Printing company tried to change way it imposed charges, court told

A printing company tried to change the way it imposed charges on the Thomas Crosbie newspaper group in breach of an agreement between the parties, the Commercial Court heard yesterday.

Counsel for the Thomas Crosbie Group claimed Cork printing firm Webprint Concepts Ltd only attempted to change its fee structure after it had failed to secure greater income from the publishing group.

The commercial division of the High Court is hearing the details of a dispute between the parties over the interpretation of a printing agreement made in April 2005 under which Webprint prints the group’s newspapers. The court has heard the dispute involves a sum of €43.5m over the duration of the 15-year contract.

Webprint, of Mahon Retail Park, Mahon, Cork, claims it is owed €6.1m from Thomas Crosbie Printers (TCP) under the printing agreement, while the company is also seeking aggravated damages over the alleged breach of contract.

TCP denies any such breach and has counter-claimed for specific performance of the contract, or alternatively amendment of the contract to reflect the true, original intention of the parties. TCP also claims it is owed in excess of €1m by Webprint in relation to the provision of newsprint.

Counsel for TCP, Eoin McCullough SC, said Webprint understood at all times what the agreement meant and what it was intended to mean in relation to costs.

Mr McCullough said the cost per copy was to be calculated under the agreement by dividing the minimum guaranteed sum of €6.68m, to be paid by TCP, by the original print order.

The barrister claimed the contract was operated by both parties on that basis until a dispute about the cost of printing supplements arose in 2006.

Webprint decided to radically interpret the contract and tried to charge TCP on the basis of the number of passes of the [printing] press in order to put pressure on the newspaper group to pay a separate charge for printing supplements, said Mr McCullough.

He said Webprint’s interpretation of the agreement would have significant financial consequences for the newspaper group as its annual printing costs would increase from €11.6m to €15.5m. He also pointed out that Webprint’s accounts showed it was profitable in 2007.

The court heard that the Thomas Crosbie Group had taken considerable steps to help Webprint set up in business by providing both the firm’s building and the land on which it was built, as well as advance payments of €210,000 per week for a period in 2005.

It also provided considerable operational support to Webprint.

There was also a dispute between the parties over an agreement that TCP would not have to pay for existing supplements or new supplements that would replace existing ones.

Mr McCullough said the two sides were in disagreement over what constituted such types of supplement.

He said Webprint’s managing director, Donagh O’Doherty, had a “change of mind” in 2006 and wanted to charge €8 each for blank plates, which are used for printing black and white pages when previously there had been no charge for such plates.

He claimed Mr O’Doherty also decided “suddenly and without warning” in October 2006 to charge for trimming — a service that had been provided for the previous six months free of charge.

Mr McCullough said invoices issued by Webprint to TCP until November 2006 reflected the fact that there was no charge for blank plates or the trimming of newspapers, even though the printing company would claim there were only “draft” invoices.

The court heard that trimming was part of the services contemplated by the printing agreements as the contract was clear that the only charges that could be imposed by Webprint were for cost per copy, plates and inserts.

The case before Mr Justice John MacMenamin continues today.