KB-2023-004010 - [2025] EWHC 2689 (KB)

As noted above, it is usually necessary to decide prior to ordering an inquiry whether the court in the exercise of its discretion should do so. Where the injunction was wrongly granted, the court will ordinarily order an inquiry as to damages in any case where it appears that loss may have been caused as a result.

It is submitted on behalf of Mex that no inquiry as to damages should be ordered in this case due to the conduct of Mr. Smith and CSM. They particularly emphasise (a) the failure to provide the information required by the WFO, (b) the conduct reflected in the judgments of Ellenbogen J on 12 June 2024 and before Morris J on 30 July 2024 which were critical of their conduct, (c) the finding of contempts on 13 December 2024, and (d) still failing to provide the information required.

The Court takes into account the bad conduct in not obeying the court order. This is a relevant consideration in deciding whether or not to enforce the cross-undertaking. There are two matters which outweigh that consideration. First, the costs orders which are being made against Mr Smith and CSM, whilst not being the entirety of the costs referable to the contempt, are a significant penalty to pay for that conduct. There is a risk of double punishment if in addition to costs, Mr Smith and CSM are punished by not being able to enforce the cross-undertaking.

Second, and of greater significance still, is the fact that the WFO should not have been obtained or maintained in that there is reason to believe that:

If the Claimant did not appreciate this at the outset, it ought to have been apparent by reason of the decision of Mr Tinkler, and if not then, by the time that the appeal was lost. It is also a matter of potential significance that the draft of the judgment of the Court of Appeal may have been received by the time of the notification of the Stock Exchanges. Although that was in respect of other defendants, there is no substantial reason to distinguish between the position of the different defendants on the disclosure issues, and probably also not as regards the question of inexpediency.

Third, the discontinuance of the proceedings in Scotland have raised serious questions as to whether the claim in Scotland for the reasons given by Lord Sandison was in fact a good claim at all. In circumstances where Mr Smith and CSM are unable to defend themselves because the proceedings have been abandoned, it is appropriate for the purpose of the WFO to treat it as having had no basis.

Fourth, whilst there was no excuse for the contempt, the above points are mitigating factors. Mr Smith and CSM should not have been exposed to the detriment of the WFO.