Elvee Ltd v Taylor & Ors

A without-notice search and seizure order requires an extremely strong prima facie case, very serious potential or actual damage, and clear evidence of incriminating material together with a real risk of destruction. Full and frank disclosure is essential; material non-disclosure can require the applicant to surrender benefits obtained. Once an order has been executed, the court need not conduct a hypothetical rehearing of whether relief would originally have been granted if the order was not improperly obtained. It should preserve and manage potentially relevant material, using directions to protect unrelated confidential information. Copyright proceedings should ordinarily be brought in the Chancery Division, but allocation is not mandatory and procedural failure alone does not justify discharge.

Elvee Ltd sued three former employees and their new company, alleging unauthorised copying of computer files, copyright infringement and misuse of confidential business information. Poole J, sitting without notice in the Queen's Bench Division, made an Anton Piller search and seizure order on 4 July 2000. The order was executed and computer data images were retained by specialists.

Following transfer to the Chancery Division, the deputy judge refused to discharge the order, continued preservation and non-use orders, and directed controlled examination and disclosure of copied data. The defendants appealed, principally alleging material non-disclosure and arguing that the court should reconsider the order on the fuller evidence available after execution. Elvee Ltd cross-appealed on costs.

1. Disposition and governing principles. Chadwick LJ gave the first judgment, with Morritt VC agreeing. The appeal was dismissed. The court adopted the established requirements for Anton Piller relief: an extremely strong prima facie case, very serious potential or actual damage, and clear evidence that the defendant possessed incriminating material which might realistically be destroyed before an inter partes hearing: Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55.
2. An applicant seeking without-notice relief must give full disclosure of matters within its knowledge, or discoverable by proper inquiry, which are or might be relevant. If material non-disclosure is established, the court should deprive the applicant of any advantage obtained from the breach. The approach is penal in nature: Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350.
3. Before execution, a discharge application raises both the propriety of obtaining the order and, in light of further evidence and argument, whether the requirements for relief remain satisfied. After execution, the position changes. If the order was not improperly obtained, immediate discharge is generally unnecessary; questions of loss can ordinarily be dealt with under the cross-undertaking in damages at trial: WEA Records Ltd v Visions Channel 4 [1983] 1 WLR 721; Lock Plc v Beswick [1989] 1 WLR 1268.
4. The court was not required to undertake the artificial exercise of deciding whether, on all later material, it would originally have made the order. The imaged data was potentially relevant and risked corruption through continued business use. It could therefore be preserved and examined under controlled disclosure directions, including the specific-disclosure procedure under Civil Procedure Rules rule 31.5, while protecting unrelated confidential information.
5. The alleged non-disclosures did not justify discharge. The Uxbridge reply and defence did not answer the copying allegation; the incorrect division was not chosen for tactical advantage; the lock change, extent of laptop deletion, computer diary, CD evidence and inadequacy of the hearing note were not materially significant when viewed against the powerful evidence of copying. The court applied the caution in Brinks Mat Ltd v Elcombe [1988] 1 WLR 1350 against treating non-disclosure as a last resort on slender grounds.
6. Morritt VC explained that copyright claims were assigned to the Chancery Division by section 61 and Schedule 1 paragraph 1(1) of the Supreme Court Act 1981, but section 61(6) made that allocation non-obligatory. The practice direction to Civil Procedure Rules Part 25 indicated that intellectual-property applications for search and seizure should ordinarily be made in the Chancery Division. The applicant should explain any different forum at the earliest stage, but the omission did not itself require discharge in this case.
7. The court also regarded the unexplained delay in delivering the judgment below as unfortunate in an urgent commercial application. Morritt VC observed that a judge should explain any delay caused by intervening events.
8. The costs order was varied so that the costs of the non-disclosure application and related attendance were costs of the claimant in any event, while costs concerning continuation of the injunctions remained for the trial judge. The appended non-approved order recorded the cross-appeal as dismissed and directed payments on account.

1. Court of Appeal (Civil Division). Dismissed the appeal against the interlocutory order and varied the costs direction concerning the non-disclosure application.
2. Chancery Division. The deputy judge refused to discharge the search and seizure order, continued preservation and non-use orders, directed controlled disclosure of copied data, and reserved most costs to trial.
3. Queen's Bench Division. Poole J made the without-notice search and seizure order on 4 July 2000. The proceedings were subsequently transferred to the Chancery Division.