Colin Lindridge Harman v Henry John Burge
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Hacon,Judge Hacon |
| Judgment Date | 29 July 2014 |
| Neutral Citation | [2014] EWHC 2836 (IPEC) |
| Date | 29 July 2014 |
| Court | Intellectual Property Enterprise Court |
| Docket Number | Case No: 0CL70074 |
[2014] EWHC 2836 (IPEC)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
His Honour Judge Hacon
Case No: 0CL70074
Jonathan Pennington Legh (instructed by Mayo Wynne Baxter) for the Claimant
Marc Wilkinson (instructed by Tedstone, George & Tedstone) for the Defendant
Hearing dates: 10–11 June 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an inquiry as to damages following the Order by consent of HH Judge Birss QC dated 12 June 2012 in which judgment was given for the Claimant ("Mr Harman") in respect of allegations of passing off and unlawful interference.
History of the dispute
The Defendant ("Mr Burge") owns a holding of around 80 acres at Oare, near Lynton, Devon, known as 'Cloud Farm'. It is in the Exmoor national park, a part of the country well known as a destination for holiday-makers, particularly those who enjoy camping, riding and trekking. In the years up to 2003 Mr Burge and his wife ran a holiday business from Cloud Farm known as 'Doone Valley Holidays' ("DVH").
In July 2003 the DVH business was sold to Mr Harman and his wife along with a lease to Cloud Farm for a period of 7 years, expiring on 17 July 2010. One of the assets purchased was a website with the domain name www.doonevalleyholidays.co.uk ("the Website"). Though given no attention at the time, Mr Burge remained registrant of the Website.
In their 7 years at Cloud Farm Mr Harman and his wife made considerable financial investment in the business which successfully developed. Part of the investment was devoted to the expansion and improved sophistication of the Website. This played an important role in the growth of the business. The work on the Website was done by David Cartwright who, although he was a university lecturer by profession, had experience of website design and had spent time as a holiday-maker at Cloud Farm.
As the date of expiry of the lease for Cloud Farm approached, Mr Harman took steps to inform his customers that the business would be leaving Cloud Farm. On 30 May 2010 a notice to that effect was put on the Website. Although the notice did not say so, Mr Harman and his wife had arranged to move the DVH business to Hallslake Farm in Brendon, about 7 miles away.
On 25 June 2010 Mr Harman began to receive phone calls from people who had tried and failed to access the Website. It emerged that Mr Burge had taken control of it so that none of the former content of the Website could be accessed. All that could be seen was a page headed
"Doone Valley Holidays. Announcement. Doone Valley Holidays at Cloud Farm Look forward to seeing you in 2010".
The heading thus implied that the DVH business would continue at Cloud Farm. The announcement went on to say that Mr Harman and his wife would be moving to new premises which "will only have limited facilities and availability for this season from mid July 2010" and gave some details about their new holiday business and a contact number.
Mr Harman called in Mr Cartwright to help regain control of the Website. Mr Cartwright discovered that Mr Burge was still registrant of the Website and, without Mr Harman being aware of it, Mr Burge had had the authority to control the Website all along.
A Claim Form was issued on 7 July 2010 and on 8 July 2010 HH Judge Fysh QC heard an application by Mr Harman for an interim injunction. Mr Burge gave undertakings to arrange the transfer the Website to Mr Harman's control, not to use the DVH name and not to pass himself of as the owner of or as being associated with the DVH business. On 9 July 2010 control of the Website was transferred to Mr Harman by Nominet.
On 17 July 2010 Mr Harman and his wife left Cloud Farm and resumed the DVH business at Hallslake Farm from 18 July 2010.
On about 28 October 2010 the Particulars of Claim were served. By a Defence dated 12 December 2010 Mr Burge admitted passing off and unlawful interference of trade by reason of his takeover of the Website.
A little under a year after having moved to Hallslake Farm, on 17 June 2011 Mr Harman and his wife moved the business again, this time to Caffyns Farm, Lynton, on the Exmoor coast, about 3 miles from Hallslake Farm.
In January 2013 Mr Harman changed the name of the business to 'Exmoor Coast Holidays'. The Website remains operative but only to the extent that it displays a short message redirecting visitors to the Exmoor Coast Holidays website.
Judgment on admissions
By an Order dated 12 June 2012 Judge Birss gave judgment for the Claimant on admissions in relation to the principal allegations of passing off and interference with trade. He ordered this inquiry. There remained outstanding allegations of passing off, infringement of copyright and breach of an undertaking which had not been admitted by Mr Burge. At the start of this trial these were sensibly abandoned by Mr Harman.
Damages claimed by Mr Harman
The damages claimed fall into three categories:
(1) Loss of profit, as a consequence of lost turnover caused by the disruption to the Website.
(2) The wasted cost of cancelled listings and subscriptions. These were promotions for the DVH business on other websites. The links to the Website had been rerouted to Mr Burge's 'Announcement' page, so the listings and advertisements had to be cancelled, even though Mr Harman had paid for them.
(3) Mitigation costs. These were incurred by way of the cost of new links to directories and listing sites, the cost of a Google adwords campaign (sponsored advertising on Google) to recover the profile of the website and fees paid to Mr Cartwright to carry out this work.
The law
In SDL Hair Limited v Next Row Limited [2014] EWHC 2084 (IPEC) I said this:
"[31] I derive the following principles from authorities in relation to an inquiry as to damages:
(1) A successful claimant is entitled, by way of compensation, to that sum of money which will put him in the same position he would have been in if he had not sustained the wrong, see Livingstone v Rawyards Coal Co. (1880) 5 App.Cas., 25 per Lord Blackburn at 39.
(2) The claimant has the burden of proving the loss, see General Tire and Rubber Company v Firestone Tyre and Rubber Company Limited [1976] RPC 197, at 212.
(3) The defendant being a wrongdoer, damages should be liberally assessed but the object is to compensate the claimant, not punish the defendant, see General Tire at p.212.
(4) The claimant is entitled to recover loss that was (i) foreseeable, (ii) caused by the wrong and (iii) not excluded from recovery by public or social policy, see Gerber Garment Technology Inc v Lectra Systems Ltd [1997] RPC 443, at 452.
(5) In relation to causation, it is not enough for the claimant to show that the loss would not have occurred but for the tort. The tort must be, as a matter of common sense, a cause of the loss. It is not necessary for the tort to be the sole or dominant cause of the loss, see Gerber at p.452.
(6) An inquiry will generally require the court to make an assessment of what would have happened had the tort not been committed and to compare that with what actually happened. It may also require the court to make a comparison between, on the one hand, future events that would have been expected to occur had the tort not been committed and, on the other hand, events that are expected to occur, the tort having been committed. Not much in the way of accuracy is to be expected bearing in mind all the uncertainties of quantification. See Gerber at first instance [1995] RPC 383, per Jacob J, at 395–396.
(7) Where the claimant has to prove a causal link between an act done by the defendant and the loss sustained by the claimant, the court must determine such causation on the balance of probabilities. If on balance the act caused the loss, the claimant is entitled to be compensated in full for the loss. It is irrelevant whether the court thinks that the balance only just tips in favour of the claimant or that the causation claimed is overwhelmingly likely, see Allied Maples Group v Simmons & Simmons [1995] WLR 1602, at 1609–1610.
(8) Where quantification of the claimant's loss depends on future uncertain events, such questions are decided not on the balance of probability but on the court's assessment, often expressed in percentage terms, of the loss eventuating. This may depend in part on the hypothetical acts of a third party, see Allied Maples at 1610.
(9) Where the claim for past loss depends on the hypothetical act of a third party, i.e. the claimant's case is that if the tort had not been committed the third party would have acted to the benefit of the claimant (or would have prevented a loss) in some way, the claimant need only show that he had a substantial chance, rather than a speculative one, of enjoying the benefit conferred by the third party. Once past this hurdle, the likelihood that the benefit or opportunity would have occurred is relevant only to the quantification of damages. See Allied Maples at 1611–1614."
The type of loss considered in Allied Maples and referred to in subparagraphs (8) and (9) above does not arise in the present case, see also Parabola Investments Ltd v Browallia Cal Ltd [2010] EWCA Civ 486; [2011] QB 477; Vasiliou v Hajigeorgiou [2010] EWCA Civ 1475 and Wellesley Partners LLP v Withers LLP [2014] EWHC 556 (Ch). In relation to the claim for lost profits, this is the type of case in which it is necessary to consider a counterfactual history of events in which the Website was not...
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