Neutral Citation Number: [2020] EWHC 1326 (Ch)
Claim No: HC-2016-002285
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (CHD)
INTELLECTUAL PROPERTY
Remote Hearing by Skype for Business
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Date: Wednesday, 20 May 2020
Before:
MR. RECORDER DOUGLAS CAMPBELL QC
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Between:
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(1) LIFESTYLE EQUITIES CV (2) LIFESTYLE LICENSING BV (each company incorporated under the laws of the Netherlands) |
Claimants |
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(1) SANTA MONICA POLO CLUB LIMITED (2) AZIRE GROUP LIMITED (3) CONTINENTAL SHELF 128 LIMITED t/a JUICE CORPORATION (4) MR. ZUBAIR MUKHTAR ALI
(5) MR. KASHIF AHMED
(7) YOURS CLOTHING LIMITED t/a BAD RHINO (11) HORNBY STREET LIMITED t/a JUICE CORPORATION
(13) MO & a LTD t/a BE JEALOUS (14) BIGGCLOTHING4U LIMITED (15) EON CLOTHING LIMITED (16) SIZE BASE LIMITED
(12) MRS. BUSHRA AHMED
(13) MO & a LTD t/a BE JEALOUS (14) BIGGCLOTHING4U LIMITED (15) EON CLOTHING LIMITED (16) SIZE BASE LIMITED |
Previous Defendants
Defendant
Previous Defendants
Previous Defendants
Defendant
Previous Defendants |
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MR. THOMAS ST. QUINTIN (instructed by Brandsmiths) for the Claimants
DR. TIMOTHY SAMPSON (via Direct Access) appeared for the 5th and 12th Defendants
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HTML VERSION OF JUDGMENT APPROVED
MR. RECORDER DOUGLAS CAMPBELL QC:
"(1) The court has discretion as to –
a) whether costs are payable by one party to another;
b) the amount of those costs; and
c) when they are to be paid.
(2) If the court decides to make an order about costs –
a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
b) the court may make a different order.
…
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
a) the conduct of all the parties;
b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;
b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.
…"
"Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of cost unless there is good reason to do so."
"The Claimants shall pay the Quantum Defendants their costs of and caused by the said amendments to the Points of Claim."
"(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.
(ii) The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated."
(1) The learned judge was wrong to find that there was an outstanding loan from D11 to D5 that could be recovered from D5 by the Cs as part of their account of profits. The evidence supports D5's contention to that the loan from D11 had been repaid.
(2) Subject to ground 1 above, even if the learned judge was correct in holding that there was an outstanding loan from D11 to D5 that could be subject to recovery by the Cs as part of their account of profits the learned judge was wrong to require payment of 100% of that loan sum. The requirement to pay 100% of that sum would only be justified in the event that the entire loan sum could be traced back to monies obtained by D11 from the sale of infringing goods. No such evidence exists and moreover the approach taken with regards to the loan is wholly inconsistent with the approach taken towards salary (where only 10% was found to be derived from profits generated from infringing sales).
(3) The learned judge was wrong to find that 10%1 of D5 salary could be said to be derived from sales of infringing goods by D11. It is the Ds case that the judgment does not deal with the fact that D5 was paid a single salary for all his work for the Juice Corporation Group – because this evidence was not included by the Claimants in the trial bundles despite Ds request. In particular, the overall salary paid to D5 should reflect the fact that he was not working solely for D11 but also for Wembley Mens Wear. As such, the 10% figure exaggerates the level of profit that can be said to have passed to D5. Even if the percentage applied is correct it should only be applied to that part of his salary that could be said to relate to his work for D11 (i.e. the company responsible for the sale of infringing goods).