Actial Farmaceutica LDA v De Simone & Ors

An order may be varied under Civil Procedure Rules 1998, rule 3.1(7), but the discretion is principled and normally requires a material change of circumstances, a material misstatement of the original facts, or a prompt application concerning something genuinely overlooked. The rule does not provide a second opportunity to advance arguments that could have been made earlier or an alternative to an appeal. Court orders must be obeyed while they remain in force; a party cannot impose conditions or postpone compliance merely because the order is regarded as unsatisfactory. Persistent and deliberate contempt may be punished by a substantial fine, assessed principally by reference to culpability and harm.

The claimant sought enforcement of an interim order requiring the first defendant to instruct Danisco USA Inc to supply bulk VSL#3 to specified packing agents. The order required the claimant to fortify its cross-undertaking in damages, which it did.

The first defendant appealed unsuccessfully against the order and later sought to vary it under rule 3.1(7) by adding five conditions. He also failed to comply with the order until 6 October 2015, leading to a committal application. The central issues were whether the order should be varied and whether the failure to comply amounted to contempt warranting punishment.

1. Variation application. The application under rule 3.1(7) was dismissed, and would have been dismissed even though compliance later rendered it otiose. The guidance in Tibbles v SIG plc [2012] 1 WLR 2591; [2012] EWCA Civ 518 applied. Although the rule is broadly expressed, finality, the prohibition on taking a second bite at the cherry and the need not to undermine appeals require a principled exercise of the discretion.
2. The primary circumstances normally justifying variation are a material change of circumstances or a material misstatement of the facts on which the original order was based. Prompt recourse may also be appropriate where a matter was genuinely overlooked and ought to have been dealt with in the order. Such an application must be made promptly. The conditions could have been sought at the original hearing, on appeal, or immediately after the appeal was dismissed. The delay was therefore fatal.
3. The Court of Appeal’s findings that the claimant had not breached its undertakings and had not misled the court created an issue estoppel, alternatively it was an abuse of process to reopen those matters. The existing undertakings supplied sufficient protection, and the first defendant was not entitled to renegotiate the order or ignore it pending a variation application.
4. Contempt. Alternative service of the committal application was deemed good service. The first defendant was in persistent, continued and contumacious contempt from 7 August to 6 October 2015. The court applied the principles summarised in Oktritie International Investment Management Limited v Gersamia [2015] EWHC 821, focusing on culpability and harm. The breach was deliberate and persistent, and there was no apology. A fine of €50,000 was imposed. The period during which a stay had been granted was not taken into account.

The judgment records that the first defendant appealed against the May order and the related order for substituted service. The Court of Appeal, in a unanimous decision delivered on 6 August 2015, dismissed both appeals with costs. The present court treated the Court of Appeal’s findings as binding for the purposes of the variation application.