THE  HIGH  COURT 1987 NO.2932P

DUBLIN DISTRICT MILK BOARD

v. 

GOLDEN VALE CO-OPERATIVE CREAMERIES LIMITED

TRANSCRIPT  OF  JUDGMENT

DELIVERED BY THE HONOURABLE MR JUSTICE DECLAN COSTELLO ON 3RD APRIL 1987

APPEARANCES

Mary Robinson, SC  )         For the Plaintiff
Richard Nesbitt, BL)

Brian HcCracken, SC)        For the Defendant
Dermot Gleeson, SC )
Paul Gallagher, BL )

The Plaintiffs are a statutory body established by the Minister for Agriculture under the provisions of the Milk (Regulation of Supply and Price) Act 1936.

The Defendants are a large dairy co-operative situated in County Cork supplying over 34 million gallons of milk per annum mainly in the Munster area.

The Plaintiffs' functions under the 1936 Act, as amended, relate to a district in the east of the country and defined in the Dublin District Milk Board Order 1936, as amended.  They operate a statutory regime under the 1936 Act for the production and supply of milk in the Dublin area.  The object of the regime is to provide a regular supply of milk in the Dublin area and this is achieved by a system of registered producers, wholesalers and retailers, fixed prices and approved production contracts and a legal prohibition backed by criminal sanctions against sales in the Dublin area which do not comply with the statute.

On 27th March the Defendants began selling milk to retailers in the Dublin district.  They are doing so quite clearly in contravention of the 1936 Act and the amending Acts.  They say, however, that the provisions of the 1936 Act and the amending Acts which render their activity illegal are invalid as they are in contravention of the Rome Treaty, the EEC Regulations, in particular EEC Regulation No.804 of 1968.

The main issue in this case is whether the Defendants' contention is correct and on this Motion I am not required to decide this issue. The Court's function now is to consider whether, in the exercise of its discretion, an injunction should be granted until the trial of the action, and on this Motion the first matter which is raised for consideration is whether the Plaintiffs have been able to show that a fair question has been raised on the legal issue in the case and whether or not the claim that they make in these proceedings is correct or to put it another way, to consider whether the Plaintiffs' claim that the Statute does not offend EEC law is frivolous or not.

It is true that the EEC Commission has given a direction under Article 169 of the Treaty indicating the view that the 1936 Act contravenes community law but this does not determine the matter.

It seems to me relevant to bear in mind that the 1936 Act has been in
operation without challenge since Ireland's accession to the Community in 1973 and that even though Regulation No.804 of 1968 was in force at the date of accession, no requirement to amend the 1936 Act so as to conform with community law was imposed at the time of accession.

I am satisfied, therefore, that the Plaintiffs' assertion that the 1936 Act is presently in force and that it is not invalidated by EEC law is not a frivolous one and that the Plaintiffs have raised a fair question to be tried on this issue at the trial of the action.
The next matter which I must consider in exercising my discretion on this Motion is whether, if the Plaintiffs succeed at the trial, damages would be an adequate remedy.  Quite clearly they would not and the Defendants have not argued that they would be on this Motion.

If the statute is valid it is obvious that damages would not be the appropriate remedy because only an injunction would enable the Plaintiffs to carry out their statutory function and maintain the statutory regime.

That brings me to the third matter which I must consider on this Motion, namely, the balance of convenience.  Firstly, I must consider what damages the Defendants will suffer if I grant an injunction today and if at the trial after, in all probability, a reference on the Community law issue to the European Court of Justice has taken place it should transpire that the 1936 Act was invalid and that the injunction should not have been granted.

The Defendants loss, in my view, is largely quantifiable because the damage which they allege to their goodwill would be very slight, and the quantifiable damage which the Defendants would have suffered are the profits they would have earned between now and the hearing of the action had the injunction not been granted.  These profits should not
be based upon a loss of £800 per day because on the evidence before me this figure is not a net figure of the Defendants' daily profit. Furthermore, the evidence at present indicates that the Defendants would not be able to supply the Dublin area during the winter months.

The Plaintiffs have assets worth approximately £2M and an annual income of £3H, and on the evidence before me at the present time I think they would be in a position to pay any loss which the Defendants could establish they would suffer between now and the trial should it subsequently transpire that the injunction had been wrongly granted.

I must now turn to consider the case from the other point of view.  I must now consider the consequences for the Plaintiffs should I refuse to grant an injunction and should it transpire at the trial that the 1936 Act was valid and that for a period between now and the trial the Defendants have sold milk illegally in the Dublin area.

If an injunction is refused today the Plaintiffs anticipate that other wholesalers outside the Dublin area will commence to sell in the Dublin market; that seasonably cheap milk available in the Spring and Summer months will affect Dublin producers whose costs are increased by reason of their production contracts which require them to reduce the differential between the quantity output in the high production months and the quantity output during the low production months; that the production ratio of 2:1 will be upset and that the regular supply of milk in the Winter in the Dublin area may be put in jeopardy.

I do not think these apprehensions are fanciful.  I consider that the Plaintiffs have shown that on the balance of probabilities there is considerable risk that the statutory regime which is in operation under the 1936 Act would be undermined if an injunction is not granted.

I am entitled to assume that the Oireachtas considers that the maintenance of the present statutory regime is in the public interest as it has not repealed the 1936 Act.  When the Plaintiffs are carrying out a statutory function in the public interest I am entitled on a motion of this sort to consider the public interest when weighing up the balance of convenience in the case.
 
I conclude that, weighing the possible danger to the public interest against the compensatable damages which the Defendants may suffer if it is subsequently found that the Act is invalid, I should grant an injunction until the trial of the action.

The evidence of Mr Twomey indicated that as a result of recent discussions between the Government and the EEC Commission, the 1936 Act may be repealed in the near future.  Accordingly, I will give liberty to both parties to re-enter the motion should there be a change of circumstances which would justify the Court in raising the injunction which I propose granting today.

I certify the foregoing to be a true and accurate transcript of the shorthand note taken by me.

Official Stenographer