Bartholomew Hawkins Asset Management Ltd v Bartholomew Hawkins Ltd

For interim injunctive relief, the applicant must show a serious issue to be tried, namely a claim that is neither frivolous nor vexatious. The court then considers the adequacy of damages and, where necessary, the balance of convenience or risk of injustice.

Where a business sale agreement requires the seller to provide the buyer with the benefit, use and enjoyment of an asset pending transfer, continued access to data and the system by which it is accessed may fall within that obligation. A contractual alternative- arrangements clause does not necessarily displace the obligation. The court may grant relief where loss of client access risks substantial, difficult-to-quantify commercial and reputational harm and the respondent may be unable to meet a damages award.

The claimant had purchased the defendant’s business and assets under a business purchase agreement. The agreement provided for the transfer or trust-holding of assets, including client data and business intellectual property, and required the defendant to provide the claimant with the benefit, use and enjoyment of assets pending transfer.

Following the claimant’s receipt of revised permissions from the FCA, the defendant withdrew the claimant’s access to the Intelligent Office software platform containing client records. The claimant applied for an interim injunction requiring restoration of access. The defendant argued that the secondment arrangements had ended, that alternative arrangements were required, and that access could breach the GDPR.

1. Application granted. The court applied the approach in American Cyanamid Co v Ethicon Ltd [1975] AC 396: whether there was a serious issue to be tried, whether damages were adequate, and, if necessary, where the balance of convenience lay. The court also adopted the formulation of the third stage as the lower risk of injustice, identified in NWL Ltd v Woods [1979] 1 WLR 1294.
2. There was a serious issue that the client data was an asset under the business purchase agreement and that the software platform, or the means of accessing the data, was itself within the transferred assets. If it were not, there was also a serious issue as to breach of the warranty that the assets comprised those necessary for effective operation of the business.
3. The claimant had shown a serious issue that its request for continued access was reasonable under clause 4.6.2(c), which required the defendant to do what was reasonably requested to provide the claimant with the benefit, use and enjoyment of the asset. Clause 4.8, concerning alternative arrangements and third-party consents, did not render that obligation irrelevant.
4. The court was satisfied that processing the client data arguably fell within General Data Protection Regulation 2018, art 6(1)(b) or art 6(1)(f). Processing could be necessary for performance of client contracts or justified by the claimant’s legitimate interests in servicing clients, which were not shown to be overridden by the clients’ interests.
5. Damages were not an adequate remedy. The claimant faced potentially substantial and difficult-to-quantify commercial, goodwill and reputational loss, including the risk that clients would move to other advisers. The defendant also appeared unlikely to satisfy a damages award, whereas the claimant had resources to meet any cross-undertaking.
6. The balance of convenience favoured restoration of access. The order was analogous to, but not the same as, the former secondment arrangements. Access was ordered to be restored by 10.00 am on 10 June 2020. An expedited trial was directed, and the claimant’s costs were ordered to be costs in the case.

The judgment was a first-instance decision on the claimant’s on-notice application for interim injunctive relief, issued after the application filed on 1 June 2020. A subsequent judgment settled the terms of the order and directed an expedited trial.