Before : |
W. J. Bailhache, Q.C., Deputy Bailiff, and Jurats Le Cornu and Blampied. |
Between |
Nautech Services Limited |
Plaintiff |
And |
C S S Limited |
First Defendant |
|
Ryan Dunning |
Second defendant |
|
Stephen Coleman |
Third Defendant |
|
Christopher Ernest Inns |
Fourth Defendant |
|
Kevin Gollop |
Fifth Defendant |
|
Maywal Limited |
Sixth Defendant |
|
David Kenneth Michael Warpole |
Seventh Defendant |
|
Mark David Warpole |
Eighth Defendant |
|
Charles David Murch |
Ninth Defendant |
Advocate S. M. J. Chiddicks Plaintiff.
Advocate T. V. R. Hanson for the Sixth to Ninth Defendants.
judgment
the deputy bailiff:
1. This is an application by the Sixth to Ninth Defendants to set aside an order of this Court for service of a Re-Amended Order of Justice upon them out of the jurisdiction.
2. On 11th April, 2013 the Plaintiff issued an Order of Justice against the First to Fifth Defendants inclusive. Within the scope of the Order of Justice were a number of immediate orders, including an Anton Piller order and some interim injunctions. The Anton Piller order was served and enforced, and an amount of paperwork and computer hardware and software was removed from those Defendants. Subsequently the First, Second, Third and Fifth Defendants applied for the discharge of the Anton Pillar order and some consequential relief. The Plaintiff cross-applied for a variety of orders. The Court's adjudication of these various applications is to be found in the decision of this Court on 13th May 2013, [2013] JRC 089. In summary, the Court found that the Anton Piller orders were to be discharged as a matter of principle on the basis that the Plaintiff, through its counsel, seriously misled the Bailiff at the time he held a hearing to determine whether or not the orders ought to be made. The interim injunctions were also varied to some extent. The details of those variations are not relevant now. However, it is material to refer to one part of the judgment of 13th May 2013, where we said:-
"92 In this case, we are satisfied that although the Anton Piller orders in principle ought to be discharged for the reasons which we have given, which would normally mean that the Plaintiff should not profit from orders improperly obtained, the Defendants' conduct also leaves much to be desired. Accordingly, any interim orders from now on should have the dual objectives of enabling the Plaintiff to use the material which has been obtained for the purposes of proving its case and secondly should not prevent the Defendants from taking steps legitimately to run their business. The corollary of the last point is that the Plaintiff should be prevented from maintaining orders which are intended to restrain competition as opposed to protecting its legitimate rights."
3. Amongst other orders actually made, the Court ordered this at paragraph 96(iv):-
"The Plaintiff shall without delay deliver to the Judicial Greffier all images which it has made from the property seized from the Defendants by virtue of the Anton Piller order now discharged. If the Plaintiff has more than one copy of the same image so taken, all duplicate copies are to be returned to the Defendants."
4. The intention underlying that order was that while the Plaintiff would not be in possession of material to which it was not entitled, the maintenance of the material which it had wrongly seized was ensured by delivery of the images to the Judicial Greffier, and the Defendants would be obliged on the close of pleadings to make the discovery of all relevant documents in the usual way. Thus, to the extent that the Defendants' computers and other hardware contained images of relevant material, it could be expected that the Defendants would give discovery of that - and to the extent that those computers and hardware contained irrelevant material, the privacy of the Defendants in those irrelevant documents and other material would be protected.
5. In summary the Order of Justice issued at that time claimed that the Second, Third and Fourth Defendants have misused confidential information and/or trade secrets belonging to the Plaintiff and copied its database, and made the same available to the First and Fifth Defendants for the purposes of the new business which the First Defendant had commenced in competition with the Plaintiff. The claims made by the Plaintiff were of misuse of confidential information and trade secrets, breach of the contract of employment, infringement of copyright and conspiracy. The Plaintiff claimed damages, delivery up to the Plaintiff of the Plaintiff's copyright works in the possession, custody or control of the Defendants and an enquiry into damages for infringement of copyright and misuse of confidential information, and an account of profits and other sums due to the Plaintiff.
6. The Order of Justice has been amended and re-amended. The most recent version of the claim is a re-amended Order of Justice dated November 2013. The claims in the re-amended Order of Justice are in many respects similar to those which are to be found in the Order of Justice of April 2013, but the Sixth, Seventh, Eighth and Ninth Defendants ("the English Defendants") had been added as defendants. The basis upon which they have been so added is that they knew of and actively participated in the activities of the First to Fifth Defendants ("the Jersey Defendants") and that they conspired with the Jersey Defendants to cause loss to the Plaintiff. There is an alternative claim for infringement of copyright and a further claim that the English Defendants have funded through the Sixth Defendant the activities of the Jersey Defendants in Jersey.
7. Having asserted that the First Defendant is beneficially owned in whole or in part by one or more of the English Defendants and/or the Fifth Defendant, the Plaintiff asserts that at some time presently unknown, the Defendants and each of them began working towards establishing the First Defendant, and made plans between them to extract, copy and misuse the Plaintiff's literary works and/or database and the confidential information contained therein, in order to damage the Plaintiff's economic interests. The Plaintiff asserted that the Defendants would not have been able to offer services in the seismic and maritime recruitment industry on behalf of the First Defendant as at 4th April, 2013 without having copied and infringed the Plaintiff's rights in its literary works and/or database and/or the Plaintiff's confidential information.
8. The key paragraphs which set out the detail of the Plaintiff's claims against the English Defendants are these:
"14 On 9th February 2013, Mr Dunning, Mr Inns and Mr Gollop met with the English Defendants at Maywal's offices in Dorking, Surrey, England to discuss setting up CSS and to "bring across" to CSS the Database and Mr Inns, Mr Dunning and Mr Coleman as employees of CSS. The Defendants also prepared from early February 2013 to "bring across" to CSS maritime personnel already under contract to Nautech who were at that time working inter alia for WesternGeco. Mr Inns, Mr Dunning and Mr Coleman agreed with Mr Gollop and the English Defendants that they would extract and/or re-utilise and copy each of the Data Files in the Database and disclose to CSS Mr Gollop and the English Defendants the Data Files in order to enable CSS to divert Nautech's business to CSS. Thereafter the English Defendants and Mr Gollop procured Mr Dunning, Mr Inns and Mr Coleman to leave Nautech's employ and to extract, copy and remove from Nautech the Data Files and each of them, PAN documents and signed contracts with seismic and maritime personnel for the benefit of CSS. The English Defendants and the Jersey Defendants (or any two or more together) thereby wrongfully and with the intent to injure Nautech by unlawful means conspired and combined together to harm Nautech's business and to conceal their activities from Nautech. In early April 2013, CSS advertised on its Facebook page "a position for a recruitment manager based in our UK office in SE England for our rapidly expanding company to assist in maritime personnel", a reference to the offices of Maywal."
9. The Plaintiff then pleaded detail of an action plan with various emails found on the Plaintiff's backup data which referred to proposed action points for the set-up of the First Defendant and action to be taken by one or more of the Second, Third, Fourth and Fifth Defendants. The Plaintiff asserts that the First Defendant provided a UK telephone number on its website which is switched through the vantage telephone system of the Sixth Defendant.
10. Later in the Order of Justice, in so far as the English Defendants are concerned, there is a bare assertion that "the Defendants and each of them made unauthorised use of Nautech's confidential information to the detriment of Nautech", and at paragraph 32, there is this allegation:
"The English Defendants received and used the confirmation information of Nautech from or through the Jersey Defendants knowing or having reason to suspect that the information was confidential information of Nautech and that it had been obtained by the Jersey Defendants without Nautech's permission and in breach of Mr Dunning's, Mr Inns' and Mr Coleman's duties to Nautech."
11. So that is the claim against the English Defendants based upon misuse of confidential information and trade secrets.
12. The second claim against the English Defendants is for infringement of a database right. Here the Plaintiff asserts:
"33 The Defendants and each of them have infringed Nautech's database right in the Database by the extraction and/or reutilisation by them of a substantial part or parts of the Database without the consent of Nautech pursuant to Article 196 [sic] of the Law.
34 Further or alternatively, by copy information from the Data Files, the Defendants and each of them have infringed Nautech's database right by the repeated and systematic extraction and/or reutilisation of insubstantial parts of the contents of the Database."
13. Next follows a claim for infringement of copyright:
"36 On a date presently unknown to Nautech but believed to be in or about January 2013 the Defendants resolved between them that Mr Inns, Mr Dunning and Mr Coleman would copy or authorise the copying of all or a substantial part of the Database including the Data Files for the benefit of CSS and Mr Gollop and to give a copy of the whole or a substantial part of the literary works in the Database to CSS and to the English Defendants for their use. On a date presently unknown to Nautech, the Defendants infringed Nautech's copyright by reproducing and/or authorising the reproduction of Nautech's works in a material form without the licence of Nautech.
37 The Defendants have in their possession, power, custody or control in the course of their business infringing copies of Nautech's copyright works.
38 Unless restrained by this Honourable Court, the Defendants and each of them threaten and intend to continue and repeat the acts of copyright and database right infringement and misuse of confidential information complained of, whereby Nautech will suffer further loss and damage."
14. The Plaintiff makes assertions against the English Defendants in relation to what are called the PAN documents which it is said were copied by the Fourth Defendant for the benefit of the First Defendant and the English Defendants. There then follows the following claim in conspiracy:
"44 Pursuant to and in furtherance of the conspiracy pleaded in paragraph 11 above, the Jersey Defendants and the English Defendants carried out the following unlawful acts and means by which Nautech was injured:
i) Mr Inns, Mr Dunning, Mr Coleman and Mr Gollop agreed with Mr David Warpole, Mr Mark Warpole and Mr Murch that Mr Inns, Mr Dunning and Mr Coleman would disclose confidential information of Nautech and extract and/or reutilise the Database for the benefit of the Defendants. The Defendants were engaged in a joint exercise to deceive Nautech as to their infringing activities and misuse of Nautech's confidential information so as to induce Nautech to continue to allow Mr Inns, Mr Dunning and Mr Coleman access to the Database and confidential information, contrary to their duties of good faith as employees of Nautech; and
ii) The Defendants conspired to transfer the whole of Nautech's business to CSS and/or to transfer enough of Nautech's business to CSS as to make Nautech's business unviable.
45 The Defendants are jointly and severally liable to Nautech for conspiracy."
15. That is the basis upon which the Plaintiff claims various injunctions and orders for damages and/or for an account.
Amended answer
16. The Jersey Defendants filed an answer on 27th December, 2013. Insofar as is relevant for the purposes of the English Defendants, the Jersey Defendants deny any conspiracy with the English Defendants, any agreement with the English Defendants to extract and/or reutilise and copy the Plaintiff's database, or data from the Plaintiff's computer system and generally deny the Plaintiff's claim for loss and damage.
17. Sitting as a single judge on 15th November, 2013, I had given leave to the Plaintiff to amend further its Re-Amended Order of Justice and to serve the Re-Amended Order of Justice upon the English Defendants out of the jurisdiction. The order for service out was made on the basis of an affidavit sworn by Mr Matthew Hanley, a paralegal employed by Messrs Sinels, acting for the Plaintiff. In that affidavit, which was sworn on 12th November, 2013, Mr Hanley deposed that the Sixth Defendant was an English private company with a registered office at an address in Leatherhead; that the Seventh, Eighth and Ninth Defendants were directors of the Sixth Defendant; and that the Ninth Defendant was also company secretary. Reliance was placed in this affidavit on all the affidavits which had been filed in the proceedings so far.
18. As to the reasons why service out was appropriate, Mr Hanley indicated (at paragraph 17) that reliance was placed on the meeting on 9th February, 2013 between the Second, Fourth and Fifth Defendants and the English Defendants, at which it was agreed that the English Defendants would financially back the First Defendant so that it could employ the Second, Fourth and Fifth Defendant. He noted that it was averred in the Re-Amended Order of Justice that the English Defendants had procured that the Second, Third and Fourth Defendants unlawfully copied the Plaintiff's database and engaged in a joint enterprise with them to misuse the Plaintiff's confidential information.
19. It was asserted that the English Defendants had chosen to fund and financially back a Jersey company which they knew would benefit from the unlawful copying and misuse of the Plaintiff's database and confidential information and that they were complicit in the conspiracy which saw them procure employees of a Jersey company to breach implied terms of their employment contracts made in and governed by Jersey law. As the proceedings arose out of claims in relation to material held in Jersey by a Jersey incorporated company which traded in the Island, and concerned the unlawful copying by former employees of a Jersey company of its database and misuse of its confidential information held in Jersey, this was an appropriate case in which to subject a party from outside the jurisdiction to proceedings in this jurisdiction. Mr Hanley deposed that the orders sought fell within paragraph 7(d), 7(e) and 7(f) of the Service of Process Rules 1994.
20. In accordance with the Plaintiff's duty of full and frank disclosure, Mr Hanley drew attention to a letter from Messrs Ashfords LLP, dated 6th November. 2013, in which those English solicitors set out a number of reasons why the Royal Court should not make an order for service out of the jurisdiction. I noted that in giving leave to serve out, I was not adjudicating upon the various matters set out by Messrs Ashfords in their letter, and the English Defendants had liberty to apply to discharge the order. However it seemed to me at the time that there was sufficient to justify service out of the jurisdiction at that stage. I have a recollection that notwithstanding the absence of any reference in Mr Hanley's affidavit to paragraph 7(c) of the Service of Process Rules 1994, there was in fact some discussion as to whether the English Defendants were necessary and/or proper parties to a claim properly brought in this jurisdiction.
21. The English Defendants issued a summons for setting aside the service of process upon them, for a declaration that the proceedings had not been duly served upon them, for the discharge of the Act of Court joining the English Defendants as parties to the proceedings and giving the Plaintiff leave to serve them out of the jurisdiction, and for a declaration that the Court had no jurisdiction over the Sixth to Ninth Defendants in respect of the subject matter of the claim and/or the relief or remedy sought in the proceedings. In his skeleton argument and submissions before us, Advocate Hanson relied upon the argument that leave to serve out of the jurisdiction ought not to have been given because:
(i) The Plaintiff had brought its application under Rule 7(d), 7(e) and 7(f) of the Service of Process Rules, and for various reasons none of those rules was satisfied;
(ii) The Plaintiff was obliged to show a good arguable case against the English Defendants, and there was no evidence to justify such a claim.
22. The Plaintiff responded that the affidavit of Mr Hanley sworn on 12th November, 2013 did in substance support the view that the application was also based on paragraph 7(c) of the Service of Process Rules; that there was sufficient evidence to justify drawing the English Defendants into the proceedings, and that from 9th February, 2013 at the latest, they combined with the Jersey Defendants to conspire by unlawful means to injure the Plaintiff's economic interest. Objection was taken to the affidavit sworn by Mr Sharp in support of the English Defendant's application. It was asserted that Mr Sharp is an English solicitor whose evidence did not support the claims for relief in the summons, and that contrary to established rules, the affidavit contained comment, submissions, argument and irrelevancy; and furthermore that Mr Sharp purported to give evidence of Jersey law, but was not admitted in Jersey.
23. We take first the objection based upon the Service of Process and Taking of Evidence (Jersey) Law 1960 (the "Service of Process Law") and the Service of Process Rules made thereunder. This was a relatively technical argument which was adduced. Advocate Hanson relied upon Article 2 of the Service of Process Law which is in these terms:-
"Any process in any civil or commercial court summoning or citing a person outside Jersey to appear before a Court of Jersey may be served on that person in such cases and in such manner as may be prescribed by Rules of Court."
24. The submission was that unless the application fell within the Rules of Court, it could not be properly served outside the Island. Without deciding whether that is right, we proceed upon the basis that it is.
25. As indicated above, the affidavit of Mr Hanley indicated that the claim for service out of the jurisdiction was based upon Rule 7(d), (e) and (f). Rule 7(d) concerns claims brought in contract. It is clear that the Plaintiff does not in its Order of Justice assert any contractual relationship with any of the English Defendants. To the extent therefore that the claim for service out of the jurisdiction is based on paragraph 7(d), without more, it seems to us that Advocate Hanson is correct in his objection.
26. Rule 7(e) of the Service of Process Rules relates to claims brought in respect of a breach of contract which is committed within the jurisdiction. The same objections raised by Advocate Hanson appear to hold good here as well.
27. Rule 7(f) concerns claims founded on a tort where the damage was sustained, or resulted from an act committed within the jurisdiction. It is in these terms:-
"the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction;"
28. We are satisfied that the claims brought by the Plaintiff against the English Defendants are based in tort. Furthermore, it seems to us that to the extent that the Plaintiff claims that the English Defendants were party to a conspiracy or agreement for the Jersey Defendants to take various steps within the jurisdiction, the Plaintiff is entitled to say that the damage was sustained or resulted from an act committed within the jurisdiction even though the agreement between the Jersey Defendants and the English Defendants as pleaded may equally have been completed in England rather than in Jersey. We think that in paragraph 7(f) the words "within the jurisdiction" qualify the second part of the sentence, namely where the damage was sustained, or where the act was committed which lead to that damage taking place. Accordingly, even if the agreement which gives rise to the conspiracy was made out of the jurisdiction and the English Defendants did nothing themselves within the jurisdiction, the claim falls within paragraph 7(f) because the damage was sustained within the jurisdiction; and alternatively, because the damage resulted from acts committed within the jurisdiction. Accordingly, we think that the claim for service out of the jurisdiction falls within paragraph 7(f) and that the Plaintiff can bring its application for service out on that basis.
29. Furthermore, we think the claim for service out falls in theory within paragraph 7(c) because it is brought within the jurisdiction against persons who have been duly served, and the nature of the claims which have been made is such that persons out of the jurisdiction can be treated as necessary or proper parties thereto.
30. In the arguments to the effect that Rule 7(c) could not be relied upon, it was pointed out for the English Defendants that Mr Hanley's affidavit did not refer to this paragraph and that there are dicta of this Court in Virani-v-Virani [2000] JLR 203 to the effect that it is not sufficient merely to set out a factual basis of claim and leave the Court to guess which paragraphs of Rule 7 might be relied upon. The relevant part of the judgment of the Royal Court in that case appears at page 212 where Birt DB said this:-
"More significantly, there is no reference in the affidavit accompanying the second Order of Justice to r.7 or to which of the paragraphs of r.7 are relied upon as conferring the power to serve out of the jurisdiction. In our judgment, in order to comply with r.9, an affidavit in support of an application to serve out of the jurisdiction must specify, by reference to r.7, which paragraph(s) are relied upon and must relate those paragraphs to the facts of the case sufficiently to satisfy the Court that there are valid grounds under those paragraph(s) of r.7 for granting leave. It is not sufficient to produce and affidavit simply setting out the factual basis of the claim and leaving the Court to try and ascertain which paragraphs of r.7 may be relied upon by the Plaintiff. It follows that the affidavit sworn in support of the second Order of Justice did not comply with requirements of r.9."
31. If Birt DB had stopped there, there might have been something in the objection made in the present case. It would be a question for determination as to what were the consequences of a failure to set out the relevant paragraphs of Rule 7 which were relied upon. However the Deputy Bailiff did not stop there. He went on:-
"The fact that an affidavit in support of an application for leave to serve out of the jurisdiction is defective (in that it does not comply with r.9) does not of itself necessarily invalidate any order for leave to serve out. It is primarily for the judge considering the application to serve out of the jurisdiction to consider whether the affidavit is in sufficient form and whether it gives him sufficient information to make a decision. The success of an application to set aside leave on grounds of failure to comply with the requirements of r.9 will depend upon the facts of the case, including any prejudice to the defendant, the extent and effect of any non-disclosure by the Plaintiff and whether the Court is satisfied that, notwithstanding the failure, there are clearly valid grounds for leave to serve out."
32. It is clear therefore that the submission that the affidavit of Mr Hanley does not show that reliance is placed on Rule 7(c) takes one only so far - and given that, as I recall it, there was some discussion about paragraph 7(c) at the time that leave to serve out was granted, and given that I am clear in my recollection that paragraph 7(c) of the Service of Process Rules was in my mind at that time whether reference was made to it or not, we are satisfied that leave to serve out could be given under either Rule 7(c) or 7(f) and that Mr Hanley's affidavit is sufficient in that respect.
33. We turn now to the second ground of objection, which is essentially founded upon the discretion implicit in the use of the word "may" in the first line of Rule 7 and upon the second part of Rule 9 of the Service of Process Rules which is to the effect that no leave for service out shall be granted unless it appears to the Court that the case is a proper one for service out of the jurisdiction under Part 3 of those Rules. A case could only be a proper one if the Plaintiff had a good cause of action - and hence Rule 9 of the Service of Process Rules required an affidavit on behalf of the Plaintiff to that effect. So what is a good cause of action? Is it a good arguable case, or is it a case where it is demonstrated that there is a serious issue to be tried?
34. The English Defendants asserted that the Plaintiff had to show not only that the Court had jurisdiction under one or more of the limbs of Rule 7 but also that there was a serious issue to be tried in respect to each cause of action; and thirdly that Jersey was the most appropriate forum for the trial of the action. This threefold approach to the tests to be met before leave to serve out should be given was adopted by the Royal Court in Koonmen-v-Bender and Others [2002] JLR 407. There was no particular argument before us as to the third limb of whether Jersey was the most appropriate forum - presumably because the parties must have accepted that if any jurisdiction was appropriate for the trial of the action, it was the Royal Court, Jersey being the place where the Plaintiff is incorporated, from which its business is run and where it alleges loss has been suffered. Jersey is the place where the bulk of the documents, the database, whatever it is, and the data files, whatever they may be, are located. Jersey is where most of the alleged wrongdoing took place. It is clearly the jurisdiction with which the action has its closest connection.
35. In Seaconsar Far East Limited -v-Bank Markazi Jomhouri Islami Iran [1994] 1 AC 4 38, the House of Lords considered that the "serious issues to be tried" was a better test than one where the Court had to be satisfied there was a "good arguable case" on the merits. The good arguable case test was the one which had been adopted in Jersey by Tomes, DB, in James Capel (Channel Islands) Limited-v-Koppel and Fenchurch Trust Limited [1989] JLR 51, a decision based on the 1961 Service of Process (Jersey) Rules. Recognising that it is undesirable that there should be any detailed factual review on the merits at the service out stage, Lord Goff in Seconsar said this at page 456G:-
"Once it is recognised that, so far as the merits of the plaintiff's claim are concerned, no more is required than that the evidence should disclose that there is a serious issue to be tried, it is difficult to see how this matter, although it falls within the ambit of the court's discretion, has not in practice to be established in any event. This is because it is very difficult to conceive how a judge could, in the proper exercise of his discretion, give leave where there was no serious issue to be tried. Accordingly, a judge faced with a question of leave to serve proceedings out of the jurisdiction under order 11 will in practice have to consider both (1) whether jurisdiction has been sufficiently established, on the criteria of the good arguable case laid down in Korner's case, under one of the paragraphs of Rule 1(1), and (2) whether there is a serious issue to be tried so as to enable him to exercise his discretion to grant leave, before he goes on to consider the exercise of that discretion with particular reference to the issue of forum conveniens."
36. From this analysis it would seem that the right approach in England and Wales is to apply the "good arguable case" test to whether or not the Plaintiff's claim fell within one or more of the limbs of Rule 1 under the English Rules (Rule 7 of our Rules), and if the answer to that were in the affirmative, to consider whether there was a serious issue to be tried - and then finally to go on to consider the issue of forum conveniens.
37. Given that the different tests are applied to different questions, we did not find the argument before us over whether we should apply the "good arguable case" test or the "serious issue to be tried" test to be particularly helpful. In particular we think that the Royal Court should be alert to the fact that the English case law on service out and forum conveniens will have been affected by the Lugano Convention on jurisdiction and enforcement of judgments in civil and commercial matters in 1988, given the force of law by s3A of the Civil Jurisdiction and Judgments Act 1982, neither of which have application in Jersey; and the development of our law and practice should reflect that the possible absence of reciprocity of approach in other countries may lead to some of the more historical arguments over forum being resurrected in our courts, which might be undesirable.
38. In our approach in the present case we found helpful the dicta of Waller LJ in Canada Trust Co & Others-v-Stolzenburg & Others (No.2) [1998] 1 WLR 547 where he said at p555 B/C:-
"But Lord Goff was not concerned to explore in the Seconsar case [1994] 1 WLR 438 the application of the standard "good arguable case" to all the various factors that can arise. It is I believe important to recognise, as the language of their Lordships in Korner's case [1951] AC 869 demonstrated, that what the court is endeavouring to do is to find a concept not capable of very precise definition which reflects that the plaintiff must properly satisfy the court that it is right for the court to take jurisdiction. That may involve in some cases considering matters which go both to jurisdiction and to the very matter to be argued at the trial, e.g. the existence of a contract, but in other cases a matter which goes purely to jurisdiction, e.g. the domicile of a defendant. The concept also reflects that the question before the court is one which should be decided on affidavits from both sides and without full discovery and/or cross-examination, and in relation to which therefore to apply the language of the civil burden of proof applicable to issues after full trial is inapposite."
39. We proceed upon the basis that to justify an order for service out of the jurisdiction:-
(i) There is a threshold to be passed before the Court has jurisdiction to order service out of the jurisdiction. That threshold is that the Plaintiff must establish a good arguable case that his claim falls under one or more of the paragraphs in Rule 7 of the Service of Process Rules.
(ii) Once satisfied that the case does fall within one or more of those paragraphs, the Court should consider whether it is appropriate to bring before it a non-resident who owes no allegiance in this jurisdiction. This involves an assessment of whether there is a serious issue to be tried as against the non-resident defendant. However, if the jurisdiction is established under Rule 7, then, adopting what Lord Goff said in Seconsar at page 456 letter D we think there is no good reason why we should require any particular degree of cogency to be applied in relation to the merits of the Plaintiff's claim not least because it is inappropriate to have a trial on the merits conducted by affidavit at the outset of the proceedings.
(iii) The application of these tests does not preclude us from considering at all the legal merits of the claim which it is sought to bring in this case against the English Defendants. In the case of Hague-v-Nan Tai Electronics Inc. [2008] UK PC 13, the Privy Council was considering an appeal from the Court of Appeal of the British Virgin Islands which had refused to set aside an order granting permission to serve proceedings out of the jurisdiction for breach of a duty of care by the liquidator of a BVI company, in liquidation. In their conclusions, at paragraph 16, on behalf of the Board, Lord Scott of Foscote said this:-
"The unfortunate fact of the matter, in their Lordships opinion, is that Nan Tai's action as at present constituted is misconceived and discloses no cause of action vested in Nan Tai. If, instead of applying to have the order to serve out of the jurisdiction and the service on them set aside, Mr Hague and PWC had applied to have the claims struck out as disclosing no reasonable cause of action, the application should, in their Lordships opinion, have succeeded. It follows that this was not a case in which leave to serve out should have been granted."
In other words, the Privy Council has decided that it is appropriate to look at the legal merits in determining whether leave to serve out should be given. This is part of the test of whether it is proper to do so for the purposes of Rule 9 of the Service of Process Rules and there is no reason in our judgment why in an appropriate case the Court should not decide a point of law at the challenge to an order for service out of the jurisdiction rather than perhaps accept the lesser positions that there is a good arguable case or a serious issue to be tried on a point of law and allow the action to proceed to trial.
We think therefore that in examining the question as to whether there is a serious issue to be tried in respect of each cause of action, it might in some cases be helpful to identify whether a strike out application under Rule 6/13 of the Royal Court Rules 2004 might be successful bearing in mind that the prohibition in Rule 6/13(2) does not apply because the Service of Process Rules require affidavit evidence. There must be sufficient evidence, if service out is challenged, for the Court to conclude there is a serious issue to be tried, albeit the Court must be careful to avoid a trial of the case itself on affidavits at this early stage. Indeed, it seems to us that considering whether a claim if made would survive a strike out application may be a practical balancing test to apply in judging whether it is proper to make an order for service out in the circumstances where it is important to avoid a trial by affidavit of the factual merits of the opposing parties' cases. We have also reviewed the evidence in this case on that basis.
(iv) The Court should finally consider whether Jersey is the forum conveniens for the hearing of the action. No party asserts that it is not the forum conveniens in this case.
40. We recognise that it is not for us to decide disputed questions of fact on affidavit at this stage, and we therefore do not determine facts which are due to be determined at trial. The only issue for us is the application of the tests which are set out above in relation to the application to discharge the order for service of the proceedings out of the jurisdiction.
41. It is not enough to make bold assertions in an Order of Justice. There must be something to support them. That "something" must be enough to satisfy the Court that there is a serious issue to be tried in the sense that it is appropriate to exercise discretion so as to permit service of the proceedings on someone outside the jurisdiction of the Court.
42. We assume for present purposes, without deciding it, that there is good evidence of an unlawful means conspiracy between two or more of the Jersey Defendants. That of itself is not enough to bring in the English Defendants. Thus for example, the information given by the Second and Third Defendants to the Plaintiff at the time of their resignation on 29th March, 2013 that they would be taking the WesternGeco contract with them to the First Defendant, their new employer, is no evidence by itself against the English Defendants. What one has to look at is whether there is sufficient evidence of action on the part of each of the English Defendants to justify the conclusion that there is a serious issue to be tried that any of them was respectively party to a conspiracy with one or more of the Jersey Defendants.
43. In the Re-Amended Order of Justice the unlawful means of conspiracy has subsumed within it the other allegations made. At this stage, the evidence that has been put before us which might suggest such a conspiracy involving the English Defendants amounts to the following:-
(i) There are minutes of a meeting held in Dorking, Surrey, under the heading "Channel Ships Services" dated 9th February, 2013. The Second, Fourth, Fifth, Seventh, Eighth and Ninth Defendants were present. The Seventh Defendant was named as the Chairman. After introductions and a career resumé was provided in relation to the Fourth and Second Defendants, the discussions turned to the way in which the Plaintiff's business was actually run on a day to day basis. That included some discussion about the WesternGeco contract, which was described as the Plaintiff's main contract. The discussion then flowed on to what would be required for the start-up of a new business. The meeting reached agreement that the name for the new company would be CSS. As both the Second and Fourth Defendants were required to give 30 days' notice, the ideal time to leave would be at the end of a month. There was discussion about premises, insurance and equipment. It was agreed that there were no book-keeping concerns because the staff of the Sixth Defendant would do the book-keeping whilst the Second and Fourth Defendants would take care of invoicing. The meeting considered various software systems and other requirements for running a business which it is not necessary to set out for the purposes of this judgment. At paragraphs (9) and (10) of the minutes there appears the following:
"(9) Business Strategy. The intention is to uplift as much as (sic) the existing clientele as possible. Ultimately the clientele will either follow Chris and Ryan or got (sic) to others. WesternGeco has offered a contract to the new company before Chris and Ryan leave Nautech. It was agreed it is better to take up this contract sooner. Accordingly Kevin will negotiate with WesternGeco, effectively being a puppet for Ryan.
(10) Competing Companies. Possible loss of clients/contractors. Possible repercussions from Nautech."
At paragraph (12) the minutes reflect an agreed requirement for a weekly report to all shareholders to ensure that there were no sudden surprises.
(ii) There is an email string on 13th March, 2013 starting with an email from the Fourth Defendant to the Second Defendant in which he asks whether, when he left, there was a way of hijacking the Nautech Facebook and Linked-In accounts. The Second Defendant gave some encouragement to this. This email exchange is not obviously copied to any of the English Defendants but it is clear that the Seventh, Eighth and Ninth Defendants saw the exchange because the Eighth Defendant indicated some reservations about the legal implications. The Fifth Defendant then makes this contribution:
"If the accounts are in the name of Nautech I would recommend leaving well alone and starting again. If you have the admin rights, you would be able to "extract" all the contacts anyway."
(iii) On 28th March the Ninth Defendant, the company secretary of the Sixth Defendant but emailing from the address given as david.murch@css-shipservices.com, concerning the WesternGeco contract, raising some questions which he had on it. He adds that "there is a lot in the WesternGeco contract that I assume will be incorporated in our standard employment contracts".
(iv) On 29th March, the Fifth Defendant sent an update to the Seventh Defendant. That included the summary that the Second and Third Defendants had handed in their letters of resignation. It also included what for interlocutory purposes might be taken to be an admission of wrongdoing in that the Fifth Defendant said:-
"Anyway Ryan and Peter concluded on good enough terms and Peter even wished Ryan and Stephen well. This may of course be a lull before the storm of allegations, but we have been very careful not to do anything unethical in the run up to the resignations, save for the proposal to WesternGeco and they were going to follow Ryan regardless." (emphasis added).
The Seventh Defendant responded by suggesting that the Fifth Defendant might be confronted by Mr Harrison, the Managing Director of the Plaintiff and suggested that he should have a good cover story.
(v) On the same date 29th March an extract from the website of the First Defendant shows that it was advertising as offshore maritime recruitment specialists and gave contact details which included a UK based telephone number.
(vi) On 7th April the Seventh Defendant sent an email to the Fifth Defendant concerning the system of bonuses on gross earnings. That system was worrying him. He said "I think I would not have invested at all, if I had realised it was the system Nautech had instigated. I want you to look at it and redesign it!"
44. What is noteworthy about this evidence is that it all goes to establish, for interlocutory purposes only, an involvement by each of the Sixth, Seventh, Eighth and Ninth Defendants in the proposed new business. It seems reasonably clear that the English Defendants knew of the intention to set up the new business, and were party to it. There was an intention to invest in it. It was intended to operate in competition with the business of the Plaintiff. Apart from the fact that the Seventh, Eighth and Ninth Defendants were copied into the email exchanges of 13th March concerning the possibility of "hijacking" the Nautech Facebook account - and indeed the Eighth Defendant contributed to that exchange - and the minutes of the original meeting in February held in Dorking, Surrey, there is not much directly to suggest that the English Defendants agreed to use or endorsed the use of unlawful means for the purposes of acquiring information of the Plaintiff in order to start the new business. On the other hand, the First Defendant was newly incorporated and had limited information of its own, yet was apparently able to advertise for business as though it had operated for years.
45. In our judgment, however, there is enough to disclose a serious issue to be tried. We have not sought to review every single document that has been put before us because it is not appropriate to do so for the purposes of an interlocutory argument such as the present one. We have extracted those which we find to be most relevant for present purposes.
46. We now turn to one other question which is whether the Plaintiff is able to rely on evidence wrongly obtained by the Anton Piller order, now discharged. In our view it would be wrong in principle to allow a party to rely upon information obtained by the improper use of the Anton Piller procedure for the purposes of advancing his case, and that goes as much to justifying an application for service out of the jurisdiction as it does for any other part of the litigation process. There is however a distinction to be drawn. Even if information had been obtained wrongly by the use of the Anton Piller procedure, it might have become available to the Plaintiff in any event in the discovery process as between the Plaintiff and the Jersey Defendants. If that had been the case, then an amendment of the claim at a later stage could have been sought, based on the information so disclosed. In our judgment the material which we have mentioned above would have been supplied to the Plaintiff on discovery, and it follows that it would have been available to the Plaintiff to use within the context of the existing proceedings to seek an amendment of the Order of Justice at that stage and service of the Amended Order of Justice out of the jurisdiction on the English Defendants. Accordingly we do not think that the obtaining of the information by the discharged Anton Piller order has done anything other than to advance the time when the Plaintiff would be seeking leave to amend, and this is not therefore a reason for refusing to give leave to serve out of the jurisdiction or for setting aside the leave which has been given.
47. Some technical points were taken by Advocate Hanson as to whether the Sixth Defendant was properly made a party to the proceedings, and alternatively whether the Seventh, Eighth and Ninth Defendants were only acting as agents for the Sixth Defendant. It seems to us at the present stage of the proceedings that there will be a number of factual matters which remain unclear, and that the Plaintiff has done sufficient for the purposes of convening both the Sixth Defendant and the Seventh, Eighth and Ninth Defendants before the Court, even if the case at trial may not be proved against one or more of them.
48. For these reasons, the application to set aside the Order of the Court on 15th November, 2013 for service of the Re-Amended Order of Justice out of the jurisdiction is dismissed.
49. Before leaving this case however there is one further procedural point which we wish to address. The hearing before us took place on 29th January, 2014, that date having been fixed in the usual way. Two days later, Messrs Sinels wrote to Advocate Hanson, acting for the English Defendants to enclose a second affidavit of Mr Hanley sworn in support of the application to serve the Re-Amended Order of Justice out of the proceedings, and some supplemental submissions. These were sent also to the Bailiff's Judicial Secretary. The letter suggests that it is open to Advocate Hanson to respond with further evidence within five working days. The Plaintiff apparently reserved its position to make further submissions depending upon any further evidence filed by the English Defendants.
50. By way of response, Advocate Hanson's associate contacted the Bailiff's Judicial Secretary to say that the English Defendants objected to the case being re-opened. The Plaintiff, it was said, had been given considerable leeway on 29th January, 2014 to recast its case on leave to serve out, and it did not at the time raise any question of further evidence being needed.
51. We have paid no attention in this case to the additional material which has been sent by Messrs Sinels with its letter of 31st January, 2014. It has not been necessary to do so. However there is an important procedural issue here. The contentions which parties wish to advance which are relevant to the case or application which has been listed for hearing should be made at that hearing. Any other process is likely to lead to extra cost and delay because if new material is placed before the Court after the hearing, the opposing party will treat it as only fair in the interests of justice that it should have the opportunity to respond. It was procedurally wrong for the Plaintiff's lawyers to proceed in the way they did.
52. Of course it is true that until judgment has been handed down, it is open to the parties to apply to the Court to put further material before it, in which case the usual rules on the admission of evidence after the hearing would apply. If those rules are not complied with, the evidence would not be admitted, because it is important that the litigation process should come to an end at some point.
53. The position is different if an authority which had not been thought to be relevant becomes relevant during the course of the hearing and had not been available then; or if a very recent authority is handed down after the date of the hearing. In those circumstances, it is not at all inappropriate for the authority to be drawn to the attention of the Court, without submissions upon it. If the Court wishes to invite further submissions it would do so. If the party putting the authority before the Court wishes to make further submissions on it, he should seek leave to do so before making them and the Court will give appropriate directions.
Authorities
Nautech-v-CSS Ltd and Others [2013] JRC 089.
Service of Process Rules 1994.
Service of Process and Taking of Evidence (Jersey) Law 1960.
Virani-v-Virani [2000] JLR 203.
Koonmen-v-Bender and Others [2002] JLR 407.
Seaconsar Far East Limited -v- Bank Markazi Jomhouri Islami Iran [1994] 1 AC 4 38.
James Capel (Channel Islands) Limited-v-Koppel and Fenchurch Trust Limited [1989] JLR 51.
Civil Jurisdiction and Judgments Act 1982.
Canada Trust Co & Others-v-Stolzenburg & Others (No.2) [1998] 1 WLR 547.
Hague-v-Nan Tai Electronics Inc. [2008] UK PC 13.
Royal Court Rules 2004.