R Griggs Group Ltd & Ors v Evans & Ors (No 2)

A court may enforce in personam an equitable obligation concerning property situated abroad, including intellectual property, where the defendant is properly before the court. This may include an obligation arising when a purchaser acquires property with actual notice of a prior enforceable agreement to transfer it. The claim is not necessarily an impermissible adjudication of foreign title or an infringement of international comity. Foreign location may raise a choice-of-law or forum conveniens issue, rather than a question of jurisdiction. The position may differ where the lex situs contains a registration or other mandatory rule extinguishing the equity, or where the foreign law makes the property inalienable.

The claimants owned an equitable interest in the copyright in a logo created by the first defendant under contracts governed by English law. The first defendant subsequently assigned the copyright, including foreign copyrights, to the second defendant, which had notice of the claimants’ prior equity. The court had previously ordered an assignment of the copyrights.

Before the order was drawn up and entered, the defendants argued that the court lacked jurisdiction to order assignment of copyrights existing under foreign laws. They relied principally on the rule concerning foreign immovables and on Tyburn Productions Ltd v. Conan Doyle. The central issue was whether an English court could enforce the claimants’ equity against a purchaser with notice without improperly adjudicating title to foreign property.

1. The objection was properly considered. A court may correct an order before it is drawn up and entered where the objection concerns a genuine absence of jurisdiction. The distinction between jurisdiction and restraint based on international comity was material. The court was also entitled, and where necessary obliged, to investigate jurisdiction of its own motion.
2. The purchaser-with-notice rule. Where a vendor has entered into an enforceable obligation to transfer unique property, a third-party purchaser with actual notice of that obligation cannot ordinarily retain the property. The purchaser’s conscience is affected by unconscionable conduct or equitable fraud. The rule may be modified by a statutory registration scheme.
3. Foreign immovables. The Moçambique rule concerns adjudication of rights in rem to foreign land. It does not prevent an English court from enforcing a personal obligation concerning foreign property. Following the analysis in Macmillan Inc v. Bishopsgate Trust (No. 3), the issue is better treated as one of choice of law where the claimant seeks to enforce an equitable obligation against a person amenable to the court.
4. Where the contract is governed by English law, a purchaser with actual notice may in principle be subject to an equity enforceable in England, unless the lex situs contains a rule which extinguishes that equity or otherwise prevents the transfer. A forum conveniens objection is distinct from absence of jurisdiction.
5. Foreign intellectual property. Copyright is not analogous to foreign land merely because it exists under foreign law. Tyburn Productions Ltd v. Conan Doyle concerned a substantially different, in rem dispute about the existence of foreign intellectual property rights and did not govern an in personam claim based on contract and notice. Modern international practice and the statutory abolition of the double-actionability rule supported the distinction.
6. The defendants’ jurisdictional objection failed. The escrowed assignment was to be delivered by the defendants’ solicitors to the claimants.

First-instance decision. The judgment refers to an earlier decision in the same litigation, [2003] EWHC 2914 (Ch) , concerning the claimants’ equitable ownership of the logo copyright.