DNANudge Limited v Jabil, Inc.

For an application for interim delivery up of property, the court should apply the principles governing interim injunctions where the claim is contractual rather than a claim for wrongful interference with goods. The court must consider whether there is a serious issue to be tried, the adequacy of damages, and, if necessary, the balance of convenience. A mandatory injunction requires particular caution because it changes the existing state of affairs and may effectively determine the proceedings. The court should assess which course carries the least risk of irremediable injustice, taking account of the applicant’s prospects, the respondent’s security, the applicant’s ability to honour a cross-undertaking, and any delay or lack of immediate need.

DNANudge Limited and Jabil, Inc. entered into a manufacturing agreement under which Jabil manufactured products and held equipment and components connected with that manufacturing relationship. The agreement was terminated amid a dispute about sums allegedly owed by DNANudge and the parties’ respective rights in the equipment and components.

DNANudge applied for an interim injunction requiring delivery up of specified equipment and components. It relied on contractual rights and ownership, while Jabil asserted a contractual lien or other right to retain the property pending payment. The central issues were whether there was a serious issue to be tried, whether damages would be adequate for either party, and where the balance of convenience lay.

1. Application characterised. The application was approached as an application for an interim injunction under CPR 25.1.1(a), rather than an application under CPR 25.1.1(e). The claim sought delivery up pursuant to the contract and was not a claim for wrongful interference with goods within section 4 of the Torts (Interference with Goods) Act 1977 (paras [31]-[34]).
2. Applicable principles. The court applied the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396, as explained in R v Secretary of State for Transport ex parte Factortame (No. 2) [1991] 1 AC 603. There was a serious issue to be tried concerning the construction of clause 4.6 and DNANudge’s title to, and entitlement to delivery up of, the components (paras [36]-[38], [74]-[75]).
3. Mandatory injunction. Delivery up was mandatory because it would alter the existing state of affairs and might dispose of the proceedings. The court therefore applied the guidance in Nottingham Building Society v Eurodynamics Systems [1993] FSR 468, as endorsed in Zockoll Group Ltd v Mercury Communications Ltd [1998] FSR 354. The overriding consideration was the course likely to involve the least risk of injustice if the order proved wrong. A high degree of assurance of success was relevant, but was not an absolute precondition.
4. Damages and balance of convenience. Damages would not be adequate for either party. Loss of DNANudge’s business could be difficult to compensate, while loss of Jabil’s security right could not adequately be compensated and DNANudge lacked the means to satisfy a damages award. The balance of convenience nevertheless favoured Jabil. Delivery up would remove the most valuable part of the security, the residual equipment might be insufficient, DNANudge was markedly insolvent and unable to provide meaningful security, its evidence showed no immediate need for the property, and it had delayed about three months before applying.
5. Disposition. The Delivery Up Application was dismissed (paras [76]-[82]).

Not an appeal. The judgment determined DNANudge Limited’s interim application at first instance.