[1986] 1 All ER 733

The plaintiffs, a pharmaceutical company, began an action against the defendants, claiming damages in respect of the alleged wrongful worldwide distribution and sale of counterfeit insecticide purporting to be a product of the plaintiffs. Pending the hearing of the action the plaintiffs applied to the High Court for a Mareva injunction and an Anton Piller order requiring, inter alia, (i) that the defendants disclose the whereabouts of documents relating to transactions worldwide in which the counterfeit insecticide had been supplied or offered for sale, (ii) that they swear an affidavit setting forth particulars of such transactions and (iii) that they deliver up the relevant document to the plaintiffs' solicitors. The plaintiffs feared that the first defendant would evade the effect of such orders by leaving the jurisdiction and therefore sought further injunctive relief, namely (i) that the first defendant deliver up his passports and (ii) that he be restrained from leaving the jurisdiction until the Anton Piller order had been executed. The judge granted the Mareva and Anton Piller orders but refused to grant the further relief. The plaintiffs appealed to the Court of Appeal, contending that the court had jurisdiction to grant the further relief under s 37(1)^a of the Supreme Court Act 1981, which provided that the court had jurisdiction to grant 'an injunction ... in all cases in which it appears ... to be just and convenient to do so', and that the further relief ought to be granted because the evidence showed that there was a real risk that the first defendant would leave the jurisdiction thereby depriving the plaintiffs of the benefit of the Anton Piller order. It was conceded that a writ ne exeat regno was not appropriate in the circumstances.

Held - It was clear on the true construction of s 37(1) of the 1981 Act and from established practice that the court had a wide discretion to do what was just and reasonable in the circumstances to ensure the proper administration of justice at the hearing of the action. Furthermore, the further relief sought was necessary and reasonable as being ancillary to the due performance of the court's function of protecting, by means of the Anton Piller and Mareva orders, the plaintiffs' rights pending the hearing of the action. There was accordingly jurisdiction to grant the further relief sought. In the circumstances, balancing the hardship to the plaintiffs if they were deprived of the benefit of the Anton Piller order against the hardship caused to the first defendant by interfering with his liberty, and taking into account that unless the further relief sought was granted there was a real risk that the plaintiffs' action would suffer, whereas the first defendant could be protected by applying to have the order granting the further relief discharged and by the plaintiffs giving an undertaking in damages, it was appropriate to grant the further relief sought for the protection of the plaintiffs. However, since the further relief would constitute an interference with the liberty of the subject, it would not be granted for any longer than was necessary to enable the plaintiffs to execute the Mareva and Anton Piller orders. The appeal would accordingly be allowed (see p 737 f g and j to p 738 j, post).
   Dictum of Jessel MR in Smith v Peters (1875) LR 20 Eq at 512-513 and Astro Exito733 Navegacion SA v Southland Enterprise Co Ltd (Chase Manhattan Bank NA intervening), The Messiniaki Tolmi [1982] 3 All ER 335 applied.

Notes
For the statutory jurisdiction of the court to grant interlocutory injunctions, see 24 Halsbury's Laws (4th edn) paras 917-918, and for cases on interlocutory mandatory injunctions, see 28(2) Digest (Reissue) 995-996, 254-274.
   For Mareva injunctions, see 37 Halsbury's Laws (4th edn) para 362, and for cases on the subject, see 37(2) Digest (Reissue) 474-476, 2947-2962.
   For Anton Piller orders, see 37 Halsbury's Laws (4th edn) para 372, and for cases on the subject, see 37(2) Digest (Reissue) 480-483, 2978-2990.
   For the Supreme Court Act 1981, s 37, see 11 Halsbury's Statutes (4th edn) 792.

Interlocutory appeal
The plaintiffs, Bayer AG, sought as against the defendants, (1) Peter Christopher Winter, (2) Douglas Galloway, (3) Gannwear Ltd, (4) Grandview Investments Inc and (5) Ivywood Ltd, damages in respect of wrongful distribution and sale of counterfeit insecticide purporting to be the product Baygon produced and marketed by the plaintiffs. The plaintiffs applied ex parte to the Chancery Division for injunctions, inter alia, (i) requiring the defendants to disclose the precise whereabouts of all correspondence, invoices, consignment notes, certificates of origin and all other documents whatsoever relating to any transactions anywhere in the world of which they were aware in which counterfeit Baygon had been supplied or offered, (ii) requiring the defendants to make a true affidavit setting forth the particulars of each and every such transaction including the dates and quantities and parties involved and to exhibit thereto any documents relating thereto, and (iii) to deliver up into the custody of the plaintiffs' solicitors all such documents whose whereabouts the defendants were required to disclose. On 20 December 1985 Walton J granted the orders sought, but refused to grant further relief, namely (i) that the first defendant be restrained from leaving England and Wales until after a specified period, and (ii) that the first defendant do forthwith deliver up his passports. The plaintiffs appealed to the Court of Appeal. The hearing was held and judgment given in camera. The case is reported with the permission of the court. The facts are set out in the judgment of Fox LJ.

20 December 1985. The following judgments were delivered.

FOX LJ. This is an appeal by the plaintiffs from a decision of Walton J made on the plaintiff's ex parte application this morning. On that application, the judge granted relief in the Anton Piller and Mareva forms against the defendant, with which the plaintiffs are satisfied, subject to a matter to which I shall refer later, which arises from an error of their own.

734

   The subject of this appeal is the judge's refusal to include in the provisions of the order the following:

provided that the plaintiffs' solicitors must return them to him on the expiry of the time referred to in the preceding paragraph of the order.
   The judge did not deliver a judgment on that aspect of the matter; he merely indicated that he did not feel able to grant relief, and left the plaintiffs to apply to this court. He felt, as the law stood, if such relief was to be granted it should be done by the Court of Appeal. That was a perfectly understandable view on an ex parte application for relief of a novel kind.
   The background to the matter is the subject of a good deal of evidence, and in view of the hour at which we are dealing with this matter, I will refer to the position briefly. The plaintiffs, Bayer AG, are a well-known pharmaceutical company, and the group of which they are a member has a worldwide turnover of about Dm 43 billion, and has assets which are somewhat less. The group has substantial assets in the United Kingdom, and in particular it carries on a very substantial trade in this country under the name of Bayer (UK) Ltd.
   The present case concerns the distribution and sale of counterfeit insecticides. From about 1966 the plaintiffs have marketed in very large quantities in many countries in the world an insecticide aerosol spray under the mark Baygon. The nature of the plaintiffs' concern is that counterfeit aerosols are now being marketed containing an insecticide which the evidence of the plaintiffs suggests is ineffective for the purpose for which it is intended. The counterfeit aerosols have a mark similar to that of the plaintiffs' product.
   The precise extent of this activity is not known; the plaintiffs fear that the activities which they have uncovered are, as they put it, only a tip of the iceberg and, if allowed to continue, could do them great harm in their reputation and business. The counterfeit activities appear to be of an international character, crossing the borders of a number of countries.
   So far as the first defendant is concerned, there is evidence (and I say no more because this is an ex parte application) which connects him with the activities which I have mentioned.
   There is before the court an affidavit of 19 December 1985 deposed to by a Mr Black exhibiting a report of an inquiry agent which recounts what purports to be an interview with the first defendant. In para 33 of that report it is stated:

Then para 34 states:

735

   Against that general background, without dealing with the evidence in detail, which is voluminous, the plaintiffs before Walton J this morning sought Mareva and Anton Piller orders. The material order which Walton J made against the defendants is as follows: first, by para 3:

The plaintiffs desire to add: '(C) particulars of all such transactions as are referred to in sub-paragraph (A) including sources of supply, intended consignees, quantities and dates.'
   Then there is a further order, in para (4):

Paragraph (3) is part of the earlier order to which I have already referred.
   Then it is ordered, by para (5):

   The contention of the plaintiffs is that without the protection of such an order as they seek restraining the first defendant from leaving England and delivering up his passports, they may be denied the information which the order of Walton J is intended to secure to them. It is said that the first defendant has knowledge of these matters; as appears from the paragraph in the report which I have read concerning an interview with him, that he is unconcerned about the alleged counterfeiting of the plaintiffs' product; that he has declined to supply information, and that if, notwithstanding the order of Walton J he declines to supply information or evades its provision in some manner, he may then leave the jurisdiction and the plaintiffs will be denied the information which the order was intended to give to them.
   It is accepted by counsel on behalf of the plaintiffs, that this is not a case in which a writ ne exeat regno would be applicable so as to assist them. They are therefore compelled to seek interlocutory injunctions (negative and positive) in the terms which I have mentioned.
   The jurisdiction on which counsel for the plaintiffs relies is that conferred by s 37(1) of the Supreme Court Act 1981, which provides:

   Counsel for the plaintiffs referred us to the decision in Astro Exito Navegacion SA v Southland Enterprise Co Ltd (Chase Manhattan Bank NA intervening), The Messiniaki Tolmi [1982] 3 All ER 335, [1982] QB 1248. In that case the court cited with approval the observations of Jessel MR in Smith v Peters (1875) LR 20 Eq 511 at 512-513 in which he said this:

   It is clear from the language of the section itself and from Jessel MR's statement of the general width of the practice of the court, and from the approach of the Court of Appeal itself in the Astro case that the court has a wide discretion to do what appears to be just and reasonable in the circumstances of the case.
   The court has to exercise that discretion according to established principles, and the particular matter with which we are concerned at the moment, namely of an injunctive restraint on a person leaving the jurisdiction, is not one on which there appears to be previous authority. It is clear, however, that the law in relation to the grant of injunctive relief for the protection of a litigant's rights pending the hearing of an action has been transformed over the past ten years by the Anton Piller and Mareva relief which has greatly extended the law on this topic as previously understood so as to meet the needs of justice.
   Bearing in mind we are exercising a jurisdiction which is statutory, and which is expressed in terms of considerable width, it seems to me that the court should not shrink, if it is of opinion that an injunction is necessary for the proper protection of a party to the action, from granting relief, notwithstanding it may, in its terms, be of a novel character.
   The position here appears to be this: first, so far as the first defendant is concerned, one asks what harm will this order do him? If he says it will cause him some embarassment or hardship, he can apply to the High Court forthwith, on evidence, to ask that it be varied or, if necessary, discharged. He has therefore an opportunity, if it imposes hardship on him, of establishing that very quickly before a court.
   I turn next to the position from the point of view of the plaintiffs. If the first defendant, on the service of Walton J's order requiring disclosure of the information to which I have referred, declines to give that information, or is not frank in the answers which he gives, then if he leaves the United Kingdom, the plaintiffs are at risk that they will be unable to obtain that information. It appears to be doubtful, at any rate, whether the first defendant has in fact a permanent residence in this country.
   In the circumstances which I have mentioned of the first defendant failing to provide answers to the matters referred to in the order of Walton J, or on his failure to be frank in the answers which he gaves, it is open to the plaintiffs to seek an order for cross-examination; and the first defendant, if he remains within the jurisdiction, could be compelled to attend for that purpose. If, however, he has left the jurisdiction, then in those circumstances the order would be frustrated.
   Therefore it seems to me that the court is faced with a situation in which there is a risk to the plaintiffs that they may not obtain the information ordered to be disclosed, unless737 the order which is now sought is granted; while, at the same time, any risk of hardship to the first defendant is dealt with by his capacity to apply to a judge to vary or discharge the order.
   For the reasons which I have indicated, therefore, I would be prepared to grant the order which counsel for the plaintiffs now seeks; that is to say, an injunction restraining the first defendant from leaving the jurisdiction, and secondly, that he deliver up his passports. The orders are, in my view, in Jessel MR's words, 'necessary and reasonable orders which are ancillary to the due performance of the Court's functions'. Cumming-Bruce LJ in House of Spring Gardens Ltd v Waite (1985) 11 FSR 173 at 183 emphasised the power and duty of the court (in relation to a case where an order had been made that the defendants identify their assets and disclose their whereabouts) to take 'such steps ... as will enable the order to have effect as completely and successfully as the powers of the court can procure'.
   The time during which the first of those orders should run should, and counsel for the plaintiffs accepts this, be of very limited duration. It is an interference with the liberty of the subject, so that the period should be no longer than is necessary to enable the plaintiffs to serve the Mareva and Anton Piller orders which they have obtained, and endeavour to obtain from the defendant the information which is referred to in those orders.
   Counsel for the plaintiffs therefore propose, and I would accept, that in the first of the proposed orders a period of two days should be inserted, so that it will read: 'The first defendant be restrained until after two days or further order in the meantime ... '
   For the reasons which I have indicated, I would allow the appeal and include in the order the two further paragraphs which I have indicated.

RALPH GIBSON LJ. I agree with Fox LJ that the appeal against the order of the judge should be allowed for the reasons which he has given. I agree also with the order he has proposed should be made. I will add very little.
   I found the order which counsel for the plaintiffs asked this court to make at first glance to be surprising. However, with great care, he explained both the novelty and the nature of the order which he sought, and it became apparent that that which was sought was no more than could be enforced against the first defendant if he chose to remain in this country. I therefore became persuaded that the court should make the order which has been asked for. If the first defendant chooses to comply with the order readily and with candour, it will cause him very little trouble.
   I also agree that if it should turn out the order has been made in circumstances which will cause unusual difficulty for the first defendant, he can apply for discharge and there is no doubt whatever of the ability of these plaintiffs to satisfy any claim that he may have on the basis of their undertaking in damages.
   We were referred to House of Spring Gardens Ltd v Waite (1985) 11 FSR 173, which was concerned with a Mareva injunction, where the powers of the court under the statute are referred to. Cumming-Bruce LJ said (at 183):

   These proceedings are concerned not so much with the Mareva part of the injunction as the attempt to obtain information.
   For the reasons which Fox LJ has given, I accept that the court has both the power and, in this case, the duty to accede to the order which is requested.

Solicitors: Durrant Piesse (for the plaintiffs).