Attorney General for Tuvalu v Philatelic Distribution Corporation Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WOOLF |
| Judgment Date | 20 October 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J1020-8 |
| Docket Number | 89/1053 1086/89 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 October 1989 |
[1989] EWCA Civ J1020-8
Lord Justice Woolf
Lord Justice Bingham
and
Sir Roualeyn Cumming-Bruce
89/1053
1989/T/No. 568
1086/89
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
SIR GERVASE SHELDON
Royal Courts of Justice
MR. C. ROSS-MUNRO QC AND MR. T. BEAZLEY (instructed by Messrs Judge Sykes & Harrison, London WC2) appeared on behalf of the Appellant (Second Defendant).
MR. R. ROSEN (instructed by Messrs Herbert Smith, London EC4) appeared on behalf of the Respondents (Plaintiffs).
This is a judgment of the court to which all the members have contributed. On 25th July 1989 Sir Gervase Sheldon sitting as a Deputy High Court Judge found Mr. Clive Harold Feigenbaum, Frederick George Hughes and Roger Dorset Apsey guilty of contempt and sentenced them as follows: Mr. Feigenbaum to prison for 3 months and a fine of £3,000; Mr. Hughes to prison for 1 month, suspended for 12 months, and a fine of £750 and Mr. Apsey to prison for 2 weeks, suspended for 6 months, and a fine of £750. They were also ordered to pay costs on an indemnity basis, three-quarters of those costs to be paid by Mr. Feigenbaurm (the appellant) and one-eighth of those costs to be paid both by Mr. Hughes and by Mr. Apsey.
The appellant's contempt was in relation to an order made by Henry J. on 3rd March 1989 and undertakings which were given on 26th April 1989.
Only the appellant now appeals.
Background
The committal proceedings were initiated by the Attorney General of Tuvalu and the Tuvalu Philatelic Bureau ("the Government") as a sequel to the commencement of civil proceedings by the Government against the appellant and three companies, those companies being the Philatelic Distribution Corporation Ltd. (PDC), London & New York International Stamp Co. Ltd. (LNYI) and Format International Security Printers Ltd. (Format).
Tuvalu is a State situated in the South Pacific and a member of the Commonwealth with a population of approximately 8,000 people. The Tuvalu Philatelic Bureau is a body corporate which carries on a philatelic business in the stamps of Tuvalu; the ability of Tuvalu to sell its own stamps being a significant source of income to Tuvalu.
The appellant has been involved in the philatelic business for thirty years and upwards. He is also a property developer. He operates his stamp business through a number of companies of which, with the exception of Format, he is managing director and chairman. The shares of the companies, other than Format, are all owned by himself and his family. In the case of Format he was never a director and only owns approximately 60% of the shares. The appellant acquired his interest in Format when that company was in financial difficulties. Mr. Hughes then became the managing director of that company. As its full title indicates Format carried on a printing business which is based at Parker Street, London. Prior to the appellant acquiring his interest in April 1988 Format was already carrying out printing orders for the appellant's companies and after the acquisition these orders formed the majority of Format's business.
PDC was a wholesale dealer in stamps; it operated from Chandlers Ford in Hampshire and had three or four employees including Mr. Apsey and up until April 1989 a Mr. Ronald Bell-Wallen who was then employed by Format.
Also operating from separate premises at Chandlers Ford was the appellant's company Philatelic Collections Ltd. (PCL). That company also had approximately three employees and was used for marketing stamps. Among its employees was a Mr. May.
LNYI, which was described by the Appellant as his "basic stamp company", had offices in the appellant's home and warehousing in London.
There were two other companies which are referred to in the evidence, Library of Heirlooms Ltd. and Urch Harris & Co. Ltd. which carried on substantial retail and mail order stamp businesses based in Bristol. Urch Harris had over 20 staff and the total staff employed by the group of companies was approximately 100.
Mr. Apsey was the stock controller of PDC, he was based at Chandlers Ford as was Alan Hayward who was the financial adviser and controller of the group of companies. A Mrs. Doreen Hope acted as Format's warehous manageress and her daughter Jackie Hope was also employed by Format.
The Government's relationship with the appellant and his companies arose out of a series of contracts. The earliest contract was made on 19th December 1983, not with the appellant's companies but with Philatelic Ltd. and Philatelist Caribbean Ltd. under which those companies acquired rights to produce and distribute Tuvalu stamps. In January 1987 those companies were in financial difficulty and LNYI and PDC acquired from them the right to reprint certain stamps, for which they paid over £300,000. Whether or not the appellant's companies in fact acquired the rights which they thought they were acquiring or whether the acquisition of those rights was subject to the Government giving their consent which was not forthcoming, it is reasonable to accept that the appellant at least thought he had acquired valuable reprinting rights for his company.
In June 1987 PDC under a further agreement purchased from the Government some 16 million of Tuvalu stamps, of which over 2 million are alleged to be flawed, for £65,000.
This was followed by the contract which gave rise to the present litigation. This was a contract made on 7th October 1987 between PDC and the Government which gave PDC strictly defined rights to design, produce, sell and distribute thematic postage stamps of Tuvalu and its associated islands.
Among the terms of this contract was clause 2.2 which provided that the stamps were to be produced "under supervision of PDC by security printers acceptable to the Government" and clause 3.1 which required PDC in the design, production, sale and distribution of the stamps to uphold the integrity of the Government.
Having obtained these contractual rights PDC, using the printing services of Format, printed large quantities of Tuvalu stamps. For the production of these stamps PDC had given instructions to Format that a substantial proportion of stamps were to be flawed or "funny". The reason this was done is that collectors can be persuaded to pay a premium for a flawed stamp because of its rarity value. There is however an obvious distinction between an isolated error which happens in the normal course of printing by a reputable printer and the mass produced flaws which were being created on the instructions of PDC. Apparently there are countries who, for reasons of commercial expediency, will countenance what PDC had instructed Format to do and there is an issue between the Government and the appellant as to whether the Government were prepared to acquiesce in the deliberate printing of flawed stamps.
However, in March 1988 the Government were concerned about advertisements which were appearing offering flawed Tuvalu stamps and, commencing with a telex of 31st March 1988 to the appellant, a series of communications passed between the Government and PDC and Format. It is not necessary to repeat the details of these communications because it is common ground that the appellant was thoroughly dishonest in what he said during the course of the communications. He concealed the relationship between PDC and Format from the Government and far from disclosing the fact that Format had been instructed to print a substantial quantity of flawed stamps suggested that Format were extrememly reliable security printers who were making every effort to minimise the risk of errors during the printing. The Government naturally rely upon this correspondence to discredit the appellant and as indicating, as it does, how devious and dishonest he can be. The Government also rely on the correspondence as indicating the extent to which the appellant was personally in control of the companies because in the absence of the appellant Mr. Hayward was not prepared to reply to a telex and Format did not reply to correspondence which was addressed to them but left the appellant to reply.
The Government were not impressed by the replies from the appellant and made it clear that contrary to his wishes Format were not to be used as printers. This decision of the Government was ignored by PDC who continued to give orders to Format. By 3rd March 1989 the Government suspected that PDC had produced millions of deliberately flawed and unauthorised stamps and principally on that ground terminated the contract of 7th October 1987 and commenced proceedings. The same day an ex parte, Anton Piller, order was made by Henry J. The order included injuctions restraining PDC, the appellant, LNYI and Format:
"…..from doing or causing or permitting to be done the following acts or any of them…..namely
(a) producing or disposing of or dealing with any further stamps, or other articles of philately or plates dies artwork or other goods relating to the same, bearing the name of Tuvalu or any of its islands;
(b) selling using copying or howsoever disposing of or dealing with any of the Ordered Materials."
(Ordered Materials were described in the order as being "all and any stamps or other articles of philately and all plates dies artwork archival materials and other goods relating to the same, bearing the...
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