Niche Products Ltd v Macdermid Offshore Solutions LLC

A trial of issues which substantially overlap an outstanding appeal against strike-out or summary judgment may pre-empt that appeal and should ordinarily be avoided. However, a stay need not extend to distinct preliminary issues where their determination remains independently valuable to related claims or proceedings. The court must balance the risk of wasted costs and delay against the value of resolving the issues, the parties’ conduct, and the overriding objective. An appellate court should interfere with a trial-management decision only for an error of principle or where the decision is wholly wrong.

MacDermid appealed, with permission, against Birss J’s refusal on 14 November 2013 to strike out the malicious-falsehood claim or grant summary judgment. It applied to stay the proceedings pending determination of that appeal. The appeal concerned the actionability of the alleged statements, loss and malice.

The IPEC had ordered a trial of preliminary technical issues concerning whether two hydraulic fluids materially differed. MacDermid sought a stay of the whole claim, while Niche accepted that the proceedings should be stayed except for those preliminary issues. The central question was whether the technical issues should proceed before the appeal was decided.

The Court of Appeal granted only limited relief. The proceedings were stayed to the extent that a trial of issues overlapping the strike-out appeal would pre-empt that appeal, but the preliminary technical issues were permitted to proceed. The application to expedite the appeal was refused.

1. A trial of all issues, including actionability, pecuniary loss and malice, would require the trial judge to decide matters directly raised by the appeal. It would therefore pre-empt the appeal and might render it redundant.
2. The technical question whether Version 1 and Version 2 of the product materially differed was the central issue in the malicious-falsehood claim, the defamation counterclaim and the related Texas proceedings. Its resolution remained commercially significant and could be valuable even if the malicious-falsehood claim were struck out.
3. The IPEC was well suited to determine the technical issues speedily and economically. The costs cap was a relevant consideration, but MacDermid had chosen to proceed in that forum, had not appealed the order directing the preliminary trial, and had not previously sought either a stay of the testing or expedition of the appeal.
4. The court could not anticipate the result of the appeal. Independent testing had begun, and although the timetable was tight, it remained capable of being met with appropriate case management. A confidentiality regime protected genuine trade secrets.
5. Birss J’s refusal to stay the proceedings was substantially a trial-management decision. The Court of Appeal should not interfere unless he had erred in principle or his decision was wholly wrong. His decision to allow the preliminary issues to proceed was plainly open to him.

1. Court of Appeal (Civil Division): On 13 February 2014, the court granted a limited stay pending determination of the strike-out appeal, allowed the preliminary technical issues to proceed, and refused expedition: [2014] EWCA Civ 379.
2. High Court of Justice, Chancery Division: Birss J refused MacDermid’s application for a stay pending the appeal on 14 November 2013 and granted permission to appeal.