Carl Zeiss Stiftung v Herbert Smith & Company
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DIPLOCK,LORD JUSTICE SACHS |
| Judgment Date | 23 May 1968 |
| Judgment citation (vLex) | [1968] EWCA Civ J0523-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 May 1968 |
[1968] EWCA Civ J0523-2
The Master of The Rolls (Lord Denning)
Lord Justice Diplock and
Lord Justice Sachs
In The Supreme Court of Judicature
Court of Appeal.
Appeal from judgment of Mr. Justice Pennycuick on 8th nay, 1968.
Mr. MICHAEL KERR, Q.C., Mr. C.J. SLADE, Q.C., and Mr. GORDON SLYNN (instructed by Messrs. Herbert Smith & Co.) appeared on behalf of the Appellant Defendants.
Mr. D.W. FALCONER, Q.C., and Mr. JEREMIAH HARMAN, Q.C. (instructed by Messrs. Courts & Co.) appeared on behalf of the Respondent Plaintiff.
We need not trouble you, Mr. Kerr.
This is a claim by a company which is called Carl Zeiss Stiftung. It is a corporate entity, but that is all that is admitted about it. It carries on business in East Germany. It brings this action against two firms of solicitors, Herbert Smith & Co., and Dehn and Lauderdale. The claim arises in this way: there is another organisation which is also called Carl Zeiss Stiftung. It carries on business in West Germany. Now the Carl Zeiss Stiftung of East Germany has brought this action against the Carl Zeiss Stiftung of West Germany. The East German company claims that the West German company has been guilty of passing off, infringing trade marks, and so forth. In addition, by an amendment, the East German company claims that all the property and assets of the West German company belong to the East German company. That is the main action. It is an action on a colossal scale. It has been going on for years. It will not come on for trial in the most optimistic circumstances until some time next year.
Now in this present action the East German company make a claim against the solicitors for the other side - against the solicitors who have acted for the West German company. The East German Company say that the solicitors must pay over to the East German company all the moneys they have received from their clients, the West German company, for fees and disbursements. The East German Company say that all these moneys belonged to them and that the solicitors are accountable as constructive trustees, or something of the kind.
The East German company first put forward their claim in a letter of the 10th January, 1963. It made the solicitors, Herbert Smith & Co, very anxious. They had already received large sums for costs; and there were very large sums which were going to be incurred in carrying on this action. It was a great risk for them to go on with this claim hanging over them. They wrote back on the 8th March, 1968: "The fact that this claim has been made and is being maintained renders our Clients'position in this litigation extremely difficult, if not impossible." They said that they would have to apply to the Court. But, before the solicitors applied to the Court, the East German company brought this action against them.
The solicitors now ask that a preliminary issue be tried so as to decide whether they are liable for moneys which they received from their clients honestly on account of their fees and disbursements. They point out that they cannot safely conduct the litigation for the West German company with this risk, and I might almost say, this threat, hanging over their heads. The Judge refused to order a preliminary issue. He said that the main action should be fought out to its conclusion before the trial Judge; and then this second action against the solicitors should be tried before the same Judge.
I am afraid that I cannot agree with the Judge's decision. These...
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...Mat Ltd. v. Elcombe, [1988] 1 W.L.R. 1350; [1988] 3 All E.R. 188, applied. (6) Carl Zeiss Stiftung v. Herbert Smith & Co. (No. 2), [1969] 1 Ch. 93; [1968] 2 All E.R. 1002, applied. (7) Cayman Islands News Bureau Ltd. v. Cohen, 1988–89 CILR 195, followed. (8) Dubai Bank v. Galadari, [1990] 1......
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