Fred Perry (Holdings) Ltd v Brands Plaza Trading Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Jackson,Lord Justice Maurice Kay |
| Judgment Date | 01 February 2012 |
| Neutral Citation | [2012] EWCA Civ 224 |
| Docket Number | Case No: A3/2011/0990 (A) and (B) |
| Court | Court of Appeal (Civil Division) |
| Date | 01 February 2012 |
[2012] EWCA Civ 224
Lord Justice Maurice Kay
(Vice President of the Court of Appeal
Lord Justice Jackson
and
Lord Justice Lewison
Case No: A3/2011/0990 (A) and (B)
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE MANN)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Mark Engelmann and Mr Paul Considine (instructed by ABGM Solicitors) appeared on behalf of the Applicants.
Miss Anna Edwards-Stuart (instructed by Clarke Willmott LLP) appeared on behalf of the Respondent.
Fred Perry Holdings Limited is a well-known manufacturer of sportswear, which has substantial reputation and goodwill. It is the proprietor of a number of registered trademarks connected with its products. It sued Brands Plaza Trading Limited and Mr Ivan Genis for infringement of trademarks and for passing off.
The essential allegation was that Mr Genis as sole trader and, after the incorporation of his business, Brands Plaza had been dealing in counterfeit Fred Perry sportswear although there might have been some parallel imports as well.
In the course of the proceedings Brands Plaza and Mr Genis failed to comply with an unless order. The effect of the non-compliance was that their defences were automatically struck out and judgment for Fred Perry with costs entered against them. Mann J dismissed an application for relief against sanctions under CPR 3.9. This is an appeal against his decision brought with the permission of the Master of the Rolls.
The procedural chronology is as follows. Fred Perry served its proceedings on the two defendants on 14 January 2010, although at that time Mr Genis was joined not as sole trader but as an alleged joint tortfeasor with Brands Plaza. In breach of the CPR the defendants failed to acknowledge service in time, so Fred Perry applied for judgment in default of Acknowledgement of Service in February 2010. The defendant staved off that application by serving a defence on the morning of the hearing.
On 14 April 2010 Arnold J made an order by consent. That order amongst other things required Mr Genis to inform Fred Perry by 20 April 2010 which of two defences he was relying on and required both defendants to serve a statement of costs in accordance with the practice direction by the same date.
The defendants failed to comply with that order and on 21 June 2010, sitting at first instance, I made a further order requiring compliance with those parts of Arnold J's order by 28 June 2010. In addition the defendants had failed to comply with an order for disclosure made by Master Teverson and I also ordered them to make standard disclosure by 12 July 2010.
The defendants then failed to comply with my order and Fred Perry applied for a further order, which was made by consent by Master Pia on 9 August 2010. That order was an unless order, which had the effect that failure to comply would result in the defendant's defences being automatically struck out and judgment entered for Fred Perry.
The defendants still failed to comply with the order for disclosure. That resulted in the application to Henderson J for a further unless order, which he made on 26 November 2010. That order required the defendants to search electronic documents by reference to certain key words and to make disclosure of documents revealed by that search by 20 December 2010. They were also required to give specific disclosure of certain documents specified in the order. Those parts of the order were also subject to an unless order, which had the effect that failure to comply would result in the defendant's defences being automatically struck out and judgment entered for Fred Perry with costs.
20 December came and went and still the defendants failed to comply, nor did they appeal against Henderson J's order or apply for an extension of time or for relief against the sanctions. Accordingly, on 20 December 2010, the defendant's defences were automatically struck out and judgment entered for the claimants with costs. But although Henderson J's order said that if the defences were struck out judgment would be entered to Fred Perry, that could not be done administratively because Fred Perry were claiming injunctions and other non-monetary relief. So Fred Perry issued an application for judgment in default of defence. That application was issued and served on the 11 February 2011 and was listed for hearing on 2 March 2011.
In the evidence which was filed in support of the application witness statements were made by both Mr Andrew Stone, Fred Perry's solicitor, and also by Mr Ichinose, the assistant to Fred Perry's directors.
In the course of his statement Mr Stone set out a number of respects in which Fred Perry alleged that the defendants had failed to comply with the orders for disclosure. In his witness statement Mr Ichinose said that Fred Perry had obtained through its own investigation a number of invoices created by the defendants evidencing further dealings in purported Fred Perry garments which the defendants had failed to disclose. He went on to say that Fred Perry were continuing to discover, through its own anti-counterfeiting procedures and investigations, further invoices relating to sales of purported Fred Perry garments by the defendants which they had failed to disclose in the proceedings. Those were the allegations contained in the evidence that were before the judge.
In the intervening period between the issue and service of the application and the eve of the hearing the defendants took no step to apply for relief against sanctions. It was only on the day before the hearing, on 1 March 2011, that the defendants served an affidavit sworn by Mr Genis. It had been drafted with the help of his solicitor, Mr Fenton. In that affidavit Mr Genis asked for relief against sanctions. He acknowledged that he had been in breach of court orders in the past. He said that although he had previously been ordered to pay costs in the sum of £10,000 he was unable to pay because of cash flow issues. He said that the failure to comply with the unless order was not intentional and explained, in effect, that the defendants had run out of money and asserted that the defendants had a genuine defence. He said that the case had been a nightmare for him and that he had been struggling to cope with running his business and dealing with the litigation at the same time. He said that to deny the case an opportunity for full trial would be against the interests of justice. He accepted that there had been an impact on Fred Perry but suggested that an appropriate sanction would be a costs order made against the defendants.
CPR 3.9 provides:
"(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including –
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant preaction protocol (GL);
(f) whether the failure to comply was caused by the party or his legal representative;
(g) whether the trial date or the likely trial date can still be met if relief is granted;
(h) the effect which the failure to comply had on each party; and
(i) the effect which the granting of relief would have on each party.
(2) An application for relief must be supported by evidence."
It is obvious that the power to grant relief against sanctions is a discretionary power. It is equally obvious that the discretion is that of the first instance judge and not that of the appellate court. An appellate court can only interfere with the discretion of the first instance judge if he has made an error of principle or if he is plainly wrong.
In his report on costs in civil litigation Jackson LJ discussed case management decisions in one section of his report. He said in paragraph 6.5 of the relevant section that:
"…courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed."
In paragraph 7.2 of the same section he put forward the view that he regarded it as vital that the Court of Appeal supports first instance judges who make robust but fair case management decisions. I agree with both those points.
In Woodhouse v Consignia Plc [2002] EWCA Civ 275; [2002] 1 WLR 2558 Brooke LJ set out the approach which should be adopted in cases concerning CPR 3.9. He pointed out that the rule was a good example of the way in which the draftsman of the rules had tried to collect in one place the various matters which the court will normally take into account when deciding to exercise its discretion. He went on to say in paragraph 33:
"The circumstances in which a court may be asked to make a decision of this kind are infinitely varied. This is why the rule instructs the court to consider all the circumstances of the particular case, including the nine listed items. On the other hand, the rule would lose much of its praiseworthy purpose of encouraging structured decision-making if courts did not consciously go through the exercise of considering all the items on the list...
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