Prudential Assurance Company Ltd v Prudential Insurance Company of America
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE LADDIE |
| Judgment Date | 20 December 2002 |
| Neutral Citation | [2002] EWHC 534 (Ch) |
| Date | 20 December 2002 |
| Court | Chancery Division |
| Docket Number | Claim No HC 01 C05141 |
[2002] EWHC 534 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Laddie
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Claim No HC 01 C05141
Mr Geoffrey Hobbs QC and Mr Colin Birss (instructed by Lovells for the Claimant)
Mr Michael Silverleaf QC (instructed by Linklaters for the Defendant)
Hearing dates: 6, 7 March, 2002
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.
Approved Judgment.
MR JUSTICE LADDIE
The claimant in this action is The Prudential Assurance Company Limited and the defendant is The Prudential Insurance Company of America. They are large and well known insurance companies. Both carry on business and sell products under and by reference to the trade mark and name "PRUDENTIAL". The claimant conducts a large part of its business in the United Kingdom and in Commonwealth countries. I will refer to it as P-UK. The defendant carries on most of its business in the USA and other foreign countries. I will refer to it as P-US. The companies have existed for well over a century. As a result of their growth and the greater globalisation of the areas of business in which they operate, they have not infrequently come into potential conflict over their respective uses of the "PRUDENTIAL" trade mark and marks derived from it. In this country, and possibly elsewhere, P-UK uses and is also known as "The Pru". It may be that P-US is known likewise in its markets.
In this action, P-UK is seeking to prevent P-US from using the trade marks "PRUMERICA" and "PRUDENTIAL-BACHE" in the United Kingdom and other parts of Europe. There are two ways in which it puts its claim. First it alleges that a legally binding contract was entered into in 1974 and still exists. In broad terms the purpose of the contract was to split the world up into different spheres of influence with each side having the right to use "PRUDENTIAL" in some countries to the exclusion of the other. It is said that P-US is embarking on range of activities, including activities in this country, which will breach that contract. Second it is alleged that the use of the "PRUMERICA" and "PRUDENTIAL-BACHE" marks would infringe a number of Community Trade Marks ("CTMs") and UK Trade Marks.
Because P-US is outside the jurisdiction of the court, P-UK needed permission to serve out under CPr 6.20. This it applied for and obtained from Jacob J on 23 November 2001. As is normal, that application was made without notice.
The application before me has been brought by P-US. Its purpose is to allow P-US to extricate itself from these proceedings without the need for a trial here. It therefore challenges the jurisdiction on the basis that, when properly understood, P-UK never had a sufficiently cogent cause of action to justify the court granting permission to serve out. It asks for the permission to serve out to be set aside on this ground. It also argues that P-UK failed to make full and fair disclosure on the application and the order should be set aside on this ground also. Further, it invites the court to strike out or stay the proceedings on the basis that they are not arguable. Since all the matters raised in relation to the issue of whether there was full and frank disclosure are also central to the other issues, Mr Silverleaf QC, who appears for P-US, accepts that success or failure on those other issues is likely to detennine the question of disclosure as well. The result was that the issue of whether there has been full and frank disclosure was not addressed during the hearing.
Although P-UK is prepared to meet P-US's challenges on the merits, it says that there is a preliminary point which should determine the outcome of this application. It argues that P-US has submitted to the jurisdiction. If this is correct, it is not open to P-US to extricate itself from these proceedings on the basis of want of jurisdiction. Instead it would need to concentrate on the argument that P-UK's claims are so lacking in substance that they should be struck out at this stage. It is agreed that in those circumstances the onus would be on P-US and would be heavy. I agree with Mr Hobbs QC, who appears for P-UK, that it is convenient to consider this issue first since its outcome will significantly affect, if not determine, the outcome of this application.
SUBMISSION TO THE JURISDICTION
Following the successful application for permission to serve out made on 23 November 2001, this action was commenced by claim form dated 30 November. The first thing that P-US did was to serve, through its solicitors, an acknowledgement of service on 27 December 2001. This document indicated that it was P-US's intention to defend the proceedings. It also contains on its face a number of check boxes. P-US had checked the one which indicates that the party challenges jurisdiction. On 8 January this year it served the current application. The relief sought is as described in paragraph 4 above. It follows that on this application P-US both challenges jurisdiction and invites the court to dismiss the claims on substantive grounds.
Mr Hobbs says that the relevant law on this subject is to be found in two decisions of the Court of Appeal; In re Dulles' Settlement (No 2) [1951] 1 Ch 842 and The Messiniaki Tolmi [1984] 1 Lloyds Rep 266, which have been followed recently at first instance in Caltex v Metro [2000] 1 All ER (Comm) 108. In The Messiniaki Tolmi he places particular reliance on the following passage from the judgment of Robert Goff LJ:
"Applying these principles, it is plain to us that the appellant in the present case did indeed submit voluntarily to the jurisdiction. We need not decide whether his application for a stay was alone sufficient for this purpose; for his application for an order striking out par. 4 of the claim indorsed on the writ puts the matter beyond doubt. For if he had been successful in that application the Court would have decided that issue in his favour and against the respondents. The Court's decision on the point would then have created an issue estoppel against the respondents, which the appellant could have invoked to prevent the respondents pursuing such a claim in the Courts of this country, and possibly also in Courts overseas. Plainly, therefore, by making his application for an order striking out par. 4, the appellant was voluntarily submitting to the jurisdiction. In these circumstances it was in any event not open for the appellant thereafter to dispute the jurisdiction of the Court." (p 271)
In In re Dulles' Settlement (No 2) there is a passage in the judgment of Denning LJ which is particularly significant to Mr Hobbs' submissions:
"I cannot see how anyone can fairly say that a man has voluntarily submitted to the jurisdiction of a court, when he has all the time been vigorously protesting that it has no jurisdiction. If he does nothing and lets judgment go against him in default of appearance, he clearly does not submit to the jurisdiction. What difference in principle does it make, if he does not merely do nothing, but actually goes to the court and protests that it has no jurisdiction? I can see no distinction at all. I quite agree, of course, that if he fights the case, not only on the jurisdiction, but also on the merits, he must then be taken to have submitted to the jurisdiction, because he is then inviting the court to decide in his favour on the merits; and he cannot be allowed, at one and the same time, to say that he will accept the decision on the merits if it is favourable to him and will not submit to it if it is unfavourable. But when he only appears with the sole object of protesting against the jurisdiction, I do not think that he can be said to submit to the jurisdiction: see Tallack v Tallack, per Lord Merrivale, P." (p 850 -emphasis added)
In accordance with this passage, according to Mr Hobbs, P-US's mistake was that it chose to put all of its objections before the court on this application at the same time. It should have limited itself to challenging the permission granted by Jacob J. If and when it failed on that issue, it could come back to argue for a strike out.
It seems to me that if the law is as Mr Hobbs argues it to be, it would be unreasonably formalistic. It would force parties to engage in sequential applications when it is clear that the issues could be better and more economically dealt with at the same time. P-US would have had to attack jurisdiction first and alone. No doubt whatever the outcome, the losing party would have taken the matter to the Court of Appeal. Again, no matter what the outcome, there is a substantial chance that the loser there would seek permission to appeal to the House of Lords. Although it cannot be assumed that permission would be granted, the delay and cost of making that application cannot be discounted. Assuming that at the end of that lengthy and costly exercise P-US's challenge to jurisdiction failed, it would then have to make a new application to strike out on conventional grounds. Once again, whatever the outcome on that application, the losing party would be expected to appeal to the Court of Appeal. Again, an application to appeal to the House of Lords could not be ruled out. The cost and delay caused by this is apparent. The need to make sequential applications here would be particularly strange, because there would be substantial overlap between the issues arising in the two applications.
The parties here are big companies with, no doubt, deep pockets. They can afford to litigate. Other litigants might not be...
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