Binstead & Anor v Zytronic Displays Ltd

The power to order a preliminary issue should be exercised sparingly and with realistic regard to the likely effect on the litigation. A preliminary issue is particularly unsuitable where it involves disputed facts, mixed questions of fact and law, substantial evidence, or a real risk of increasing costs and delay. The court should consider whether the issue is decisive or potentially decisive, whether it will materially reduce the overall burden of the proceedings, and whether it may become irrelevant or require later appeals or amendments. The relevant factors are guidance, not rigid conditions, but the court must apply them through the Overriding Objective.

The claimants alleged that the defendant had continued to manufacture touch screens using technology demonstrated in 1999, giving rise to claims concerning patent infringement, breach of confidence and breach of contract. The defendant denied liability and sought remedies including a declaration of patent invalidity.

The claimants sought a preliminary trial on three issues concerning the prior development of confidential technology, what was demonstrated at the 1999 meeting, and whether the defendant owed a duty of confidence. The application was made without an application notice and was opposed by the defendant. The central question was whether those issues should be tried separately before the substantive dispute.

1. The application was rejected. The court declined to order the three proposed issues to be tried as preliminary issues.
2. The jurisdiction to order a separate trial was accepted. The governing question was whether, in exercising case-management responsibilities, such an order was appropriate. The ten considerations identified in Steele v Steele [2001] CP Rep 106 were treated as useful criteria, not rigid rules, following Wentworth Sons Sub-Debt SARL v Anthony Victor Lomas [2017] EWHC 3158 (Ch).
3. The court emphasised the caution expressed in Woodland Trust v Essex County Council [2013] UKSC 66, Rossetti Marketing Ltd v Diamond Sofa Co Ltd [2012] EWCA Civ 1021, Bond v Dunster [2011] EWCA Civ 455 and SCA Packaging Ltd v Boyle [2009] UKHL 37. The court should resist the prospective attraction of a preliminary trial unless it is likely to provide a genuine and proportionate benefit.
4. The proposed issues were not a succinct or decisive knockout point. They involved hotly disputed facts concerning events extending over several periods, followed by the application of the law of confidential information. A preliminary judge might reach a midway conclusion which neither disposed of the litigation nor materially promoted settlement.
5. A separate trial was likely to increase costs and delay the final determination. It could generate further hearings, judgment-writing time and appeals, and patent proceedings might in practice require separate liability and quantum trials. The proposed issues could also become irrelevant as the case narrowed.
6. The court therefore concluded, applying the Overriding Objective, that ordering a preliminary trial would be inappropriate. The defendant was awarded its costs of the application. Half the costs of the defendant’s solicitor’s witness statement were disallowed because it contained legal argument, recited documents and addressed matters outside the proper function of a witness statement, contrary to the guidance discussed in JD Wetherspoon Plc v Harris [2013] EWHC 1088 (Ch).