England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Royal Courts of Justice Strand London, WC2 Claimant Defendants
		9 October 2015

Andrew Hochhauser QC:

Introduction

1. On 7 May 2015, I made an order in this action ('the May Order'). Paragraph 7 of the May Order provided:

"The First Defendant shall, within 48 hours of the Claimant satisfying the undertaking in (a) above, instruct Danisco USA Inc to supply to one of the Claimant's two packing agents (being either S.I.I.T S.r.L or Sanico N.V) sufficient bulk VSL#3 to enable the Claimant to fulfil the order placed by Ferring UK on the 13 April 2015 for supplies of Product totalling €1,634,857.70."

2. The reference to 'the undertaking in (a) above' was to a requirement I imposed on the Claimant ('Actial') to fortify its cross-undertaking in damages by increasing it to a total of €500,000. That was done at 12.30pm on Thursday 14 May 2015 and solicitors for the First Defendant ('the Professor') were duly notified of that by a letter sent by email the same day. As a result the Order fell to be complied with by midday on 16 May 2015.
3. Despite the fulfilment of that undertaking, at the date of the hearing before me, 5 October 2015, the Professor had failed to comply with paragraph 7 of the May Order.

The applications before the Court

4. There are two applications before the Court:

(1) Actial's application by notice dated 11 September 2015 for a declaration that the Professor is in contempt of Court for failing to comply with paragraph 7 of the May Order and seeking his committal to prison for such contempt, alternatively that the Court imposes such other penalty as it deems appropriate ('the Committal Application'). It is supported by the first Affidavit of Caroline Louise Mattin sworn on 11 September 2015, and in relation to service, the eleventh witness statement of Ms Mattin dated 18 September 2015. The terms of the application notice are very similar to Actial's earlier committal application dated 20 May 2015, in respect of which an Order for substituted service was made on 8 June 2015, save that it contains an update in the last sentence of paragraph 3, entitled "What order are you asking the court to make and why?" as follows: "The Professor appealed the May Order, which was dismissed on 6 August 2015 with costs. The Professor has not complied with the May Order and he remains in contempt."; and

(2) the Professor's application by notice dated 25 September 2015 to vary the May Order in the terms sought in the draft order attached to his application notice ('the Variation Application'). In essence, it sought to modify paragraph 7 of the May Order, by imposing five preconditions contained in a Schedule to a draft Order, which I shall append to this judgment, with which Actial were obliged to give written confirmation of compliance, before the Professor was obliged, within 48 hours of receipt, to give the instruction to Danisco USA Inc. That application is supported by the fifth witness statement of the Professor dated 25 September 2015. He further relied upon some additional evidence which was placed before the Court of Appeal at a hearing in August 2015, to which I will later refer. Further evidence was produced before me on behalf of Actial, namely the second witness statement of Andrew John Ford, one of its solicitors, which challenged certain aspects of the Professor's account of the hearing. In addition on the morning of this hearing, a further witness statement dated 4 October 2015 was produced by the Professor's solicitor, Mr Primal Laxman. Although, it had been served on Actial at about 6pm on Sunday 4 October, Mr Wardell QC, leading Counsel for Actial, was content for me to read it de bene esse.

The procedural background leading to the May Order

5. I have set out the factual background to the action and the initial application to this Court in my two earlier judgments in this action, handed down on 31 March 2015 and 7 May 2015. I do not propose to repeat that background here. I briefly summarise the relevant procedural history as follows, employing the same abbreviations used in those earlier judgments.
6. An application by Actial for interim injunctive relief came before me on 13, 14 and 16 January 2015. At that time there was a jurisdictional challenge made by the Defendants.
7. The matter had previously been before Norris J on 18 December 2014. He made an order ('the Norris J Order') which was designed to hold the ring until the matter could return to Court to be fully argued. In broad terms, and upon Actial giving an undertaking to provide security in the sum of €400,000 and not to attempt to clone, reproduce, reverse engineer or otherwise modify the finished Product supplied pursuant to Ferring UK's orders, the Norris J Order required the Professor to instruct Danisco to supply to the Netherlands and Italian packaging agents, SIIT and Sanico, sufficient Product to enable Actial to fulfil orders placed by Ferring UK which were consistent with its past pattern of trading, including any reasonable growth in such trading. The Professor duly instructed Danisco in those terms and on 8 January 2015 Ferring UK placed an order with Actial for stock worth in excess of 640,000 Euros. This was satisfied by deliveries made in late March 2015.
8. I handed down a reserved judgment on 31 March 2015. I held that the Court had no jurisdiction to hear the claims as presently formulated. I explained, however, that if I had found that the Court did have jurisdiction, I would have been willing to grant interim relief in similar terms to that granted by Norris J until trial or further order, subject to putting in place a mechanism to ensure that it would have worked more smoothly and consideration being given to whether to require further fortification of Actial's cross undertaking in damages.
9. Unfortunately, due to the ill health of one of the Counsel in the case, it was not possible for applications relating to the costs and other consequential matters to be heard at that time. The matter was stood over until 20 April 2015. At that hearing, I granted Actial permission to appeal against my ruling on jurisdiction and I also gave directions in relation to a late application by Actial for further interim relief pending that appeal. This further application came on for hearing on 7 May 2015. Thus the parties had well over two weeks to prepare for the adjourned hearing. At its conclusion I gave judgment and made the May Order, paragraph 7 of which is now under consideration.

Events after the May Order

10. Shortly afterwards, the Professor applied in writing to me for permission to appeal and for a stay of paragraph 7 of the May Order.

I refused both applications in a ruling handed down on 14 May 2015.

11. I invited the parties to submit a draft minute of Order, which they did. It contained the following four undertakings on the part of Actial in the following terms:

"AND UPON the Claimant by its leading Counsel undertaking that :

(a) It will by 4pm on 14 May 2015 increase the amount of the security for €400,000 to a net sum of €500,000 after making the interim costs payment referred to in paragraph 5 below;

(b) It will not (by itself, its servants or agents or otherwise howsoever) intercept or take samples of the bulk VSL#3 which is to be delivered by Danisco to its packing agents pursuant to this Order;

(c) It will not (by itself, its servants or agents or otherwise howsoever) attempt to clone, reproduce, reverse engineer or otherwise modify the finished VSL#3 product supplied pursuant to Ferring UK's order referred to in paragraph 7 below ('the Product');

(d) It will instruct the relevant packaging agent to deliver the Product directly to Ferring UK."

12. At the hearing on 7 May 2015, the stance of the Professor was that no interim relief should be granted, but if it were, it should be subject to an increase in the sum fortifying the cross-undertaking in damages to €1m. In the event, I was prepared only to increase it to €500,000 for the reasons given at paragraph 52 of my judgment delivered on that day. He also submitted that, given the size of the Ferring UK order, there should be a staged delivery. At paragraph 55 of my judgment, I acceded to that submission, but in the event that was not pursued. The undertakings referred to at (b) and (d) above were suggested by Mr Sutcliffe after I had delivered my judgment and were thereafter embodied in the May Order. I emphasise that at no time did Mr Sutcliffe QC, leading Counsel for the Professor, submit that there should be compliance with any of the five conditions contained in the Schedule to the Variation Application. He informed me in the course of oral submissions that at that time he had no instructions to do so. As I have earlier stated, the matter was adjourned on 20 April 2015, to enable the Professor properly to consider Actial's application for interim relief pending appeal and the supporting evidence, to give instructions to his legal advisers and to file further evidence. I set a timetable for the service of any further evidence, so that neither side would be taken by surprise. In paragraph 18 of my judgment of 7 May 2015, I recorded the further evidence I received at the date of the adjourned hearing. It included three further witness statements from the Defendants. Insofar as it is suggested (and it was not altogether clear to me that Mr Sutcliffe QC was so suggesting), I do not accept that the Professor or his legal advisers were in any way disadvantaged at the restored hearing on 7 May 2015. It was open to him, as an alternative to his opposition to any interim relief being granted, to submit that, were I minded to grant further interim relief pending appeal, it should be subject to the conditions now relied upon in the Schedule to the Variation Application notice made over four months later. He did not.
13. As stated in paragraph 2 above, on 14 May at 12.30pm, Actial increased the security held by its solicitors to €500,000, in satisfaction of the undertaking recorded in the May Order.
14. Instead of complying with paragraph 7 of the May Order, on 15 May 2015 the Professor issued an application to the Court of Appeal for permission to appeal and a stay pending the determination of that permission.
15. On 19 May 2015, Actial's solicitors received a letter of the same date from the Professor's solicitors confirming that they had spoken to the Professor who was "fully aware of what he has been ordered to do pursuant to the 7 May 2015 Order. It is the Professor's position however that he awaits a determination from the Court of Appeal on his applications for a stay and permission to appeal"
16. On the same day, the Professor was served with a copy of the May Order endorsed with a penal notice by a process server in the United States.
17. On 20 May 2015 Actial then issued a committal application against the Professor for failure to comply with the May Order. On 21 May 2015 Actial issued a further application for an order for substituted service, deeming earlier service of the committal application on the Professor's solicitors by email and courier as good service on the Professor, relying on CPR 6.15(2). These applications came on for hearing before Asplin J on Monday 8 June 2015. She made an order for substituted service ('the June Order') pursuant to the power contained in CPR 81.10(5), the alternative methods being those earlier steps relied upon by Actial. She did so on the basis that exceptional circumstances had been show. As Kitchen LJ stated at paragraph 36 of his judgment granting permission to appeal [2015] EWCA Civ 783:

"She had in mind, particularly, the delay of two months whilst service was effected under the Hague Convention, which would, she thought, seriously undermine the deputy judge's order if not render it worthless. Second, the Professor was throughout fully aware of the committal application. Third, the Professor had made it clear he did not intend to comply with the order and had made no effort to expedite the application to this court for permission to appeal despite the refusal by the deputy judge either to grant permission or to grant a stay. Fourth, there was no suggestion that the order sought would be in any way contrary to the law of Switzerland. Looked at in the round, Actial's business was being seriously threatened and the order would be rendered all but useless if Actial was required to serve the application under the Hague Convention."

18. Because of lack of time, Asplin J adjourned the committal hearing until Friday that week. She refused permission to appeal. In the interim, the Professor made an urgent application to the Court of Appeal. On 11 June 2015 Ryder LJ ordered that the committal application should be adjourned pending determination of the Professor's applications for permission to appeal (both the May Order and the June Order) and a stay meantime.
19. Those applications were granted at an inter partes hearing by Kitchin LJ on 1 July 2015. At that hearing, the Professor further sought permission to introduce the first witness statement of Florence Pryen, the third defendant dated 23 June 2015, the eighth witness statement of Mr Primal Laxman, the Professor's solicitor, dated 24 June 2015, and his own third witness statement dated 30 June 2015. In further evidence the Professor accused Actial of having breached the undertakings it had given to Norris J at the return date on 18 December 2014, of having misled the Court when obtaining the May Order and addressed what the Professor saw as a real risk of cloning. At that hearing, Actial sought and obtained permission to rely upon the ninth witness statement of Ms Caroline Mattin dated 29 June 2015.
20. The appeals were heard on 6 August 2015 by Jackson, Kitchin and Ryder LJJ. Mr Sutcliffe appeared for the Professor, and Ms Clare Stanley QC appeared for Actial. Both appeals were unanimously dismissed with costs the next morning. A transcript of the hearing and the judgment is currently awaited, but in advance of this hearing, I requested that the parties agreed a note of the judgment, which I received early in the morning of 5 October 2015, together with an agreed note of the hearing itself. Mr Sutcliffe told me that he had not agreed these notes himself, but this was an exercise carried out by his instructing solicitor, and therefore he personally could not vouch for their accuracy.
21. Whilst it is regrettable that a proper transcript is not available, I proceed on the basis that this agreed note reflects the gist of the judgment of Kitchin LJ, who delivered the only reasoned judgment, with which the rest of the Court agreed.
22. I would refer to the following findings in that judgment:

(1) On a perusal of the new evidence, Kitchin LJ found the Court could not be satisfied that Actial had breached its undertaking;

(2) Having given the matter his anxious consideration, Kitchin LJ was not convinced that Actial had misled the Court;

(3) He found that I did not give insufficient weight to the risk of cloning or the alleged damage to the Professor's reputation;

(4) He held that I applied the correct test when considering the application for interim relief and did not fall into error when applying the relevant principles and determining which course led to the least risk of injustice;

(5) In relation to the June Order, Kitchin LJ found that Asplin J was entitled to conclude that unless she granted the June Order, the May Order would be seriously undermined and rendered ineffective. He did not accept that the Professor was unable to defend himself. The fact that the Professor was obviously aware of the application was plainly a matter for the Judge to take into account.

23. Significantly in my view, at that hearing, Mr Sutcliffe did not invite the Court of Appeal, were it minded to continue the May Order, in the light of the new evidence, to vary it by attaching the five conditions he now seeks to have imposed. When I asked him why he did not, he stated that he had no instructions to do so, and his position was simply to apply to set aside the May and June Orders. At the end of the hearing, he felt he had won the appeals, and no question of the conditions was raised. He further relied on an exchange in the note of the hearing as follows:

"Mr Sutcliffe: The reason the open offer was never accepted was because Actial wanted access to the bulk.

Kitchin LJ: Well, if that is the only issue between you I'm sure that Actial will be prepared to give an undertaking right now that would allow these concerns to be addressed?

[Looks in the direction of Ms Stanley] Ms Stanley rises to address the court and nods, then interrupted by Mr Sutcliffe:…well, Mr Lord with respect the damage is done, if you look in the Norris order, they have already breached that order…"

24. As stated above, the Court of Appeal found there had been no breach of the undertakings given by Actial. By the undertaking at (b) of the May Order, Actial promised not "…(by itself, its servants or agents or otherwise howsoever) to intercept or take samples of the bulk VSL#3 which is to be delivered by Danisco to its packing agents pursuant to this Order. That contains in my view existing, sufficient protection. If Mr Sutcliffe wanted to raise the matter of further protection, the time to do it was before the Court of Appeal, either during submissions or as a consequential application upon the delivery of the judgment the following day. He did not. The result of dismissal of the appeals was that the stay was lifted.
25. Thereafter, instead of complying with paragraph 7 of the May Order, by his solicitors' letter dated 7 August 2015, the Professor sought to impose additional conditions as a pre-condition of any compliance. They were in similar terms to those contained in the Schedule to the draft Order, albeit it in a different order. The Professor's solicitors further stated that there was 'no proper basis on which the conditions cannot be agreed' and once the conditions were agreed, the Professor would provide Danisco with the necessary instruction. Further, if Actial was not prepared to accept these conditions, he would apply to me for a variation of the May Order. I emphasise that that indication was made on 7 August, but the application to vary was not made until 25 September, some seven weeks later. Actial responded on 10 August 2015. It is worth reciting in full.

" Thank you for your letter dated 7 August 2015.

Your client remains in contempt of court. His continued failure to comply with his court-ordered obligations cannot be justified by his incessant allegations about our client intercepting Danisco bulk. These are completely unfounded and unsubstantiated by any evidence. As we have made clear, our client has no intention in intercepting the bulk or producing a clone. Actial's concern is the immediate resumption of supplies to Ferring UK to cover its April Purchase Order.

After three months of litigating this one point, your client now requests additional conditions to be imposed on our client's undertakings before he will comply with Mr Hochhauser QC's judgment dated 7 may 2015. We note that your client is proposing to incur further costs and delays ( the latter at our client's, Ferring UK's and the UK patients' continued expense) by applying to the Deputy Judge to vary the terms of the order, in line with the new conditions set out in your letter, if he cannot get his own way. This is circumstances where your client has lost his appeals and your client claiming not to have sufficient funds to cover our clients' costs of defending these ill-founded appeals.

Our client is not prepared to be further hindered or inconvenienced by the introduction of unnecessary conditions. For example, there is no justification for a condition that requires the shipment and packaging to be dealt with in one shipment. This may not be feasible or practical. As a result of your client's delaying tactics and continued contempt, there is a desperate need to fulfil the Ferring UK order and our client anticipates the best way may be by way of instalments.

Notwithstanding this, our client is prepared to authorise SIIT/Sanico and Danisco to report (in writing) to the Professor, in response to written requests, on the handling of the bulk. The Professor shall be at liberty to contact them at any time (in writing) to ask them to confirm that Actial/CDI has not interfered with the bulk. In return the Professor will undertake to copy our client to all correspondence with Danisco and the packaging agents. Further, Danisco and the packaging agents shall report to our client any information exchanged via telephone calls. To be clear none of these requests or reports will be allowed to delay the manufacture, delivery or packaging of the bulk or end product, but will provide your clients with confirmation that our client has not intercepted the bulk.

Please confirm agreement by return and provide a copy of the Professor's letter of authorisation to Danisco."

26. In my view, this made Actial's position clear. Paragraph 7 of the May Order had to be fulfilled and the Professor remained in contempt of Court. It addressed one of the conditions, the single shipment condition, by way of example, indicating that it was neither feasible nor practical. It suggested another means by which the Professor could satisfy himself the undertakings were being complied with, namely permitting him to ask questions in writing of both Danisco and the packaging agent with a view to eliciting information about the handling of the bulk. It was, however, not prepared to go further than that.
27. On 11 August 2015, despite the clear indication of Actial's position, the Professor's solicitors said he would agree to shipment by instalments, provided the other conditions applied to each shipment. It asked for an explanation as to why each of the conditions should not be possible. The letter concluded "Subject to your client's agreement to those conditions, our client agrees to provide a letter of confirmation to Danisco in respect of each shipment." In other words, he was only prepared to comply with the May Order, recently upheld by the Court of Appeal, on terms which suited him. There was no reply to this letter until 11 September 2015, when Actial said it did not accept the conditions on the basis they were unnecessary and that it was not prepared to compromise any further. Their letter concluded:

"In our letter dated 10 August we suggested a solution to allay your clients concerns regarding interception, which he has rejected. For the reasons set out in correspondence since 6 August, our client is not prepared to compromise any further. Your client should now comply with his court-ordered obligations without further delay."

Mr Sutcliffe places great reliance on the time taken for Actial's solicitors to send the reply. Their response is dated 11 September 2015. He submits that the Professor was entitled to do nothing until he had a response, and the delay was indicative of the fact that there was no urgency as far as obtaining the Product was concerned.

28. I asked Mr Wardell to explain the delay and he said, and I accept, that in August 2015, following the dismissal of the appeals, his solicitors had been in contact with Chancery Listing to restore the earlier committal application before Asplin J, but given it was the vacation there were difficulties in getting a date, given her other court commitments. It was felt that Actial had made its position clear to the Professor and he should simply obey the May Order. Upon Mr Wardell's return from holiday, the letter of 11 September 2015 was sent, out of an abundance of caution. A further committal application was issued on the same day, 11 September 2015 and served on the Professor by email and courier to his solicitors on that date, as set out in paragraph 2 of Ms Mattin's eleventh witness statement.
29. I do not accept that the Professor was entitled simply to ignore the May Order after sending Actials's solicitors the 11 August 2015 letter. Actial's solicitors had made their client's position clear in their letter of 10 August 2015. The May Order remained on foot and had to be obeyed. If he wished to have further clarification or negotiation, his solicitors should have followed this up, or at the very least issued a timely application to vary the May Order. They did not.
30. As indicated earlier, it was not until 25 September 2015, two weeks after the service of the committal application, that the variation application was issued. I find this delay inexplicable. Mr Sutcliffe suggested that it was because the Professor's legal team is small. In my judgment that does not begin to amount an adequate explanation, particularly since the possibility of making an application had been heralded in FiTZ's letter of 7 August 2015.

The listing of the applications

31. On 25 September 2015, Mr Sutcliffe wrote to Chancery Listing, referring to the pending Committal Application and indicating that the Professor's Variation Application was about to be issued that day. He asked that both be listed to come on at the same time before me, given my prior knowledge of the matter. That request was granted and, as a result, both matters were listed before me on 5 October 2015. I would point out that at no stage in that letter, when applying for these applications to be heard together, did Mr Sutcliffe inform the Court that he was not instructed by the Professor in relation to Actial's committal application.

The conduct of the hearing on 5 October

32. I received a skeleton argument from Mr Sutcliffe on Friday, 2 October 2015 in the late afternoon, in which he said at paragraph 2:

"This skeleton is prepared in respect of the Professor's application. The Professor's lawyers are instructed not to make any submissions in respect of Actial's application. For the sake of clarity, it is the Professor's case that he has not been properly served according to the terms of the Hague Convention. I am not arguing this case because I am not instructed to do so."

33. At the outset of hearing, I raised some preliminary matters, and in the course of those, Mr Sutcliffe indicated that when the Committal Application was being made, he and his instructing solicitor intended to leave the Court. I invited him to reconsider this and at least have his solicitor remain in Court to listen to what was said on behalf of Actial. He indicated that his instructions were clear: he and his solicitor were to play no part in the Committal Application. And so they sat outside the Court whilst it was heard. As a result I heard no submissions from him, orally in writing, on this matter, although certain points which touch on the Committal Application were made by him in the course of considering the Variation Application.
34. At the end of the hearing, I indicated that I would reserve judgment and hand it down on Wednesday 7 October.^[1] On the morning of 6 October I received a note from Mr Sutcliffe indicating, on the basis that the offer made in Actial's solicitors letter of 10 August 2015 still stood (which Mr Wardell indicated at the hearing it did), that the Professor had complied with paragraph 7 of the May Order and enclosing a copy of the written instruction to Danisco dated 6 October 2015. In the note he sets out the Professor's position, to which I will refer when considering the Committal Application. The effect of this belated compliance is that the Variation Application is now otiose. Because it was fully argued, I am going to indicate that had it still been pursued, I would have refused the relief sought and I will give in summary my reasons for so doing. Actial's reaction to Mr Sutcliffe's note was that, as far as it was concerned, the Committal Application remained live and they were going to seek indemnity costs in relation to the Variation Application

The application to amend the May Order

35. This is an application made under CPR 3.1(7), which provides:

"A power of the court under these Rules to make an order includes a power to vary or revoke the order."

36. I bear in mind the dictum of Lord Bingham, LCJ in The Arab Monetary Fund v Hashim [1997] EWCA Civ 1298 where he stated:

" …it is I think, clear that it is wrong to take as a starting point the proposition that the court will not hear a party in contempt and then to ask if the instant case falls within an exception to that general rule. It is preferable to ask whether, in the circumstances of an individual case, the interests of justice are best served by hearing a party in contempt or by refusing to do so, always bearing in mind the paramount importance which the court must attach to the prompt and unquestioning observance of court orders."

37. I indicated that I was willing to hear the Professor's application despite his continuing contempt, and Mr Wardell did not invite me to do otherwise.
38. This power under CPR 3.1(7) is not, however, unfettered, and clear guidance has been given by the Court of Appeal in Tibbles v SIG plc [2012] 1 WLR 2591, [2012] EWCA Civ 518. At paragraphs 39- 24, Rix LJ (with whom Etherton and Lewison LJJ agreed), stated:

"39. In my judgment, this jurisprudence permits the following conclusions to be drawn:

(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.

(ii) The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated.

(iii) It would be dangerous to treat the statement of these primary circumstances, originating with Patten J and approved in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition.

(iv) Thus there is room for debate in any particular case as to whether and to what extent, in the context of principle (b) in (ii) above, misstatement may include omission as well as positive misstatement, or concern argument as distinct from facts. In my judgment, this debate is likely ultimately to be a matter for the exercise of discretion in the circumstances of each case.

(v) Similarly, questions may arise as to whether the misstatement (or omission) is conscious or unconscious; and whether the facts (or arguments) were known or unknown, knowable or unknowable. These, as it seems to me, are also factors going to discretion: but where the facts or arguments are known or ought to have been known as at the time of the original order, it is unlikely that the order can be revisited, and that must be still more strongly the case where the decision not to mention them is conscious or deliberate.

(vi) Edwards v. Golding is an example of the operation of the rule in a rather different circumstance, namely that of a manifest mistake on the part of the judge in the formulation of his order. It was plain in that case from the master's judgment itself that he was seeking a disposition which would preserve the limitation point for future debate, but he did not realise that the form which his order took would not permit the realisation of his adjudicated and manifest intention.

(vii) The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and sometimes misleading word: however, such is the interest of justice in the finality of a court's orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation.

40. I am nevertheless left with the feeling that the cases cited above, the facts of which are for the most part complex, and reveal litigants, as in Collier v. Williams, seeking to use CPR 3.1(7) to get round other, limiting, provisions of the civil procedure code, may not reveal the true core of circumstances for which that rule was introduced. It may be that there are many other, rather different, cases which raise no problems and do not lead to disputed decisions. The revisiting of orders is commonplace where the judge includes a "Liberty to apply" in his order. That is no doubt an express recognition of the possible need to revisit an order in an ongoing situation: but the question may be raised whether it is indispensable. In this connection see the opening paragraph of the note in The White Book at 3.1.9 discussing CPR 3.1(7), and pointing out that this "omnibus" rule has replaced a series of more bespoke rules in the RSC dealing with interlocutory matters.

41. Thus it may well be that there is room within CPR 3.1(7) for a prompt recourse back to a court to deal with a matter which ought to have been dealt with in an order but which in genuine error was overlooked (by parties and the court) and which the purposes behind the overriding objective, above all the interests of justice and the efficient management of litigation, would favour giving proper consideration to on the materials already before the court. This would not be a second consideration of something which had already been considered once (as would typically arise in a change of circumstances situation), but would be giving consideration to something for the first time. On that basis, the power within the rule would not be invoked in order to give a party a second bite of the cherry, or to avoid the need for an appeal, but to deal with something which, once the question is raised, is more or less obvious, on the materials already before the court.

42. I emphasise however the word "prompt" which I have used above. The court would be unlikely to be prepared to assist an applicant once much time had gone by. With the passing of time is likely to come prejudice for a respondent who is entitled to go forward in reliance on the order that the court has made. Promptness in application is inherent in many of the rules of court: for instance in applying for an appeal, or in seeking relief against sanctions (see CPR 3.9(1)(b)). Indeed, the checklist within CPR 3.9(1) must be of general relevance, mutatis mutandis, as factors going to the exercise of any discretion to vary or revoke an order."

39. The guidance given by Rix LJ in Tibbles was approved and applied by the Court of Appeal (Richards, Aikens and Davis LJJ ) in Thevarajah v Riordan and others [2014] EWCA Civ 14. In particular at paragraph 36, Richards LJ (with whom the other members of the Court agreed) reiterated (by reference to Tibbles) the importance of promptness in relation to applications under CPR 3.1(7).
40. This variation application was not made promptly. The request for these conditions could have been made at 7 May hearing before me, at 5 August hearing in the Court of Appeal, or immediately after the dismissal of the appeals on 6 August 2015. I do not accept that the Professor was entitled to do nothing until receiving Actial's solicitors' letter of 11 September 2015, for the reasons set out at paragraph 29 above. The further delay of waiting until 25 September 2015 to issue it was inexcusable in my view, and on that ground alone this application should fail.
41. Mr Sutcliffe in the course of argument accepted the accuracy of the passage in paragraph 24 of Actial's skeleton argument which stated :

"In practice, the discretion might be appropriately exercised normally only (i) where there had been a material change of circumstances since the order had been made, (ii) where the facts on which the original decision had been made had been, innocently or otherwise, misstated."

42. He submitted that both these limbs had been satisfied. I disagree and find that neither of them has been satisfied.
43. The judgment of the Court of Appeal makes clear that the allegations of misleading the Court were not made out and there was no evidence of any breach by Actial of the undertakings given. I accept Mr Wardell's submission, on well-established principles, it is too late for the Professor to re-open them now since the Court of Appeal's decision amounts to an issue estoppel, alternatively it is a clear abuse of process for the identical points to be ventilated now, when this application could and should in my view have been made to them. In this respect see the summary of the principles applied by the courts, in paragraph 63 of the decision of Morgan J in Rawlinson & Hunter Trustees SA (In its Capacity as Trustee of the Tchenguiz Settlement) v ITG Limited, Bayeux Trustees Limited (in their capacity as trustees of the Tchenguiz Discretionary Trust) [2015] EWHC 1644.
44. I would add that even were it open to me to approach the matter without being bound by the Court of Appeal's findings, I would have refused the relief on the grounds that the Tibbles requirements were not satisfied.
45. A constant refrain in Mr Sutcliffe's submissions was that there was nothing wrong with the suggested conditions and they were eminently reasonable. "Why should not they be imposed?", he asked. It seems to me that the answer to that is clear. Parties should not be entitled to reopen matters endlessly. The opportunity existed on more than one previous occasion to seek the imposition of such conditions. Having lost two battles, it is not open to the Professor to try once more. Furthermore, in any event, having looked at the protection in the existing undertakings from Actial in the May Order, I regard them as unnecessary.

Conclusion on the Professor's application

46. Had, therefore, the Variation Application been live, I would have dismissed it.

Actial's committal application

47. Service of the Committal Application

Although there was no specific application within the Committal Application notice, at the outset, Mr Wardell invited me to make a similar order to that made by Asplin J in relation to the earlier committal application. I agreed to do so on similar grounds as recorded in paragraph 17 above. I also took into account that (1) the only difference between the two committal applications was that there was the additional sentence containing the update, referred to in paragraph 4 above; (2) the Professor was well aware of the Committal Application, and indeed his Counsel had written to the Court, asking for it to be listed at the same time as the Variation Application; (3) the Professor had legal representation at the hearing, and the fact that they chose not to participate was a matter for them. I therefore order that the steps already taken by Actial to bring the Application for Committal (and supporting evidence) dated 11 September to the attention of the Professor by alternative methods, namely (a) by courier addressed to Mr Primal Laxman of FiTZ Solicitors, Chappell House, The Green, Datchet, Berkshire, SL3 9EH; and (b) By email to primal@fitz-legal.com be deemed good service.

48. There is no doubt that, until 6 October 2015, the Professor failed to comply with the May Order and that it may be enforced by an order for committal: CPR 81.4(1). It is well-established that this is not just a form of execution. The Court has a very substantial interest in seeing that its orders are upheld.
49. The applicable principles are usefully summarised in Appendix 1 to the judgment of Mr Justice Eder sitting in the Commercial Court in the recent decision of Oktritie International Investment Management Limited v Gersamia [2015] EWHC 821. I have carefully considered them in relation to this case.
50. As stated in paragraph 10 of the Appendix, "As one would expect, key questions (apart from any mitigation made on the contemnor's behalf) are questions of culpability and harm."

Actial's submissions

51. Mr Wardell submits as follows:

(1) The Professor went to great lengths to resist the interim relief even though he will benefit from the fulfilment of the April Order placed by Ferring UK giving him a right to royalties. His opposition was unsuccessful as was his initial application for permission and a stay.

(2) Having retained the services of leading counsel, he would have been told in no uncertain terms that an application to the Court of Appeal does not operate as a stay (per CPR 52.7) and that he was required to comply with the May Order or risk being sent to prison for contempt. He decided not to comply and relied instead on his appeals being successful. However, prior to the matter being ventilated at the hearing before Asplin J, he took no steps to have an expedited hearing of his permission application or his application for a stay determined.

(3) To make matters worse, it appears that he caused his American lawyers to communicate with Mr Scott Bush of Danisco warning him not to fulfil any order for bulk VSL#3 placed by Actial.

(4) His appeals were unsuccessful. On any view, his decision not to comply with the May Order since 7 August 2015 is deliberate and is in flagrant disregard of the Court's authority.

(5) There is a powerful inference to be drawn that he has carefully weighed up the balance of advantage and decided that the benefit to him of being able to capture the UK market (as well as consolidating his position elsewhere) outweighs the risks of a committal order.

(6) So this is a clear case of a deliberate breach of a Court order where the litigant has carefully calculated where, in his view, his maximum advantage lies.

(7) It is notable that he has made no attempt to purge his contempt or to apologise for his gross misconduct. In the circumstances, it is very difficult to see what possible mitigation can be relied on by the Professor.

The Professor's position

52. Although no submissions were made on his behalf during the hearing of the Committal Application, there were points made in the course of Variation Application and in Mr Sutcliffe's note of 6 October 2015 which I take into account. I summarise them as follows:

(1) The Professor always wanted to comply with the May Order.

Unfortunately, this was only on the basis of terms which suited him. Having not obtained them, he refused to comply. He seems to regard the Order as something he was able wholly to disregard, if he was dissatisfied with it.

(2) He was only concerned about patient safety and the quality of the product provided.

I regarded these concerns at the hearing on 7 May as exaggerated, and I could not see how, if Danisco were supplying the bulk to the usual packaging agents, SIIT or Savico, for onward supply to Ferring UK, as they had done previously, why this posed any kind of threat.

(3) The conditions he sought to impose were reasonable because they were not difficult to comply with and did not put either party to the burden of additional cost.

I have addressed this point in paragraph 45 above. Having been ordered by the Court to do something, it was not for him to renegotiate it. Having been told by this Court and the Court of Appeal that it had to be obeyed, he then deliberately did not do so. He has been unapologetic about his stance and indeed turned his back on the hearing, instructing his legal representatives to leave the court.

(4) Following Actial's indication on 11 September that it was not prepared to accept any of the conditions, the Professor made is application to the court, and specifically requested that I hear his application, fully believing that his request for conditions would be heard sympathetically.

As indicated at paragraph 31 above, I fail to understand why he did nothing for two weeks before issuing the variation application, and why, if they were necessary conditions, why they had not been sought previously. In any event the Order was on foot and should have been complied with. Instead the Professor did the opposite and instructed Danisco not to comply.

53. In my judgment, there is no doubt that from 7 August until 6 October 2015 the Professor was in persistent, continued and contumacious contempt of paragraph 7 of the May Order. There has been no apology on his part. I give him the benefit of the doubt in relation to the period between 17 May and 11 June when a stay was granted by Ryder LJ, having been sought on 16 May 2015 and I do not take this into account when deciding on the appropriate penalty.
54. In relation to sentence, it seems to me that I should take account of the facts that (1) the failure to obey the May Order was deliberate and persistent, (2) it was a means employed by him to try to get his own way, despite two earlier defeats and (3) the insistence that either matters were dealt in his way or not at all smacks of arrogance. It was described by Mr Wardell as "Heads I win, tails I do not lose.", and is to be deprecated.
55. I bear in mind that at last there has been compliance with the May Order, and therefore there is no longer any need to secure this in future. One is simply concerned now with punishment for past contempt.
56. Taking all these matters into account, in my judgment the appropriate penalty for this clear contempt is the imposition of a fine of €50,000. I would add that had the May Order not been complied with, I would have permitted the Professor a small amount of time to comply with it and thereafter would have imposed a daily fine of €10,000 until he did comply with it.
57. I will hear the parties in relation to costs and consequential matters.

APPENDIX

SCHEDULE TO THE DRAFT ORDER TO THE VARIATION APPLICATION

SCHEDULE

1 The total bulk requested will be supplied in one order and one single shipment or in two instalments within a 2 months interval as the Claimant or Ferring UK may request.

2 All bulk product must be shipped directly to SllT at Trezzano Sul Naviglio, Milano, Italy and once packaged by SllT must be shipped directly to Ferring UK only.

3 The Claimant will instruct SllT or Danisco as appropriate to provide the First Defendant with copies of the following documentation:

i. Shipper's letter: This letter from Danisco confirms the quantity of bulk product ordered, the quantity of bulk actually produced (expressed in kg of powder) and the total number of drums that the product has been packaged in.

ii. Packing List: This document is produced by Danisco for the purposes of setting out what product is being collected by the shipping company.

iii. Sign off on packing list upon receipt (confirmation of receipt): This document is signed by SllT confirming safe receipt of all the goods that are on the packing list.

iv. Production Working Sheet: This document is produced by SllT and identifies the number of kilograms of bulk powder that have been used to produce a particular batcti (identified by its batch number) of finished product.

v. Packing List of Finished Product: This document is produced by SllT and details the exact number of boxes and lot numbers when they are to be shipped from SllT to Ferring UK.

4 The Claimant will instruct SllT to add the words "For sale in the UK and Ireland only" on both the sachets and outer cardboard packaging of the product packaged by SllT and the revised artwork/packaging must be provided to the First Defendant before production of the first batch of the product.

58. The Claimant will instruct SllT to provide the First Defendant with a sample product from each production batch sent to Ferring UK.

Note 1   In the event, the hand down of the judgment was postponed until 9 October 2015 at the request of Mr Sutcliffe    [Back]