Create Financial Management LLP v Lee & Anor

An interim injunction may be varied under CPR 3.1(7) where the issue was promptly raised, was genuinely overlooked, or falls within an express liberty to apply. The discretion remains constrained by finality and the prohibition on giving a party a second bite.

The court should not make a blanket declaration that third-party conduct will or will not constitute contempt without the facts of a particular transaction. The legality of assistance may depend on the purpose of the injunction and the circumstances of the transfer.

An application for permission to appeal must be made at the hearing at which the decision was made, or at a hearing to which it was adjourned for that purpose.

The judgment followed an earlier decision granting the Claimant an interim springboard injunction against the Defendants, prohibiting solicitation of specified former clients. The further hearing concerned four matters: removal of clients from the order’s schedule, the position of third-party financial providers, corrective communications, and permission to appeal.

The Defendants sought variation of the order under CPR 3.1(7), clarification of whether transfers could amount to contempt, revised wording governing transfers, and permission to appeal the earlier judgment. The central issues were whether the order should be varied, whether a blanket declaration was appropriate, and whether the permission application had been made at the hearing required by the procedural rules.

1. Variation of the schedule. The principles in Tibbles v SIG Plc [2012] 1 WLR 2591 applied. Variation is exceptional because of finality, the prohibition on two bites, and the importance of appeal. Misstatement may include omissions of fact or argument. Prompt reconsideration may be appropriate where an issue was genuinely overlooked and can be dealt with on the existing material. An express liberty to apply also recognises the need to revisit an order in an ongoing situation. The issue had been raised before the order was made, the further hearing was promptly arranged, and the order contained liberty to apply. Thirty-five clients were therefore removed because there was no real prospect of a lasting competitive advantage from the alleged failure to delete contact details.
2. Third-party contempt. The principles in Attorney-General v Punch Ltd [2003] 1 AC 1046 recognise possible contempt where a third party knowingly aids or abets breach of an injunction, or knowingly does something which disables the court from conducting the case in the intended manner. It was inappropriate to decide on a blanket basis whether transfers by financial providers constituted contempt. The answer could depend on the purpose of the injunction and the facts of the particular transfer. The application for a declaration was refused.
3. Transfer mechanism. The existing wording gave the Claimant an effective veto over transfers and risked further disputes. The order was varied to adopt a mechanism based broadly on the Defendants’ proposed wording, with the precise drafting left for the parties or further argument.
4. Corrective communications. The Claimant undertook to send corrective emails to clients who had received misleading communications and to identify those clients to the Defendants.
5. Permission to appeal. Under CPR 52.3(2)(a) and Practice Direction 52A para. 4.1(a), permission had to be sought at the hearing at which judgment was given or at a later hearing to which that hearing had been adjourned for that purpose. The application was made after the order had been made and was therefore outside the court’s jurisdiction. The application was dismissed on that basis. In any event, permission would have been refused because the proposed point concerning the significance of the gap before trial did not arise on the facts.

The judgment concerned matters arising from the earlier injunction decision reported at [2020] EWHC 1933 (QB). The court varied the consequential order, refused a blanket declaration concerning third-party contempt, ordered corrective communications, and held that it had no jurisdiction to consider the application for permission to appeal against the earlier judgment.