Armstrong Watson LLP v Person(s) Unknown

Where defendants have failed to engage with proceedings, the court may determine an application for final relief on the papers under CPR 23.8 if a hearing would add expense without sufficient practical benefit and open justice and Article 6 can otherwise be respected.

For default judgment, the court ordinarily proceeds on the pleaded facts, treated as established, and asks what judgment the claimant is entitled to on the statement of case. Evidence on the merits is generally unnecessary, subject to exceptional features requiring scrutiny. A properly pleaded breach of confidence claim may support permanent injunctive relief where there is a high risk of continued unlawful use or disclosure.

The claimant, an accountancy and professional services limited liability partnership, alleged that unknown persons had obtained confidential documents during a ransomware attack and threatened disclosure unless a ransom was paid.

An interim injunction had previously been granted by Ritchie J, and the injunction was continued by Linden J at the return date. The defendants did not identify themselves, comply with the orders, acknowledge service, or file a defence. The claimant applied on the papers for default judgment, permanent injunctive relief, and protective measures concerning the confidentiality of the court papers.

The issues were whether the application should be dealt with without a hearing, whether the procedural conditions for default judgment were satisfied, whether the pleaded case established breach of confidence, and what relief should follow.

1. Determination on the papers. Under Civil Procedure Rules 1998, CPR 23.8 permits an application to be determined without a hearing where the parties agree or the court considers a hearing inappropriate. A hearing was inappropriate here because the defendants had remained entirely disengaged, there had been no material developments, and a written public judgment would adequately respect open justice and Article 6 of the Convention. The court applied the approach in Clarkson Plc v Person(s) Unknown [2018] EWHC 417 (QB) and Pendragon PLC v Person(s) Unknown [2022] EWHC 2985 (KB).
2. Default judgment. CPR 12.3 required due filing and service of the claim form and particulars of claim, failure by the defendants to acknowledge service or file a defence, and expiry of the relevant time. CPR 12.12(1) required the court to give such judgment as the claimant was entitled to on its statement of case. Applying Glenn v Kline [2020] EWHC 3182 (QB), the pleaded facts were treated as established. No merits evidence or findings of fact were required because the pleaded case was neither extravagant nor otherwise exceptional.
3. Liability. The particulars adequately pleaded the elements of breach of confidence: confidential quality, unauthorised obtaining with the requisite knowledge or constructive knowledge, a duty of confidence, and actual or threatened use, publication, communication or disclosure. The pleaded facts supported the cause of action.
4. Relief and order. Default judgment was entered. Permanent injunctions restraining use and disclosure and requiring deletion or delivery up were granted. The risk of continued unlawful disclosure was high, particularly given the alleged blackmail, previous breaches of court orders, and failure to engage. The defendants were ordered to pay the claimant’s costs. Protective provisions concerning access to and use of litigation documents were maintained, with liberty to apply and the safeguards in CPR 13.3 explained.

• High Court (King's Bench Division): Ritchie J granted interim injunctive relief, as reported at [2023] 4 WLR 41.
• High Court (King's Bench Division): Linden J proceeded in the defendants’ absence at the return date and continued the injunction in [2023] EWHC 921 (KB).
• High Court (King's Bench Division): Collins Rice J granted default judgment, permanent injunctive relief and consequential orders in the present judgment.