Miller Brewing Company v Ruhi Enterprises Ltd and another
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE NEUBERGER |
| Judgment Date | 23 May 2003 |
| Neutral Citation | [2003] EWHC 1606 (Ch) |
| Docket Number | Case No: HC02C00088 |
| Court | Chancery Division |
| Date | 23 May 2003 |
[2003] EWHC 1606 (Ch)
The Honourable MR. JUSTICE NEUBERGER
Case No: HC02C00088
HC003C00469
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
MR. MARTIN HOWE QC for the Claimant
MR. ASHLEY ROUGHTON for the Second Defendant
MR. MARK JONES for the First Defendant
MISS MADELINE HEAL for the Sixth, Seventh and Eighth Defendants
1. I have to determi ne a number of issues arising out of two sets of proceedings issued by the claimant, Miller Brewery Company, a Wisconsin-based company, in relation to beer which infringes its trade marks.
The facts
2. The relevant facts are as follows. The claimant is the proprietor of three United Kingdom registered trade marks and two community registered trade marks consisting of or including the word “Miller” in respect, inter alia, of beer. One of the trade marks is Miller Genuine Draft.
3. In December 1999 the claimant licensed Middle East International Investment Group (“MEIIG”) to brew and bottle Miller Genuine Draft beer in Jordan and to apply the claimant's trade marks to the beer bottles and to distribute the bottled beer in the Middle East. It appears that at least on occasions MEIIG produced beer of an inferior quality, known, I understand, as “lousy beer”. Some time in 2001 someone started to import the lousy beer into Northern Ireland without the claimant's licence or consent. As the claimant had not licensed use of its trade mark on this beer anywhere in the European Union there was an infringement of the claimant's rights in respect of its United Kingdom and European Community registered marks. Further, as the beer in the bottles was of poor quality the potential damage to the claimant's goodwill was self-evident.
4. On 17th December 2001 Her Majesty's Commissioners of Customs and Excise (“the Commissioners”) informed the claimant that they had detained 2200 cases of this lousy beer in the custody of the Mersey Docks and Harbour Company (“Mersey Docks”) in Liverpool. It appears that this beer had been shipped from Aqaba to Liverpool with a view to its being shipped on from Liverpool to Belfast. The beer had been ordered by Mr. Derek Isherwood, a Northern Ireland resident, from Hyet Pte Ltd. (“Hyet”) a Singapore company. Hyet had apparently acquired the beer from MEIIG who were recorded as the shipper on the bill of lading (“the first bill”) issued by Seth Shipping Limited (“Seth”), a Mauritius company, the shipper in respect of the carriage of the beer from Aqaba to Liverpool. The consignee in the first bill was a Californian Bank, Overseas Union Bank, (“OUB”), but on its reverse the first bill was endorsed over by OUB to Hyet. Under a second bill of lading (“the second bill”), issued by Uniline in respect of the projected carriage of the beer from Liverpool to Belfast, the shipper was recorded as Hyet and the consignee was “to order”, although Mr. Isherwood was to be informed. Under the second bill the freight was pre-paid. Bahr Behrend Agencies Limited (“Bahr Behrend”) were the shipping agents; Zim Israel Navigation Company Limited (“Zim”) owned the ship carrying the beer to Liverpool.
5. On 11th January 2002 the claimant applied for and obtained without notice an injunction against Mr. Isherwood restraining him from dealing in Miller beer manufactured by MEIIG and also for an order requiring Mr. Isherwood to disclose details of his dealings in such beer. The injunction contained a cross undertaking by the claimant in the normal form, i.e. an undertaking that,
“If the Court later finds that this order has caused loss to the defendants and decides that the defendants should be compensated for that loss, the claimant will comply with any order the Court may make”.
6. In his affidavit made pursuant to that order on 18th January 2002 Mr. Isherwood said that he had no “legal interest in the goods” and that he did “not intend to acquire any legal interest in the goods”. This is consistent with what his solicitors had written to the claimant's solicitors on 15th January 2002 saying:
“The goods to which your client refers are not in our client's ownership. Our client does not intend to complete the purchase of these goods and therefore we have no further legal interest in them. That being the case, we fail to see how your client's application can proceed.”
7. Despite this, when the application for the interlocutory injunction came back before Jacob J on 25th January 2002, it was continued until trial or further order. The claimant then served its particulars of claim in the first action. The claimant sought a judgment restraining Mr. Isherwood from importing, selling or offering or advertising for sale Miller beer produced in Jordan or otherwise using the claimant's trade marks, and also seeking an account of profit or damages, interest and costs. The claimant further sought from Mr. Isherwood, “An order for delivery up to the claimant or its agents, alternatively destruction upon oath, of all infringing goods, articles and materials in the power, possession, custody or control of [Mr. Isherwood] together with confirmation on affidavit that such delivery up or destruction to have been completed”. This was sought pursuant to the court's equitable jurisdiction.
8. On 22nd February 2002 Bahr Behrend, “as agents for Zim” faxed the claimant's solicitors requesting that “any agreement” between the claimant and Mr. Isherwood “must include the payment of all [Zim's] costs” including, “UK terminal charges, sea freight from Aqaba to Liverpool …. quay rent and container demurrage”.
9. On 1st March 2002 the claimant's solicitors replied, denying any liability on the part of the claimant for these sums.
10. During March and April there was a further exchange between Bahr Behrend and the claimant's solicitors, in which each party repeated its respective position. A further letter of 20th May 2002 from the claimant's solicitors to Bahr Behrend, following a telephone conversation, repeated the position in these terms:
“Having considered the issue of the quay rent and the demurrage charges, which we appreciate are continuing to accrue, we must again reiterate that our client is not responsible for these costs. We suggest that you contact Mr. Isherwood directly to resolve the issue. Alternatively you may consider it appropriate to make an application to the court to vary the order of Jacob J dated 25th January 2002.”
11. Meanwhile, on 15th March 2002 Mr. Isherwood's solicitors had written to the claimant's solicitors in these terms:
“We refer to our earlier without prejudice indications that our client was prepared to submit to judgment in this matter. Please accept this letter by way of confirmation. We suggest that you prepare a form of order so that the matter can be dealt with by consent. There will however need to be provision made in respect of costs to the extent that we will seek to challenge your client's costs in so far as they relate to the without notice application for an injunction.”
12. The claimant's solicitors replied to this on 11th April noting what was said and enclosing “a draft consent order for your signature”. The respective legal advisers to the claimant and Mr. Isherwood then exchanged drafts.
13. Eventually it appeared that the terms were sufficiently far advanced for Mr. Isherwood's solicitors to have issued an application on 21st May 2002. In that application, returnable on 26th July, they gave notice to the claimant's solicitors that Mr. Isherwood intended “to apply for an order in the form set out in the draft appended hereto, the said order is substantially agreed between the parties, save for those portions in square brackets and costs.” Paragraph 2 of the draft order required that Mr. Isherwood “must within seven days of this order deliver up and forfeit to the claimant free of any charges or duties for destruction of any infringing goods …. including in particular the 2200 cases of Miller beer produced in Jordan …. provided always that nothing in this order shall prevent [Mr. Isherwood] from keeping any documents for internal audit accounting purposes.”
14. The form of order was then considered by counsel for the claimant and counsel for Mr. Isherwood, and by the time of the hearing of the application before Park J on 26th July 2002 the proposed order which was passing between counsel contained paragraph 2 in precisely the same order which I have quoted. In particular, the draft dated 26th July 2002 sent by counsel to Mr. Isherwood, to counsel for the claimant, the draft order contained that paragraph.
15. The application in so far as it appeared to be the subject of any dispute, namely in relation to costs, came on before Park J on 26th July 2002. Both counsel, judging from their respective skeleton arguments, informed Park J that the terms of the proposed order were agreed other than in relation to certain issues on costs which Park J then decided. Unfortunately, no order was then drawn up as counsel continued to exchange drafts. In relation to paragraph 2 of the...
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