Full case report

Miller Brewing Company v The Mersey Docks and Harbour Company

Reference [2004] FSR 5
Court Chancery Division

Judge Neuberger J

Date of Judgment 23 May 2003


Summary

Trade Marks – Infringement – Detention of infringing goods by customs authorities – Application for statutory delivery up – Notice of Application served on all those having an interest in the goods – Whether applications under ss. 16 and 19 of the Trade Marks Act 1994 can be made in the same proceedings – Whether third party should be protected under cross undertaking in damages – Whether second defendant an importer


Facts

An injunction had been granted based on alleged trade mark infringement. There was a cross-undertaking in damages in favour of the original defendants. The claimant sought delivery up of the infringing goods. The shipping agents incurred quay rent and demurrage to the harbour company because the injunction had the effect of impounding the goods. After 17 months, these came to substantial amounts and the agents sought reimbursement from the claimant. The Claimant was the proprietor of three UK trade marks and two Community trade marks consisting of or including the word MILLER for beer. In December 1999, it had licensed a company to brew and bottle Miller Genuine Draft beer in the Middle East. On a couple of occasions, the beer produced was of inferior quality. In 2001, someone started to import this inferior beer into Northern Ireland. As the claimant had not licensed use of its trade mark on this beer anywhere in the UK the importation was an infringement.


Issue

The innocent third parties argued that the cross-undertaking in damages should be extended to them to cover their losses caused by the injunction. The seventh defendant claimed that it was entitled to recover from the claimant the amount of its liability to the first defendant for quay rent and demurrage from the date the court granted the interlocutory injunction. It argued that the order that was made should have included a cross-undertaking in damages substantially wider than that which it actually contained and it should have contained terms that the claimant would pay the reasonable costs of anyone other than the second defendant which had been incurred as a result of the order. The second defendant contended that he was an inappropriate party to the second action because he was not liable as an importer of the beer, merely as a potential seller and it was only as importer that he could have been liable for any costs.


Held

Neuberger J declined to extend the cross-undertaking to the innocent third parties. He held that the application was made too late, after the injunction had ceased to have any practical value. The approach consistently adopted in the exercise of the court’s equitable jurisdiction was that where an innocent third party had reasonably incurred legal costs to enable a claimant to obtain relief then, as between the innocent third party and the innocent claimant, it was more unjust if the innocent third party had to bear its own legal costs than it was for the innocent claimant to bear them. The same considerations applied where the relief obtained against a third party was rooted in statute.


Comment

Orders in the nature of an injunction are very likely to affect third parties in a very material way. A tribunal has no mandate from third parties (more accurately called “non-parties” – see Cardile v LED Builders Pty Ltd (1999) 198 CLR 381), to do or to decide anything affecting them. This case illustrates that the wide powers of a court to make the grant of an injunction subject to terms. The judge went on to say that Mareva relief was different from what he described as “more classic interlocutory injunctions”, and quoted the words of Meagher, Gummow & Lehane’s Equity Doctrines and Remedies published in 2002 that “In truth, there is no jurisdiction at all to grant a Mareva Injunction.” – p.81 of the judgment. Those words looked to the distant past and treated it as governing the future.