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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Motorola Solutions, Inc & Anor v Hytera Communications Corporation Ltd & Ors [2023] EWHC 1393 (Comm) (09 June 2023) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2023/1393.html Cite as: [2023] EWHC 1393 (Comm) |
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KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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(1) MOTOROLA SOLUTIONS, INC. (2) MOTOROLA SOLUTIONS MALAYSIA SDN.BHD |
Claimants |
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- and – |
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(1) HYTERA COMMUNICATIONS CORPORATION LTD. (2) HYTERA AMERICA, INC. (3) HYTERA COMMUNICATIONS AMERICA (WEST), INC. |
Defendants |
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STEPHEN RUBIN KC and ALEXANDER MILNER KC (instructed by Steptoe & Johnson UK LLP) for the First Defendant
Hearing date: 24 May 2023
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Crown Copyright ©
SIMON RAINEY K.C.:
The procedural background
i. Paragraph 5 ordered Motorola to repay to Hytera £132,098.49 which Hytera had paid to Motorola in respect of the original freezing order application, plus interest at 3%.
ii. Paragraph 6 ordered Motorola to pay Hytera's costs of the appeal, to be the subject of a detailed assessment.
iii. Paragraph 7 ordered Motorola to pay Hytera £125,000 on account of the costs of the appeal.
iv. Paragraph 8 ordered Motorola to pay Hytera's remaining costs of the proceedings, to be the subject of a detailed assessment.
v. Paragraph 9 ordered Motorola to pay Hytera £250,000 on account of the remaining costs of the proceedings.
"Whilst I need to be cautious in expressing a view as to the merit of those arguments, given that I instinctively have some sympathy with the submission made by Mr Rubin that a costs order made by the Court of Appeal in this jurisdiction is an order which ought to be complied with regardless, nonetheless I am satisfied that it would not be appropriate for me to deal, almost on-the-hoof, with a stay application which has not even been made the subject of a formal application."
Hytera's application for a stay of the Enforcement Proceedings
Motorola's response and cross-application
The issues before the Court
i. Is there an equitable set-off such that Motorola is not in breach of or is not obliged to comply with the Costs Orders?
ii. If there is not, should the Enforcement Proceedings be stayed pending Motorola's compliance with the Costs Orders?
iii. Should the Court order that the sums due under the Costs Orders be paid into Court?
Issue 1: Equitable Set-Off
i. Equitable set-off is available where a cross-claim is "so closely connected with [the claim] that it would be manifestly unjust to allow [the claimant] to enforce payment without taking into account the cross-claim": Geldof [43(iv)]; Fearns [20].
ii. The nature of an equitable set-off is not to extinguish or reduce either claim but only to prevent each party from enforcing or relying on its claim to the extent of the other claim where the connection between the claims would make this manifestly unjust: Fearns [26].
iii. The two claims cannot be netted off so as to extinguish each liability to the extent of the other except by agreement or a judgment of the court and once both liabilities have been established by agreement or judgment: Fearns [50].
iv. Instead, where the two claims are (i) made reasonably and in good faith and (ii) so closely connected that it would be manifestly unjust to allow one party to enforce payment without taking into account the cross-claim, neither party may exercise any rights contingent on the validity of its claim except in so far as it exceeds the other party's claim: ibid.
"I do not think that one should speak in terms of a two-stage test. I would prefer to say that there is both a formal element in the test and a functional element. The importance of the formal element is to ensure that the doctrine of equitable set-off is based on principle and not discretion. The importance of the functional element is to remind litigants and courts that the ultimate rationality of the regime is equity. The two elements cannot ultimately be divorced from each other."
Issue 2: Stay pending compliance with the Costs Orders
"[It] would, indeed, be concerning if the court was unable to impose appropriate sanctions on those who choose to ignore its orders and yet continue to seek its process for their own ends."
Picken J's instinctive sympathy with the need for Motorola to have complied with the Costs Orders is unsurprising.
"[…] it is necessary to have regard to the considerations which underlie the court's approach to the commencement by the same person of a second set of proceedings while the costs of the first remain unpaid, as reflected in the authorities to which I have referred. In all the cases the court was moved to act by a sense that it would be unjust to allow a claimant whose action had failed for one reason or another in circumstances in which he had been ordered to pay the defendant's costs to put the defendant to the further expense of a second action until those costs had been paid. To pursue a second action in those circumstances can properly be regarded as an abuse of the court's process. In my view what matters is not the precise nature of the former proceedings but whether, having regard to the nature of those proceedings, their outcome and the claimant's failure to satisfy an order for costs against him, the second proceedings can be regarded as abusive".
"I take the view that orders of the court, even in relation to interim costs, require to be complied with and that, unless there is some overwhelming consideration falling within Article 6 [ECHR] that compels the court to take a different view, the normal consequence of a failure to comply with such an order, is that the court, in order to protect its own procedure, should make compliance with that order a condition of the party in question being able to continue with the litigation."
Conclusions on Hytera's application for a stay
Issue (3): Payment into Court?
Conclusions on Motorola's cross-application