Perry v F H Brundle & Ors [2017] EWHC 678 (IPEC) (30 March 2017)

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

Judge Hacon :

Introduction

1. On 27 March 2017, at the application of the first and second defendants (hereafter “the defendants”) I granted a general civil restraint order (“GCRO”) against the claimant (“Mr Perry”). In view of the seriousness of the order I said I would give my reasons in writing. I now do so.
   
2. Mr Perry has already been subject to an extended civil restraint order (“ECRO”) granted by me on 25 September 2015, which expired on 25 March 2017. See the judgment of 2 October 2015, Perry v F H Brundle [2015] EWHC 2737 (IPEC); [2015] B.P.I.R. 1449.

Background to Mr Perry’s application

3. The present proceedings have their origin in an action brought by the first defendant (“Brundle”) against Mr Perry for unjustified threats of patent infringement: Case No. CC13P00980 (“the First Action”). Mr Perry counterclaimed for infringement of the patent and brought a Part 20 claim against the second and third defendants in the present action (respectively “Betafence” and “Britannia”) also for infringement of the patent. On 6 March 2014 I gave judgment in the First Action [2014] EWHC 475 (IPEC). I found that Mr Perry’s claim for patent infringement failed and that the claim against him for threats succeeded. Permission to appeal was refused by the Court of Appeal.
4. On 15 May 2015 Mr Perry started the present proceedings. In substance his claim amounted to a renewal of his allegation against the same three defendants that they had infringed the same patent. On 25 September 2015 I struck out Mr Perry’s claim on the alternative grounds that the claim was res judicata and also that, had there been a cause of action, it vested in the Official Receiver. Mr Perry was by then bankrupt. On the same day I granted the ECRO against Mr Perry, giving my reasons in the judgment of 2 October 2015.
   
5. On 11 October 2016 Rose J refused Mr Perry permission to appeal the ECRO. Mr Perry’s application for permission to appeal was renewed before Newey J on 9 March 2017. No copy of Newey J’s order is on the file or was in the possession of either Mr Perry or the first and second defendants’ solicitors, Collyer Bristow at the hearing three days ago, but Mr Perry informed me that permission to appeal was again refused by Newey J. As I have indicated, the ECRO has now expired anyway.
   
6. I should add that it is apparent from an order of Rose J dated 11 August 2016 that Mr Perry made an application for permission to bring an appeal out of time against my order striking out the present proceedings. Rose J made no order. Mr Perry informed me that he has not renewed his application to challenge the strike out and does not intend to do so.
   

The law relating to civil restraint orders

7. In the judgment of 2 October 2015 I first considered whether, sitting in the IPEC, I had jurisdiction to grant an ECRO. For the reasons set out at [16]-[22] I came to the view that I did. This was approved on appeal, see the Order of Rose J dated 11 October 2016 and the reasons therein stated. The jurisdiction to grant a GCRO is the same as for an ECRO, compare CPR PD3C paragraphs 3.1 and 4.1, so I have jurisdiction to grant a GCRO.
   
8. Comparing the grant of an ECRO and a GCRO further, CPR PD3C 3.1 provides that an ECRO may be made
   

“…where a party has persistently issued claims or made applications which are totally without merit.”

The effect of an ECRO, broadly, is that the party who is subject to it must obtain the permission of the judge identified in the order issuing a claim or making an application concerning any matter involving or relating to or touching upon or leading to the proceedings in which the order is made (see CPR PD3C 3.3).

9. As to a GCRO, CPR PD3C 4.1 provides:
   

“4.1 A general civil restraint order may be made …

…

where the party against whom the order is made persists in issuing claims or making applications which are totally without merit in circumstances where an extended civil restraint order would not be sufficient or appropriate.“

10. The effect of a GCRO is set out in CPR PD3C 4.3:
    

“4.3 Where a party who is subject to a general civil restraint order –

(1) issues a claim or makes an application in a court identified in the order without first obtaining the permission of a judge identified in the order, the claim or application will automatically be struck out or dismissed

(a) without the judge having to make any further order; and

(b) without the need for the other party to respond to it;

(2) repeatedly makes applications for permission pursuant to that order which are totally without merit, the court may direct that if the party makes any further application for permission which is totally without merit, the decision to dismiss that application will be final and there will be no right of appeal, unless the judge who refused permission grants permission to appeal.“

11. In my earlier judgment I considered the law on the grant of ECROs and said this:
    

“[27] I draw from these authorities the following principles:

(1) When considering the appropriate order in relation to an application for a CRO, the court should engage in a graduated and proportionate response to the identified abuse.

(2) Where the application is for an extended CRO, the litigant against whom the order is sought must have made a minimum of three claims or applications which were totally without merit in order to be taken to have ‘persistently’ issued such claims or applications within the meaning of paragraph 3.1 of PD3C.

(3) Subject to that minimum, the persistence of the litigant in issuing such claims, in particular the likelihood that such persistence will be maintained in the future, is to be assessed by reference to his conduct as a whole.

(4) The categorisation of a claim or application as being totally without merit need not have been done at the time they were made; the court hearing the application for the CRO is entitled retrospectively to adjudge a claim or application to be totally without merit.”

12. I added a further comment, referring to a judgment of Warren J in KL Communications Ltd v Fu [2015] EWHC 2026 (IPEC):
    

“[28] There is also an observation which I take from the judgment of Warren J in KL Communications, at [8]. A CRO should not in practice significantly deprive a litigant of any right to which he or she would otherwise be entitled. It acts as a filter to preclude the making of unmeritorious claims or applications. This ought to work in favour of all parties, including the litigant who is the subject of the order – especially where he is a litigant in person – by ensuring that their time and money are not wasted by initiatives doomed to failure.”

13. In The Chief Constable of Avon and Somerset Constabulary v Benjamin Gray [2016] EWHC 2998 (QB), Warby J made five points about the provisions relating to GCROs, of which the fourth and fifth are relevant to the present case, the fifth also being consistent with Warren J’s observation:

“(4) Fourthly, as Mr Gray has emphasised, a CRO interferes with the right of access to a court. That is a fundamental civil right. The court must be alive to that, and wary of too readily imposing restrictions upon the right of access. Restrictions should be imposed only if and to the extent that they are necessary in the pursuit of a legitimate aim. In the case of a CRO the legitimate aims in view include the protection of the rights of others, to be free from the waste of time and precious resources that flow from the bringing of unfounded claims and applications. The scarce publicly funded resources of the court also require protection against such waste. These are considerations which justify the existence of the CRO regime.

(5) In that context, the fifth point is important. A GCRO is not, as some of Mr Gray’s submissions would suggest, a bar on the bringing of any proceedings. It imposes a permission filter. Permission filters are a well-established feature of civil and criminal procedure. They are most common as a way of controlling the use of appeal mechanisms. But permission is required to initiate a claim for judicial review. The court would not refuse permission to bring a claim of substance with arguable merit. What it might do, if presented with such a case, is to give directions to ensure that any untenable aspects of the claim were removed and to ensure that all remaining claims were conducted fairly and efficiently, did not consume disproportionate resources, and were otherwise dealt with in accordance with the overriding objective.”

14. It seems to me that the principles set out above in relation to an application for an ECRO apply equally in the context of a GCRO save that I must be further satisfied that an ECRO would not be sufficient or appropriate. Generally this will require evidence that the party concerned is likely to persist in the future in issuing claims or making applications which are totally without merit concerning matters other than those involving or relating to or touching upon or leading to the proceedings in which the order is made.
    

The claims and applications Mr Perry wishes to make

15. Before me Mr Perry made no bones about his intention to make several claims and applications in the future. Mr Austen, who appeared for Brundle and Betafence, referred me to a letter dated 24 August 2016 from Mr Perry to Rose J, one of many lengthy letters sent by Mr Perry to members of the judiciary or Collyer Bristow both before and after the grant of the ECRO. Mr Perry said this under the heading ‘Relief sought’, meaning relief he intends to seek in the future:
    

“1. Pecuniary damages for the fraud itself in excess of £1m (one million pounds). Please note: the turnover on sales of the product seems to reach an amount in excess of £1.5m based on current evidence. Without having had any access to accounting records this is an estimation based on volume where figures provided by the Indian Manufacturer and as found in Michael Brundle’s own witness statement in CC13P00980. The Courts job is to remove all gain (turnover and increased trading goodwill and business expansion) from the defendants, deter further offences and impose punishment, hence in point 2 below:

2. Aggravated damages for the consequences of the fraud on the claimant, in excess of £5m (five million pounds but not more than £30m (thirty million pounds)).

3. Damages for sales of the product outside of the United Kingdom but which were masterminded by Betafence in the UK, in excess of £1m (one million pounds).

4. Order for any existing offending products to be destroyed or handed over to the claimant.

5. Injunction to prevent any further sales of the product.

6. Order (if possible) to extend the life of the claimants granted patents by five years.

7. Order (if possible) to restore any lost patents, designs, trademarks or copyrights to the register.

8. Director’s Disqualification Order for all individuals involved in the fraud to prevent these individuals from managing or having involvement in the directing of corporations, under rules of offences by company officers.

9. Revoking of any relevant practice licences or ban whether temporary or permanent of individuals involved in fraud.

10. Recommendation to Solicitors Regulation Authority and/or Police for any further investigation as the Court sees appropriate.

11. Serious Crime Prevention Order.

12. Rescission/annulment of Bankruptcy Order.

13. Order to freeze the assets of the defendants as I don’t believe they have the means to pay the damages and refuse to provide any financial proof that they can – so basically they’ve paid themselves the big Christmas bonuses and spent the money made through the fraud and then claim they can’t afford to pay me.

14. Contempt of Court order for Collyer Bristow LLP.

15. Contempt of Court order for Stuart Baran and Patrick Wheeler and revocation of practice licences.

16. Costs and interest.”

16. The letter goes on to develop an allegation of abuse of dominant position on the part of the three defendants, which Mr Perry also wishes to pursue. He added this:
    

“Collyer Bristow LLP are not yet party to proceedings and I would like to add them to the claim for:

1. Dishonest assistance,

2. Fraud by abuse of position;

3. Failing to disclose information.

4. Intent to conceal fraud.

5. Masterminding civil proceedings against an individual to conceal criminal activity carried out by corporations (their clients).

Official Receiver should be added to proceedings for:

1. Dishonest assistance whilst acting as a trustee.

2. Perverting the course of justice.

3. Interfering with the administration of justice.

4. Fraudulent breach of trust when acting as a trustee.

5. Conspiring to defraud or allow the continuation of a fraud when acting as a trustee.”

17. At the hearing Mr Perry explained to me the ‘fraud’ allegation. If I understood correctly, this forms the basis of claims 1-5, 8-10 and 13-16 in the first quotation from his letter and all the claims against Collyer Bristow. The short point, as explained by Mr Perry, is that my judgment in the First Action was reached on the basis of fraudulent evidence assembled by the officers of the three defendants, the solicitors at Collyer Bristow and counsel who acted for the defendants at the first action. I was shown an email dated 17 November 2016 to Patrick Wheeler of Collyer Bristow seeking the home addresses of these individuals and of officers of the Official Receiver, for use in what Mr Perry called his ‘appeal’ relating to the conspiracy. In fact, by this he seems to have meant a fresh claim for fraud and conspiracy, since there has been no such claim made so far. Very properly, the addresses were not provided.
    
18. I should add that on the evidence I have seen, I have no reason to suppose that there has been any misconduct by anyone.
    
19. Mr Perry also told me that one option he may take is to pursue his claim for fraud with the police for the time being. He said that when they turn up evidence, which he hopes will happen, he will then continue with his civil action for fraud.
    
20. Aside from fraud, there are two other claims, or categories of claim, which Mr Perry drew my attention to at the hearing and which he wishes to make. These were an annulment of the order of bankruptcy made against him and a separate claim for passing off based on misuse of his name.
    
21. So far as the bankruptcy order against Mr Perry is concerned, it emerged during the hearing that this has probably been discharged. Mr Perry said that on 30 April 2016, during a phone conversation with the Official Receiver, he was told that the order had been discharged either on that day or shortly before. However, Mr Perry also told me that he had never seen a written order to that effect. In any case, he wished to pursue the application to rescind the order for bankruptcy, made by Deputy District Judge Giddins in the Bath County Court on 30 April 2015, because Mr Perry wanted to clear his name and improve his credit rating.
    

Whether a GCRO should be granted

22. Mr Perry’s argument for resisting a GCRO was simply that all the claims he wished to bring were fully justified. I informed Mr Perry that having gone through his extensive submissions in writing, all of his claims seemed to me to be without merit, although I confessed that I sometimes struggled to understand the point he was making. Mr Perry said he would take me through some of the clearest evidence of fraud to prove his point.
    
23. As I mentioned earlier, Mr Perry’s original claim was for patent infringement. It related to fence brackets sold in this country by Brundle and Britannia. They were supplied to Brundle and Britannia by Betafence, which is a UK subsidiary of the Belgian manufacturer of the brackets (“Betafence Belgium”).
    
24. In July 2012 Mr Perry wrote a letter to Betafence alleging infringement of his patent. On 25 July 2012 he received a letter from the Belgian lawyers acting for Betafence Belgium, denying infringement and alleging the patent was invalid. Some months later, on 5 October 2012, Mr Perry complained to Brundle about the brackets. On 15 October 2012 Collyer Bristow responded on behalf of Brundle and their letter included this:
    

“We are aware that you have written to our client’s supplier, Betafence Limited, and that their advisers have provided detailed reasons in their letter to you dated 25 July 2012 why, if the Patent is valid and subsisting at all, the Brackets do not infringe.”

25. Mr Perry said this was the clearest possible evidence of an improper collusion between Brundle and Betafence; it was the only possible explanation for Brundle having become aware of Mr Perry’s complaint to Betafence and the Belgian lawyers’ reply in July 2012.
    
26. I can see that there was collusion but do not agree with Mr Perry that there was anything at all improper about it. When Brundle received the letter of complaint from Mr Perry in October 2012 the most obvious thing for them to do was to refer the complaint to the manufacturer of the allegedly infringing brackets. Betafence may have reassured Brundle that in Betafence’s view (and as turned out to be the case) there was no infringement, supplying a copy of Betafence’s July correspondence with Mr Perry by way of support. I should say that I do not know exactly what happened and I did not ask Mr Austen to elaborate. It did not matter. Betafence passing to Brundle its correspondence with Mr Perry was neither unlawful nor improper. It was a perfectly sound disclosure.
    
27. Having read through Mr Perry’s other complaints, I have to say that it did not surprise me to discover that what Mr Perry regarded as being among the strongest evidence of fraud he had, evaporated away on closer inspection. Of course it does not necessarily follow that all the rest of his suggestions of unlawful conduct are as similarly insubstantial, but so far I have seen nothing that puts them above the level of being totally without merit.
    
28. Some of the claims and applications that Mr Perry wishes to bring are not connected with the allegation of patent infringement that formed the basis of the present proceedings. I have in mind the application to rescind his bankruptcy order, arguably the new claim for passing off and possibly Mr Perry’s complaint against the Official Receiver.
    
29. I am satisfied that there is real risk that Mr Perry intends to bring claims and applications in the future that are totally without merit and which necessitates the grant of a GCRO.
    
30. For the foregoing reasons a GCRO has been granted against Mr Perry. It will be for a period of two years starting from 27 March 2017.
    

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