Hanco ATM Systems Ltd v Cashbox ATM Systems Ltd and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE PETER SMITH |
| Judgment Date | 10 July 2007 |
| Neutral Citation | [2007] EWHC 1599 (Ch) |
| Docket Number | Case No: HC04C00005 |
| Court | Chancery Division |
| Date | 10 July 2007 |
[2007] EWHC 1599 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
MR JUSTICE PETER SMITH
Case No: HC04C00005
Mr Richard Millett QC and Mr Peter Morel (instructed by Speechly Bircham LLP) for the Claimant
Mr Andrew Hochhauser QC and Mr David Davies ( instructed by Bryan Cave) for the First and Second Defendants
Hearing date: 19th June 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Peter Smith J :
INTRODUCTION
This judgment arises out of the hearing before me on 19th June 2007. On that day I heard the application by the First and Second Defendants for permission to appeal and if permission was granted to consider the appeal. The appeal arises out of an application for summary judgment and an interim payment brought by the Claimant against the First and Second Defendants (“Cashbox” and “Mr Thomas”). That application was issued on 23rd December 2005 and was heard by Master Bowles on 3rd, 4th and 5th May 2006. He gave judgment on 3rd August 2006.
That judgment was considered by Master Bowles on 21st February 2007. On that day he:-
(1) Entered judgment for the Claimant on liability as against Cashbox for:-
(a) Dishonestly assisting Mr Thomas to breach his fiduciary duties to the Claimant in bidding via Cashbox for the second phase of the Threshers Contract (see below) and,
(b) Breach of confidence in respect of its receipt and use of the Claimant's Terms and conditions.
(2) And as against Mr Thomas for:-
(a) Breach of his contract of employment and breach of his fiduciary duty in bidding for the second phase of the Threshers Contract.
(b) Breach of fiduciary duty in failing to disclose to the Claimant the fact of his own wrongdoing in bidding for the second phase of the Threshers Contract.
(c) Breach of his contract of employment and breach of his fiduciary duty in failing to report the impending departures of the Third, Fourth and Fifth Defendants and the corporate surveyors referred to in Mr Thomas's email of 19th May 2003 to Mustard Design and
(d) Breach of his contract of employment for breach of confidence in disclosing the Claimant's terms and conditions to Cashbox for Cashbox's use as the basis for its intended contract with Threshers.
He refused Cashbox and Mr Thomas permission to appeal and ordered them to pay the costs of the action insofar as those costs related to matters in respect to which judgment had been entered, ordered they pay 60% of the Claimant's costs of the summary judgment application dated 23rd December 2005 and ordered them to pay on account of the costs orders referred to above an interim payment of £150,000 by 4pm on 4th April 2007.
OTHER APPLICATIONS
The Claimant made an application on 5th February 2007 for specific disclosure against Cashbox and Mr Thomas under CPR 31.12 in order to assist making its election as to remedy and for pre-action disclosure against Cashbox PLC under CPR 31.16.
Those applications were listed before me but were not dealt with and have been adjourned to enable the parties to come to an agreement over them if possible.
The Claimant also made an application for an interim payment. That was also due to take place before me but was by agreement by the parties adjourned pending the outcome of the present outstanding application. It is accepted that if the Defendant's application for permission to appeal and the appeal succeeds that application will fall away. It has been fixed for hearing on 30th July 2007 before me and I made directions for the serving of further evidence (at the risk of the Claimants being liable for the costs of that hearing).
The Defendants' application initially came before Mr Justice Warren on paper and he adjourned it for further consideration in court. That matter came before me and it seemed to me that the time allocated was not sufficient properly to consider all of the arguments raised by the Defendants. I therefore directed the present hearing with the Claimants as Respondents. In the event the matter has been fully argued and the parties accept in effect that if I decide the case is appropriate for permission to appeal, it will be on the basis not merely that the appeal has prospects of success but also whether or not the appeal succeeds so that there is one hearing only.
MASTER BOWLES' JUDGMENT
As I have said above the hearing before Master Bowles lasted 3 days. He took time over his judgment and clearly delivered a careful judgment running to some 67 pages.
I remind myself of the nature of the hearing before me.
Under CPR 52.3 (6) permission to appeal may be given only where (a) the court considers that the appeal would have a real prospect of success; or (b) there is some other compelling reason why the appeal should be heard.
The appeal is limited to a review of the decision of the Lower Court unless (inter alia) in the circumstances of an individual appeal it would be in the interest of justice to hold a rehearing (which I do not believe to be the case here). The appeal will be allowed when the decision of the Lower Court was (a) wrong; or (b) unjust because of a serious procedural or other irregularity in the proceedings in the Lower Court. It is not suggested that the latter is the case.
The Appeal Court can draw an inference of fact which it is considered justified on the evidence ( CPR 52.11).
The concept of “review” was considered by the Court of Appeal in EI Du Pont Nemours & Co v ST Du Pont [2006] 1 WLR 2793 (summarised at SCP 52.11.1 page 1549). The important point for the purpose of this appeal is that appropriate respect is to be accorded to the decision of the Lower Court the nature of the Lower Court and its decision making process.
The concept of the word “wrong” in CPR 52.11 (3) (a) is meant to infer that the Lower Court either erred in law, erred in fact or erred (to the appropriate extent) in the exercise of its discretion. That latter point is designed to show that where a discretion is exercised it should be challenged only on the basis that no reasonable tribunal with the material before it could have come to the decision being challenged on appeal.
NATURE OF APPLICATION
The Claimant's application was for summary judgment.
The application against Cashbox and Mr Thomas was wide ranging. In addition to the claim for breach of contract of employment and fiduciary duty as against Mr Thomas and the dishonest assistance claim against Cashbox which succeeded the Claimant sought tortious claims for breach of confidence inducing breach of contract, unlawful interference and conspiracy against both of them.
Some of those were watered down and Mr Millett QC (who appeared for the Claimant both before me and below) at the commencement of the hearing before Master Bowles limited his application as against Mr Thomas as to breach of contract, breach of confidence and unlawful interference with the Claimant's economic interest and conspiracy with Cashbox and breach of fiduciary duty. As against Cashbox he sought liability on breach of confidence, unlawful interference with the Claimant's economic interest, conspiracy with Mr Thomas and dishonest assistance to Mr Thomas to breach his fiduciary duties.
PART 24 APPLICATIONS A NEED FOR CAUTION
Master Bowles concluded that Mr Thomas had committed (amongst other things) a breach of fiduciary duty and he also concluded that Cashbox had dishonestly assisted in that breach of fiduciary duty. These are strong decisions for a Judge to make. They are even stronger when made at the summary judgment stage. It is well understood by older practitioners that summary judgment was not open to a Plaintiff where there was an allegation of fraud. That did not necessarily preclude a claim for breach of fiduciary duty see for example Guinness v Saunders [1990] 2 AC 663 H.L. However the courts quite properly looked at very serious allegations in the context of a summary judgment application and were careful to avoid the risks of a summary application shutting out a Defendant at an early stage and thus potentially causing an injustice when it was possible that all the material was not before the Judge at that preliminary stage.
The restriction on fraud as a prohibition for summary judgment was removed in the CPR. CPR 24.2 provides that the court may give summary judgment against a Defendant if (a) he considers that the Defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at trial.
It is important to appreciate that a summary judgment application is not a summary trial. There is nothing new in that see for example under the strike out provisions under the RSC Wenlock v Maloney [1965] 1 WLR 1238. That is not to say that the suitability of the case should be judged by the bulk of the documents or even the length of the hearing. It is too easy for a Defendant to throw up a smoke screen by producing a large number of documents and a large number of issues (on the “Micawber” principle) and hope that something comes out which makes the matter go to trial. Equally however one clearly must resist becoming embroiled in a mini trial for obvious reasons. If a mini trial is necessary it is wrong to conduct a mini trial at an interim stage when there has not been full and complete deployment as between the parties of witness statements and (more importantly) disclosure.
Equally one should not...
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