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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Ultraframe UK Ltd v Clayton & Ors [2003] EWHC 242 (Ch) (14 February 2003) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2003/242.html Cite as: [2003] EWHC 242 (Ch) |
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CHANCERY DIVISION
(transferred from the Leeds District Registry)
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
(Action CH 1998 O/S 392): ULTRAFRAME UK LIMITED |
Claimant |
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| -and- |
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| (1) ALAN CLAYTON (2) EDWIN BIRKETT (3) JEFFREY NADEN |
Defendants |
____________________
Ultraframe
UK Limited)
Mr Roger Wyand QC (instructed by Halliwell Landau) for the Burnden Group Plc
Mr Iain Purvis (instructed by Addleshaw Booth & Co) for Mr and Mrs Fielding
Hearing dates: 3-5, 8, 9, 11, 12 July, 2002
____________________
Crown Copyright ©
Mr Justice Laddie:
Ultraframe
(UK) Limited ("
Ultraframe
") which is represented before me today by Mr. Speck.
Ultraframe
is a major designer, builder and supplier of conservatories in the United Kingdom. On the other side is a camp which is also involved in the manufacture, design and supply of competing conservatories. The company which currently carries out that business is called The Burnden Group Plc ("the Burden Group"). 90% of the shares of that company are owned by Mr. and Mrs. Fielding. Mr. Fielding is the managing director of the Burnden Group. Other people who are or were, at least at one stage, on what might be called the Burnden side were Mr. Alan Clayton, Mr. Edwin Birkett and Mr. Jeffrey Naden. There are two other companies which feature as parties to the litigation whose allegiance may be said to have changed over time. They are Northstar Systems Limited ("Northstar") and Seaquest Systems Limited ("Seaquest").
Ultraframe
. In the judgment in relation to the preliminary issues, I described Mr. Davies. As the parties agreed, he was likely to have made an unreliable witness had he attended court. Although I held that he was primarily responsible for the design work for what became known as the Quickfit designs of conservatory parts, he demonstrated a certain flexibility both as to the question of paying tax, receiving wages and to saying precisely on what basis the design work he carried out was carried out. From time to time he claimed to own the designs personally. Sometimes he claimed that the designs were the property of his companies. Tying him down would have been a difficult task. Indeed it may have proved impossible.
Ultraframe
purported to purchase Mr. Davies' title to the design right in the Quickfit designs from Mr. Davies' trustee in bankruptcy. On one version of Mr. Davies' account of events, it would have been the correct thing to do if
Ultraframe
were to end up owning those designs. Subsequently
Ultraframe
acquired Northstar and Seaquest. Whether Northstar owned the design rights depended upon whether Mr. Davies created those designs for and on behalf of his companies either as an employee or as director or whether he owned them personally.
Ultraframe
, Messrs. Clayton, Birkett, Naden and the Fieldings were cooperating with or at the least highly sympathetic to Mr. Davies. Mr. Davies was continuing his interest in the conservatory business through some or all of them. The suggestion is that Mr Davies is in or sympathetic to the Burnden camp. With the demise of the Quickfit, Northstar and Seaquest companies and Mr. Davies' bankruptcy, and their purchase of the design rights,
Ultraframe
thought that it had secured the designs to the competing conservatories. However, within a short time, any confidence it could have had that that was so must have evaporated because it discovered that shares in Northstar and Seaquest were being transferred by some or all of Messrs. Clayton, Birkett and Naden to Mr. Fielding.
Ultraframe
sought to prevent the transfer of the shares in Northstar and Seaquest and sought to bring proceedings against Messrs Clayton, Birkett and Naden for breach of trust. It also claimed that there was a conspiracy to injure
Ultraframe
by various unlawful means, including infringement of design right, breach of trust and so on. Interlocutory proceedings were brought but I do not need to go into those. Then came the second Leeds Action, this time brought against Mr. Fielding, Northstar and Seaquest. In these proceedings
Ultraframe
tried once again to stop the transfer of shares in Northstar and Seaquest which had by this time been acquired by Mr. Fielding. It also sought to set aside two allegedly fraudulent debentures over the assets of Northstar and Seaquest. Summary judgment has been obtained by
Ultraframe
in relation to some of the causes of action in this action but for present purposes that does not matter.
Ultraframe
sought a declaration that the intellectual property rights, in particular the design rights, were owned by Mr. Davies, whose rights, it will be recalled, it had acquired from Mr Davies' trustee in bankruptcy.
Ultraframe
is the claimant and Mr. and Mrs. Fielding and the Burnden Group are the defendants, the Burnden Group being the group which is now making conservatories and parts for conservatories which
Ultraframe
claims are, in substance, copies of the Quickfit designs which it thought it had purchased from the trustee in bankruptcy. In fact,
Ultraframe
says that if the designs happen to belong to Northstar, it has also acquired them by an alternative route, because it owns Northstar. Needless to say, all questions of who owns what is thoroughly in dispute as a result of the Leeds proceedings. There has been an order for consolidation of the two Leeds Actions and also that those actions and the London Action should be tried together,
Ultraframe
. It is not in dispute that
Ultraframe
is funding the liquidators of Northstar to bring the various proceedings they have commenced against the Burnden Group. I do not know yet whether the ingenuity of the parties will lead to the commencement of further proceedings. Perhaps five is enough.
Ultraframe
advanced its primary case, or, as Mr. Wyand would say, its only case, on the pleadings then existing in the various actions, namely that it owned the design right by virtue of the acquisition from Mr. Davies' trustee in bankruptcy. On the other hand the defendants said that the design rights did not exist because they failed the so-called must fit and must match provisions of the Copyright, Design and Patents Act 1988. I was taken at length through Mr. Davies' varying versions of who owned the rights and whether he owned them for himself or for the company. At the end of the day I came to the conclusion that Mr. Davies was at all material times, except for a short interregnum, an employee of one or other of the Quickfit companies or Seaquest or Northstar and that the designs were created by him in the course of his employment. The design rights, therefore, belonged to one or other of his companies. Indeed, all or nearly all of them have ended up in Northstar. Mr. Speck has indicated that he will apply shortly for permission to appeal on the decision in relation to ownership by Northstar. On the other hand, I have held that, save in respect of two trivial parts, design right did subsist in the various parts and that all of them had been infringed by the manufacture of substantial copies by the defendants, irrespective of who the correct owner was.
Ultraframe
has lost the overwhelming majority of the points in issue on the trial of the preliminary points. In my view they are clearly right on that. In particular they say that the result is that the current London Action (that is the third one referred to above) must be dismissed. Unless my decision on ownership is overturned,
Ultraframe
's claim as pleaded in that action has failed.
Ultraframe
was maintaining. The difference would be that the claimants would now be claiming title through Northstar, which, as a result of my judgment, is the proper claimant to advance that claim. It was clear on that application, which was unsuccessful, that the liquidators for Northstar had discussed with
Ultraframe
the question of joining the London Action. It is clear that the liquidators can be regarded for this purpose as part and parcel of the
Ultraframe
side of the dispute. Indeed it is for that very reason, amongst others, that in the Leeds proceedings an attempt is being made to replace the liquidators and it was, as I understand it, part of the reason why objection was taken by the defendants to the liquidators being allowed to join in the London Action as it was seen to be a method of deflecting the defendants from recovering their costs of that action.
Ultraframe
London Action will be struck out, the costs of that action go to the defendants and the costs of the preliminary issues, in so far as they relate to the matter of ownership, should go to the defendants because the claimant's only assertion of ownership on the preliminary issue was that it had ownership through Mr. Davies. It did not raise before me a claim that it had ownership of the design rights through Northstar. It is worth mentioning that at one stage, that is to say in the second Leeds proceedings,
Ultraframe
was suing Northstar for infringement of design right because at that stage at least its preferred claim to title to the design right was still through Mr. Davies. If it was right on that, then Northstar did not have the design rights and any reproduction of the designs by Northstar would have been an infringement.
Ultraframe
is a very large company with enormous assets and is much bigger than the defendants. Having lost the preliminary point it should pay the costs now. There is no reason why its smaller opponents should be kept out of their money.
Ultraframe
as a party but his client the Burnden Group is not. He says in respect of the proceedings brought by the liquidator of Northstar that
Ultraframe
are not a party and it would be odd, therefore, to stand the issues of costs over to a judge who is hearing proceedings in none of which both his clients and
Ultraframe
are simultaneously parties. Mr. Purvis could not run the same argument in respect of the Fieldings, but it is clearly a point which can be made with some force in relation to the Burnden Group.
Ultraframe
and indeed on
Ultraframe
's behalf. The reason why Mr. Moody-Stuart wanted to add the liquidators' claim under design right to the London Action was because, in substance, the liquidators were representing or could be said to represent in major part
Ultraframe
's interests in the design right since it is not in dispute that
Ultraframe
are the current owners of Northstar.
Ultraframe
London proceedings, that is to say an order for costs against
Ultraframe
, it will deprive the judge who sees the whole dispute, including all the really unpleasant allegations which have been made by one side against the other and vice versa, of the opportunity of doing justice on the issue of costs. I think he is right.
Ultraframe pay their costs even of the issues they have won on on the hearing of these preliminary issues. For that reason I have decided that the better course is to reserve the issue of costs to the determination of the Leeds Actions. I will strike out the London Action but in reserving costs I reserve the costs of the London Action also. I make this order in the expectation that soon there will be an application, if there is not an agreement, for the liquidators' actions to be heard together with the Leeds proceedings.