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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Irish Response Ltd v Direct Beauty Products Ltd & Anor [2011] EWHC 37 (QB) (21 January 2011)
URL: http://www.bailii.org/ew/cases/EWHC/QB/2011/37.html
Cite as: [2011] EWHC 37 (QB)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
||
B e f o r e :
(sitting as a Judge of the High Court)
____________________
| IRISH RESPONSE LIMITED (a company incorporated under the laws of the Republic of Ireland) |
Claimant |
|
| - and - |
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| DIRECT BEAUTY PRODUCTS LIMITED SIMON GOOK |
Defendants |
____________________
Thomas Grant and Thomas Munby (instructed by Harbottle & Lewis LLP) for the defendants
Hearing dates: 8, 9, 10, 13, 14, 15 and 16 December 2010
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Crown Copyright ©
- The claimant in this action, Irish Response Ltd. ("IRL"), was incorporated under the laws of the Republic of Ireland. It carries on business as a distributor and seller of personal healthcare, beauty and fitness products. In particular it sells products online and seeks to attract business by advertising in various media. Mr. James Murphy is the majority shareholder in IRL and he is a director of the company.
- The first defendant, Direct Beauty Products Ltd. ("DBP"), was incorporated in England and Wales. Its business is very similar to that of IRL. The sole director of DBP is the second defendant, Mr. Simon Gook. Mr. Gook is also the sole shareholder in DBP.
- Underlying the claims made in this action on behalf of IRL was an agreement in writing ("the Exclusive Distributorship Agreement") dated 19 November 2002 and made between a company incorporated under the laws of the Kingdom of Denmark called Pharma Medico International ApS ("PMI") and IRL.
- The guiding hand behind PMI appears to be Mr. Morten Christensen. Mr. Christensen is also interested in two other entities, a company called Direct Production ApS ("Direct") and an operation the precise status of which was unclear on the material put before me called Eurex Medical ("Eurex").
- For present purposes the material terms of the Exclusive Distributorship Agreement, in which PMI was called "Supplier" and IRL was called "Distributor", were these:-
- The products listed in Appendix 1 to the Exclusive Distributorship Agreement included what was described as "NOURKRIN RANGE". In this judgment I shall refer to the products in that range collectively as "Nourkrin".
- Nourkrin was in fact manufactured for PMI by a company incorporated under the laws of the Kingdom of Denmark called Diafarm A/S ("Diafarm"), pursuant to an agreement in writing dated 18 August 1993 and made between a company incorporated under the laws of Gibraltar called Pharma (International) Ltd. and Diafarm.
- The term of the Exclusive Distributorship Agreement was at one point extended by agreement to expire on 31 December 2010. However, it was in fact terminated earlier than at the end of the extended term, either by a letter dated 12 November 2007 written on behalf of IRL by its Danish lawyers, Eversheds Advokataktieselskab, or by a letter dated 14 February 2008 written on behalf of PMI by its Danish lawyers, Lett Law Firm.
- While the precise circumstances in which the Exclusive Distributorship Agreement came to an end are not relevant to the matters with which this judgment is concerned, what is relevant is that those circumstances were in dispute as between IRL and PMI and gave rise to proceedings ("the Danish Proceedings") between PMI and IRL in the First Division of the Court of Aarhus, Denmark ("the Danish Court"). The trial of the Danish Proceedings took place in March 2009 before Justices Monsted, Marianne Svendsen and Ingrid Thorsboe. Mr. Gook gave evidence at that trial. A judgment ("the Danish Judgment") was handed down in the Danish Proceedings on 20 May 2009. Heavy reliance was placed in an application for a freezing order and an application for a search order in this action on what was recorded in the Danish Judgment as having been the evidence of Mr. Gook at the trial of the Danish Proceedings.
- In this action IRL sought relief against DBP and Mr. Gook on three grounds.
- The first ("the Inducement Claim") was that DBP and Mr. Gook had been guilty of inducing PMI to breach the terms of the Exclusive Distributorship Agreement by supplying Nourkrin to DBP in 2005, 2006 and 2007. While I shall return to the law as to inducement of a breach of contract later in this judgment, I think that it was common ground that the elements which needed to be proved were, first, that there had been a breach of contract; and, second, that the person alleged to have induced the breach was aware of the existence of the contract in question and of the relevant terms of it. In the present case the alleged breach on the part of PMI was supplying Nourkrin to DBP for resale in the United Kingdom, in breach of Article 5(2) of the Exclusive Distributorship Agreement. It was contended on behalf of IRL that, at all material times, DBP and Mr. Gook were aware that IRL had the benefit of an exclusive distributorship agreement with PMI in relation to sale of Nourkrin in the United Kingdom.
- The second ("the Unlawful Means Claim") was an alternative to the Inducement Claim. On the hypothesis that it might be found that DBP and/or Mr. Gook misled PMI as to the territory or territories in which it desired to resell Nourkrin, it was contended that DBP and Mr. Gook, being aware of the existence of an exclusive distributorship agreement between PMI and IRL in relation to resale of Nourkrin in the United Kingdom, deliberately misled PMI into supplying DBP by representing, falsely, that it intended to resell in territories other than the United Kingdom.
- The third claim ("the Conspiracy Claim") was based on the assertion that Mr. Christensen, Mr. Gook and a Mr. Jayant Mashru, who is a director of a company incorporated in England and Wales called Mashco Ltd. ("Mashco") conspired together to give false evidence at the trial of the Danish Proceedings.
- The Conspiracy Claim was pleaded in the Particulars of Claim in this action, but had not been mentioned at any earlier point. In particular it was not mentioned in the Claim Form issued on 10 June 2010. The Particulars of Claim were served on 14 July 2010.
- The Particulars of Claim as served did not contain any prayer for relief consequent upon the Conspiracy Claim.
- Prior to the commencement of the action by issue of the Claim Form, application was made on 9 June 2010 to McCombe J for the making of freezing and search orders against DBP and Mr. Gook. McCombe J was persuaded to grant the orders sought. The amount the subject of the freezing order ("the Freezing Order") was £3,000,000. The search order ("the Search Order") was executed on 10 June 2010.
- A consent order was made in this action on 17 June 2010 to the effect that the return date fixed by McCombe J when making his orders was vacated on terms that the defendants would be entitled to apply subsequently to vary or discharge the orders without having to show a change in circumstances.
- By an application notice dated 8 November 2010 DBP and Mr. Gook sought the following orders:-
- That application came on for hearing before me. The aspect of it which was submitted by Mr. Thomas Grant, who appeared with Mr. Thomas Munby on behalf of DBP and Mr. Gook, as being the most urgent was the question whether the Freezing Order should be discharged. In relation to that aspect of the application a considerable amount of evidence was put before me. In particular there were two substantial witness statements made by Mr. Gook on behalf of himself and DBP, and three witness statements made by Mr. Andrew Millmore, the solicitor having conduct of the action on behalf of the defendants. On the other side, in addition to the affidavit of Mr. Murphy sworn in support of the without notice applications to McCombe J, Mr.Murphy made three witness statements, two of them of considerable length. Mr. Jeremy Hertzog, the solicitor with conduct of the action on behalf of IRL, made four witness statements. Also submitted on the side of IRL were witness statements from Mr. David Faires, of the Trading Standards Department of Hertfordshire County Council ("Herts"); from Mr. Neil O'Mahony, an Irish solicitor who had acted on behalf of IRL; and from Miss Cassandra Hill, Mr. Hertzog's assistant. Attached to some of the witness statements adduced on behalf of IRL, in particular those of Mr. Murphy, was a substantial number of documents. Mr. Grant frankly accepted that the deficiencies identified in the Replies to the Request for Information dated 2 September 2010 addressed on behalf of DBP and Mr. Gook to IRL might have been remedied, at least to some degree, by information to be found in the documents exhibited to the witness statements of Mr. Murphy. However, the bulk of the documents, and the timing of their production to the defendants' side, had meant that there had not been a proper opportunity to assess that. Consequently Mr. Grant was content not to pursue the order sought at paragraph 7 of the application notice at this stage.
- Mr. Grant also suggested that it was not appropriate for me to consider the application for security for costs or the application for fortification of the cross-undertaking in damages until after I had delivered judgment on the other aspects of the application, for discharging the Freezing Order and/or the Search Order, for striking out the Unlawful Means Claim and the Conspiracy Claim, and for reducing the amount the subject of the Freezing Order, in the event that I decided to continue it. It seemed to me that that was a sensible suggestion.
- In the event, Miss Hannah Brown, who appeared on behalf of IRL, accepted, for reasons which I shall explain, that the paragraphs of the Particulars of Claim in which the Unlawful Means Claim was pleaded should be struck out.
- The other application before me was that of IRL for permission to amend the Particulars of Claim to include a prayer for relief in respect of the Conspiracy Claim. It was accepted by Miss Brown that that application could not be pursued if I acceded to the application on behalf of the defendants to strike out, or give summary judgment in favour of the defendants in respect of, the Conspiracy Claim. Conversely, she submitted, if I resolved not to strike out, or to give summary judgment in favour of the defendants in relation to, the Conspiracy Claim, it was unlikely that there would be any opposition to the application for permission to amend. Mr. Grant accepted that. This application was, therefore, left on one side, to be revisited once my conclusion in relation to the Conspiracy Claim was known.
- It is convenient to consider first the applications to discharge the Freezing Order and the Search Order.
- Before coming to the facts of the present case, it is important to remind oneself of the principles underlying the jurisdiction of the court to make freezing and search orders.
- It was common ground that the first essential requirement was that the applicant for a freezing order must demonstrate that it had "a good arguable case" against the respondent. This was pointed out by Kerr LJ giving the judgment of the Court of Appeal in Ninemia Maritime Corporation v. Trave Schiffahrtgesellschaft m.b.H. und Co. KG ("The Niedersachsen") [1983] 1 WLR 1412 at page 1417E – F;-
- What is "a good arguable case" was explained by Mustill J at first instance in The Niedersachsen [1983] 2 Lloyd's Rep 600 at page 605:-
- Assuming that "a good arguable case" can be demonstrated, the next requirement to be satisfied if a freezing order is to be made is that it is shown that, "the refusal of [an] injunction would involve a real risk that a judgment or award in favour of the plaintiffs would remain unsatisfied" – per Kerr LJ in The Niedersachsen at page 1422H.
- How the court should approach the question of reaching a conclusion on the latter point was explained by Peter Gibson LJ, giving the leading judgment, in Thane Investments Ltd. v. Tomlinson [2003] EWCA Civ 1272 at paragraphs 26 – 28, inclusive :-
- It is, I think, clear from that passage that it is not enough, to justify a conclusion that there is a real risk that the party against whom a freezing order is sought will dissipate his assets in order to defeat a judgment, to show merely that the person in question has been dishonest in relation to some matter. All of the circumstances have to be considered in order to determine what, if any, conclusion as to risk of dissipation is appropriate. Some of the relevant considerations identified by Peter Gibson LJ in paragraph 26 of his judgment were: whether the party against whom the order was sought had a poor credit record; whether he had a history of defaulting on other debts; and whether he had threatened to remove assets or otherwise deal with his assets.
- Those considerations in fact echo the approach approved by Sir Peter Pain in O'Regan v. Iambic Productions Ltd. (1989) 139 NLJ 1378, where he said:-
- The list of factors mentioned by Sir Peter Pain currently appears at paragraph 12.039 of Mr. Gee's work, now in its fifth edition and called "Commercial Injunctions":-
- The facts that "a good arguable case" is demonstrated and that the evidence justifies the conclusion that there is a real risk that, unless restrained by injunction, the party against whom the injunction is sought will seek so to organise his affairs as to ensure that any judgment would go unsatisfied do not, of themselves, lead to the conclusion that an injunction should be granted. The court must still consider whether it is just and convenient, having regard to the interests of the party against whom the injunction is sought, and other relevant considerations.
- In Polly Peck International plc v. Nadir [1992] 4 All ER 769 Lord Donaldson of Lymington MR identified, at pages 785E – 786A of his judgment, these principles as underlying the jurisdiction to grant a freezing order:-
- The critical difference between a decision as to whether to grant an ordinary injunction, applying the criteria identified in American Cyanamid Co. v. Ethicon Ltd., and a freezing order is that, whereas in the case of an ordinary injunction, once it has been demonstrated that there is a serious question to be tried and that damages would be an inadequate remedy, the question is where does the balance of convenience lie, in the case of a freezing injunction the issue, after "a good arguable case" has been shown and it has been demonstrated that there is a real risk that, absent the grant of an injunction, any judgment would go unsatisfied, is whether it is just and convenient to grant the injunction. The factors to be considered at this stage of the enquiry were helpfully considered by Kerr LJ in The Niedersachsen at page 1426B – E:-
- A further matter which needs to be noticed in this section of this judgment is the duty of an applicant for a freezing order on a without notice basis to make a fair presentation to the judge of the material facts and the law relevant to the application. It was pointed out by Ralph Gibson LJ in Brink's Mat Ltd. v. Elcombe [1988] 1 WLR 1350 at page 1356F that the applicant was under a duty to make a full and fair disclosure of all the material facts. That duty was emphasised by Lord Scott of Foscote in Fourie v. Le Roux [2007] 1 WLR 320 at pages 333H – 334B:-
- Whilst often spoken of as a duty of full and frank disclosure, and generally focused on the question whether the court was informed of all relevant facts, the duty is in fact wider, as was explained in Memory Corporation Plc v. Sidhu (No.2) [2000] 1 WLR 1443.
- The leading judgment was that of Robert Walker LJ. At page 1454C – D, he said:-
- Having reviewed a number of authorities, Robert Walker LJ continued, at page 1455E – G:-
- In his judgment in Memory Corporation Plc v. Sidhu (No.2) Mummery LJ said, at pages 1459H – 1460B:-
- Subject to it being necessary to have regard to the width of the obligation, as explained in Memory Corporation Plc v. Sidhu (No.2), a convenient summary of the nature of the duty of fair presentation, and the consequences of breach of that duty, is to be found in the judgment of Ralph Gibson LJ in Brink's Mat Ltd. v. Elcombe, at pages 1356G – 1357E, following the identification of the need to make full and fair disclosure:-
- In his judgment in Behbehani v. Salem [1989] 1 WLR 723 at page 729D – F, Woolf LJ explained that, in assessing the materiality of non-disclosure, the test is not whether, if informed of that which he or she was not told, the judge would have made a different order from that in fact made:-
- The question of the circumstances in which it was appropriate for the court to make a search order was considered by the Court of Appeal in Anton Piller KG v. Manufacturing Processes Ltd. [1976] Ch 55. The principles laid down in that case have been followed ever since. They were conveniently summarised in the judgment of Ormrod LJ, at pages 61H – 62A:-
- The duty of fair presentation applies as much in relation to an application for a search order as in relation to an application for a freezing order. The consequences of a failure to perform that duty are the same in relation to search orders as they are in respect of freezing orders.
- As I have explained, the first of the claims advanced in this action, the Inducement Claim, was based on the allegation that the defendants had induced breaches of Art. 5(2) of the Exclusive Distributorship Agreement on the part of PMI. The elements of the tort of inducing a breach of contract were considered by the House of Lords in OBG Ltd. v. Allan [2008] 1 AC 1. Lord Hoffmann set out his conclusions on this point, which were shared by the other members of the House, at pages 29D – 30D:-
- Lord Hoffmann did not, in terms, state in that passage that there had to be a breach of contract, but that, I think, is obvious.
- It is necessary now to turn to consider the question whether there was, and is, "a good arguable case" against DBP and Mr. Gook in the present case, such as to justify the grant, and continuation, of the Freezing Order.
- Subject to one matter, it was accepted by Mr. Grant that, on the evidence put before McCombe J and that put before me, "a good arguable case" was shown in relation to the Inducement Claim. However, Mr. Grant submitted that the ingredient necessary to be demonstrated in respect of that claim that PMI had been in breach of Art. 5(2) of the Exclusive Distributorship Agreement could not be demonstrated by reason of the Danish Judgment.
- One of the issues in the Danish Proceedings was whether IRL had been entitled to terminate the Exclusive Distributorship Agreement by reason of breach on the part of PMI of Art. 5(2) by supplying DBP. In a letter in the nature of a letter before action, dated 2 October 2007 and written on behalf of IRL by its Danish lawyer, Mr. Jakob Karlsen, to PMI this complaint was identified:-
- That was not the only complaint made in the letter, and it was not the only basis of the claims made on behalf of IRL in the Danish Proceedings.
- The Danish Judgment was a lengthy document. A copy of an English translation was put in evidence. In the fashion adopted in the courts of some civil law countries an extended recitation of the evidence was followed by a section entitled "Grounds and decision of the Court". Within that section was identified the claim "Regarding the issue of Pharma Medico's violation of the exclusive distribution right". That part of the "Grounds and decision of the Court" was in the following terms, as translated:-
- Whilst the findings of the Danish court as to the facts were different from what were contended before me on behalf of DBP and Mr. Gook to be the correct facts, it was plain that the Danish court had considered whether, on the evidence led before it, PMI had acted in breach of Art. 5(2) of the Exclusive Distributorship Agreement, and had concluded that it had not.
- Mr. Grant reminded me that by Council Regulation No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("the Judgments Regulation") Article 33 (1) it is provided that:-
- Moreover, Article 36 of the Judgments Regulation is in these terms:-
- Mr. Grant submitted that the effect of these Articles in the present case was that this court had to recognise that a competent Danish court had considered and determined the issue whether PMI had been in breach of Art. 5(2) of the Exclusive Distributorship Agreement by supplying Nourkrin to DBP and had concluded that it had not. That conclusion was binding on this court, he contended. Consequently this court could not entertain any proceedings in which the substance of the decision recorded in the Danish Judgment was challenged. The proper course, if IRL wished to challenge the Danish Judgment was to appeal the decision of the Danish Court. In fact such an appeal had been launched and one of the grounds of the appeal was that the Danish Court was misled as to the facts.
- In Hunter v. Chief Constable of the West Midlands Police [1982] AC 529 Lord Diplock, who gave the only substantive speech, explained, at page 536B – D, that:-
- In the light of the provisions of the Judgments Regulation which I have quoted, contended Mr. Grant, in effect, this court should exercise its powers to prevent abuse of its process to stop a party seeking to mount a collateral attack upon a judgment of a competent court of another Member State of the European Union. If those powers were exercised in the present case, it would prevent IRL contending in this action that the decision of the Danish Court as recorded in the Danish Judgment was wrong.
- Miss Brown submitted that the parties to the present action were different from the parties to the Danish Proceedings. That is correct. However, that seems not to be an answer, in itself, to the question whether the Inducement Claim in this action is an abuse of process. In Taylor Walton v. Laing [2007] EWCA Civ 1146 the Court of Appeal had to consider a claim made following an earlier claim between two different parties. The leading judgment was that of Buxton LJ. He said:-
- From that passage, as it seems to me, it is clear that, as Lord Diplock foreshadowed in Hunter, the court needs to be astute to recognise what is in substance an abuse of its process, and not be diverted by the form in which the issue of abuse arises.
- In support of his submissions Mr. Grant reminded me of the comments of the European Court of Justice in Erich Gasser GmbH v. MISAT Srl [2005] QB 1 in paragraph 72 of its judgment at page 35D – E:-
- The practical implications of that statement were explained, in part, by Phillips J in Interdesco SA v. Nullifire Ltd. [1992] 1 Lloyd's Rep 180 at page 187:-
- Phillips J went on to consider what course the English court should adopt where, in support of the case of fraud alleged as vitiating the decision of the foreign court, so that recognition of that decision should not be afforded in England, the defendant sought to rely on evidence that was not before the foreign court. He stated his conclusions on that issue at page 188:-
- The decision of Phillips J was cited in argument, but not referred to in the advice of the Privy Council, in the case of Owens Bank Ltd. v. Etoile Commercial SA [1995] 1 WLR 44. That case concerned an attempt to enforce in the High Court of St. Vincent and the Grenadines a judgment of the Commercial Court of Paris. Neither the Brussels Convention nor the Judgments Regulation was relevant. The advice of the Privy Council was given by Lord Templeman. At page 51B – C he said:-
- Miss Brown accepted that the principle of abuse of process discussed in Hunter was applicable to decisions of competent courts of other Member States of the European Union, which fall within the Judgments Regulation. However, she drew attention to an exception to the rule against collateral attack on a judgment considered by Lord Diplock at page 545A – E:-
- In the present case, submitted Miss Brown, there was fresh evidence which had not been put before the Danish Court, specifically documentary evidence in the form of invoices which showed that DBP had, in the period 2005 to 2007, inclusive, obtained supplies of Nourkrin from Eurex and Direct. Those entities were treated, by agreement of PMI, at the trial of the Danish Proceedings as alter egos of PMI. As I understood it, the documentary evidence in question formed an important plank of the appeal being pursued by IRL in Denmark against the Danish Judgment. Miss Brown told me that that appeal is expected to be heard sometime in 2012. The desire of IRL was that the present action be tried in England as soon as possible, for preference in the Hilary Term 2011.
- If this action, and in particular the Inducement Claim, were tried at the beginning of 2011, it would be very likely that judgment would be delivered prior to the consideration in Denmark of the appeal against the Danish Judgment. If that were to happen, it seems that, under Articles 33(1) and 36 of the Judgments Regulation, to which the court of appeal in Denmark would be subject, in the same way as this court, it could be suggested that the court of appeal was bound to recognise the judgment in this court, whatever that judgment was, on the issue of the Inducement Claim. Thus, it could be perceived that the outcome of the appeal in Denmark, at least on the points whether DBP had received supplies of Nourkrin from Eurex and Direct in the period 2005 to 2007, inclusive, and whether Mr. Christensen, and thus PMI, was aware that DBP had received such supplies, was pre-empted by a decision of this court.
- Consequently, in my judgment, whether consciously intended or not, the commencement and pursuit in this action of the Inducement Claim amounted to an abuse of the process of this court because it was in the nature of a collateral attack on the correctness of the Danish Judgment in circumstances in which the matters alleged to justify the Inducement Claim were facts contrary to the findings of the Danish Court but the self-same facts which are to be relied upon in support of the appeal against the Danish Judgment. As it seems to me, it is contrary to the spirit of the Judgments Regulation for a court in England to entertain, in advance of a hearing of an appeal in Denmark, a claim which has to be based on the proposition that the findings in the Danish Judgment were wrong. The proper course, in my judgment, bearing in mind that the parties to this action are not identical to the parties to the Danish Proceedings, is to stay this action, insofar as it relates to the Inducement Claim, until after the hearing of the appeal against the Danish Judgment. It would not be right, I think, to dismiss the Inducement Claim, although it cannot succeed unless and until the Danish Judgment is overturned in respect of its findings as to whether PMI was in breach of Art. 5(2) of the Exclusive Distributorship Agreement, because, if that were done, and it was left to IRL to commence fresh proceedings after a determination of the appeal in Denmark, issues of limitation might arise. However, technically the Inducement Claim cannot succeed at present because IRL cannot be permitted to adduce evidence at a trial of this action which points to the conclusions recorded in the Danish Judgment being incorrect. In the result, therefore, IRL has failed to demonstrate that it has "a good arguable case" in relation to the Inducement Claim.
- As I have noted, Miss Brown accepted that, in the light of the admissions in the Defence, the Unlawful Means Claim was liable to be struck out. I shall return to explain later in this judgment what the issue in relation to the Unlawful Means Claim was, but for present purposes it is enough that it must follow from Miss Brown's concession that "a good arguable case" is not demonstrated in relation to the Unlawful Means Claim, the only other basis of claim put before McCombe J.
- The Conspiracy Claim was not adverted to before McCombe J. It was not specifically urged upon me as an independent ground for continuing the Freezing Order, if otherwise I were minded to discharge it. The submissions of Miss Brown as to the amount of money to be frozen were all focused on the losses alleged to have been suffered by IRL as a result of the Inducement Claim, to which the Unlawful Means Claim was an alternative leading to the same loss. The losses alleged to have been suffered as a result of the Conspiracy Claim were very substantially larger than the losses alleged to have been suffered as a result of the Inducement Claim. They totalled €25,700,000, calculated as €14,700,000 the amount of the judgment against IRL in the Danish Proceedings as a result of the failure of its case that it had been entitled to terminate the Exclusive Distributorship Agreement by reason of the breach of Art. 5(2) by PMI, plus €11,000,000, the amount which it is said IRL would have recovered in the Danish Proceedings had its defence and counterclaim succeeded. Whether or not the Conspiracy Claim was relied upon as justifying a continuation of the Freezing Order, if otherwise there were no grounds for doing so, as I shall explain I have concluded that the Conspiracy Claim cannot, as a matter of law, succeed and should be struck out. Consequently, there was and is no "good arguable case" in relation to the Conspiracy Claim.
- Miss Brown really put as the sole basis of her submissions that there was a real risk of dissipation, both before McCombe J and before me, the contention that it was plain from the evidence recorded in the Danish Judgment as having been given by Mr. Gook, that he had perjured himself when giving evidence before the Danish Court, and thus it should be inferred that, unless restrained by injunction, he and DBP would seek so to arrange their financial affairs as to avoid or minimise the enforcement of any judgment obtained by IRL against them.
- I have already set out the relevant part of the "Grounds and decision of the Court" section of the Danish Judgment. Earlier in the judgment was set out a section reciting the evidence given by Mr. Gook as understood by the judges participating in the trial. That section ran to just under two pages of single-spaced A4 pages of typing. It is not necessary to cite it for the purposes of this judgment. It is enough to quote what Miss Brown submitted in her written skeleton argument for the hearing before me could be derived from it:-
- Save that I am not sure that the contention at c. could be found in the recitation of the evidence of Mr. Gook in the passage from the Danish Judgment in which the evidence of Mr. Gook was recorded (although it was noted in the "Grounds and decision of the Court" section), it seems to me that Miss Brown's summary of the material evidence is fair.
- Why the evidence which was recorded in the Danish Judgment which Miss Brown summarised at paragraph 24 of her skeleton argument was untrue, in her submission, Miss Brown explained at paragraphs 31 to 33 inclusive of her skeleton argument:-
- While, from time to time in the course of her oral submissions to me, Miss Brown's oratory flew to the heights of describing Mr. Gook as a "recidivist" liar, in fact the case for IRL in relation to the Inducement Claim depended critically upon Mr. Gook's alleged lies to the Danish Court having been selective. His recorded evidence that he knew of the existence of the Exclusive Distributorship Agreement was relied upon heavily as amounting to an admission of one of the critical elements in the Inducement Claim. What were alleged on behalf of IRL to have been lies were the recorded evidence that PMI had not supplied any Nourkrin to DBP in 2006 or 2007, and that such Nourkrin as had been supplied by PMI to DBP in 2005 had been intended for resale in Italy. It was these alleged lies, and alleged lies associated with this account, such as in relation to the sale of Nourkrin to Mashco, that were said to point to there being a real risk of dissipation of the assets of DBP and Mr. Gook unless a freezing order were made in the first place, and now maintained.
- Miss Brown submitted that Mr. Gook had told lies in some respects in his witness statements put before me in relation to the application with which this judgment is concerned. That was denied on behalf of Mr. Gook, and plainly I am not in a position at this stage to reach any conclusion as to whether the matters upon which Miss Brown sought to rely did amount to Mr. Gook telling deliberate untruths. For the reasons to which I am about to come, it does not seem to me to be necessary to consider further the issue whether, in his evidence before me, Mr. Gook had told lies. Whether he had or not seems to me to be immaterial, as such, to the issue whether there was a real risk of dissipation.
- Unhappily there were important documents which McCombe J was not shown which seem to me to be crucial in relation to the question whether, simply on the basis of the alleged lies relied upon on behalf of IRL, it was appropriate to infer, as Miss Brown contended it should be inferred, that there was a real risk of dissipation.
- As I have already observed, in my view the effect of the decision of the Court of Appeal in Thane Investments Ltd. v. Tomlinson is that alleged or proven dishonesty on the part of a person against whom a freezing order is sought is not, of itself, sufficient to justify the conclusion that there is a real risk of dissipation of assets. Rather, all of the circumstances of the case need to be considered to see whether the inference that there is a real risk of dissipation is justified.
- On 1 October 2007 Eversheds LLP wrote a letter to DBP marked for the attention of Mr. Gook. The letter was in these terms:-
- Mr. Gook responded to that letter in a letter dated 16 October 2007, which again was not shown to McCombe J. In his letter Mr. Gook wrote:-
- The exchange of letters between Eversheds LLP and DBP in October 2007 was, in my judgment, highly significant. That exchange was not followed by any relevant communication between IRL and DBP, or solicitors acting on behalf of either, prior to the application to McCombe J on 9 June 2010. What the exchange showed was that DBP and Mr. Gook had been put squarely on notice of the Inducement Claim in October 2007. As it seems to me, it follows logically that, if DBP and Mr. Gook were minded so to seek to arrange their respective affairs as to avoid or minimise the impact of a judgment in favour of IRL in relation to the Inducement Claim, they had had ample time in which to do so. If, conversely, no steps had been taken in reaction to what was in effect a letter before action in relation to the Inducement Claim, it follows, logically, that there was no sensible reason for supposing that steps would be taken now. In fact the evidence led before me was that neither DBP nor Mr. Gook had taken any steps to re-arrange its or his financial position after receipt of the letter dated 1 October 2007 from Eversheds LLP. It follows, in my judgment, that, whether or not Mr. Gook had told lies in his evidence before the Danish Court, and whether or not he had told lies in his evidence before me, his and DBP's actions, or rather inaction, in relation to re-arranging their respective financial affairs after receipt of the letter dated 1 October 2007 speak volumes on the point of risk of dissipation, those volumes all to the effect that there was no real risk.
- In my judgment, the lack of any real risk of dissipation is reinforced by the fact that Mr. Gook, in replying to the letter dated 1 October 2007 from Eversheds LLP, adopted a robust, yet frank, stance. It was clear from his letter dated 16 October 2007 that DBP had been distributing Nourkrin in the United Kingdom, and intended to continue to do so, yet Mr. Gook asserted that he and DBP had been unaware of the existence of an exclusive distributorship agreement between PMI and IRL. On the face of the letter DBP and Mr. Gook had a defence to the Inducement Claim which it intended to assert. If the position adopted in the letter was a genuine one, there was no reason for DBP or Mr. Gook to be fearful of a claim from IRL, and thus no reason to seek to anticipate an adverse outcome. That the position explained in the letter dated 16 October 2007 was genuine was suggested by the fact that there was no response to Mr. Gook's letter. No attempt was made to contradict what he asserted, at least not until 9 June 2010.
- Miss Brown submitted that the exchange of correspondence between Eversheds LLP and Mr. Gook in October 2007 did not have the significance which I have attributed to it. She said that it was one thing to make a claim, such as that made in the letter dated 1 October 2007, and to make threats, such as also there contained, to seek injunctions, but that Mr. Gook and DBP must have known that IRL did not have the evidence to pursue any claim, and that explains why neither took any steps to dissipate their assets. However, once it became clear, contended Miss Brown, that IRL did have the evidence to pursue a claim, things would have changed, and Mr. Gook, being a "recidivist liar", would have realised that he needed to dissipate his own assets and those of DBP in order to protect them from loss on enforcement of the judgment which IRL was very likely to obtain in relation to either the Inducement Claim or the Unlawful Means Claim.
- I am afraid that I did not really follow that submission. It was asserted in terms in the letter dated 1 October 2007 that IRL had evidence that DBP had been obtaining supplies of Nourkrin from PMI. I imagine that that assertion would not have been made unless it were correct. Save that the actual suppliers may have been Direct and Eurex, rather than PMI itself, it was in fact correct, as was accepted before me by Mr. Grant. Mr. Gook did not dispute, in the letter dated 16 October 2007, that DBP had been selling Nourkrin in the United Kingdom. He did not comment specifically on the source from which those supplies had been obtained, but he certainly did not, in terms, dispute the proposition that they had come from PMI. What he did assert clearly was that he and DBP had not been aware of the existence of what was in fact the Exclusive Distributorship Agreement.
- The pleaded case of IRL in the Particulars of Claim in this action was that,
- If that were correct, not only Mr. Murphy, but also Mr. Gook, knew that it was correct. Consequently, if DBP and Mr. Gook needed to be afraid of the Inducement Claim at all, they needed to be afraid when Mr. Gook received the letter dated 1 October 2007 from Eversheds LLP.
- Another curiosity highlighted by the exchange between Eversheds LLP and Mr. Gook in October 2007 was that, in its essentials, what Mr. Gook asserted in his letter dated 16 October 2007 to Eversheds LLP, and maintained before me was the truth, was precisely contrary to what he was recorded as having said in evidence in the Danish Court, according to the Danish Judgment. Whilst his letter dated 16 October 2007 in essence admitted obtaining supplies of Nourkrin and reselling in the United Kingdom, but denied knowledge of the Exclusive Distributorship Agreement, his evidence in Denmark, as recorded, was to the effect that he admitted knowledge of the existence of the Exclusive Distributorship Agreement, but denied obtaining supplies of Nourkrin for resale in the United Kingdom. These positions were flatly contradictory. They could not both be correct. If what was said in the letter dated 16 October 2007 were correct, the evidence recorded as having been given in Denmark that there were no sales by DBP in the United Kingdom in 2006 and 2007 of Nourkrin obtained from PMI could be shown to be incorrect by reference to that letter. However, that alone would not have exposed DBP or Mr. Gook to liability to IRL in respect of the Inducement Claim. The defence to the Inducement Claim depended critically upon neither DBP nor Mr. Gook having been aware that IRL had an exclusive distributorship agreement with PMI at the time DBP purchased Nourkrin, if it purchased from PMI for resale in the United Kingdom. Yet, on the face of the record of his evidence contained in the Danish Judgment, Mr. Gook surrendered that point, which had been asserted confidently in the letter dated 16 October 2007, in circumstances in which it was not material to any issue in the Danish Proceedings whether Mr. Gook was aware of the existence of an exclusive distributorship agreement or not.
- Consequently, it is material, as it seems to me, to consider the exchange of correspondence between Eversheds LLP and Mr. Gook in October 2007 not only in the context of how, on the evidence, DBP and Mr. Gook acted on receipt of a letter before action in relation to the Inducement Claim, but also in the context of the submissions of Miss Brown that Mr. Gook had lied in his evidence to the Danish Court. As I have explained, in my judgment the effect of Art. 33(1) and Art. 36 of the Judgments Regulation is that I am bound to recognise the Danish Judgment and not to review it as to its substance. I am happy to recognise the Danish Judgment and have no desire to review it as to its substance. It follows, I think, that I accept that the findings of fact recorded in the Danish Judgment were properly made, based on the evidence received by the Danish Court. However, it seems clear that something unusual has happened, for the evidence recorded as given by Mr. Gook was totally at variance from the position which he had adopted only some 17 months before the trial in Aarhus in his letter dated 16 October 2007. What it is that happened is not for me to investigate on the hearing of this application. Pending the hearing of the appeal against the Danish Judgment, and probably even after that hearing, it is not a matter for a court in this jurisdiction to investigate. The substance of the Danish Judgment must be recognised unless and until it is overturned on appeal. If the Danish Judgment is overturned on appeal, then this court will have to recognise the appeal decision. However, what is material to the issue of real risk of dissipation is that, whilst it seems that something unusual has happened, it is not clear what. Consequently I am not in a position to conclude that Mr. Gook did tell lies to the Danish Court. All that one can say with confidence is that his evidence as recorded in the Danish Judgment is at variance from the position adopted in the letter dated 16 October 2007. Mr. Gook asserts, in his witness statements put in evidence before me, that his evidence was misunderstood by the judges trying the Danish Proceedings or was inaccurately recorded. That is not for me to determine. If and insofar as this issue can be investigated in this jurisdiction at all, it is a matter for a trial, and not for resolution simply on written statements on an interim application. What matters at this stage is whether, as Miss Brown contended, it is plain that Mr. Gook had committed perjury at the trial of the Danish Proceedings. For the reasons which I have given, that is not plain.
- Miss Brown sought to reinforce her submissions as to the accuracy of the admission by Mr. Gook, recorded in the Danish Judgment, of his knowledge of the existence of the Exclusive Distributorship Agreement by reference to material contained in some ten documents produced over a period starting in July 2004 and continuing until September 2007, and also the exchange between Eversheds LLP and Mr. Gook in October 2007. Mr. Gook, in his witness statements, sought to put the material relied upon into what he said was the proper context, or otherwise to explain the material and why it did not evidence what Miss Brown contended that it evidenced.
- I think that it is unnecessary for me to consider the material upon which Miss Brown relied in any detail. That, in Miss Brown's submission, there was evidence which tended to show that Mr. Gook's recorded evidence to the Danish Court that he was aware of the existence of the Exclusive Distributorship Agreement was correct, was certainly not evidence of his dishonesty. Rather the contrary. The point therefore actually went, insofar as relevant at all, to the issue of whether there was "a good arguable case". Moreover, I am not in a position on the hearing of the application before me to resolve the disputes as to what the material relied upon in fact showed. Mr. Grant, in the section of his submissions dealing with the contention that there had been, before McCombe J, a breach of the duty of fair presentation, contended that some of the points urged on him by reference to the material relied on by Miss Brown had not been presented as they should have been. However, I shall revisit that submission in the appropriate section of this judgment.
- On the material put before me I am not satisfied that there is, in this case, a real risk that, unless restrained by injunction, DBP and/or Mr. Gook will seek so to arrange their respective financial affairs as to avoid or minimise the impact of a judgment in favour of IRL.
- DBP was incorporated as Spectrum Worldwide Ltd. on 30 July 1997. It changed its name on three occasions, most recently on 29 August 2006 to its present name. Its registered office is at its business premises, Manor Farm Barns, Fox Road, Framingham Pigot, Norfolk. The total number of shares which have been issued in DBP is 1000, all of which are held by Mr. Gook. The company has 21 employees. Its balance sheet as at 31 July 2008, the last one available at the time of the hearing before McCombe J, showed net assets of £602,777. It then held £660,602 in bank accounts, but the bulk of its assets were represented by stocks (£533,617) and debtors (£929,045). However, creditors who were due to be paid within one year amounted to £1,586,606. I was shown the balance sheet of DBP as at 31 July 2009, the last currently available. It showed an increase in net assets to £984,931. As compared with the previous year each of the elements of cash at bank, stocks, debtors and creditors due to be paid within one year had increased. Fixed assets had increased from £73,914 to £459,370. Put before me, but not before McCombe J, were profit and loss accounts. That for the year ended 31 July 2008 showed a turnover of £6,800,167, producing a gross profit of £3,276,048 and an operating profit of £927,182. The profit and loss account for the year ended 31 July 2009 showed a turnover of £8,518,428, gross profit of £3,854,742 and an operating profit of £529,353. The account suggested that the substantial increase in turnover had been achieved at a significant increase in selling and distribution expenses – up, in broad terms, £750,000 – and some material increase in administration expenses – up, in round terms, £180,000. However, the picture presented by the balance sheets and accounts was of a thriving and successful business, generating significant profits in proportion to its assets.
- Mr. Gook swore an affidavit of the assets of DBP and of himself on 11 June 2010. What he said in that affidavit was not challenged.
- At the date of his affidavit Mr. Gook put the stocks of DBP at approximately £750,000 and current debtors at about £1,000,000. Those figures show some decline from the position as at 31 July 2009, but are still healthy. Mr. Gook said in his affidavit that DBP owns a yacht, "The Seahorse", which had been purchased in 2009 for £425,000 subject to a marine mortgage of £300,000, and owned a berth in St. Jean Cap Ferrat with an estimated market value of £400,000. Those assets seem to be reflected in the increase in the fixed assets of DBP as at 31 July 2009 as recorded in the balance sheet. However, the cash held by DBP with its bankers seems to have declined somewhat between 31 July 2009 and the date of the affidavit. The cash of DBP declared by Mr. Gook totalled £466,653.
- None of the information contained in Mr. Gook's affidavit in relation to DBP was remotely suggestive of DBP seeking to dissipate its assets or to make them less readily accessible to a judgment creditor.
- From his affidavit it appeared that Mr. Gook has substantial assets, the vast bulk of which is in the form of land in England. He owns a house in London, with a net equity of about £2,000,000, a house in Norfolk, with a net equity of just under £500,000, and six flats in Leeds, with a net equity of about £510,000. Mr. Gook also owns three motor cars. One is an Aston Martin which he purchased in June 2010 for £57,500 with the benefit of a loan of £30,000. Another is a Ferrari, worth, he thought, about £45,000. The third vehicle is a BMW X5, with an estimated value of about £17,500. At the date of the affidavit Mr. Gook had cash in various National Westminster Bank accounts which totalled £297,748. His only foreign asset was an amount of about €5,000 in an account with Coutts in Monaco.
- Miss Brown submitted that Mr. Gook could easily convert his interests in real property in England into cash either by selling the various properties or by raising loans to the value of the existing equity in each. I am afraid that it seems to me that that submission was fanciful.
- Another feature of Mr. Gook's way of life which Miss Brown contended indicated that there was a real risk of dissipation was the fact that he is accustomed to spend the summer in the South of France. It appears that he likes sailing. Far from that factor favouring the submission of Miss Brown, it seems to me that the fact that, despite wishing to spend a significant period of the summer in the South of France, Mr. Gook has no permanent residence there, but valuable real property in England, demonstrates that his feet are firmly based in England, where he lives with his partner, and where his children also live.
- In the circumstances it is unnecessary to consider whether, had I been satisfied that IRL had demonstrated "a good arguable case" against DBP and Mr. Gook, and that there was a real risk that one or other or both would dissipate their assets to avoid, or minimise, exposure to a judgment in favour of IRL, it would have been just and convenient to continue the Freezing Order. I am going to discharge the Freezing Order for the reasons which I have given, and also on the ground of breach of the duty of fair presentation, to which I now turn.
- In their skeleton argument in support of the application of DBP and Mr. Gook Mr. Grant and Mr. Munby raised a considerable number of points which they contended demonstrated that there had been a breach on the part of IRL of the duty of fair presentation. There were six major points and a number of minor ones. A significant part of the argument before me focused on whether IRL had been in breach in relation to each of the matters complained of.
- It is not necessary, in my judgment, to consider exhaustively the points on fair presentation raised by Mr. Grant and Mr. Munby because the breach which Miss Brown accepted was so egregious that the only possible conclusion was that, even if I had otherwise been persuaded to continue the Freezing Order, on account of the admitted breach of the duty of fair presentation I should not have done so.
- The admitted breach was the failure to show McCombe J the letter dated 1 October 2007 written by Eversheds LLP to Mr. Gook and Mr. Gook's response dated 16 October 2007. I have already explained my view of the significance of those documents. They put a complexion on the issue of risk of dissipation which completely changed how matters were presented to McCombe J, and, indeed, to me, in reliance on the alleged lies of Mr. Gook, principally in the evidence given in the Danish Proceedings. Moreover, the stark contrast between the position adopted by Mr. Gook in the letter dated 16 October 2007 in relation to sales of Nourkrin in the United Kingdom and in relation to the issue of knowledge on his part of the Exclusive Distributorship Agreement, and his evidence as recorded in the Danish Judgment, introduced an important element of uncertainty in respect of the case of IRL against DBP and Mr. Gook on the facts.
- Unsurprisingly, in his first witness statement prepared for the purposes of the application of DBP and himself, Mr. Gook drew attention to the exchange of correspondence with Eversheds LLP in October 2007. In his witness statement dated 29 November 2010 in answer to that witness statement Mr. Murphy gave, at paragraph 36.10.2(a), this explanation of why McCombe J was not shown the letter dated 1 October 2007 written by Eversheds LLP and Mr. Gook's response:-
- That explanation, I am afraid, is totally unacceptable.
- It is correct that IRL had instructed a firm of solicitors called Monro Fisher Wasbrough to write to DBP a letter dated 13 April 2007 about the use by DBP of what were called in the letter "celebrity testimonials". A copy of that letter was put in evidence before me, although not put before McCombe J.
- However, as Miss Brown explained in paragraph 68 of her skeleton argument,
- It followed that, essentially, IRL could have taken as long as it wished to prepare the application properly. There was no excuse that urgency prevented the opportunity to check every detail which needed to be checked in order to ensure that a fair presentation was made at the hearing of the without notice application.
- It is plain from the explanation which Mr. Murphy gave of why the exchange between Eversheds LLP and Mr. Gook was not put before McCombe J that IRL was aware at the time he made his affidavit that an exchange between English solicitors instructed on behalf of IRL and DBP had taken place, but had misremembered what was the substance of the exchange. It follows, as it seems to me, as the night does the day, that Mr. Murphy should have checked the relevant correspondence, following the guidance given by Ralph Gibson LJ in Brink's Mat Ltd. v. Elcombe. Had he done so, as Miss Brown accepted, the only possible conclusion was that the exchange needed to be disclosed.
- I was urged by Miss Brown to accept the explanation of Mr. Murphy that the non-disclosure of the exchange between Eversheds LLP and Mr. Gook was innocent. Mr. Grant submitted that I should reject it as incredible. I am not in a position to decide, at this stage and without hearing Mr. Murphy cross-examined, whether to accept that he overlooked the relevant correspondence or not. It is enough that the correspondence plainly should have been disclosed and that, on Mr. Murphy's own evidence, IRL failed to check, as it should have checked, previous correspondence between any solicitors instructed on behalf of IRL and DBP or Mr. Gook about the issue of alleged breach on the part of DBP of obligations said to have been owed to IRL, in particular not to obtain supplies of Nourkrin from PMI. However, it does seem somewhat surprising, given that the letter which Eversheds LLP wrote was written at the same time as the letter before action addressed to PMI by the Danish branch of Eversheds, that Mr. Murphy did not recall that a letter had been written on the instructions of IRL to DBP at the same time as one had been sent to PMI.
- In the circumstances it is unnecessary to consider whether to vary the amount the subject of the Freezing Order.
- The focus of the submissions to me was really whether the Freezing Order should continue. Sub silentio it seemed to be common ground that if I were not persuaded to continue the Freezing Order, it was likely that I would conclude that the Search Order should be discharged.
- The Search Order had, of course, been executed long before the hearing before me. What had been done could not be undone. However, Mr. Grant submitted that, if I were persuaded that the Search Order would never have been made, but for breach of the duty of fair presentation, I should discharge it, following the logic explained by Sir Peter Pain in O'Regan v. Iambic Productions Ltd. at page 1379:-
- It is not, I think, appropriate for me to consider whether, with the benefit of the submissions which have been made to me, McCombe J would not have made the Search Order. Sir Andrew Morritt explained in Elvee Ltd. v. Taylor [2001] EWCA Civ 1943 at paragraphs 52 to 59 inclusive why it might not be appropriate to consider whether a search order would have been made, in a case not involving material non-disclosure or breach of the duty of fair presentation, had the judge who made the order had the benefit of the information and submissions presented on the return day. The question fit for consideration thus focuses on the issue of breach of the duty of fair presentation.
- The egregious breach which I have found in respect of the application for the Freezing Order applies equally to the Search Order. I think it inconceivable that the Search Order was appropriate once one has the knowledge that what was in effect a letter before action had been written some 2½ years prior to the application for the Search Order. If the expressed fear was well-founded, the incriminating documents would have met the shredder long before. If that had not happened already, there was no likelihood of it happening now.
- Consequently I am going to discharge the Search Order.
- Although Miss Brown accepted that it was appropriate for me to strike out paragraphs 31 to 35 inclusive of the Particulars of Claim, I think that it is helpful to explain the basis upon which it was agreed that this plainly correct course should be taken.
- Paragraphs 31 to 35 inclusive of the Particulars of Claim were in these terms:-
- It is clear from those paragraphs that the Unlawful Means Claim depended critically upon the contention that Mr. Christensen was unaware that DBP intended to re-sell Nourkrin in the United Kingdom. At paragraph 20(3) of the Defence served on 10 September 2010 it was admitted that Mr. Christensen was aware that Nourkrin purchased by DBP was intended for re-sale in the United Kingdom. Consequently, for the purposes of this action there was no issue as to the knowledge of Mr. Christensen, and, in those circumstances, the Unlawful Means Claim could not succeed, as Miss Brown accepted. Although the Unlawful Means Claim was, in theory, a viable claim alternative to the Inducement Claim at the time the Particulars of Claim were drafted, it had ceased to be a viable alternative in the light of the admission of the knowledge of Mr. Christensen in the Defence.
- Although on the face of the application notice issued on behalf of DBP and Mr. Gook what was sought was the striking out of paragraphs 36 to 41 of the Particulars of Claim, paragraph 41 was a plea for interest, and in fact only paragraphs 36 to 40 inclusive set out the Conspiracy Claim which Mr. Grant sought to attack.
- Miss Brown did not accept that paragraphs 36 to 40 inclusive of the Particulars of Claim should be struck out. She did recognise that some amendment to paragraph 37 might be appropriate, and to that question I shall come.
- The ground upon which Mr. Grant contended that the Conspiracy Claim should be struck out was that, as a matter of law, it could not succeed. Before coming to the relevant law, it is convenient to set out the paragraphs of the Particulars of Claim the striking out of which were sought:-
- The amendment to paragraph 37 which Miss Brown contemplated might be appropriate was to add, at the end, "It is averred that as a matter of Danish Law a witness who has given evidence in a Danish Court is not protected from civil suit by any immunity in relation to the evidence given by him before a Danish court or in the preparation of such evidence".
- The grounds upon which Mr. Grant submitted that the Conspiracy Claim could not succeed were that, as a matter of English law, there is no tort of perjury, and, as a matter of public policy, it is not permissible to pursue a claim which is in fact based on alleged perjury in the form of a conspiracy to cause damage by unlawful means, the unlawful means being giving perjured evidence.
- I think that the basic principles of the relevant law were not in dispute.
- It was common ground that there is no tort of perjury in English law. This was explained by Lord Goddard CJ sitting at first instance in Hargreaves v. Bretherton [1959] 1 QB 45 at page 51:-
- An attempt to circumvent the lack of a tort of perjury by invoking an allegation of conspiracy was made in Australia in Cabassi v. Vila (1940) 64 CLR 130, a decision of the High Court of Australia. The leading judgment was that of Rich ACJ. He explained the public policy in not permitting claims based on conspiracy to cause damage by unlawful means, where the unlawful means was giving perjured evidence, at page 139 of his judgment:-
- In his judgment in the same case, Starke J said, at page 140:-
- Later, at page 141, Starke J considered specifically the question whether it made any difference that the claim was framed in conspiracy:-
- The decision in Cabassi v. Vila was considered by the Court of Appeal in England in Marrinan v. Vibart [1963] 1 QB 528. At page 536 Sellers LJ cited with approval the passages from the judgment of Starke J which I have quoted. All the members of the Court of Appeal agreed that the contention that a claim in conspiracy to cause damage by unlawful means, where the unlawful means was alleged to consist in giving perjured evidence, was unsustainable. Diplock LJ concluded his judgment, at page 539 by quoting Lord Halsbury LC in Watson v McEwan [1905] AC 480 that the appeal before him was "absolutely unarguable".
- Miss Brown accepted that, had IRL been seeking to allege a conspiracy to give false evidence in proceedings in England, the claim would have been unsustainable as a matter of law. However, she contended that the fact that the alleged perjury had been committed in Denmark made all the difference.
- She drew to my attention a passage in the speech of Lord Walker of Gestingthorpe in Revenue and Customs Commissioners v. Total Network SL [2008] 1 AC 1174 at page 1253A – D. Having referred to various authorities Lord Walker went on:-
- In his speech in that case, at paragraph 56 on page 1240, Lord Scott of Foscote agreed with the view of Lord Walker. However, other members of the House of Lords forming part of the panel took a more cautious position.
- Lord Hope of Craighead said, at paragraph 45 of his speech at page 1235F, that, "I would hold, in agreement with all [my emphasis] your Lordships that criminal conduct at common law or by statute can constitute unlawful means in unlawful means conspiracy".
- Lord Mance, in his speech, said, so far as is presently relevant, at page 1258E, and then page 1259D – F:-
- The fifth member of the panel was Lord Neuberger of Abbotsbury. In his speech in paragraph 221, at page 1284E – H, he said:-
- The decision of the Court of Appeal in Marrinan v. Vibart was cited in the speeches in Revenue and Customs Commissioners v. Total Network SL. It was not suggested that it did not represent the law in relation to the allegation of a conspiracy to cause damage by committing perjury. Miss Brown did not submit that the effect of the decision in Marrinan v. Vibart had been overturned by the decision in Total Network. What she did seek to derive from that decision was that an agreement to commit a crime could amount to unlawful means for the purposes of a conspiracy to cause damage by unlawful means. Consequently, she submitted, since committing perjury in a Danish court was a crime in Denmark, a conspiracy to commit perjury in a Danish court was an actionable conspiracy in England.
- That submission seemed to me to conflate two areas of law with a view to constructing something which could be wholly artificial. Read at its widest, the speech of Lord Walker in Total Network only went so far as contemplating that "criminal conduct (at common law or by statute)" might form the basis of a cause of action in conspiracy. What Lord Walker was plainly contemplating was that conduct which was criminal in England might form the basis of a cause of action in conspiracy, not that conduct which was criminal somewhere other than in England, and not criminal in England itself, might form the basis of a cause of action in conspiracy in England.
- The only relevant evidence of Danish law which was adduced before me was in the form of a Note of Advice prepared by Mr. Ole Spiermann, a partner in the firm of Bruun and Hjelje of Copenhagen, dated 4 November 2010. In the course of his Note of Advice Mr. Spiermann recorded that, unsurprisingly, perjury is a crime in Denmark, by virtue of section 158 of the Danish Criminal Code. However, as is obvious, it is not a crime in England to commit perjury in a court in Denmark.
- The main focus of the Note of Advice of Mr. Spiermann was the issue of whether, in Denmark, a witness who gives evidence at a trial is immune from suit, in the same way that a witness giving evidence in a trial in England is. Mr. Spiermann concluded, in paragraph 14, that:-
- Mr. Spiermann helpfully explained that, "Case law is sparse". The one relevant authority which he had been able to find was a decision of the Supreme Court of Denmark, Nielsen v. Konradi, reported in Ugeskrift for Retsvaesen [Weekly Law Reports] for 1959 at page 300. Mr. Spiermann attached a copy of that decision, happily in English, to his Note of Advice. The decision of the court was brief in the extreme. The full text of the judgment as reported was:-
- Mr. Spiermann concluded, from the fact that in Nielsen v. Konradi, the claim failed on the facts, that, if the facts had supported the claim, it would have been found to be sound in law. That approach to the interpretation of the judgment may be correct, as a matter of Danish law, but a decision to similar effect in an English court would be interpreted as leaving open the question whether, as a matter of law, the claim was sustainable. However that may be, I proceed on the basis that the conclusion expressed by Mr. Spiermann is correct as a matter of Danish law.
- On that basis, the critical question for me is whether a conspiracy to commit perjury in a court in Denmark is actionable in this court.
- There was no evidence as to whether, in Danish law, a conspiracy is actionable as a civil wrong, or, if so, what the elements of the wrong were.
- Consequently what I was being invited to contemplate was a conspiracy actionable in England to perform an act which was not criminal in England, but was criminal in Denmark.
- In my judgment, the critical question is not whether a witness who gave false evidence in Denmark would be immune from suit in Denmark in respect of that false testimony, but whether, under English law, a conspiracy to give false evidence in a court in Denmark is actionable.
- The answer to the question involves the need to consider what, in England, is usually called the witness immunity rule. That rule in fact is the foundation for the principles that perjury is not actionable as a tort in England, and neither is conspiracy to commit perjury.
- The witness immunity rule is well-established in England. In his speech in Watson v. McEwan Lord Halsbury LC expressed his view at page 486:-
- Most of the authorities in this area of the law focus on the attributes of the proceedings in which evidence is given if it is to attract the immunity. Thus in Trapp v. Mackie [1979] 1 WLR 377 Lord Diplock's consideration proceeded thus, at pages 379E – 380A:-
- It seems that it has never been decided in England whether the witness immunity rule applies to evidence given before a foreign court. Such a court is manifestly "recognised by law", at least where the court is a competent court of a Member State of the European Union, for it is recognised by the Judgments Regulation, which has the force of law in England and Wales.
- The issue in Hasselblad (GB) Ltd. v. Orbinson [1985] 1 QB 475 was whether a communication to the European Commission was covered by the witness immunity rule. The Court of Appeal determined in the negative. However, in the course of his judgment, Sir John Donaldson MR said, at pages 496H – 497A:-
- In Darker v. Chief Constable of the West Midlands Police [2001] 1 AC 435 Lord Hope of Craighead examined, in his speech at pages 446F – 447C, the public policy underlying the immunity:-
- There is no obvious reason why the public policy reasons for the witness immunity rule are not applicable to evidence given in competent courts of Member States of the European Union. As I have pointed out already, the judgments of such courts are entitled to recognition in this country and the substance of the decisions of such courts is not subject to review in any circumstances in this court. It must follow that, as a matter of the public policy of this country, witnesses giving evidence in any competent court in a Member State of the European Union should be encouraged to give evidence fully and frankly in the same way that persons giving evidence in this country are. Per contra, it seems undesirable to expose persons giving evidence in competent courts in other Member States to the risk of being pursued through the courts of this country in relation to allegations that they gave perjured evidence. To admit of that possibility would be to expose the courts of this country to what were, in effect, collateral attacks on the decisions of competent courts of other Member States, something which, as I have already explained, seems to me to be impermissible.
- The Conspiracy Claim is presently pleaded simply as an English conspiracy. No element of Danish law is pleaded. As an English conspiracy it must fail because of the decision of the Court of Appeal in Marrinan v. Vibart.
- The suggested amendment does not cure the deficiency. It was proposed only to plead that there was no witness immunity rule in Danish law. That plea is simply immaterial. As it seems to me, a viable conspiracy claim could only be pleaded on the basis that Danish law applied to all elements. That is to say, it would have to plead whatever is the Danish law of conspiracy, assuming that there is such a civil wrong recognised in Danish law, and then the facts relied upon as making out each necessary element. If that were done, technically there would be a viable claim, based on Danish law. Such claim would be vulnerable to the objection that it was a collateral attack on the Danish Judgment, but at least, apart from that, it would disclose a cause of action.
- What Miss Brown seems to have been trying to do is to produce a hybrid Anglo-Danish cause of action, in which English law supplied the conspiracy and Danish law supplied the crime. The simple answer to that hybrid tort is that it is not a crime in England to commit an offence in Denmark.
- Thus, for the reasons which I have given, the Conspiracy Claim is bound to fail.
- Miss Brown submitted that it was premature to strike out the Conspiracy Claim in advance of the finding by a court at trial of the relevant facts. In my judgment, no conceivable set of findings in respect of the facts pleaded in paragraphs 36 – 40 of the Particulars of Claim could result in IRL succeeding on the Conspiracy Claim. It would be pointless, and wasteful of the resources of the court and the money of the parties, to delay a decision against IRL in respect of the Conspiracy Claim until possibly many days had been spent in court investigating in evidence what had transpired in the Danish Court at the trial of the Danish Proceedings.
- In the result the Freezing Order and the Search Order are discharged and paragraphs 31 – 40 inclusive of the Particulars of Claim are struck out.
His Honour Judge Richard Seymour Q.C. :
Introduction
"ART. 1 – DEFINITIONS
The words below are agreed to mean as follows:
(1) "TERRITORY" shall mean the territory of the United Kingdom plus the Republic of Ireland.
(2) "PRODUCTS" shall mean the Products listed in Appendix 1 as attached to this Agreement and as from time to time agreed in writing between the parties
(3) …
(4) "AGREEMENT PERIOD" shall commence on the date of this Agreement and shall continue until terminated in accordance with this Agreement.
…
ART. 2 – APPOINTMENT OF THE DISTRIBUTOR
(1) The Supplier hereby appoints the Distributor as his Distributor for the sale of the Products within the Territory.
…
ART. 5 – OBLIGATIONS OF THE SUPPLIER
(1) …
(2) The Supplier must not appoint any other Distributor for the Territory and must not supply the Products to any other person, firm or company within the Territory.
(3) …
(4) The Supplier shall not be responsible for any loss if the Products are sold within the Territory from some other source outside the Territory but shall use his best endeavours to prevent it.
…
ART. 8 – TERM/TERMINATION
(1) This Agreement shall commence on the date of this Agreement and shall run for a period of five (5) years. After five (5) years the Agreement shall automatically renew itself for a further one (1) year unless it will be terminated by giving twelve (12) months notice.
(2) Irrespective of Art. 8(1) and in addition to any other rights and remedies at law either party may, by giving written notice to the other party, terminate immediately this Agreement on the following grounds:-
(a) …
(b) Where either party has committed a serious breach of its obligations under this Agreement unless such party rectifies this breach, as far as reasonably possible, within twenty-eight (28) days. This clause does not apply if time has been of the essence;
…
ART. 10 – MISCELLANEOUS
…
GOVERNING LAW
This Agreement shall be governed by Danish Law. Place of jurisdiction shall be Denmark. "
"1. Paragraphs 31 to 35 of the Particulars of Claim [in which the Unlawful Means Claim was pleaded] should be struck out pursuant to CPR r. 3.4 and/or summary judgment be entered in favour of the Defendants pursuant to CPR Part 24 on the grounds that they disclose no reasonable grounds for bringing the claim made therein and/or they are an abuse of the process and/or the Claimant has no real prospect of succeeding on the claim or issue set out therein.
2. Paragraphs 36 to 41 of the Particulars of Claim [in which the Conspiracy Claim, and a claim for interest, was pleaded] should be struck out pursuant to CPR r. 3.4 and/or summary judgment be entered in favour of the Defendants pursuant to CPR Part 24 on the grounds that they are irrelevant and/or they disclose no reasonable grounds for bringing the claim made therein and/or they are an abuse of the process and/or the Claimant has no real prospect of succeeding on the claim or issue set out therein.
3. The Freezing Order (the "Freezing Order") and/or Search Order granted by Mr. Justice McCombe on 12 [sic] June 2010 be discharged in their entirety.
4. Alternatively the Freezing Order be varied so as to reduce the sum thereby frozen to the sum of £300,000, or such other sum as this Court thinks fit; and there be ancillary variations of the Freezing Order consequential on that reduction; and that the Claimant do provide further fortification of its cross-undertaking in damages in such sum as the Court thinks fit.
5. There be an enquiry as to the loss and damage sustained by the Defendants as a result of the Freezing Order and what portion of that loss and damage should be paid by the Claimant pursuant to its cross-undertaking.
6. The Claimant provide security for costs pursuant to CPR r. 25.12 and 25.13 on the grounds there is reason to believe that it will be unable to pay the Defendants' costs if ordered to do so.
7. The Claimant provide better and proper answers to Requests 2 and 19-31 of the Defendants' Request for Further Information dated 2 September 2010. The purported Replies which have been provided so far (by way of the Reply document served on 30 September 2010) are inadequate and do not properly answer the Requests made.
8. That the Claimant should pay the costs of this application."
The applications to discharge the Freezing Order and the Search Order.
(a) The law in relation to freezing orders
"It follows that the evidence, including the evidence on the second question posed by the judge to which we turn in a moment, must be looked at as a whole. A "good arguable case" is no doubt the minimum which the plaintiff must show in order to cross what the judge rightly described as the "threshold" for the exercise of the jurisdiction. But at the end of the day the court must consider the evidence as a whole in deciding whether or not to exercise this statutory jurisdiction."
"one which is more than barely capable of serious argument, but not necessarily one which the judge considers would have a better than 50 per cent chance of success."
"26. In my judgment the way the matter was presented to Judge Thompson was, to say the least, highly unfortunate. It is important on applications for so seriously intrusive an order as a freezing order that great care should be taken in the presentation of the evidence to the court, so that the court can see not only whether the applicant has a good arguable case but also whether there is a real risk of dissipation of assets. There is no evidence, and it is not suggested, that Mr. Tomlinson had a poor credit record, or a history of defaulting on other debts, or had threatened to remove assets or otherwise deal with his assets. It is suggested that, because he had received large sums of money each year from Thane and Denbrae, he may have had some hoard of cash somewhere which would be easily moved or disposed of. But those monies were received some years ago, purportedly under the service agreements. Mr. Tomlinson has made no secret of the fact, as he puts in his witness statements, that he has had considerable expenses in relation to the education of his children, as well as in respect of a divorce. He may or may not be wholly truthful in relation to that. What is quite plain is that there was simply no evidence to refute what he says was the position, that he has spent all the monies that he has received. He acknowledges that he has had a fairly successful career in business. Nevertheless, he submits that he is now left with no monies. There is no evidence to the contrary.
27. On those facts, in my judgment, Judge Thompson when dealing with the application for a freezing order, in particular in relation to parties who were not present or represented at the hearing, should have been astute to ensure that the requirements of the rules are met. The requirements are imposed on applicants for a freezing order in order to protect persons who are not in a position to protect themselves. I conclude that Judge Thompson was wrong to have granted the freezing order on the information that was before him, in particular because there was no evidence of a real risk that Mr. Tomlinson or Reyall was likely to dissipate his or its assets.
28. The appeal before us is, of course, not from Judge Thompson's order: it is from the decision of Neuberger J, and that judge was viewing the matter afresh and had a discretion whether or not to discharge the freezing order, whether or not to impose a new freezing order. In my judgment Neuberger J' s reasons for finding Judge Thompson' s order one which should not be discharged are insufficient to justify the order which he made. First, Neuberger J said that the matters relied on for the good and [sic] arguable case applied in demonstrating that there was a real danger of the defendants dissipating their assets to defeat the judgment. I regret that I do not see that the judgment does support a conclusion that in the particular circumstances of Mr. Tomlinson and Reyall there was a real risk of assets being dissipated. Mr. Blackett-Ord submitted that it has now become the practice for parties to bring ex parte applications seeking a freezing order by pointing to some dishonesty, and that, he says, is sufficient to enable this court to make a freezing order. I have to say that, if that has become the practice, then the practice should be reconsidered. It is appropriate in each case for the court to scrutinise with care whether what is alleged to have been the dishonesty of the person against whom the order is sought in itself justifies the inference that that person has assets which he is likely to dissipate unless restricted."
"It has been made clear ever since Third Chandris Shipping v. Unimarine [1979] 2 All ER 972 that it is the duty of a plaintiff applying for a Mareva order to provide the court with information about the defendant … In my judgment the court should approve the application of the very useful check list set out in Gee and Andrews' Mareva Injunctions – Law and Practice (1st edn) pp 51 – 52 as to the sort of factors about which the court should have information before it decides to grant an application for a Mareva injunction. Here there was no real attempt to meet that obligation either."
"(1) The nature of the assets which are to be the subject of the proposed injunction, and the ease or difficulty with which they could be disposed of or dissipated. The claimant may find it easier to establish the risk of dissipation of a bank account, or of moveable chattels, than the risk that the defendant will dispose of real estate, e.g. his house or office. Nevertheless, in appropriate cases Mareva injunctions can be, and have been, granted where the defendant's only known asset within the jurisdiction is his house ...e.g. if he has put it up for sale and has evinced an intention to go and live abroad).
(2) The nature and financial standing of the defendant's business: see Lord Denning's remarks about certain types of offshore company in Third Chandris Shipping Corporation v. Unimarine, and Lawton L.J. , and Siporex Trade SA v. Comdel Commodities Ltd. Contrast, however, The Niedersachsen: even a "one-ship" company incorporated in Panama or Liberia may be a subsidiary of a substantial company incorporated elsewhere, and would be likely to honour its debts.
(3) The length of time the defendant has been in business. Stronger evidence of potential dissipation will be needed where the defendant is a long-established company with a reasonable market reputation than where little or nothing is known or can be ascertained about it.
(4) The domicile or residence of the defendant. At one time, Mareva injunctions were granted to prevent only foreign defendants from removing their assets from the jurisdiction to defeat a judgment or arbitration award. While the jurisdiction has widened to include domestic defendants, the court will be less ready to infer that a defendant who is based in England, and has a home or established business here, will remove or dissipate his assets. On the other hand, if the defendant company, though English, is controlled by an offshore company of the kind described by Lord Denning in Third Chandris Shipping Corporation v. Unimarine, the inference that there is a real risk that a judgment or award may go unsatisfied may be more readily drawn.
(5) If the defendant is a foreign company, partnership, or trader, the country in which it has been registered or has its main business address, and the availability or non-availability of any machinery for reciprocal enforcement of English judgments or arbitration awards in that country. If such machinery does exist, the length of time it would take to implement it may be an important factor.
(6) The defendant's past or existing credit record. A history of default in honouring other debts may be a powerful factor in the claimant's favour – on the other hand, persistent default in honouring debts, if it occurs in a period shortly before the claimant commences his action, may signify nothing more than the fact that the defendant has fallen on hard times and has cash-flow difficulties, or is about to become insolvent. The possibility of insolvency does not justify the granting of Mareva relief. As a factor it may weigh against it, on the grounds that an injunction would be oppressive because it might deprive the defendant of a last opportunity to put his business affairs in good order again. The fact that a Mareva injunction has been granted over the defendant's assets may well discourage a bank or other company from lending him money or otherwise coming to his aid.
(7) Any intention expressed by the defendant about future dealings with his English assets, or assets outside the jurisdiction.
(8) Connections between a defendant company and other companies which have defaulted on arbitration awards or judgments. If the defendant company is the subsidiary of a foreign company which has allowed other subsidiaries to default on awards or judgments, or go into liquidation owing large sums of money to trade creditors, this may be a powerful factor in favour of granting an injunction.
(9) The defendant's behaviour in response to the claimant's claims: a pattern of evasiveness, or unwillingness to participate in the litigation or arbitration, or raising thin defences after admitting liability, or total silence, may be factors which assist the claimant."
"I therefore turn to the principles underlying the jurisdiction. (1) So far as it lies in their power, the courts will not permit the course of justice to be frustrated by a defendant taking action, the purpose of which is to render nugatory or less effective any judgment or order which the plaintiff may thereafter obtain. (2) It is not the purpose of a Mareva injunction to prevent a defendant acting as he would have acted in the absence of a claim against him. Whilst a defendant who is a natural person can and should be enjoined from indulging in a spending spree undertaken with the intention of dissipating or reducing his assets before the day of judgment, he cannot be required to reduce his ordinary standard of living with a view to putting by sums to satisfy a judgment which may or may not be given in the future. Equally no defendant, whether a natural or a juridical person, can be enjoined in terms which will prevent him from carrying on his business in the ordinary way or from meeting his debts or other obligations as they come due prior to judgment being given in the action. (3) Justice requires that defendants be free to incur and discharge obligations in respect of professional advice and assistance in resisting the plaintiff's claims. (4) It is not the purpose of a Mareva injunction to render the plaintiff a secured creditor, although this may be the result if the defendant offers a third party guarantee or bond in order to avoid such an injunction being imposed. (5) The approach called for by the decision in American Cyanamid Co. v. Ethicon Ltd. [1975] 1 All ER 504, [1975] AC 396 has, as such, no application to the grant or refusal of Mareva injunctions which proceed on principles which are quite different from those applicable to other interlocutory injunctions."
"On the present appeal we have been mainly concerned with the tests to be applied in answering the two questions posed by the judge. However, other matters may often also have to be borne in mind. The ultimate test for the exercise of the jurisdiction is whether, in all the circumstances, the case is one in which it appears to the court "to be just and convenient" to grant the injunction: see section 37 of the Supreme Court Act 1981 which we have already set out. Thus, the conduct of the plaintiffs may be material, and the rights of any third parties who may be affected by the grant of an injunction may often also have to be borne in mind: see Galaxia Maritime SA v. Mineralimportexport [1982] 1 WLR 539. Further, it must always be remembered that if, or to the extent that, the grant of a Mareva injunction inflicts hardship on the defendants, their legitimate interests must prevail over those of the plaintiffs, who seek to obtain security for a claim which may appear to be well-founded but which still remains to be established at the trial. There is no need to repeat here what was said in that connection in Z Ltd. v. A – Z and AA – LL [1982] QB 558, 585, 586. If the plaintiffs are in a position to contend that their claim is not open to doubt, then they must satisfy the requirements of an application for summary judgment under RSC Ord. 14. But if they apply for a Mareva injunction on the ground that they have "a good arguable case", then the balance should be weighed as we have indicated above."
"33. Whenever an interlocutory injunction is applied for, the judge, if otherwise minded to make the order, should, as a matter of good practice, pay careful attention to the substantive relief that is, or will be, sought. The interlocutory injunction in aid of the substantive relief should not place a greater burden on the respondent than is necessary. The yardstick in section 37(1) of the 1981 Act, "just and convenient", must be applied having regard to the interests not only of the claimant but also of the defendant. This is particularly so in the case of freezing orders applied for without notice. Assets of the defendant to which the claimant has no proprietary claim whatever are to be frozen so as to constitute a source from which the claimant can hope to satisfy the money judgment that, in the substantive proceedings, he hopes to obtain. The frozen assets are removed for the time being from any beneficial use by their owner, the defendant. This is a draconian remedy and the strict rules relating to full disclosure by the claimant are a recognition of the nature of the remedy and its potential for causing injustice to the defendant."
"I see some force in some of these criticisms, if and so far as the judge intended to draw any fundamental distinction between the litigant's duty of full disclosure of material facts, and the advocate's duty to assist the court by reference to (or correct summary of) relevant authorities, statutory provisions and practice directions. In the context of what should be disclosed to the court on a without notice application, the distinction between fact and law is not clear-cut. Many of the authorities already cited refer almost interchangeably to non-disclosure of "material facts" or "relevant matters". Little weight can be attached to these slight variations in language. But some statements of the principle of full disclosure extend to what the court is told about matters of law."
"The correct view, it seems to me, is that the advocate's individual duty to the court, and the collective duty to the court, on a without notice application, of the plaintiff and his team of legal advisers are duties which often overlap. Where they do overlap it will usually be unnecessary, and unprofitable, to insist on one categorisation to the exclusion of the other. It will however always be necessary for the court, in deciding what should be the consequences of any breach of duty, to take account of all the relevant circumstances, including the gravity of the breach, the excuse or explanation offered, and the severity and duration of the prejudice occasioned to the defendant (which will include the question whether the consequences of the breach are remediable and have been remedied). Above all the court must bear in mind the overriding objective and the need for proportionality. As Balcombe LJ said in Brink's Mat Ltd. v. Elcombe [1988] 1 WLR 1350, 1358, this judge-made rule cannot itself be allowed to become an instrument of injustice. The relative degrees of culpability of the client and of his lawyers are not irrelevant but will seldom if ever be determinative."
"It cannot be emphasised too strongly that at an urgent without notice hearing for a freezing order, as well as for a search order or any other form of interim injunction, there is a high duty to make full, fair and accurate disclosure of material information to the court and to draw the court's attention to significant factual, legal and procedural aspects of the case. It is the particular duty of the advocate to see that the correct legal procedures and forms are used; that a written skeleton argument and a properly drafted order are prepared by him personally and lodged with the court before the oral hearing; and that at the hearing the court's attention is drawn by him to unusual features of the evidence adduced, to the applicable law and to the formalities and procedure to be observed."
"(2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy MR, at p. 504, citing Dalgleish v. Jarvie (1850) 2 Mac & G 231, 238, and Browne-Wilkinson J in Thermax Ltd. v. Schott Industrial Glass Ltd. [1981] FSR 289, 295.
(3) The applicant must make proper inquiries before making the application: see Bank Mellat v. Nikpour [1985] FSR 87. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries.
(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which the application is made and the probable effect of the order on the defendant: see, for example, the examination by Scott J of the possible effect of an Anton Piller order in Columbia Picture Industries Inc. v. Robinson [1987] Ch 38; and (c) the degree of legitimate urgency and the time available for the making of inquiries: see per Slade LJ in Bank Mellat v. Nikpour [1985] FSR 87, 92 – 93.
(5) If material non-disclosure is established the court will be "astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure … is deprived of any advantage he may have derived by that breach of duty:" see per Donaldson LJ in Bank Mellat v. Nikpour, at p. 91, citing Warrington LJ in the Kensington Income Tax Commissioners' case [1917] 1 KB 486, 509.
(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented.
(7) Finally, it "is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded:" per Lord Denning MR in Bank Mellat v. Nikpour [1985] FSR 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms."
"In deciding in a case where there has undoubtedly been non-disclosure whether or not there should be a discharge of an existing injunction and a re-grant of fresh injunctions, it is most important that the court assesses the degree and extent of the culpability with regard to the non-disclosure, and the importance and significance of the outcome of the application for an injunction of the matters which were not disclosed to the court.
In this connection Mr. Brodie at one stage of his argument submitted that the acid test was whether or not the original judge who granted the injunction ex parte would have been likely to have arrived at a different decision if the material matters had been before him. I do not regard that as being the acid test. Indeed, although I regard it as a relevant matter when considering the question of discharge and re-grant of injunctions, I do not regard it as a matter of great significance unless the facts which were not disclosed would have resulted in the refusal of an injunction."
(b) The law in relation to search orders
"I agree with all that Lord Denning MR has said. The proposed order is at the extremity of this court's powers. Such orders, therefore, will rarely be made, and only when there is no alternative way of ensuring that justice is done to the applicant.
There are three essential pre-conditions for the making of such an order, in my judgment. First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made."
(c) The law as to inducing a breach of contract
"39. To be liable for inducing breach of contract, you must know that you are inducing a breach of contract. It is not enough that you know that you are procuring an act which, as a matter of law or construction of the contract, is a breach. You must actually realize that it will have this effect. Nor does it matter that you ought reasonably to have done so. This proposition is most strikingly illustrated by the decision of this House in British Industrial Plastics Ltd. v. Ferguson [1940] 1 All ER 479, in which the plaintiff's former employee offered the defendant information about one of the plaintiff's secret processes which he, as an employee, had invented. The defendant knew that the employee had a contractual obligation not to reveal trade secrets but held the eccentric opinion that if the process was patentable, it would be the exclusive property of the employee. He took the information in the honest belief that the employee would not be in breach of contract. In the Court of Appeal [1938] 4 All ER 504, 513, MacKinnon LJ observed tartly that in accepting this evidence the judge had "vindicated his honesty … at the expense of his intelligence" but he and the House of Lords agreed that he could not be held liable for inducing a breach of contract.
40. The question of what counts as knowledge for the purposes of liability for inducing a breach of contract has also been the subject of a consistent line of decisions. In Emerald Construction Co. Ltd. v. Lowthian [1966] 1 WLR 691 union officials threatened a building contractor with a strike unless he terminated a subcontract for the supply of labour. The defendants obviously knew that there was a contract – they wanted it terminated – but the court found that they did not know its terms and, in particular, how soon it could be terminated. Lord Denning MR said, at pp 700 – 701:
"Even if they did not know the actual terms of the contract, but had the means of knowledge – which they deliberately disregarded – that would be enough. Like the man who turns a blind eye. So here, if the officers deliberately sought to get this contract terminated by breach or not, they would do wrong. For it is unlawful for a third person to procure a breach of contract knowingly, or recklessly, indifferent whether it is a breach or not."
41. This statement of the law has since been followed in many cases and, so far as I am aware, has not given rise to any difficulty. It is in accordance with the general principle of law that a conscious decision not to inquire into the existence of a fact is in many cases treated as equivalent to knowledge of that fact: see Manifest Shipping Co. Ltd. v. Uni-Polaris Insurance Co. Ltd. [2003] 1 AC 469. It is not the same as negligence or even gross negligence: in British Industrial Plastics Ltd. v. Ferguson [1940] 1 All ER 479, for example, Mr. Ferguson did not deliberately abstain from inquiry into whether disclosure of the secret process would be a breach of contract. He negligently made the wrong inquiry, but that is an altogether different state of mind."
(d) "A good arguable case"
"Regarding 2005 I have received information and documentation in the form of emails sent from PMI to Diafarm A/S containing orders for specific Diafarm A/S products that are comprised by the Agreement. It appears from the orders that the particular products are to be delivered to Direct Beauty Products Ltd. ("DBP") in Great Britain.
Furthermore I have received invoices from Diafarm A/S from which it appears that a number of products from Diafarm A/S which are also comprised by the Agreement have been delivered to DBP in Great Britain.
In so far as 2006 and 2007 are concerned my client is in the process of gathering evidence that is similar to the above mentioned documentation.
The documentation proves that PMI ordered shipments of Diafarm A/S products for DBP and that the particular shipments have been delivered to DBP in Great Britain. This constitutes a serious breach of the obligations owed to IRL under Article 5(2) of the Agreement which entitles IRL to terminate the Agreement immediately under Article 8(2) of the Agreement."
"The Court's assessment of this issue is based on §5(2) of the Agreement, pursuant to which Irish Response was the exclusive distributor of Pharma Medico's products in the Territory, which comprised the UK and Ireland, and pursuant to which, Pharma Medico could not supply the products to any other persons, enterprises or companies within the Territory. Pharma Medico would, pursuant to §5(4) of the Agreement, not be liable for any losses in the event that the products were to be sold from sources outside the Territory, but would endeavour to prevent such sales.
The Court bases its decision in part on the premise that James Murphy and Simon Gook had known one another for a number of years, and that they entered into a cooperative arrangement in 2004 under which Direct Beauty Products purchased Nourkrin® ExtraStrength from Irish Response for sale on the English market. There were, in this context, discussions between these parties regarding the extent of Irish Response's exclusive distribution rights, and concerning a possible cooperative arrangement with regard to the distribution of Pharma Medico's products in the rest of Europe.
According to presented copies of invoices from Diafarm A/S, a total of 38,000 Nourkrin® ExtraStrength were delivered to Direct Beauty Products from January to October 2005. According to the declarations of Morten Christensen and Simon Gook and presented correspondence, the Court bases its decision in part on the premise that these products were delivered to Direct Beauty Products' transit warehouse in England with a view to their further sale in Italy. The products were delivered in boxes that were provided with labels bearing Irish Response's name. According to the declarations, it was presumed that Direct Beauty Products would put their own labels on the boxes before sending them on to the European market.
It has not been proven that Pharma Medico supplied Nourkrin® ExtraStrength directly to Direct Beauty Products after 2005.
Finally, the Court bases its decision in part on the premise that, in Britain in 2006, Direct Beauty Products sold Nourkrin® ExtraStrength that had been supplied by Pharma Medico, including to the Mashco company, in violation of the Agreement.
The Court finds that, even though they were initially made to Direct Beauty Products in the Territory, these deliveries do not, in and of themselves, constitute a violation of §5 of the Agreement. The Court finds that the Agreement cannot be interpreted as to preclude Pharma Medico from delivering products for storage in such a transit warehouse in the Territory with a view to their sale outside the Territory. Nor are there grounds for assuming that the purpose of the deliveries was for Direct Beauty Products to distribute, in violation of the Agreement, the products in Great Britain and Ireland in competition with Irish Response, or that Pharma Medico was aware that this actually occurred in 2006.
The issue is therefore whether Pharma Medico did, despite this, fail to discharge its obligation to endeavour to prevent deliveries to other customers from being sold in the Irish or English market in violation of Irish Response's rights.
Based on the declarations provided, it was stated on Pharma Medico's invoices that the goods were not to be sold in Ireland and England, but Pharma Medico exercised no direct oversight to determine whether Direct Beauty Products was complying with the presumed conditions for the transaction, or that the goods were in fact being forwarded for sale in areas outside the Territory.
However, based on the correspondence among the three parties in 2005 concerning Direct Beauty Products' plans to distribute Pharma Medico's products, including Nourkrin® ExtraStrength, and given that Pharma Medico's deliveries of 38,000 Nourkrin® ExtraStrength were made to Direct Beauty Products in 2005, that Direct Beauty Products took concrete steps to sell this product in Italy, that the further sale by Direct Beauty Products to the English market took place during the first half of 2007 without Pharma Medico's knowledge, and that Irish Response simultaneously delivered the same product to Direct Beauty Products, the Court does not find that Direct Beauty Products' sales in violation of the Agreement can be blamed on Pharma Medico to such an extent that grounds exist to find that a material breach of the Agreement has occurred.
With regard to Mashco, the Court assumes, based on the evidence presented, that Direct Beauty Products resold the Nourkrin® ExtraStrength delivered by Pharma Medico in 2005 to Mashco in 2007. The Court does not find it to have been proven that Pharma Medico sold Nourkrin® ExtraStrength directly to Mashco in violation of the Agreement.
Nor, on this basis, can Mashco's sale of Nourkrin® ExtraStrength within the Territory in 2007 constitute a basis for Irish Response's cancellation of the Agreement on grounds of a material breach."
"A judgment given in a Member State shall be recognised in the other Member States without any special procedure being required."
"Under no circumstances may a foreign judgment be reviewed as to its substance."
"My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power."
"25. I therefore conclude that it would bring the administration of justice into disrepute if Mr. Laing were to be permitted in the second claim to advance exactly the same case as was tried and rejected by Judge Thornton. If Judge Thornton's judgment was to be disturbed, the proper course was to appeal, rather than seek to have it in effect reversed by a court not of superior but of concurrent jurisdiction hearing the second claim. That the second claim is in substance an attempt to reverse Judge Thornton is important in the context of wider principles of finality of judgments. In Hunter, at p 545D, Lord Diplock said that the proper course to upset the decision of a court of first instance was by way of appeal. Where, wholly exceptionally, a collateral, first instance, action can be brought it has to be based on new evidence, that must be such as entirely changes the aspect of the case: see per Earl Cairns LC in Phosphate Sewage v. Molleson (1879) 4 App Cas 801 at p, 814. The second claim in our case not merely falls short of that standard, but relies on no new evidence at all.
26. It is however argued that all of that is irrelevant, or at least not conclusive, where the second claim is, unlike the claim in Phosphate Sewage, not between the same parties. The appellant relied on, and Langley J was impressed by, observations by Lord Hoffmann in Hall v. Simons [2002] 1 AC 615 at p. 705H, on the status of claims of abuse of process in negligence actions against solicitors involved in earlier proceedings:
"I see no objection on grounds of public interest to a claim that a civil case was lost because of the negligence of the advocate, merely because the case went to a full trial. In such a case the plaintiff accepts that the decision is res judicata and binding upon him. He claims, however, that if the right arguments had been used or evidence called, it would have been decided differently."
In the present case, Mr. Laing perforce accepts that the decision of Judge Thornton is binding on him. The obligation to Mr. Watson placed on him by that judgment is the loss that he seeks to recover in the second claim against TW. That judgment against him was only obtained by Mr. Watson because of the negligence of Mr. Kelly. Accordingly, the second claim does not seek to reverse the decision of Judge Thornton, but rather seeks to recover from TW the cost to Mr. Laing of that decision.
27. I of course agree that it will not necessarily, or perhaps usually, be a valid objection to a claim for solicitors' negligence in or about litigation that the claim asserts matters different from those decided in that litigation. That is so not only of cases where the solicitors have made what might be called administrative errors that have prevented the earlier proceedings from being properly pursued or their outcome challenged by the proper means (eg Walpole v. Partridge & Wilson [1994] AC 106); but also where errors in assembling the evidence or understanding the law are alleged to have led to an incorrect result, as was the case in Hall v. Simons itself. But the present case is significantly different from those just mentioned. The difference is that, as shown in §19 above, in order to succeed in the new claim Mr. Laing has to demonstrate not only that the decision of Judge Thornton was wrong, but also that it was wrong because it wrongly assessed the very matters that are relied on in support of the new claim. That is an abusive relitigation of Judge Thornton's decision not by appeal but in collateral proceedings, and in substance if not strictly in form falls foul of the Phosphate Sewage rule."
"Secondly, it must be borne in mind that the Brussels Convention [the predecessor to the Judgments Regulation] is necessarily based on the trust which the contracting states accord to each other's legal systems and judicial institutions. It is that mutual trust which has enabled a compulsory system of jurisdiction to be established, which all the courts within the purview of the Convention are required to respect, and as a corollary the waiver by those states of the right to apply their internal rules on recognition and enforcement of foreign judgments in favour of a simplified mechanism for the recognition and enforcement of judgments. It is also common ground that the Convention thereby seeks to ensure legal certainty by allowing individuals to foresee with sufficient certainty which court will have jurisdiction."
"… In my judgment, where the foreign Court has, in its judgment, ruled on precisely the matters that a defendant seeks to raise when challenging the judgment on the ground of fraud, the [Brussels] Convention precludes the Court from reviewing the conclusion of the foreign Court. …"
"That was a general comment and not made in the context of a Convention case. In my judgment, where registration of a Convention judgment is challenged on the ground that the foreign Court has been fraudulently deceived, the English Court should first consider whether a remedy lies in such a case in the foreign jurisdiction in question. If so it will normally be appropriate to leave the defendant to pursue his remedy in that jurisdiction. Such a course commends itself for two reasons. First it accords with the spirit of the Convention that all issues should, so far as possible, be dealt with by the State enjoying the original jurisdiction. Secondly, the Courts of that State are likely to be better able to assess whether the original judgment was procured by fraud.
…
… the English Court should not normally entertain a challenge to a Convention judgment in circumstances where it would not permit a challenge to an English judgment."
"There is nothing in the authorities which precludes a party from obtaining summary judgment or an order striking out a pleading on the grounds of abuse of process where a fraud is alleged. It is axiomatic that where fraud is alleged full particulars should be given. Where allegations of fraud have been made and determined abroad [as it was in that case], summary judgment or striking out in subsequent proceedings are appropriate remedies in the absence of plausible evidence disclosing at least a prima facie case of fraud. No strict rule can be laid down; in every case the court must decide whether justice requires the further investigation of alleged fraud or requires that the plaintiff, having obtained a foreign judgment, shall no longer be frustrated in enforcing that judgment."
"There remains to be considered the circumstances in which the existence at the commencement of the civil action of "fresh evidence" obtained since the criminal trial and the probative weight of such evidence justify making an exception to the general rule of public policy that the use of civil actions to initiate collateral attacks on final decisions against the intending plaintiff by criminal courts of competent jurisdiction should be treated as an abuse of the process of the court.
I can deal with this very shortly, for I find myself in full agreement with the judgment of Goff LJ. He points out that on this aspect of the case Hunter and the other Birmingham Bombers fail in limine because the so-called "fresh evidence" on which they seek to rely in the civil action was available at the trial or could by reasonable diligence have been obtained then. He examines also the two suggested tests as to the character of fresh evidence which would justify departing from the general policy by permitting the plaintiff to challenge a previous final decision against him by a court of competent jurisdiction, and he adopts as the proper test that laid down by Earl Cairns LC in Phosphate Sewage Co. Ltd. v. Molleson (1879) 4 App Cas 801, 814, namely that the new evidence must be such as "entirely changes the aspect of the case". This is perhaps a little stronger than that suggested by Denning LJ in Ladd v. Marshall [1954] 1 WLR 1489, 1491 as justifying the reception of fresh evidence by the Court of Appeal in a civil action, viz., that the evidence "… would probably have an important influence on the result of the case, though it need not be decisive; …"
The latter test, however, is applicable where the proper course to upset the decision of a court of first instance is being taken, that is to say, by appealing to a court with jurisdiction to hear appeals from the first-instance court and whose procedure, like that of the Court of Appeal (Civil Division), is by way of a rehearing. I agree with Goff LJ that in the case of collateral attack in a court of coordinate jurisdiction the more rigorous test laid down by Earl Cairns is appropriate."
(e) Real risk of dissipation
"24. The Danish Judgment records that Mr. Gook gave the following key evidence:
a. He knew IRL had the sole distribution rights for Nourkrin in the UK and Ireland and therefore DBP purchased Nourkrin from IRL in 2004 – 2006 for sale in the UK and Ireland.
b. DBP placed an order for Nourkrin from PMI in 2005 knowing it was not allowed to sell it in the UK and Ireland, which was also stated on the invoice on delivery.
c. The order was intended for sale in the Italian market.
d. DBP did not receive deliveries from PMI in 2006 and 2007.
e. Sales on the Italian market did not go particularly well and about half of the Nourkrin product was returned to DBP and some of these were sold to Mashco during the first 6 months of 2007. Mr. Christensen did not know about this and it was "not so good" because it conflicted with his agreement with Mr. Christensen.
f. As far as he could remember, Mashco bought about 10,000 – 12,000 boxes."
"New evidence obtained after the Danish Judgment
31. After the Danish Judgment was handed down, IRL obtained further evidence as follows:
a. From the Danish police: invoices issued by Direct Productions [sic] to DBP for sales of 44,000 and 55,000 boxes of Nourkrin in 2006 and 2007 respectively …
b. From the Danish police: further Diafarm invoices showing a further 7,000 (additional to the admitted 38,000) boxes sold by PMI to DBP in 2005; …
c. From HTS [that is, Herts]: invoices from DBP to Mashco which show that DBP sold 52,000 boxes of Nourkrin to Mashco in 2007 (rather than 10,000 – 12,000) …
Relevance of the new evidence
32. The new evidence demonstrates that the evidence which is recorded in the Danish Judgment as having been given by each of Messrs. Gook, Christensen and Mashru was false. The falsity of the evidence was considered at paragraphs 62 – 67 of the Without Notice Skeleton and Affidavit [in support of the application for the Freezing Order and the Search Order, made by Mr. Murphy, but unsworn at the time of the hearing before McCombe J] paragraphs 126 – 150.
33. In particular, the new evidence showed that:
a. PMI sold substantial quantities of Nourkrin to DBP in 2006 and 2007 (which necessarily could not have been for the Italian market as that had, according to Mr. Gook and Mr. Christensen's evidence, been unsuccessful in 2005).
b. DBP sold about 55,000 boxes of Nourkrin to Mashco (not 10 – 12,000) (which sales could not be explained by being part of the original 38,000 admitted to have been purchased by DBP for Italy in 2005 and/or the number of boxes of Nourkrin purchased by DBP from IRL)."
"Breach of distribution agreement in relation to Nourkrin products
We act for Irish Response Limited. Our client has obtained evidence that you have been receiving supplies of Nourkrin products from Pharma Medico International APS [sic] ("Pharma"). This supply to you by Pharma breaches an agreement made in 2002 between our client and Pharma which gives our client the exclusive distribution rights to the Nourkrin products in the UK and Ireland (the "Agreement").
James Murphy of Irish Response Limited introduced Pharma's principal, Morten Christensen, to Simon Gook of your company in 2004. Simon Gook was aware that our client had the exclusive distribution rights to the above products in the UK and Ireland but it appears that he went on to use this introduction to enter into discussions with Pharma and persuaded Pharma to supply you directly with the Nourkrin products.
Our client has suffered significant losses resulting from Pharma's breaches of the Agreement and your company's sales of the products in the UK. Our client therefore intends to make a claim against you for inducing the breaches of contract by Pharma and/or conspiring with Pharma to damage our client's economic interests.
Please confirm immediately that:
1. You will not take delivery of any further supplies of Nourkrin products from Pharma. Please be advised that if you fail to give such confirmation, our client reserves the right to pursue an injunction against you (in addition to a claim for lost profits). Insofar as you continue to sell Nourkrin products in the UK this will increase the value of our client's claim against you.
2. You will indemnify our client for the lost profits resulting from your sales of Nourkrin products in the UK.
If you fail to provide the above confirmations, our client reserves the right to commence proceedings against you without further notice."
"Breach of distribution agreement in relation to Nourkrin products
We deny the allegations made in your letter dated 1st October 2007.
We have email communications from your client following the meeting with Morten Christensen in 2004 which are explicit in the agreement that DBP will be distributing the Nourkrin product range in the UK and Europe through the DBP Magazine, Essential Woman.
The fact that your client then decided to publish his own magazine in the UK and Ireland was by his own choice.
We are not aware of and have not seen any exclusive distribution agreement for the UK and Ireland as you claim in your letter of 1st October.
We are selling genuine Nourkrin products; we are not infringing any Copyright or Trademarks; in fact it is your client that is continually breaking the EU Competition rules by insisting that we increase our prices to come 'into line' with his RRP."
"13. In about June 2004 Mr. Murphy told Mr. Gook that IRL had the exclusive distribution rights for Nourkrin products in the UK and the Republic of Ireland. …"
(f) Just and convenient
(g) Duty of fair presentation
"It was an oversight on IRL's part that this letter and DBP's response dated 16 October 2007 were not included in my Affidavit (pages 46 – 47 of JHM 1) [it is unclear to what this is supposed to refer – pages 46 and 47 of exhibit JHM 1 are part of the accounts of IRL for the year ended 31 December 2008]. At the time of the without notice application, I had forgotten about these letters as it was my recollection that IRL had only instructed solicitors in England to write to DBP in relation to Cheryl Baker and her endorsement of Nourkrin, as set out at paragraph 36.8.4 above."
"The application [to McCombe J] was made without notice because of the need not to alert the Defendants to the application and not on the basis that the application was urgent: see Affidavit paragraph 208 and Skeleton paragraph 118. Nothing was said to the court on the without notice application to suggest that it was being made without notice due to any urgency."
(h) Variation of the amount of the Freezing Order
(i) The Search Order
"An Anton Piller order plainly carries the suggestion that a person is not to be trusted and is likely to destroy evidence. This is a very serious thing. People who owe the defendant money, or may enter into further obligations with him, are reluctant to carry on business with him in the ordinary way while this is hanging over him. Consequently, I discharge the Anton Piller order and I believe it to be fair to the defendant to express the view that if the true facts had been known the order should never have been made."
Striking out the Unlawful Means Claim
"31. As above, it is IRL's primary case that Mr. Christensen and, therefore, PMI, knew that DBP intended to re-sell the Nourkrin products purchased from PMI within the Territory. If, contrary to that primary case, Mr. Christensen and, therefore, PMI genuinely believed that DBP intended to re-sell the Nourkrin products in Italy and/or France, then it is averred that such belief was caused by Mr. Gook, acting on behalf of DBP, representing to Mr. Christensen that DBP was purchasing the Nourkrin products for resale in Italy and/or France.
32. Any such representation would have been made by Mr. Gook, on behalf of DBP, with knowledge that it was false and with the intention that it would be acted upon by PMI by its agreement to sell Nourkrin products to DBP.
33. In such premises, even if the sale by PMI to DBP of the said Nourkrin products did not constitute a breach of the terms of the Distribution Agreement by PMI, Mr. Gook intentionally caused loss to IRL by fraudulently inducing PMI to sell the Nourkrin products to DBP which Mr. Gook intended should be re-sold within the Territory contrary to IRL's rights under the Distribution Agreement. Mr. Gook's said intentions are to be attributed to DBP as its directing mind and will.
34. Further, Mr. Gook knowingly and deliberately caused and/or procured DBP to induce and/or procure PMI to sell the Nourkrin products to DBP as aforesaid. In the premises Mr. Gook is personally liable for the tort of DBP.
35. In the premises, IRL has suffered the same loss and damage by reason of Mr. Gook's and DBP's said actions as set out at paragraphs 27 – 30 above."
Whether the Conspiracy Claim should be struck out
"36. IRL repeats paragraphs 19 and 20 above [in which was pleaded the relevant evidence given in the trial of the Danish Proceedings which was contended to have been false].
37. The said false evidence was given by Messrs. Gook, Christensen and Mashru pursuant to an express or implicit agreement between them and with the intention that the Danish court would rely upon such false evidence in finding in favour of PMI, and against IRL, in the Danish proceedings.
38. The Danish court did rely upon the false evidence of each of Messrs. Gook, Christensen and Mashru in finding in favour of PMI, and against IRL, in the Danish proceedings. As a result of such finding, the Danish court gave judgment for PMI against IRL in the sum of €14,700,000 plus interest and costs and dismissed IRL's claim for damages against PMI in the sum of €11,000,000 ("the Danish Judgment"). The Danish Judgment is currently the subject of an appeal by IRL and its enforcement is currently stayed.
39. In the premises, IRL has suffered loss and damage as a result of the false evidence given by each of Messrs. Gook, Christensen and Mashru in the Danish proceedings pursuant to the conspiracy pleaded at paragraphs 36 – 38 above.
PARTICULARS OF LOSS AND DAMAGE
40. The best particulars which IRL is presently able to give of the loss and damage suffered by it as a result of the said conspiracy are as follows:
a. IRL is subject to a judgment in favour of PMI as aforesaid in the sum of €14,700,000 plus interest and costs;
b. IRL was denied judgment against PMI as aforesaid in the sum of €11,000,000;
c. PMI issued a press release on 20 May 2009 regarding the Danish Judgment which claimed that "Lifes2Good [a trading style of IRL] has disparaged Nourkrin, among others with false statements on the effectiveness of Nourkrin". A copy of the press release is annexed hereto at Annex 6. This press release was sent to L2G employees, IRL's bankers and shareholders, state development agencies and trade media outlets. By way of example:
i) Annexed hereto at Annex 7 are two emails from Mr. Gook to Ian Prager (IRL's UK media buyer) dated 22 May 2009 and 25 May 2009 in relation to the press release; and
ii) On receipt of the press release, one investor shareholder immediately suspended a second planned equity injection into IRL, which was aimed at funding IRL' s market developments in Europe and the US;
d. Credit insurers have been advised of the Danish Judgment and as a result IRL has been unable to get credit facilities with some continental suppliers; and
e. The Danish Judgment has caused IRL further damage to its business and to its reputation."
"The simple point that I have to decide is whether or not an action lies at the suit of the person who says that he has been damnified by false evidence given against him. In my opinion it is perfectly clear and beyond peradventure nowadays that such an action will not lie. The matter has been adumbrated and considered since the thirty-eighth and thirty-ninth year of the reign of Queen Elizabeth I. It was raised again in the eighteenth year of the reign of James I. It is true that in Part III, Chapter 74, p. 164 of Coke's Institutes, there is a passage by that most learned writer which gives rise to an argument that such an action would lie, but the two cases, Damport v. Sympson and Eyres v. Sedgewicke heard in the reigns of Queen Elizabeth I and James I decided that it would not. I do not propose to deal with those cases at any length because there is to be found modern authority to the effect that such an action will not lie, and nobody has been able to point to any case in the whole history of our law in which such an action has been entertained by the courts."
"A proceeding of this kind is an attempt to re-examine the merits of a judgment in a collateral suit between the same parties. Reasons of public policy and uniform authority forbid the attacking and impeachment of a judgment in this way. The plaintiff's only remedy is an equitable proceeding to set aside the judgment, or a petition for a new trial under the statute. An action by the defeated party cannot, for equally good reasons, be maintained against a witness or witnesses for giving false testimony in favour of his opponent. Public policy and the safe administration of justice require that witnesses, who are a necessary part of the judicial machinery, be privileged against any restraint, excepting that imposed by the penalty for perjury. Though not a party to the former suit and judgment, the merits of that judgment cannot be re-examined by a trial of the witness' testimony in a suit against him. The procedure, if permitted, would encourage and multiply vexatious suits, and lead to interminable litigation …"
"No action lies in respect of evidence given by witnesses in the course of judicial proceedings, however false and malicious it may be, any more than it lies against judges, advocates or parties in respect of words used by them in the course of such proceedings or against juries in respect of their verdicts."
"But it does not matter whether the action is framed as an action for defamation or as an action analogous to an action for malicious prosecution or for deceit or, as in this instance, for combining or conspiring together for the purpose of injuring another; the rule of law is that no action lies against witnesses in respect of evidence prepared ...Watson v. McEwan (3)), given, adduced or procured by them in the course of legal proceedings. The law protects witnesses and others, not for their benefit, but for a higher interest, namely, the advancement of public justice (Seaman v. Netherclift (4); Goffin v. Donnelly (5)). The remedy against a witness who has given or procured false evidence is by means of the criminal law or by the punitive process of contempt of court; See Watson v. McEwan(3)."
"94. From these and other authorities I derive a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort. To hold otherwise would, as has often been pointed out, deprive the tort of conspiracy of any real content, since the conspirators would be joint tortfeasors in any event (and there are cases discussing the notion of conspiracy "merging" into some other tort, but I need not go into those: …
95. In my opinion your Lordships should clarify the law by holding that criminal conduct at common law or by statute) can constitute unlawful means, provided that it is indeed the means (what Lord Nicholls of Birkenhead in OBG Ltd. v. Allan [2008] 1 AC 1, para 159 called "instrumentality") of intentionally inflicting harm. …"
"116. In agreement with the reasoning of Lord Walker and Lord Neuberger, I consider that the history and jurisprudence relating to this type of conspiracy point clearly to the conclusion that at least some criminal acts [my emphasis], not amounting to torts, may suffice to ground the tort. ..
119. Caution is nonetheless necessary about the scope of the tort of conspiracy by unlawful means. Not every criminal act committed in order to injure can or should give rise to tortious liability to the person injured, even where the element of conspiracy is present. The pizza delivery business which obtains more custom, to the detriment of its competitors, because it instructs its drivers to ignore speed limits and jump red lights (Lord Walker in OBG Ltd. v. Allan [2008] 1 AC 1, para 266) should not be liable, even if the claim be put as a claim in conspiracy involving its drivers and directors. And – as in relation to the tort of causing loss by unlawful means inflicted on a third party – there is a legitimate objection to making liability "depend upon whether the defendant has done something which is wrongful for reasons which have nothing to do with the damage inflicted on the claimant": per Lord Hoffmann in OBG Ltd. v. Allan, at para 59."
"On the other hand, it appears that the law of tort takes a particularly censorious view where conspiracy is involved. Thus, a claim based on conspiracy to injure can be established even where no unlawful means, let alone any other actionable tort, is involved. That tort is therefore frequently described as anomalous; yet its existence is very well established. Its centrally important feature is that the conspiracy must have as its primary purpose injury to the claimant. In my judgment, given the existence of that tort, it would be anomalous if an unlawful means conspiracy could not found a cause of action where, as here, the means "merely" involved a crime, where the loss to the claimant was the obvious and inevitable, indeed in many ways the intended, result of the sole purpose of the conspiracy, and where the crime involved, cheating the revenue, has as its purpose the protection of the victim of the conspiracy. The difference between intending to make a profit at the claimant's expense and intending to cause injury to the claimant is pretty fine and, in economic terms, artificial: that point emerges most clearly from the discussion in Lord Hoffmann's opinion in OBG, at paras 130 – 134."
"For the reasons set out above, my conclusion is that Danish law does not recognise a rule or a principle similar to the rule of witness immunity in English law. There is no basis upon which such immunity could be alleged to arise in Danish law. It follows that, under Danish law, witnesses are not generally protected from civil action in respect of the evidence they have given before a court."
"On the basis of the evidence produced during the proceeding, there is no basis for assuming that the appellee and Engineer Jensen as expert witnesses did not perform the tests described in their report of March 6, 1949 and submitted on oath or for asserting that respondent had otherwise submitted a false report and false statements for use in court.
As a result, the lower court's decision is upheld."
"By complete authority, including the authority of this House, it has been decided that the privilege of a witness, the immunity from responsibility in an action when evidence has been given by him in a Court of justice, is too well established now to be shaken. Practically I may say that in my view it is absolutely unarguable – it is settled law and cannot be doubted."
"No single touchstone emerges from the cases; but this is not surprising for the rule of law is one which involves the balancing of conflicting public policies, one general: that the law should provide a remedy to the citizen whose good name and reputation is traduced by malicious falsehoods uttered by another; and the other particular: that witnesses before tribunals recognised by law should, in the words of the answer of the judges in Dawkins v. Lord Rokeby LR 7 HL 744, 753 "give their testimony free from any fear of being harassed by an action on an allegation, whether true or false, that they acted from malice".
So, to decide whether a tribunal acts in a manner similar to courts of justice and thus is of such a kind as will attract absolute, as distinct from qualified, privilege for witnesses when they give testimony before it, one must consider first, under what authority the tribunal acts, secondly the nature of the question into which it is its duty to inquire; thirdly the procedure adopted by it in carrying out the inquiry; and fourthly the legal consequences of the conclusion reached by the tribunal as a result of the inquiry.
To attract absolute privilege for the testimony of witnesses the tribunal, by whatever name it is described, must be "recognised by law", a phrase first used by the Court of Exchequer in Dawkins v. Lord Rokeby, LR 7 HL 255, 263. This is a sine qua non; the absolute privilege does not attach to purely domestic tribunals. Although the description "recognised by law" is not necessarily confined to tribunals constituted or recognised by Act of Parliament (see Lincoln v. Daniels [1962] 1 QB 237) it embraces all that are, and so includes the local inquiry in the instant case at which Mr. Mackie's evidence was given. This was held by the commissioner, Mr. Kissen Q.C., appointed for the purpose by the Secretary of State under section 63 and section 81(3) of the Education (Scotland) Act 1946."
"This procedure [that of the European Commission] is wholly dissimilar to that of any court or judicial tribunal operating under the common law system, but I do not think that that is the test. When in Trapp v. Mackie [1979] 1 WLR 377, 379, Lord Diplock referred to a tribunal acting "in a manner similar to courts of justice" and Lord Fraser of Tullybelton at p. 385G to tribunals having "similar attributes" to courts of justice, I think that they must have had a wider concept in mind which would embrace courts of justice operating both under common law and under civil law procedures."
"The first step that must be taken in order to identify the extent of the immunity is to examine the grounds of public policy which explain the basis for the immunity. In Silcott v. Comr. Of Police of the Metropolis (1996) 8 Admin LR 633, 637, Simon Brown LJ said:
"(2) The public policy purposes underlying the immunity are essentially twofold. First, per Fry LJ in Munster v. Lamb (1883) 11 QBD 588: ' to protect persons acting bona fide, who under a different rule would be liable, not perhaps to verdicts and judgments against them, but to the vexation of defending actions.' Second, as Lord Wilberforce said in Roy v. Prior [1971] AC 470, 480: 'to avoid multiplicity of actions in which the value or truth of their evidence would be tried over again …'"
The second of these two policy reasons relates only to the core immunity, as it is limited in its application to things said or done in court. Lord Wilberforce made this clear, in Roy v. Prior [1991] AC 470, 480, when he said that the immunity which he was considering was that of witnesses "in respect of evidence given in court" and when he referred to the fact that the trial process, in the subjection of witnesses to cross-examination and confrontation with other evidence, contains some safeguard against careless, malicious or untruthful evidence. The plaintiffs' allegations relate to things done outside the courtroom, so it is the first policy reason only which is relevant to this case. In the Court of Appeal Auld LJ said:
"The whole point of the first public policy reason for immunity is to encourage honest and well-meaning persons to assist justice even if dishonest and malicious persons may on occasion benefit from the immunity."
As Lord Hoffmann put it in Taylor v. Director of the Serious Fraud Office [1999] 2 AC 177, 208, the absolute immunity rule:
"is designed to encourage freedom of speech and communication in judicial proceedings by relieving persons who take part in the judicial process from the fear of being sued for something they say.""
Conclusions