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1. The first Plaintiff ("Eurostock") is a company incorporated in Northern Ireland and carries on the business of processing and packaging meat products. The relevant products for the purpose of these proceedings are all material fit for human consumption from ox heads, including cheek material, ox livers, kidneys and tongues. Eurostock also processes other materials and carries out some deboning, but these activities are not relevant to these proceedings. The second Plaintiff is not pursuing its cliam and took no part in the plenary hearing.

2. At the relevant time a ban had been imposed by the United Kingdom Government on the processing of ox heads which originated from animals slaughtered within the United Kingdom by reason of the prevalence of bovine spongiform encephalopathy ("BSE"). As a result, Eurostock had to source all its requirements of ox heads from the Republic of Ireland.

3. As from 23rd June, 1997 the first Defendant imposed an immediate ban on the export of ox heads from the State to Northern Ireland thus preventing Eurostock from obtaining its supplies from the State, and I am satisfied that it was not economically possible for Eurostock to obtain whole ox heads from any other source, such as a continental country. It should be said that the ban did not restrict the export of cheek meat after it had been removed from the ox heads.

4. As a result of this ban, these proceedings were issued on 27th June, 1997 and initially came on for hearing before me on 22nd October, 1997. On 24th October, 1997, after two days hearing, I was informed that the issue of liability had been settled on certain agreed terms, including a provision that the ban on export of ox heads from the State to Northern Ireland would be removed as of 28th October, 1997, and that the Defendants would pay damages to Eurostock. The issue of damages was heard by me on 18th February, 1998 and the succeeding two days, and this Judgment is only concerned with that issue.

5. It should also be said, as it affects the issue of damages, that the Northern Ireland authorities introduced measures prohibiting imports from the State from

6. I have been greatly assisted by the clear and helpful evidence given by the accountants on behalf of both parties, and I am glad to say that the differences between the parties narrowed considerably in the course of the hearing.

7. Eurostock seeks damages under six headings which are as follows:-

8. Before considering these headings individually, however, there is a matter of principle to be determined which affects several of these headings. As it is impossible to know exactly what Eurostock's sales would have been were it not for the ban, it is necessary to use comparative figures, and draw inferences from them as to the probable losses of Eurostock. There is a dispute in principle between the accountants as to the proper comparisons to use. Eurostock's accountants have calculated figures based on the trade in the twenty weeks immediately prior to the imposition of the ban, that is from the beginning of February 1997, which was the beginning of a financial year for Eurostock. The Defendants' accountant, on the other hand, maintains that the correct comparisons are the figures for the equivalent weeks in the previous year, that is in 1996. There is no doubt that in most claims for loss of profits the usual procedure is to look at the comparative figures for the same period of the previous year, or indeed of the previous three or four years. Eurostock's argument in the present case is that those figures are not suitable because the period concerned is too close to the initial BSE scare which distorted the market for most of 1996, and the market was only getting back on its feet at the beginning of 1997. On the other hand, the Defendants' contention is that the market was in fact distorted in the first half of 1997 for a totally different reason, and that this gave rise to abnormal profits during that period.

9. The basis for the Defendants' contention is that ox skulls were considered to be specified risk material because of the BSE problems, and as from 21st February, 1997 all ox skulls in the State were required to be destroyed by being rendered at a plant situated at Monaray. This involved considerable expense to the beef processors in the State, which considerably outweighed any profit to be made from the meat on the ox head. As a result, beef processors in the State were actually prepared to pay Eurostock to take their ox heads, as they in effect had a negative value. The ox skulls did have to be rendered in Northern Ireland after they had been processed by Eurostock, but the cost in Northern Ireland was very considerably less than the cost in the State. There is no doubt that this did distort the market as compared with the second half of 1996, and equally I think there is no doubt that the 1996 market was distorted by reason of the BSE crisis. The question is what was more likely to be the position during the relevant period in 1997 in respect of which damages are sought for loss of profits.

10. The effect of the 1997 distortion was to increase the gross profit margin for Eurostock during this twenty week period, and also to increase the availability of ox heads on the market. It is quite clear that the number of ox heads purchased per week during the twenty weeks was considerably greater than the number purchased per week in the second half of 1986. On the evidence I have heard, I am of the view that probability is that this distortion would have continued until the end of 1997, and therefore that the profits made in the second half of 1997 would have been more comparable to those made in the immediately prior period than to those made twelve months earlier. Therefore, I think this is one of those unusual cases in which a more accurate view of loss of profits can be obtained from looking at the period immediately before the loss rather than looking at comparable periods in previous years. I should say, however, and this is acknowledged by Eurostock, that the trade is somewhat seasonal, and Eurostock in its calculations has allowed a reduction of 11.5% in its calculation of profits for this reason. Accordingly, I prefer the method used by Eurostock's accountants on this issue.

11. I now propose to consider the headings under which the claim is put forward individually. A huge volume of documentation was put before me, but I do not think it is necessary for me to refer to individual back up documents in this Judgment.

12. As I have said, I consider that Eurostock's method of calculation under this heading is correct, and, subject to one matter, I accept Eurostock's figures. There has, however, been no allowance made for any saving in general overheads by reason of the fact that heads were not being processed during this period. I think there ought to be some deduction, and in the absence of specific evidence, I can only estimate a figure. I think there should be a reduction of £1,500 per week, making a total reduction of £30,000 for the twenty weeks. Accordingly, I would award £216,371 damages under this heading.

13. Again, I accept Eurostock's calculations, but from the figure claimed there must be deducted two days profits to take in Christmas day and St. Stephen's day, which would amount to £7,010, and there is also an error in the calculations of Eurostock in relation to actual sales during this period, in that actual haulage costs seem to have been deducted from the gross profit when it ought not to have been. This would reduce the figure by £12,568. Accordingly, under this heading I would award £46,002.

14. All Eurostock's products which were exported to France were sold to a company called Centregel. The normal pattern of trade was that orders would be given by Centregel over the telephone as and when they were required. However, it so happened that in May 1997 Centregel had a customer who wished to have a guaranteed supply of certain products packed in a certain way over periods from 1st May, 1997 in four cases and 1st July, 1997 in a fifth case up to the period ending 30th April, 1998. Centregel entered into similar contracts with Eurostock. I should say that there was some debate during the hearing as to whether these were strictly speaking contracts. Although they were vague as to certain particulars, each of them started with the sentence:-

15. In my view these were clearly contracts for the sale of goods and imposed a binding obligation on both parties.

16. Some evidence was given by Eurostock that, had there been no ban, all the goods under each of these contracts would have been delivered by

17. I should say that in calculating these figures I may have been a little simplistic, but I think the figures are probably as accurate as I can get based on the principles I have set out above. What I have done is to take Eurostock's own figures in respect of each contract for the total loss claimed, reduce it to a figure per ton, and multiply that by the number of tons lost. The only exception to this is in the case of the veal kidney where more than 50% was actually delivered, and accordingly I have used the actual figure for loss claimed by Eurostock.

18. The losses claimed under this heading are not in relation to cheek meat, but are in relation to other products. While I accept that the contracts with Centregel were closely interconnected, and the ultimate purchaser required both cheek meat and other products, there is no real evidence that this would have been the case with other purchasers. Eurostock is, of course, already being compensated for any loss in relation to cheek meat. I am not satisfied that there is sufficient evidence to show as a matter of probability that there would have been the claimed increases in sales to France, and I do not propose to allow anything under this heading.

19. I find Eurostock's evidence in relation to this part of the claim rather unconvincing. It is quite clear from a number of documents that Eurostock did not pay for much of the work being done until long after the ban was imposed, and there is no real evidence as to why, if the new part of the factory was ready at the time of the ban, at least some production did not take place. Accordingly, I cannot accept the method of calculation used by Eurostock in its claim. However, I do accept that there probably was some loss under this heading and I would allow a figure of £10,000 in relation to this claim.

20. Accordingly there will be a decree for £372,542 Sterling together with interest calculated in accordance with the Courts Act, 1981. The interest is to be calculated from