described in his witness statement how Delta had introduced a lead-free solder ring fitting in 1988 and decided to take market share from IMI by pricing this product competitively. This destabilised the market place leading to a price war which led ultimately to the formation of the cartel. Mr Pearce described his contacts with Travis Perkins as a major customer of Delta. He recounts that after the cartel had formed, when he told Travis Perkins that Delta was about to increase its prices, he would reassure his contact at Travis Perkins that IMI would follow with a similar increase shortly after Delta 'to restore the status quo in list price differentials' between Delta and IMI. He says: 'It was crystal clear to me that wholesalers knew that Delta was coordinating its price increases with its competitors'.
In the course of the case management of these proceedings, IMI had the opportunity to amend their own defence in the main action to incorporate Delta's assertions. IMI decided not to do so.
Legris settled Travis Perkins' claim against it at an early stage and dropped out of the Main Claim at that point. Most of the Part 20 Defendants have also dropped out of the proceedings. IMI reached a settlement of the Main Claim with Travis...
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