Cinpres Gas Injection Ltd v Melea Ltd

This is an application to set aside an injunction made by Patten J on 9th September 2005. The action in which the injunction was granted is concerned with the ownership of an invention, the subject matter of international application number PCT/US89/02815 and the title of the invention is “Process For Injection Moulding and Hollow and Plastic Article Made Thereby”. The defendant is the registered proprietor of the European UK designation of that application and has been found in previous entitlement proceedings between it and the claimant to be the owner of the invention, by assignment from an individual, one Michael Ladney.

The injunction in question is an injunction intended to prevent interference with a witness and the witness in question, Mr. Hendry, was said by Mr. Ladney to be the inventor of the invention and to have made the invention in circumstances in which the claimant in these proceedings could have no right or interest in it. This allegation has, as I have indicated, been tried in this jurisdiction and resolved in favour of Mr. Ladney by the Court of Appeal. It has also been raised in the United States by way of defence by the claimant's licensees to actions brought by Mr. Ladney or associated companies of his. On the occasions this has happened Mr. Hendry has given the same evidence that he made the invention as he gave in the English proceedings, although the matter has never been resolved by a trial in the United States.

The relationship between Mr. Ladney and Mr. Hendry has lasted for many years and has been stormy. There has been litigation between them on at least two occasions. It is described at length in an affidavit made by Mr. Hendry during the course of last year. I have not heard Mr. Ladney's version of those events but the present position may be summarized, and I emphasize the word summarized, as follows.

Mr. Hendry is now 84 and Mr. Ladney is 87. They have known each other for 35 years. Mr. Ladney took an assignment of at least the United States application and the invention from Mr. Hendry in 1988. Until 1999 they have, as Mr. Purvis appearing on behalf of the defendant observed, fought side by side against the claimant and in the course of this joint fight they fought the entitlement proceedings to which I have referred.

In 2001 an event occurred about which it is unprofitable for me to speculate too much but the effect was that Mr. Hendry changed horses. He started working for the claimant or an associated company of the claimant and was paid for his services $3,000 per calendar month. It is clear that at that stage he agreed to have no further contact with Mr. Ladney.

Rather surprisingly on 24th April to 2003 it appears that Mr. Ladney again took Mr. Hendry on as a consultant in respect of litigation with the claimant for a down payment in advance of hourly fees of $10,000. At that point Mr. Hendry announced that he could not afford to offend the claimant. Shortly thereafter he was asked for his comments on a declaration, yet again as I understand it, setting out the circumstances in which the invention had been made. He declined to complete this declaration and has done no further acts pursuant to the supposed consultancy with Mr. Ladney.

In June 2003 these proceedings started in the Patent Office notwithstanding the determination of the Court of Appeal in favour of what I shall call the Ladney interest. The Patent Office proceedings were aborted.

By November 2003 these proceedings, which necessarily involve an allegation of fraud, had been launched. There was what was described to me as a hiatus for 14 months or thereabouts between February 2004 and May 2005 during which time the parties held discussions. It was during that time that the long affidavit, to which I have referred, was sworn by Mr. Hendry.

The relationship between Mr. Ladney and Mr. Hendry has completely collapsed and Mr. Hendry is now on the side of the claimant in proceedings which have taken place in the United States. On 7th September 2005 Mr. Hendry left a message with the claimant's solicitor, Mr. Gordon Harris, by mobile phone. This message, as one would expect with a caller from the United States, was left fairly late at about 9pm. On 8th September Mr. Harris picked up his voicemail and was told by Mr. Hendry that Mr. Ladney was threatening to sue him. At 3pm that day Mr. Harris phoned Mr. Hendry and was told about alleged pressure from Mr. Ladney.

Now, there are two somewhat variant accounts of this telephone call. The first is to be found in a transcript of the proceedings before Patten J. In circumstances which I shall describe in a little more detail later Mr. Harris gave evidence of the telephone call from the witness box before Patten J and said this:

The history between Mr. Ladney and Mr. Hendry reveals, so it is suggested, three matters to which Mr. Hendry might have been referring when he said that he had been through all this before many times with Mr. Ladney. The first is, of course, the proceedings in the English Patent Office which ended up in the Court of Appeal in which Mr. Ladney was held entitled to the patent. Second is an early dispute between them in 1992 when one of Mr. Ladney's American companies sued Mr. Hendry personally. It is perhaps worth noting in passing that in that action an order was made by the Circuit Court Judge of the Circuit Court for the County of Makeham in the state of Michigan that provided that there should be no direct contact between the parties for any reason and that all contact between the company in question, Mr. Ladney and any related and/or affiliated entities and/or agents and James W. Hendry and his family and/or agents should be conducted only through counsel of record or the parties in that case.

The second version of the conversation is that which is set out in the witness statement of Mr. Harris which is itself taken from a note which appears to have been made in court at the time the evidence was given ,in which it says this in relation to the telephone call:

On the following day, which was the day on which the application was made to Patten J, Mr. Harris attended a consultation with leading and junior counsel and it was decided after consideration to make an application for an injunction. It will be understood that the 9th September was a Friday and, of course, it is a Friday in the vacation. There is, therefore, always available at least one judge who, providing work allows, is available to take short notice applications and, in the Chancery Division at least, normally two judges.

After the usual discussion through the usual channels the application was made at 3pm to Patten J. By that stage a number of things had not been done. There had been no preparation of a manuscript note of the telephone call between Mr. Harris and Mr. Hendry and it is that that necessitated Mr. Harris giving the evidence in question in the witness box. Second, there was no skeleton argument and no draft order, although a draft order was continuing to be prepared during the course of the hearing.

This being an action which was on foot and active there was of course a solicitor on the other side and counsel also instructed. No notice was given to the solicitors of this application. Patten J made the order after an application which can be followed in the transcript. There was a long dispute before me as to what he had and had not read and in particular whether he had read, for example, a paragraph in Mr. Hendry's long affidavit in which Mr. Hendry recognizes that he will have to appear in court because he is admitting now to having lied repeatedly upon oath. He asserts that he is ready, willing and able so to do, as he puts it:

It is either right or appropriate that I should embark on speculation as to the impact this paragraph might have had on Patten J. The correct approach to the statements made by Mr. Hendry in his witness statement and what is said by Mr. Harris in the two versions to which I have referred are matters which may well strike me in the same way or in a different way as they struck Patten J. It is not fruitful to embark upon a further analysis of what Mr. Hendry did or did not say at this stage and what Patten J did or did not read. There is no doubt that the most striking thing in front of him was the evidence of Mr. Harris, which I should say in the application before me is not denied.

There is no explanation of the telephone call which took place from Mr. Ladney. There is no dispute that it did take place and no statement from Mr. Ladney's side at this stage as to what was said. Patten J exercised his discretion on the material available to him in a way which I cannot revisit. However, I must concentrate in this application on a number of other matters. The first is the failure to give notice of the application to the defendant or their solicitors. The second is the failure properly to note what was said in court including the failure properly to provide the defendants with a note of what was said as soon as practicable. The third is the lack of any provision of confirmatory evidence for the written record at any time until this application was raised.

Before turning to these particular matters I should make a number of general observations. The grant of an injunction is a serious matter. Our familiarity with injunctive relief tends to blunt our appreciation of the significance of an injunction to lay parties. It so happens in the present case that Mr. Ladney and Mr. Hendry had through the years been so submerged in litigation that to all intents and purposes they may be regarded as continual and consistent litigants. That does not affect the general principle which I am attempting to articulate.

The second important consideration is the court's need to protect its own proceedings against interference. This is an extremely serious matter. The court's need to protect its proceedings against interference extends to taking proper and proportionate steps to prevent pressure from being placed on witnesses. This does not, however, excuse a failure to give notice. Quite the opposite. The more serious an application the more desirable it is for notice to be given to the respondent. Applications without notice are only for genuinely urgent cases and cases where notice would frustrate the purpose of the order. There are also cases where giving notice, although desirable, is simply not practicable in the time available and in all cases in which notice is not given the failure must be justified to the judge.

No regard was had to this basic principle in this case and no explanation was given to the judge either at the time or now. It is not as if this was a recondite area of legal learning. These basic requirements, together with the need for evidence to be recorded in a witness statement, are clearly set out in the notes to CPR 25 and in the practice direction thereunder. In this case a very serious allegation was being made of interference with a witness. As I have indicated the gravity of the allegation made the giving of notice even more desirable than perhaps it might otherwise be. Notice could plainly have been given in this case and was not. There is no question that notice was possible since when it came to service of the order the address of the solicitors was proffered as an address for alternative service. I regard this is a grave procedural fault and as I have indicated no attempt has been made to explain it.

The purpose of these rules is to ensure that the defendant must know if it is not present at the hearing what case it has to meet. There should therefore be a full note and the normal practice is to enforce this desirable state of affairs by requiring the party obtaining interim relief without notice to give undertakings to reduce the allegations made before the judge into a witness statement to be served as soon as practicable upon the respondent. That was not done in the present case. Some objection was taken before me to the fact that Mr. Harris gave hearsay evidence of the conversation from the witness box but there is of course nothing either wrong or irregular about that. The inadequacy is elsewhere. The inadequacy is in making a record of what was said and providing it as soon as practicable to the respondent. Indeed no transcript was obtained by the claimant until much later. Counsel's note was never produced and in the end a solicitor's note, which does not touch at all points with the transcript, was reluctantly produced.

It should be noted for future reference that it is wrong in principle to rely upon the existence of a transcript. There are too many potential technical faults in a very large and complex recording system such as the one that exists in the Royal Courts of Justice to guarantee that a transcript will be available of any application. Any judge will recall occasions when a transcript would have been of immense value but, for entirely understandable and technical reasons, is not available. No reliance can be placed therefore on the automatic mechanisms that are available in this building; there must be a proper note. A function of counsel and solicitors on an application of this description is to take such a note.

In obtaining the order from Patten J, therefore, it seems to me that there was a disregard for procedural safeguards, safeguards which were intended both to ensure that the defendant knew what case it had to meet and to ensure that the case was dealt with efficiently and proportionately. These are matters which do not require the intervention of the judge who hears the application. They should be automatic and it is the duty of the parties to inform the judge who is hearing the application that they have not been done.

The defendants complain also of the fact that the order was made over trial. At that date no trial date had been fixed and normal practice is to fix a return date, normally after a comparatively brief period. Consideration of the transcript shows that this either might or did involve the exercise of discretion by Patten J and I am not going to second-guess him. It is not my task. I therefore reject the complaint made on the basis that the order was made over trial.

The final matter is the scope of the order made. The defendant's complaint is that it goes too wide. What appears to have prompted this application today is that the defendant's solicitors fear that the order could or might inhibit ordinary evidence-gathering steps which, for this purpose, might well include litigation against Mr. Hendry to secure third party evidence for use in foreign proceedings under section 1782 of title 28 of the US Code.

Obviously no injunction should have the potential to interfere with this process. Contrary to Mr. Prescott's submission it seems to me clear that today, on what I shall regard as the first return day in the presence of the respondent, the discretion as to the form of the order is at large. In the normal course of events, there would have been a return day and I can see no reason why, in the light of the solicitor's evidence, the question of the scope of the order should not be revisited. Indeed, until Mr. Prescott became aware that I was contemplating circumscribing the scope of the order he himself was seeking to expand it by continuing it in respect of other individuals.

At the same time the lack of any evidence as to the circumstances of any contact between Mr. Ladney and Mr. Hendry from Mr. Ladney's side is a striking feature of this application. There is, therefore, on the undisputed evidence a potentially serious mischief which can only be guarded against by an appropriate order.

Now, I referred at the beginning of this judgment to an order which had already been made in the United States. This order seems to me, if I may say so with respect to the judge, to preserve that which needs to be preserved while making proper contact possible without any objection of the nature of harassment or intimidation being raised. No breach of this order in the United States is complained of and Mr. Hendry's affidavit both refers to this paragraph in the order and to many other disputes with Mr. Ladney and I do not see why an order of this general type should not do office in this jurisdiction also.

Accordingly, I propose to discharge Patten J's order. I propose to substitute for it an injunction restraining any contact by or on behalf of Mr. Ladney with Mr. Hendry relating to any matter in issue in this action or to any evidence which he has or might in the future give otherwise than through lawyers instructed both by Mr. Ladney and by Mr. Hendry. That actually seems to me to be a workable order as it stands, but if counsel have any points upon its drafting I will hear them. I will not make any other order and I will hear counsel on the costs of this application.