Crystal Decisions (UK) Ltd and Others v Vedatech Corporation and Another

Judgement

I have before me Mr Mani Subramanian, who appears in person and who also represents his own company, Vedatech Corporation. They are defendants to proceedings in the Chancery Division, HC03C01553, and the applications before me today are applications for permission to appeal against five, or indeed possibly six orders, made in those proceedings. There are, I think four orders, certainly three orders but possibly four orders by Lightman J made in July and October last year. There is an order by Patten J made in January of this year, and in a separate category there are costs certificates issued by Master Gorden-Saker, as a costs judge, pursuant to an earlier order in these proceedings on 19 May 2004. In all of these respects, Mr Subramanian seeks permission to appeal.

I should say a little about the procedural history of the applications. Originally I was due to hear his applications for permission to appeal against orders of Lightman J on 18 July and on 12 and 20 October – I think 20 October, but maybe that one had not yet become an effective appeal. Recently, following procedural issues that I need not go into, three further appellant's notices were issued, against a costs order by Lightman J, which is dated 30 November but was made on or soon after 20 October 2005, against Patten J's order in January and against the costs certificates issued by Master Gorden-Saker. Mr Subramanian suggested to the Civil Appeals Office, quite rightly, that it would be sensible for all these applications to be dealt with together, and to allow himself to have time to prepare the bundles and so on. He asked that they all be heard at some date in April or thereafter. It seemed to me that he was right to say that they should all be heard together, and since I had much of the documentation relating to the new appeals from the papers that the office had already, that the sensible thing was to hear all the applications together, and that is what has happened today.

Mr Subramanian lives in the United States and has had to come here for this hearing. I directed that he should be at liberty to put in further documentation, for example skeleton arguments, in support of the new appeals up to 4.30 pm yesterday. In fact he emailed what became when printed out a lot of paper to the Civil Appeals Office yesterday afternoon, but I was not able to see it at that stage because it was password-protected, and whether for that reason or for some other reason, the case management staff were not able to get access until this morning, so I had not seen the papers until I came out of court following the appeal I was involved in hearing this morning.

I have looked at the papers to see what there was. I have read one or two of the documents that I knew that I had not had already. Mr Subramanian has referred me to a few more pages in the course of his submissions this afternoon but I have not read by any means all of what was presented in that way. However, partly because today's main appeal took less time than it was thought it might, there has been longer available for this hearing than I had expected. Mr Subramanian in his very clear submissions has used that time to good effect and has explained the position to me as he wished, and has been helpful in that respect.

The case has a long history. There were proceedings which he started – and when I say "he" I refer to him and his company, either or both of them – in November 1997 arising from a contract between Vedatech and an English company, Crystal Decisions, following that company dispensing with Vedatech's services. Initially, Mr Subramanian was represented by Herbert Smith. Come 2001, they withdrew, and he proceeded in person and representing the company. There was a lot of procedural toing and froing. There were security for costs orders, which were then set aside on appeal, or largely set aside on appeal.

The matter came before Jacob J, as he then was, in 2002 for a trial of liability only. The judge found in favour of Mr Subramanian on an issue of unjust enrichment and it therefore remained to quantify the liability on that head. The judge, as I understand it, gave the parties strong encouragement to have recourse to mediation rather than to go to a full hearing of an inquiry as to damages. The parties did indeed enter upon a mediation and on 29 August 2002, a mediation agreement was made between the parties – when I say between the parties, that is sufficient for present purposes although there were some issues about that — and on 30 August a settlement agreement was reached. That document I must refer to because much turns on it. The settlement agreement contains, confusingly, two paragraphs number 2. The first of them sets out a number of definitions and the second of them is headed "Release and Discharge" and its opening words are:

"Save in relation to obligations arising under this agreement, the claimant and the defendants agree that upon payment of the settlement sum, each is released and discharged from …"

Then it goes on to say what the releases extend to.

The settlement sum was defined and was a dollar amount payable by Crystal to Vedatech in accordance with clause 4 of the agreement. That clause provides for the details of the obligation for payment. Crystal was to pay to Vedatech a sum by telegraphic transfer to a bank to be notified to Crystal and to be paid within 14 working days of the notification, and it was to be free of deductions, and there was a provision as to the manner of notification of the identity of the bank account. Clause 6 said that:

"Upon receipt of the settlement sum and all accrued interest, if any, the claimant agrees to make an application to court for an order to which the defendants will consent to dismiss the action with no order as to costs and for the release of the monies paid into court as security."

Clause 11 of the agreement is an entire agreement clause and Clause 12 is an English law and jurisdiction clause.

Within a really quite short time of that agreement being made, Mr Subramanian tells me, he became aware of a number of things that were wrong about the agreement or the manner in which it had been reached. He applied to Jacob J in relation to that, having given notice rescinding the agreement on the ground of misrepresentation. He applied to Jacob J and although I do not know, I assume that his application was to proceed with the assessment of quantum of the liability. That was opposed on the basis that the agreement had been entered into, and the judge said that if there was to be a challenge to the settlement agreement, that ought to be by way of separate and new proceedings. Mr Subramanian appealed against that order. The Court of Appeal dismissed the appeal, although it is right to say that Pill LJ dissented and would have allowed the appeal, and would have directed the matter to continue in the original proceedings.

At that stage or soon thereafter, as I understand it, and it matters not precisely when, Mr Subramanian, seeing that Crystal asserted that the rescission was invalid and ineffective, gave notice to them of the details of the bank account to which payment should be made if payment was due in accordance with the agreement, but he said he did not do so by way of affirmation of the contract which he had already rescinded. The Crystal parties did not pay within the 14 days, and he then said that they had repudiated the contract by not paying.

Soon after that Crystal issued the present proceedings in 2003. Within the context of those proceedings they paid the full amount of the settlement sum into court, by way of a part 36 payment. Mr Subramanian then started proceedings in California, but the Crystal parties responded to that by amending the present proceedings and by applying for an anti-suit injunction, which they ultimately obtained from Pumfrey J, who also ruled in their favour on points as to service of the claim form, which Mr Subramanian had taken and which he describes as points about the mechanics of service. What he says, and I have not gone into it this afternoon, is that what Pumfrey J did not decide on, and maybe he did not have to, because I think there may possibly have been some service within this jurisdiction, was whether the standards required by part 11 of the CPR for service out of the jurisdiction as regards a substantial case, and so on, had been met.

As I say, Pumfrey J granted the injunction and refused to set aside service. Mr Subramanian applied for permission to appeal to the Court of Appeal; that application came on before a full court and was dismissed, though he tells me that the court would have granted permission if it had simply been a question of the exclusive jurisdiction clause, but they held that there was no arguable point on appeal against the decision based on the court's discretion as to the right forum.

That was in July last year and Mr Subramanian's next move was to make an application at first instance for summary judgment in his favour on the claim. That is an application that I have not, I think, actually seen, but I have...