Jenkins v Mxsweep Ltd
| Jurisdiction | Ireland |
| Judge | Miss Justice Laffoy |
| Judgment Date | 14 February 2011 |
| Neutral Citation | [2011] IEHC 101 |
| Court | High Court |
| Date | 14 February 2011 |
[2011] IEHC 101
THE HIGH COURT
BETWEEN
AND
COMPANIES ACT 1963 S205
FOSKETT THE LAW & PRACTICE OF COMPROMISE WITH PRECEDENTS 7ED 2010 PARA 5.10
FOSKETT THE LAW & PRACTICE OF COMPROMISE WITH PRECEDENTS 7ED 2010 PARA 5.14
COLLEN CONSTRUCTION LTD v BUILDING & ALLIED TRADES UNION & ORS UNREP CLARKE 16.5.2006 2006/12/2326 2006 IEHC 159
WESTMAN HOLDINGS LTD v MCCORMACK & ORS 1992 1 IR 151 1991 ILRM 833 1991/10/2491
INJUNCTIONS
Interlocutory injunction
Adequacy of damages -Fair issue to be tried - Balance of convenience -Settlement of proceedings - Collen Construction Ltd v Building And Allied Trades Union [2006] IEHC 159, (Unrep, Clarke J, 16/5/2006) considered - Westman Holdings Ltd v McCormack [1992] 1 IR 151 distinguished -Companies Act 1963 (No 33), s 205 -Interim injunction granted (2010/7651P- Laffoy J- 14/2/2011) [2011] IEHC 101
Jenkins v MX Sweep Ltd
Facts The plaintiff and the defendants had formerly been in dispute over issues relating to the copying and use of software. It was the plaintiff's contention that the defendants were engaged in activity and in allegations against the plaintiff which had already been compromised in a previous settlement. Central to the allegations were that the plaintiff had been engaged in software theft and/or illegal copying. This included allegations that source codes had been stolen in order to build rival software products. The plaintiff sought an interlocutory injunction pending the trial of the action restraining the defendant from making any further allegations in this regard. In addition an injunction was sought restraining the defendant from prosecuting its complaints of software theft against certain companies (associated with the plaintiff) to the Federation Against Software Theft Ltd. (FAST). The plaintiff contended that the defendant has refused to withdraw its complaints to FAST when requested to do so by the plaintiff. The defendant contended that no allegation had been made against the plaintiff personally. The previous settlement merely ended the dispute between the plaintiff and the defendant personally and did not preclude pursuing complaints against associated companies.
Held by Laffoy J in granting the relief sought. The instigation by the defendant of the FAST investigation was expressly directed at matters which had been at issue in the plenary proceedings. The plaintiff had established that there was a fair issue to be tried that, following the execution of the settlement, the defendant was precluded from pursuing those issues. In relation to one the companies (V-Clouds) the court was not satisfied the plaintiff had established that there was a fair issue to be tried that a complaint against V-Clouds of alleged software misappropriation would be precluded by the settlement agreement and would therefore not be included in the injunction. The plaintiff was at risk of serious reputational damage for which damages would not be an adequate remedy because of the impossibility of quantifying damages. The fact that the plaintiff now resided in Malta, which was within the European Union, was not a factor which should give rise to prejudice to the defendant. The balance of convenience lay in favour of granting the injunction pending trial of the action. The plaintiff's undertaking as to damages would be noted in the order.
Reporter: R.F.
Judgment of Miss Justice Laffoy delivered on the 14th day of February, 2011.
2 1.1 The launch pad for these proceedings, which were initiated by a plenary summons issued on 12 th August, 2010, is the settlement of two previous actions in this Court, namely:
(a) a plenary action brought by the plaintiff against the defendant (Record No. 2008/ 10922P) (the plenary proceedings), wherein the plaintiff sought relief against the defendant for the alleged wrongful dismissal of the plaintiff from his employment with the defendant; and
(b) proceedings under s. 205 of the Companies Act 1963 between the plaintiff, as petitioner, and Eugene Murtagh, Paul Murtagh, Edward Grant and the defendant, as respondents (Record No. 2009/87 COS) (the Companies Act proceedings) in which the plaintiff, as a shareholder of the defendant, made various allegations against the respondents and sought various reliefs, including an order directing the purchase by the respondents of his shares in the defendant.
3 1.2 On this application the plaintiff is pursuing the following reliefs sought in the notice of motion which was presented to the Court on 18 th August, 2009, namely:
(a) an interlocutory injunction pending the trial of the action restraining the defendant its servants or agents from making any further allegations against any party of software theft, improper conduct and/or illegal copying which allegations arise from, were considered in and/or relate to the plenary proceedings and the Companies Act proceedings; and
(b) an interlocutory injunction pending the trial of the action restraining the defendant from prosecuting its complaints of software theft against V-Clouds Ltd. (V-Clouds) and Enable Software Ltd. (Enable) to the Federation Against Software Theft Ltd. (FAST).
The Court was informed that the plaintiff was not pursuing the remainder of the reliefs sought in the notice of motion at this interlocutory stage.
4 1.3 On 12 th August, 2010, on foot of an ex parte application made by the plaintiff, it was ordered by this Court (McMahon J.) that the defendant its servants or agents be restrained until further order from making any further allegations against the plaintiff and/or companies associated with him of software theft, improper conduct and/or illegal copying which allegations arise from, were considered in/or relate to the plenary proceedings and the Companies Act proceedings. That order has continued in being. Although it is not clear on the face of the order, I am satisfied that an undertaking as to damages was given on behalf of the plaintiff to the Court as a condition of the granting of the interim order.
2 2.1 The terms of settlement (the settlement) of the plenary proceedings and the Companies Act proceedings were dated 21 st January, 2010 and were signed by Edward Grant on behalf of the defendant and the respondents. In clause 1 it was agreed that the defendant and the other respondents in the Companies Act proceedings would pay a certain sum of money to the plaintiff. Clause 2 provided:
"The said payment is to be in full and final settlement of all claims between the Parties made in or arising out the above entitled proceedings by the [plaintiff] against the [defendant], its directors and shareholders and in full and final settlement of the [defendant's] counterclaim against the [plaintiff]."
As part of the settlement the plaintiff's shareholding in the defendant was to be transferred to one of the respondents in the Companies Act proceedings. Clause 8 of the settlement provided:
"This Agreement shall be confidential as between the Parties and their respective advisers save for such disclosure as may be required in accordance with law."
3 2.2 In order to ascertain the scope of the settlement, it is necessary to consider the pleadings in the proceedings which were thereby compromised and, in particular, the defence and counterclaim in the plenary proceedings. In its defence delivered in the plenary proceedings, the defendant had pleaded reliance on various matters in mitigation or extinction of any award for damages and costs to the plaintiff. The matters relied on included allegations that the plaintiff had:
(a) used, or procured the use of, the defendant's software and source code to develop software for a rival company,
(b) encouraged the defendant to exit from a contractual arrangement and business opportunity with a client, a company known as TTAsia (TTA), and had then provided a service to that company in his personal capacity and/or through the auspices of a company, Enable t/a Enable TS, and
(c) permitted TTA to use the defendant's software without the defendant's knowledge or permission.
In its counterclaim the defendant justified the termination of the plaintiff's contract of employment on the basis, inter alia, of an allegation that the plaintiff had been engaged in misconduct of so fundamental a character as to show repudiation of his contract of employment, to wit, the setting up of a rival company and the procurement and use of the defendant's intellectual property, including source codes, to design and build a rival software product.
2 3.1 The plaintiff's complaints of breach of the settlement at the core of these proceedings are based on the actions on the part of the defendant subsequent to the settlement outlined below:
3 3.2 First, sometime prior to 26 th April, 2010 the defendant made a complaint to FAST, which describes itself as a not for profit company, which I understand to be registered in the United Kingdom, representing "software publishers, resellers and other producers in the IT industry", the object of which is to safeguard the intellectual property rights in law of its members. The defendant is a member of FAST. While the defendant's position is that the complaint was not against the plaintiff personally, by letter dated 26 th April, 2010 from FAST, which was addressed to "Mr. Daniel Jenkins Director Enable Software Ltd." at the plaintiff's home address in Ireland, which was expressed to be written on behalf of the defendant, it was stated that the defendant was concerned that there had been an unauthorised copying and subsequent development of software owned by it and it...
To continue reading
Request your trial