John Lobb S.A.S v John Lobb Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Edwin Johnson |
| Judgment Date | 08 September 2022 |
| Neutral Citation | [2022] EWHC 2306 (Ch) |
| Docket Number | Appeal Reference: CH-2021-000171 |
| Court | Chancery Division |
[2022] EWHC 2306 (Ch)
Mr Justice Edwin Johnson
Appeal Reference: CH-2021-000171
Claim No. IL-2020-000059
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
On appeal from the order of Deputy Master Marsh [2021] EWHC 1226 (Ch) — Claim No. IL-2020-000059
Rolls Building
7 Rolls Buildings
Fetter Lane
London, EC4A 1NL
Huw Davies QC and Jaani Riordan (instructed by DLA Piper UK LLP) for the Appellant/Defendant
Ian Mill QC and Hollie Higgins (instructed by Clintons) for the Respondent/Claimant
Hearing date: 5 th July 2022
Approved Judgment
This judgment was handed down remotely by circulation to the parties' representatives by email and released to The National Archives. The time and date for hand-down are deemed to be 10.00am on 8 th September 2022
Introduction
This is my reserved judgment on the hearing of the appeal of John Lobb S.A.S against an order of Deputy Master Marsh ( “the Order”) made on 23 rd February 2022. The Order was made pursuant to a judgment handed down by the Deputy Master on 24 th May 2021 ( “the Judgment”). By the Order, and for the reasons set out in the Judgment, the Deputy Master dismissed the application of John Lobb S.A.S for summary judgment and/or an order striking out the Claimant's Particulars of Claim in this action ( “the Application”). Permission to appeal was granted by Roth J by an order made on 8 th February 2022.
At the hearing of the appeal the Appellant/Defendant (John Lobb S.A.S) has been represented by Huw Davies QC and Jaani Riordan. The Respondent/Claimant (John Lobb Limited) has been represented by Ian Mill QC and Hollie Higgins. I am most grateful to all counsel for their helpful written and oral submissions. In this context I should mention that I have also had the benefit of a transcript of the hearing of the appeal, which has been of immense value to me in preparing this judgment.
In this judgment I will refer John Lobb S.A.S as “the Appellant”, and to John Lobb Limited as “the Respondent”. It should however be kept in mind that the Respondent is the Claimant in the action in which this appeal has been made, and that the Appellant is the Defendant. I will refer to the Deputy Master as “the Judge”. References to the paragraphs of the Judgment are given as [J1], for paragraph 1 of the Judgment, and so on. Italics have been added to quotations in this judgment.
The parties
The Respondent is a family owned company incorporated under the laws of England and Wales on 19 th September 1972. The Respondent, on its own description, operates a world famous luxury goods business making hand-made made-to-measure footwear. The business was founded in Sydney, Australia in 1849 by John Lobb, great great grandfather of the current generation of the Lobb family who run the business. The business moved to London in 1866, and began trading from premises in Regent Street. The business was incorporated into the Respondent, in 1972, by Eric Lobb, who appears to have been the driving force behind the business, steering the business through the difficult years of the Second World War and, following the War, redeveloping the business. On incorporation the shares in the Respondent were held by Eric Lobb. The shares are now held by various members of the Lobb family.
A full account of the early history of the business is set out in the evidence of the various members of the Lobb family who provided witness statements in response to the Application. It is not necessary, for the purposes of the Application, to go into this history, but it is an interesting account of the historical development of a luxury footwear business.
The Appellant was incorporated by Eric Lobb under the laws of France in 1946. I assume, although this is not entirely clear from the evidence which I have read, that this was for the purpose of developing the John Lobb business in France, operating from Paris where the business appears to have had a branch.
In 1976 the majority of the shares in the Appellant was sold by Eric Lobb to the Hermes Group; the French luxury goods business ( “Hermes”), so that Hermes acquired control of the Appellant. The sale included the rights in a trade mark registered in France by Eric Lobb which protected the Appellant's products. Since then the Appellant has operated or continued to operate its own luxury footwear business. The history and nature of the relationship between the business of the Respondent and the business of the Appellant since 1976 is the subject of a certain amount of dispute in this action.
The relationship between the parties since 1976
My account of the relationship between the parties since 1976 is confined to what is sufficient to set the scene for what I have to decide in this appeal. Given that I am concerned with an appeal arising in respect of an application for summary judgment or for a striking out order, it is neither necessary nor appropriate either to set out a full account of this relationship or to try to resolve disputed questions of fact.
As from 1976 there appears to have been collaboration between the businesses of the Respondent and the Appellant. The Respondent's evidence is that there were good relations between Eric Lobb and Jean Louis Dumas of the Dumas family, who owned Hermes. In particular the Appellant operated, or continued to operate, its business selling footwear under the John Lobb name. In addition to this Hermes commenced an operation registering trade marks around the world, in order to protect the John Lobb brand.
In order to regularise this collaboration, the Respondent and the Appellant, together with Eric Lobb, entered into a written agreement on 9 th March 1992, which became known as the Radlett Agreement. I will use the same expression to refer to this agreement. Clause Ten of the Radlett Agreement identified that it was “entered into for a period of 15 (fifteen) years at which time its operation shall be reviewed by John Lobb Limited and John Lobb SA”. Clause Ten did not specify a start date for this period of 15 years. Clause Nine of the Radlett Agreement, which was concerned with financial matters, stated however that the Agreement was entered into from 9 th March 1992. It therefore seems reasonable to take 9 th March 1992 as the intended start date of the period of the Radlett Agreement.
The other principal provisions of the Radlett Agreement can be summarised as follows:
(1) There were a number of recitals to the Radlett Agreement. Amongst other matters the recitals recorded that the property rights in the Trade Mark in France were “ceded” by Eric Lobb to the Appellant pursuant to an agreement between the parties dated 24 th May 1976, in consideration of the payment of a percentage of the Appellant's turnover for the years between 31 st March 1976 and 31 st December 1985. The Trade Mark was defined to mean the trade mark John Lobb deposited and registered in France. The recitals also recorded the registration of the Trade Mark in other countries, and recorded the costs incurred by the Appellant in this respect. The recitals then set out the desire of the parties to continue to collaborate. The final recital was in the following terms:
“John Lobb Limited and John Lobb S.A. desire to extend existing agreements including the Sale Agreement and Amending Agreement to the manufacture, promotion and sale of products described in classes and categories of the Trade Mark already registered throughout the world”
(2) Clause One then gave the Appellant the right to the manufacture, promotion and sale of ready-to-wear footwear under the Trade Mark throughout the world. This was however subject to the terms of the Radlett Agreement which included, by Clause Two, the agreement of the Appellant not to manufacture made-to-measure hand-made footwear in the UK under the Trade Mark. By Clause Two the Appellant assigned “to John Lobb Limited any rights which may have accrued to John Lobb S.A. in the United Kingdom by its acquisition of the Trade Mark in made-to-measure hand-made footwear”.
(3) Clause Three permitted the Respondent to manufacture accoutrements under the Lobb trade name, with the consent of the Appellant, such consent not to be unreasonably withheld.
(4) By Clause Four the Appellant agreed to continue the protection of the Trade Mark where necessary and to extend the protection of the Trade Mark to the trade name Lobb when called upon to do so by the Respondent and to bear the costs of that protection.
(5) By Clause Five the Appellant agreed to make annual payments to the Respondent which were expressed to be “In consideration for extending the Sale Agreement and the Amending Agreement and other agreements in accordance with the terms and conditions of this agreement herein set out”.
(6) Clauses Six to Nine contained financial provisions supplementary to Clause Five. It should be noted that the provisions for payment to the Respondent were subject to a variation in 1997. This arose out of the acquisition by Hermes of Edward Green and Company Limited, a UK footwear manufacturer. The sums payable to the Respondent were increased to take account of the increase in turnover resulting from this acquisition.
(7) Clause Ten prescribed the term of the Radlett Agreement, as noted above.
(8) Clause Eleven provided that the Radlett Agreement was governed by and construed in accordance with the law of England and Wales.
Negotiations commenced between the parties in late 2005 concerning the nature and terms of the relationship between the parties which was to follow the Radlett Agreement. There is a good deal of dispute between the parties concerning these negotiations. For present purposes it is however only necessary to record two events.
First,...
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