Lifestyle Equities CV v Santa Monica Polo Club Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Recorder Douglas Campbell |
| Judgment Date | 23 March 2020 |
| Neutral Citation | [2020] EWHC 688 (Ch) |
| Date | 23 March 2020 |
| Docket Number | Case No: HC 2016-002285 |
| Court | Chancery Division |
[2020] EWHC 688 (Ch)
Mr. Recorder Douglas Campbell QC
(Sitting as a Judge of the Chancery Division)
Case No: HC 2016-002285
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
INTELLECTUAL PROPERTY
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr. Thomas St. Quintin (instructed by Brandsmiths) for the Claimants
The Fifth and Twelfth Defendants appeared as litigants in person
Hearing dates: 4–5, 7 February 2020
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A paragraph 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.
Mr Recorder Douglas Campbell QC:
Introduction
This is the second trial in these proceedings, according to an order made by Arnold J (as he then was) on 3 rd April 2017. I heard the first trial in October 2017 and gave judgment on 21 st December 2017: see [2017] EWHC 3313 (Ch). In summary the Claimants own various trade marks for “BEVERLY HILLS POLO CLUB”. D3 owned the word mark “SANTA MONICA POLO CLUB” and permitted D11 to use it. D11 was the only Defendant responsible for designing, manufacturing, importing, and selling Santa Monica Polo Club product.
In that first trial, I decided the following issues:
i) Infringement of the Claimants' EU trade mark no. 005482484 (“the EU mark”) and UK registered trade mark no. 1259226 (“the UK mark”) pursuant to s 10(2) of the Trade Marks Act 1994 (“the Act”)/Art 5(1)(b) of the Trade Mark Directive, 2008/95/EC (“the Directive”); and Article 9(2)(b) of Regulation 207/2009, as amended by Regulation 2015/2424, which since 1 October 2017 has been codified by Regulation 2017/1001 (“the Regulation”) respectively.
ii) Infringement of the EU and UK marks pursuant to s 10(3) of the Act/Art 5(2) of the Directive/Art 9(2)(c) of the Regulation.
iii) Passing off.
iv) Breach of contract by D3 or D11.
v) Procuring of that breach of contract by D5.
vi) The Defendants' counterclaim for unjustified threats of trade mark infringement.
In summary I found that all of the Defendants' SANTA MONICA POLO CLUB signs infringed the Claimants' EU and UK marks pursuant to s 10(2)/Art 5(1)(b) TMD/Article 9(2)(b) EUTMR and amounted to passing off, save for a sign referred to as the “three-horse sign”. However all of the Defendants' signs (ie including the “three-horse sign”) infringed the UK mark pursuant to s 10(3)/Art 5(2) TMD; and all signs first used in 2010 or later also infringed the EU mark pursuant to Art 9(2)(c) EUTMR. I dismissed each of the other claims (ie breach of contract, procuring of breach of contract, and the threats counterclaim). I was not asked to consider the issue of quantum at that trial, in accordance with normal practice in intellectual property actions. I refused permission to appeal and no application for permission to appeal the findings of infringement or passing off was ever made to the Court of Appeal.
The claims against most of the other original Defendants (namely, all except D3, D5, D11, and D12) have now settled. D3 and D11 are in administration and the claims against them are stayed pursuant to Schedule B1 of the Insolvency Act 1986. They were placed into administration on 16 th January 2018.
The Claimants' UK mark has been partially revoked since the first trial, but the Claimants submitted (and I accept) that nothing turns on this. For instance the Claimants' EU mark remains as it was.
The remaining issues to be decided at this second trial are as follows:
a. Is D5 jointly and severally liable with D3 and/or D11 for acts of infringement?
b. If so, what financial remedy should be awarded against D5?
c. Is D12 jointly and severally liable with D3 and/or D11 for acts of infringement?
d. If so, what financial remedy should be awarded against D12?
The Claimants sought an account of profits, not an enquiry as to damages, and so far as quantum is concerned the Claimants focussed on D11's profits rather than those of D3. I will still consider the issue of joint liability with D3 since it was argued and it is possible, in this complicated litigation, that something may turn on it.
D5 (or “Mr Ahmed”: I will use the terms interchangeably without intending any disrespect) and D12 (“Ms Ahmed”) were represented by Pannone Corporate LLP at the first trial. For part of the time leading up to the second trial they were represented by Excello Law, but Excello Law came off the record on or about Friday 12 July 2019. Since then they have largely represented themselves, save for some assistance given from time to time by Dr Timothy Sampson on a direct access basis.
This second trial was originally listed to begin on Monday 15 July 2019 before Penelope Reed QC, sitting as a deputy judge of this Court. Not only had the Defendants' solicitors very recently come off the record, but D5 was admitted to the emergency department of Royal Preston Hospital on Sunday 14 July complaining of chest pains. After various investigations D5 was discharged some time on Monday 15 July, having been given a two week course of aspirin. The upshot was that the deputy judge granted an adjournment with “enormous reluctance”. The second trial was then relisted before me on Tuesday 4 th February 2020.
At the outset of the hearing before me, the Defendants (represented by Dr Sampson) applied for a second adjournment of the second trial. I dismissed that application for reasons set out in my judgment in respect thereof: see [2020] EWHC 198 (Ch). The trial continued on the next day, Wednesday 5 th February 2020 with the Defendants representing themselves. In the case of Ms Ahmed, I granted permission for her to have a McKenzie friend, Ms Osmat Ahmed.
This is therefore yet another case where there is a marked disparity in resources between the parties. In particular the Claimants are professionally represented by specialist solicitors and counsel whereas the Defendants have none. However the fact that one side consists of litigants in person is not of itself a reason to apply different legal procedural rules, let alone some different substantive law: see Barton v Wright Hassall LLP [2018] UKSC 12. The substantive law is the same for everyone.
The witnesses
On behalf of the Claimants I heard oral evidence from Mr Eli Haddad, the CEO of the Claimants. The main point of his evidence was his expectation that D11, as a wholesaler, would make a gross profit on sales of between 40% to 50%. However whilst Mr Haddad had around 40 years of experience in the manufacture and distribution of fashion clothing generally he did not claim to have any specific experience of Manchester importers such as D11. Mr Haddad also considered that the Defendants were counterfeiters whereas I made no such finding at the trial. Finally there were some errors of detail in his written evidence. Those matters apart, I accept his evidence.
On behalf of the Defendants I heard from Mr Ahmed, Ms Ahmed, and Mr David Clegg of the AMS Accountants Corporate Limited (“AMS”). AMS are the former reporting accountants and auditors to D3 and D11, having been appointed some time in 2017. AMS also dealt with the personal tax returns of the directors and shareholders of D3 and D11, which included D5 and D12. Their oral evidence was important to the defence of D5 and D12 and the Claimants made a number of attacks thereon. I will therefore go into some detail about it.
As a witness, and as a litigant in person, Mr Ahmed was articulate and intelligent. It is easy to see why he became a successful businessman. However the last few years have plainly been hard both for him and for Ms Ahmed.
The Claimants made 2 main criticisms of his evidence. The first was that Mr Ahmed was, they said, dishonest. In support of this they relied on the evidence about his hospital admission, his evidence about certain OHIM proceedings, and his complaint that he was ambushed at the first trial with some earlier judgments which he had been criticised. The second criticism was that, as I had found in the first trial, he was again “an unhelpful witness who would never volunteer information or correct any misunderstandings if he thought that doing so would adversely affect his interests”: see my first judgment at [23]. For instance the Claimants put it to him in cross-examination that he had deliberately not asked AMS for any of D11's internal documentation for D11's 2016 and 2017 reports, an allegation Mr Ahmed denied.
I will take the second point first. In my judgment this criticism is well founded. It is all the more disappointing given that I criticised Mr Ahmed for adopting that very approach in the first trial. This criticism has nothing to do with the fact that Mr Ahmed was a litigant in person since it does not involve any issue of law. The upshot was that in many key areas I had very little evidence on important factual points from the person who was by far the best placed person in this trial to give that fact evidence.
Instead Mr Ahmed spent much of his evidence and time on complaints about trial bundles. I find that there is nothing in any of these complaints. For instance the Defendants never gave me an example of a document which they said should...
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