Permission granted to discontinue proceedings subject to an interim injunction after the proceedings became redundant due to the intervention of a third party

Adam Ferris

Permission granted to discontinue proceedings subject to an interim injunction after the proceedings became redundant due to the intervention of a third party

On 29 January 2019, the High Court granted an application by Sir Philip Greene (“SPG”) and others to discontinue their claim for an injunction against Telegraph Media Group Ltd (the “Telegraph”).

The Court of Appeal had previously granted SPG and his co-claimants an interim injunction restraining the Telegraph from publishing information that had been the subject of non-disclosure agreements agreed in the context of the settlement of complaints by employees of the claimants. The interim injunction was granted pending judgment in the underlying action, the trial of which was scheduled to start on 4 February 2019. It was common ground that the claim became substantially redundant following the statement made by Lord Hain in the House of Lords on 25 October 2018 and the subsequent media reporting thereof. However, the claimants did not apply to discontinue their claim until 28 January 2019. Under CPR 38.2(1) a claimant may discontinue a claim at any time, however where an interim injunction has been granted the claimant requires the court’s permission to do so (CPR 38.6(1)).

In their application to discontinue their claim the applicants sought a number of orders including an order that the default position on costs be departed from in favour of one more favourable to the applicants and an order that the confidentiality of certain documents be maintained. The respondents sought to argue that the court should only allow the applicants to discontinue their claim on certain conditions, including that the claimants should not bring further claims against the defendants without the court’s permission.

On the issue of whether it should grant an order in the terms proposed by the respondents, the court acknowledged that it had the power to refuse permission to discontinue a claim or to impose conditions upon the grant of such permission. It considered that it might be appropriate to exercise this power in cases where an applicant had obtained certain advantages from an interim injunction that it ought to give up or caused loss that should be compensated for. However, the court determined on the facts that it was not appropriate to impose any conditions on the permission to discontinue beyond those contained in the CPR, which include that a claimant must seek the court’s permission if it wishes to sue the same defendant again over the same or substantially the same matters (CPR 38.7).

Unless the court orders otherwise, a claimant who discontinues a claim is liable for the costs incurred by the defendant for the period up to and including the date on which the notice of discontinuance is served on him by the claimant (CPR 38.6). The court considered that in circumstances where the court is unable to determine which side would have won and the claimant has simply given up, it would be justified in imposing a costs liability on the claimant, being the party that has dragged the other to court and then prevented the issues in dispute from being tried. However, in this case it was the intervention of Lord Hain that rendered the proceedings redundant, leaving the court unable to determine which side would have won. In these circumstances, the court made the following costs orders:

  • no order as to the costs of the interim injunction proceedings in the High Court and in the Court of Appeal;
  • provisional order that the claimants should recover the costs of their application to discontinue with leave for the defendants to contend otherwise; and
  • in respect of all other costs, it was ordered that the default position would apply – claimants to pay the defendant’s costs on the standard basis – save that the claimants were ordered to pay costs from the date of one month after Lord Hain’s intervention to the date of judgment on the discontinuance application on the indemnity basis to reflect the fact that following Lord Hain’s statement the proceedings became substantially pointless yet were continued at the behest of the claimants.

On the issue of preserving confidentiality in respect of various documents created during the course of the proceedings, the court noted the CPR provisions governing the use of witness statements and disclosed documents and granted the orders sought.

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