House of Spring Gardens Ltd v Point Blank Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Costello
• Judgment Date: 07 March 1983
• Neutral Citation: 1983 WJSC-HC 2726,1983 WJSC-HC 2802
• Court: High Court
• Docket Number: No. 1367P/1982
• Date: 07 March 1983

1983 WJSC-HC 2726

THE HIGH COURT

No. 1367P/1982

HOUSE OF SPRING GARDENS v. POINT BLANK LTD

BETWEEN:

House of Spring Gardens Ltd. Armourshield Ltd. Michael Sacks

Plaintiffs

- and -

Point Blank Ltd. Emory Ltd. (In voluntary liquidation) William E. Waite Seamus Waite Robert Hugh Chapman Governor and Company of the Bank of Ireland Gordon MacLeod

Defendants

1 Judgment of Mr. Justice Costello delivered the 20th December, 1982.

Introduction

2 In these proceedings the Plaintiffs have made a claim, based on equitable principles, for damages for misuse of confidential information; claims for damages for breach of contract; claims for damages for infringement of copyright; and seek injunctions and declaratory orders. The proceedings arise out of the manufacture in Cork between July, 1981 and February, 1982 of 15,000 armoured vests (more commonly known as bullet proof vests) for use by the Libyan army, valued at over £5 million. I can outline, in brief, the facts which have given rise to these claims as follows:

3 Mr. Michael Sacks shortly after leaving school followed in his father's footsteps and became a tailor and cutter and a shareholder in a family company (now known as House of Spring Gardens Limited) which carries on business in Manchester. In 1975 he became interested in the designing and manufacture of bullet proof vests and had developed this side of the business with some success by the time he met Mr. William Waite, late in 1978. Mr. William Waite had commercial contacts in Libya and had discovered a possible market in the Libyan army for armoured vests. He knew nothing about manufacturing this product and was put in touch with Mr. Sacks as a person who did. He is principal shareholder in a company called Farnham Industries Limited which owns a number of subsidiaries, one of which, Molex Limited, owned factory premises in Farnham, Sussex in which it was thought, originally, the armoured vested could be manufactured. Mr. Sacks says that there was a joint venture entered into between Mr. Waite and himself and it was agreed that he would supply the know-how for the manufacture of the vests and Mr. Waite would obtain the markets and the profits on the venture divided on a fifty-fifty basis. The negotiations with the Libyan military authorities were successful and a very large contract worth over £5 million for the supply of 15,000 armoured vests was entered into in August 1979. Although Mr. Waite had negotiated the contract through Molex Limited the contract was not made with that Company. Instead on Mr. Waite's direction it was made with a Company having registered offices in the Isle of Man called Emory Limited. The relationship between Mr. Sacks and Mr. Waite broke down (was severed, Mr. Sacks would say), and the vests for the Libyan order were not manufactured either in the Molex premises or by Mr. Sacks. A company was formed in Ireland, Point Blank Limited, at the beginning of November, 1979 and from premises in Cork it began the manufacture of vests for the Libyan army in January, 1980. Point Blank Limited was and is a wholly owned subsidiary of Emory Limited. Mr. Sacks knew nothing about the establishment of Point Blank or about the manufacture of vests and when he learnt about both, he instituted proceedings both in this country and in England claiming damages for misuse of the confidential information as to the design and manufacture of armoured vests which he said he had given to Mr. Waite and his associates during the negotiations for the joint venture, damages for breach of copyright as well as injunctions to stop manufacture and sale.

4 The 1980 proceedings were settled and an agreement signed on the 10th September, 1980 which, in effect, provided for royalty payments to be made to Mr. Sacks or his companies on the Libyan contract. It also made provision for royalties to be paid, in certain circumstances, if any further contracts were entered into with the Libyan authorities for armoured vests.

5 In July, 1981 Point Blank recommenced the manufacture of vests. Again, Mr. Sacks knew nothing about this development and when he learnt of it he instituted fresh proceedings, in this country, in England, and in Jersey. In the course of these proceedings the details of a second contract which the Libyan authorities had made with Emory Limited on the 22nd January 1981 came to light. This was another contract for 15,000 vests worth over £5 million.

6 The plaintiffs in this action are Mr. Sacks, his family company, House of Spring Gardens Limited, and a subsidiary company, Armourshield Limited to whom Mr. Sacks had assigned the copyright in patterns of the armoured vests he had designed. The defendants are Point Blank Limited who, as I have said, have manufactured the armoured vests in Cork; Emory Limited with whom the second Libyan contract was made, Mr. William Waite and his son Mr. Seamus Waite and his son-in-law, Mr. Gordon MacLeod. Mr. Seamus Waite managed the Cork factory and Mr. MacLeod resided for a time in Libya and supervised the implementation of the two contracts from Tripoli. A Mr. Robert Chapman had been named as a defendant. He was a Director of Point Blank Limited but the proceedings were not served on him and no relief against him is now claimed. The Bank of Ireland is also named as a defendant. Point Blank operated an account in a branch of the Bank in Cork and an interlocutory order was sought restraining the disposition of any credit balance in this Account. As undertakings were given at the interlocutory stage no order was then made against the Bank.

7 The following are the plaintiffs claims (all of which, it should be said, are vigorously contested)

8 (a) as to infringement of copyright:

9 (i) Claim by Armour shield Ltd. This company claims as owners of the copyright in the cutting patterns that infringement of the copyright in them by the manufacture by Point Blank of the vests has occurred. It says that the Waites and Mr. MacLeod authorised this wrongful act. It seeks injunctions against each defendant restraining further breaches of copyright, a declaration that infringement occurred, and damages for infringement as well as interest.

10 (ii) Claim by Mr. Sacks. Mr. Sacks has a separate claim arising from the copyright in six photographs one of an armoured vest and the others relating to the testing materials for use in armoured vests. In November 1980 Point Blank produced a brochure to advertise its armoured vests and Mr. Sacks says that the company, the Waites and Mr. MacLeod authorised the reproduction in it of these photographs and thereby infringed his copyright. He seeks relief similar to that referred to at (a) (i) above.

11 (b) as to breach of contract:

12 (i) Point Blank, Emory, Mr. William Waite and Mr. Seamus Waite were all parties to the royalty agreement of the 10th September, 1980 by which the 1980 proceedings were settled. All three plaintiffs claim damages against all these defendants jointly and severally for breach of the 1980 agreement arising from the execution of the second Libyan contract, and interest.

13 (ii) Mr. MacLeod was not a party to the royalty agreement. But damages for inducing its breach are claimed against him by all three plaintiffs.

14 (c) as to misuse of confidential information:

15 All three plaintiffs claim injunctions against Point Blank, the Waites and Mr. MacLeod (but not against Emory Ltd.) restraining the use of the confidential information which it alleged Mr. Sacks gave to Mr. William Waites and his associates in 1979, and damages for its misuse and interest.

16 (d) generally:

17 (i) An injunction is claimed against Point Blank, Emory, the Waites and Mr. MacLeod restraining them from removing from the jurisdiction any of their assets;

18 (ii) An injunction against the Bank of Ireland restraining it from disposing of monies in any accounts held by Point Blank, Emory, the Waites or Mr. MacLeod, is also claimed.

19 In February, 1982 Anton Pillar orders (see: 1976 1 ch. 55) were made in this country, in England and in Jersey and these were followed by orders for discovery. As a result a great deal of documentary evidence was produced at the hearing and in addition I heard a considerable amount of oral evidence. I propose to review in Part I of this judgment those parts of the evidence which are necessary for arriving at certain conclusions of fact. I must do so at some length so as adequately to explain these conclusions. In Part II I will consider the claims arising out of the contract of the 10th September, 1980; in Part III the claims for misuse of confidential information; and in Part IV the copyright infringement claims. Mr. William Waite was a dominant and guiding spirit throughout all the events I will describe and I will refer throughout this judgment personally to him except where it is necessary to refer specifically to one of the companies he controls. When I make a reference to "the defendants" this should be taken as referring (unless otherwise indicated) to Mr. Waite, his son, and his son-in-law. Emory Ltd. was separately represented before me and is now in liquidation. I will examine its role in this entire affair and its relationship with Mr. Waite as I proceed with the narration of the events which have resulted in these proceedings.

PART I

THE FACTS

Mr. Sack's vest described

20 It will, I think, help to understand the events which I will later describe if I explain the make-up of the vest which Mr. Sacks developed and which, designated MS. 6 in these proceedings, features largely in them. Its basic concept is a simple one. It comprises an outer garment made of polyester cotton worn at the back and front into which is inserted what is termed a "low velocity pack" designed to counter the threat from low velocity missiles, mainly bullets. In addition the outer garment contains a pocket back and front into which may...