Tyco European Metal Framing Ltd v New Systems Ltd & Ors

Whether to adjourn an appeal is a discretionary case-management decision. The court should weigh the prospect of avoiding duplicated hearings and costs against prejudice to each party, the parties’ ability to meet or recover costs, and the practical consequences of delay. An undertaking restricting any successful appellant to damages, with no injunction sought, may substantially reduce prejudice to the respondent and favour an adjournment. The court may also consider whether the related inquiry can proceed promptly and whether the adjournment creates a realistic prospect of settlement or withdrawal.

Tyco appealed from a judgment of Laddie J dated 22 January 2001. The judge had held that the Spider Bolt was designed before the relevant Tyco drawings were seen, so there had been no copying or breach of confidence, and had ordered an inquiry as to damages under the cross-undertaking supporting an interlocutory injunction.

Before the Court of Appeal, Tyco sought an adjournment until after the damages inquiry. It argued that the inquiry might make pursuit of the appeal uneconomic or might provide funds for continued proceedings. New Systems opposed the application, relying principally on the continuing commercial uncertainty. Mr Clewer was neutral. The central issue was whether, in those circumstances, the appeal should be deferred.

1. Discretionary assessment. Aldous LJ treated the application as requiring the court to weigh all the circumstances. Relevant considerations included the prospect of avoiding duplicated hearings and costs, the likely consequences if the appeal succeeded or failed, the parties’ ability to pay or recover costs, and any prejudice caused by delay.
2. Effect of the undertaking. Tyco undertook that, if successful, it would seek no injunction and would confine its remedy to damages. That was a major factor. It removed the immediate risk that New Systems would have to withdraw the Spider Bolt from the market. Any remaining exposure was principally a damages claim, which the judge considered likely to be assessed on a reasonable royalty basis.
3. Prejudice and preparation. New Systems’ objection that the litigation had prevented marketing was substantially reduced by the undertaking. The company was said to have access to funds, and the likely irreparable damage from an adjournment appeared small. The court also considered that evidence for the damages inquiry, including accounting evidence, should be obtainable within a short period. Mr Carmedy’s inability to attend an earlier directions hearing, while funds were available to obtain representation, was not a compelling reason against adjournment.
4. Disposition. There was a realistic prospect that the inquiry would save the costs of the appeal or clarify whether it was commercially sensible to continue. On balance, the appeal was adjourned for listing in the New Year, with a time estimate of one to one and a half days. The costs of the adjournment application were ordered to be costs in the appeal.

• High Court (Chancery Division): Laddie J, on 22 January 2001, held that the Spider Bolt had been designed before Tyco’s drawings were seen. The claims for copyright infringement, breach of confidence and infringement of design right therefore failed. An inquiry as to damages under the cross-undertaking was ordered.
• Court of Appeal (Civil Division): On 14 November 2001, Aldous LJ adjourned the appeal for listing in the New Year.