The Hedgehog Golf Company Ltd v Hauser

The claimant, a company owning a patent for a golf "hedgehog" device, sought a perpetual injunction to restrain its former director and 50% shareholder, Mr Hauser, from disclosing confidential information. The court concluded that a perpetual injunction was justified because Mr Hauser had threatened to assist the claimant's opponent in patent litigation, had made explicit threats to damage the company, had given evidence that the judge found unreliable, and had resigned his directorship in circumstances from which the court could infer an intention to evade any undertaking. The court noted prior interlocutory relief and an undertaking limited to the period of directorship, and found a real risk of future improper disclosure. Accordingly the court granted a perpetual injunction restraining improper disclosure of confidential information, while reserving the precise terms.

Background and parties. The Hedgehog Golf Company Limited sells a patented device for golf trolleys. The defendant, Mr Frank Hauser, was until shortly before judgment a 50% shareholder and director. Mr Denis Lantsbury is the other shareholder and is now sole director.

Procedural history and nature of the application. Following an unfair prejudice petition under section 994 of the Companies Act 2006 decided in favour of Mr Lantsbury by Mr Moss QC, Mr Hauser was recorded as having threatened to assist the claimant's opponent in separate patent proceedings and to make public that the claimant's patent did not cover manufactured wheels. The claimant applied for and obtained interlocutory injunctive relief restraining disclosure of confidential information; that injunction was continued by Arnold J until trial. The present hearing was a first instance application for a perpetual injunction restraining the defendant from disclosing confidential information.

Issues framed. The court considered (i) whether there was a real risk that Mr Hauser would disclose confidential information to the claimant's prejudice; (ii) the weight to be given to the defendant's past conduct, statements and undertakings; and (iii) whether a perpetual injunction was an appropriate remedy and, if so, its scope.

Evidence and subsidiary findings. The judge accepted the evidence of Mr Gary Baum that Mr Hauser had made threats and proposals to assist the claimant's opponent and to help manufacturers produce a competing wheel. The judge rejected Mr Hauser's denials on key points, noted Mr Hauser had previously given untruthful evidence under oath, and inferred that Mr Hauser's resignation as director was at least partly intended to free him from any undertaking given at the hearing before Mr Moss QC.

Reasoning and conclusion. Given the defendant's conduct, his expressed willingness to damage the company, his refusal to give an undertaking beyond his period of directorship, his resignation shortly afterwards, and his willingness to disclose material even where this might risk breaching earlier injunctive orders, the court found a real and present risk of future improper disclosure. The court therefore granted a perpetual injunction restraining Mr Hauser from improperly disclosing confidential information, while reserving detailed submissions on the precise, and provisionally narrower, terms of that injunction.

Additional notes. The judgment records an interlocutory order referring to patent number 1625827 but notes that the correct patent number is 1625027. The court did not decide whether a later witness statement by Mr Hauser breached Arnold J's order; it noted it as indicative of a willingness to disclose damaging information.

The court granted a perpetual injunction restraining Mr Hauser from improperly disclosing confidential information. The judge concluded that, on the evidence, there was a real risk of future disclosure given the defendant's threats, conduct during the unfair prejudice proceedings under section 994 Companies Act 2006, his refusal to give an undertaking beyond his directorship, his resignation soon afterwards and his general willingness to disclose damaging information. The precise terms of the perpetual injunction were reserved for further submissions, with a provisional view that the injunction should be narrower than the interlocutory orders previously made.