Jack Wills Ltd v House of Fraser (Stores) Ltd

This is the taking of an account of profits pursuant to an Order made by Arnold J following a trial that took place on 20-21 January 2014 at which he held the Defendant (“HoF”) liable for trade mark infringement and passing off - see Jack Wills Limited v. House of Fraser (Stores) Limited [2014] EWHC 110 (Ch). The Order requires the taking of an account “… of profits accruing to the defendants … in respect of the defendant’s acts of registered trade mark infringement and passing off …”

The hearing before me took place on 1-2 and 4 March 2016. I heard oral evidence of fact from Mr Ray Kavanagh, HoF’s Director of Commercial and Logistics, Mr Robert Parkin, HoF’s Director of Merchandising for menswear and childrenswear and Mr Ross Wilson, HoF’s Head of Buying for Menswear and accessories. I heard expert opinion evidence concerning merchandising from Ms Susan Millin (who was called on behalf of the claimant [“JWL”]) and from two forensic accountants being Mr Mathew Geale (who was called on behalf of JWL) and Mr Mark Bezant (who was called on behalf of HoF).

By the end of the trial the issues between the parties had narrowed to a limited number of issues of principle. It was common ground between the parties that I should decide the issues of principle between the parties and they would then agree the financial consequences that followed from those conclusions. The sums involved in this dispute are on any view small. The costs of the process of which the hearing before me is the culmination will have been substantial and it is greatly to be regretted that substantial commercial parties such as those involved in this dispute were unable to agree what should be paid by HoF to JWL or resolve the issues between them by early neutral evaluation and/or facilitative mediation.

Although the issues between the parties have narrowed, in order to understand their significance it is necessary that I set out some of the background. The authoritative statement of the facts relevant to the dispute is to be found in Arnold J’s judgment however, and nothing I say in this judgment should be treated as being or being intended to be a departure from the findings that he made.

JWL is a casual clothing manufacturer, and the proprietor of a registered Community Trade Mark that consists of a left facing image of a cock pheasant wearing a top hat and carrying a walking cane that is characterised by JWL as “Mr Wills” (“the Mark”).

HoF carries on business as a retailer through a number of department stores located in city centres and retail parks across the UK as well as on line through its web site. It sells a vast number of different lines and in the context of menswear its lines break down into (a) concession sales – that is products sold by third party manufacturers hosted at stores operated by HoF, (b) bought in branded goods – that is third party manufactured and branded goods purchased by HoF and sold on by it at its stores and on line, and (c) its “own label” branded goods. HoF has two main clothing seasons – Autumn/Winter (August to January) (“AW”) and Spring/Summer (February to July) (“SS”). Each store’s floor space is divided into “mats” – that is areas from which specific brands of products are sold. There is a judgment to be made as to how intensively mats are stocked and how many mats are created on each floor of each store. HoF’s case is that it wishes to create “… pleasant and browsable shopping experience …” and seeks to avoid the “crammed” feel that some of its competitors favour.

HoF is owned by House of Fraser Limited which in turn is ultimately owned by Highland Group Holdings Limited (“HGH”). HGH has 9 subsidiaries of which one is HoF and another is James Beattie Limited. The latter company operated two of HoF’s department stores during the period when the infringing sales took place. This is significant only because the accounting material that has been disclosed by HoF consists of HGH’s management accounts. These include all sales made and costs incurred across the group. There is no information available concerning what income and costs has been contributed by each subsidiary.

The HoF product line with which this case is directly concerned is HoF’s own label “Linea” brand of menswear. In the period between November 2011 and March 2013 – that is AW 2011, SS 2012 and some but not all of AW 2013 - some but not all Linea products sold both in HoF’s stores and on line via its web site had on it a logo consisting of a right facing pigeon with a top hat and a bow tie. I refer to this image hereafter as “the Logo” and to the goods sold with the Logo on them as the “Pigeon Goods”.

It was the sale by HoF of the Pigeon Goods that was held to be the infringement of the Mark. The use of the Logo was described by Arnold J as being “… a classic case of a retailer seeking to enhance the attraction of its own brand goods by adopting an aspect of the get up of prestigious branded goods …”. He added that “… due to the resemblance to the Trade Marks, the effect of House of Fraser’s use of the Pigeon Logo will have been to cause a subtle but insidious transfer of image from the Trade Marks to the Pigeon Logo (and hence from Jack Wills goods to House of Fraser’s goods) in the minds of some consumers, whether that was House of Fraser’s intention or not. This will have assisted House of Fraser to increase the attraction of its goods in circumstances where House of Fraser did not undertake any advertising or promotion on those goods. Furthermore, House of Fraser had no justification for such conduct. Thus I conclude that House of Fraser did take unfair advantage of the reputation of the Trade Marks.”

It is submitted on behalf of JWL that these findings ought to lead me to ensure that all profits made from the sale of the infringing goods must be disgorged and that any doubts concerning any of the constituent elements leading to a conclusion of what constitutes profits should be resolved in favour of JWL. In my judgment this submission must be balanced against two other principles – first the remedy of an account of profits is not penal in any sense. It is a mechanism by which an infringer is required to pay over to the proprietor of the infringed marks all profits properly attributable to the infringement. Secondly, a proprietor who elects to accept an account of profits in preference to damages is required to take the infringer as it finds it. It is not therefore open for the proprietor of an infringed mark to maintain that if the infringer had been more efficient in the manner in which it sold infringing goods a greater profit would have been made and thus a sum greater than the actual profit attributable to the infringement should be found due on the taking of the account of profits.

By the end of the trial, in effect agreement had been reached concerning the Gross Margin that HoF had made from the sale of the infringing items. In summary the agreed figures were:

The only other issue identified by Mr Wyand in his closing submissions relevant to the Gross Margin issue concerned heavy knitwear. The oral evidence was that the Logo was not embroidered onto these particular garments but had been supplied with a stitched on version. The oral evidence was that instructions were given for the removal of the Logo and that this was removed. Mr Wyand submitted that I ought not to accept this evidence because there were no documents that supported it and because it was (he submitted) inherently unlikely that a badge could be removed from 6000 garments in a seven-day period. Mr Wyand submitted that I ought to take this into consideration when arriving at what he called in paragraph 2 of his written closing submissions “the appropriate deductions” by which he meant a percentage global deduction from the costs otherwise properly deductible in order to arrive at the profits for which HoF is accountable and which it was submitted should be made as a means of adjusting out uncertainties created by what were characterised to be evidential loopholes in the material presented by HoF.

In my judgment this is not an appropriate way to proceed. Either the evidence establishes that these items were sold as infringing items or it does not. I am not invited to disbelieve the oral evidence that was given on behalf of HoF in relation to this issue and if I was to reject that evidence it would necessarily involve me concluding that I had been given untruthful evidence by those witnesses in circumstances where those witnesses had not been cross examined on that basis and where it was not suggested on behalf of JWL that I could or should reject their evidence. It is surprising that there is not a paper trail relating to this issue […] Although there is some superficial attraction in the idea that it would be difficult to remove a label from 6000 garments in a 7 day period, in my judgment that ignores the fact that the garments were stocked across HoF’s stores and thus the number of garments where labels had to be removed would be a much lower figure when viewed on a store by store basis. I accept HoF’s evidence in relation to this issue.

Against that background I now turn to the issues of principle between the parties.

The general principle is that re-stated by the Court of Appeal in Design & Display Limited v. OOO Abbott and another [2016] EWCA Civ 95. That case was concerned with the taking of an account of profits following a patent infringement. There were two issues for the Court of Appeal to decide, one of which was whether the infringer was entitled to set off any part of its general overheads against the gross profit for which it was accountable.

Design & Display Limited (ante) confirmed the general principle to be that established by the High Court of Australia in Dart Industries Inc v. Décor Corp Pty Limited [1994] FSR 567 and by the Court of Appeal in Hollister Inc v. Medik Ostomy Supplies Limited [2012] EWCA Civ 1419; [2013] FSR 502, being that “… where a defendant has foregone the opportunity to manufacture and sell alternative products it will ordinarily be appropriate to attribute to the infringing product a proportion of the general overheads which would have sustained the opportunity. On the other hand if no opportunity is forgone and the overheads involved were costs which would have been incurred in any event, then it would not be appropriate to attribute the overheads to the infringing product. Otherwise the defendant would be in a better position than it would have been in if it had not infringed” – see Dart Industries Inc (ante) at 574. As Lewison LJ said in Design & Display Limited (ante) at [39]: “… the question … is … if the defendant had not infringed the patent would he have carried on a non-infringing business which would have been sustained by the overheads in fact used to sustain the infringement?”

If on the evidence “… the defendant’s business is not running to capacity, the defendant has not forgone an opportunity to make and sell other non infringing products and the defendant’s general overheads have not been increased by reason of the infringement and would have been incurred in any event, then …” the answer to Lewison LJ’s question would be no, and the infringer would not be permitted to deduct a proportion of its general overheads from the profits made from the manufacture or sale of infringing products – see Hollister Inc (ante) at [86] - because if the outcome were otherwise then “ … the defendant would be in a better position than it would have been in if it had not infringed…” – see Dart Industries Inc (ante) at 574.

Although it was submitted on behalf of the infringer in Design & Display Limited (ante) that demonstrating that it was running at capacity was a threshold condition applying the criteria identified in Hollister Inc (ante) at [86] that is not so. As Lewison LJ said in Design & Display Limited (ante) at [42] “… the question is not dependent on whether the infringer is or is not working to capacity. The bottom line is whether (a) the overheads would have been incurred anyway even if the infringement had not occurred and (b) the sale of infringing products would not have been replaced by sale of non-infringing products …”. It was for this reason that Lewison LJ held the criteria identified in Hollister Inc (ante) at [86] to be disjunctive not conjunctive – see Design & Display Limited (ante) at [49] – [51]. Thus, although much time and energy was taken up in the course of the trial in considering what was meant by the word “capacity” in Hollister Inc (ante) at [86], and how it applied to a retailer as opposed to a manufacturer in general and how it might apply to HoF in particular, in my judgment that was beside the point. The sole question to be answered is that identified by Lewison LJ in paragraph [39] of his judgment in Design & Display Limited (ante).

Although Mr Wyand attempted to rely on my judgment in Woolley v. UP Global Sourcing UK Limited [2014] EWHC 493 (Ch); [2014] FSR 37, in my judgment he was mistaken to do so because the outcome in that case in relation to the deductibility of a portion of central overheads resulted from the failure of the defendant in that case to address the requirements identified in Hollister Inc (ante) at [86] – see Paragraphs 34(ii) and (iv), 43 and 50 of my judgment in that case.

It was also submitted by Mr Wyand that the approach identified by Lewison LJ in Design & Display Limited (ante) at [42] was contrary to the principle to be derived from Meters Limited v. Metropolitan Gas Meters Limited (1910) 27 RPC 721 (Eve J) that “… it is no answer …” for an infringer to say “… that similar results could have been achieved without infringing the Patent …”. I am not able to accept that submission for the following reasons.

Lewison LJ considered that authority specifically in his judgment in Design & Display Limited (ante) in relation to the other (and first) issue that the Court of Appeal had to decide in that case – namely whether the whole of the profits made by selling articles incorporating an infringing component were recoverable or only part. He plainly did not consider there was any conflict between what was decided by Eve J and his formulation of the question to be answered when considering the recoverability of general overheads. This is unsurprising since the points are different ones. Eve J was concerned with the assessment of damages where the infringing finished article manufactured by the infringer could, hypothetically, have been manufactured without infringing a patent that protected a constituent part of what was manufactured, or a process used to manufacture the finished article. Lewison LJ was concerned with an entirely separate question, relevant only to the central overheads issue, which is whether alternative non-infringing goods would have been sold if the infringing items had not been – an issue it is necessary to decide only for the purpose of eliminating the unfairness identified in Dart Industries Inc (ante) at 574 and summarised in paragraph 16 above. In any event this point is not one that is open to Mr Wyand before me, and probably not before any tribunal in England and Wales other than the Supreme Court.

In the circumstances of this case therefore, the questions that I have to decide are factual ones – that is whether HoF has demonstrated that (a) the same overheads would have been incurred even if the infringement had not occurred and (b) the sale of infringing products would have been replaced by sale of non-infringing products which would have been sustained by the overheads in fact used to sustain the infringement.

The first of these questions is not one I need take up time considering further because it is common ground that the acts of infringement had no effect on general overheads. The key question to be resolved therefore is whether HoF would have replaced the sale of the Pigeon Goods by sale of non-infringing products which would have been sustained by the overheads in fact used to sustain the infringement. As Mr Wyand said in his written closing submissions, the outcome depends on whether HoF would have sold other non-infringing goods if they had not sold the Pigeon Goods. In answering this question Mr Wyand submits that it is necessary to consider the in store and web sale parts of HoF’s business separately.

It is convenient to consider the web based sales channel first. Mr Malynicz QC submitted that it is entirely artificial and wrong to consider HoF’s web site channel sales separately from its shop sales channel sales because in truth HoF is what is known in the retail world as a multi or omni channel business – that is it is a single business selling through a number of different channels including in HoF’s case both shop and web channels. Mr Wyand submitted – at least by implication – that this submission should be rejected in part because the business was run separately or largely separately from the shop sales business and because to adopt such an approach would be to ignore the realities of the situation.

Mr Wyand submitted that it was clear that there was excess capacity so far as the web based part of HoF’s business was concerned since that part of the business was serviced from a warehouse facility that was used exclusively to store and dispatch goods sold on the web – see the oral evidence of Mr Kavanagh at T1/132/4-8. He also accepted that at all times material to this case there was spare capacity within the warehouse – see T1/132/12-13. Finally he accepted that it followed that HoF could have sold other non-infringing goods via its web site at the same time as it was selling Pigeon Goods (because there was capacity within the warehouse to store such goods) in addition to the other goods that in fact it was selling via its web site channel. However, critically, Mr Kavanagh also said that there were variable costs directly related to web sales which equated to about 25% of the sales value of goods sold via its web site channel. Thus as I understood his evidence, increased sales via the web would lead to an increase in the variable costs that are incurred from sales via HoF’s web site. Mr Wyand did not challenge Mr Kavanagh as to the principle. Rather he suggested to him that the detailed figures that lay behind his evidence concerning variable costs had not been produced (as indeed they had not) – see T2/133/7-134/2.

I accept Mr Kavanagh’s evidence in relation to this issue – it was not submitted that I should not. The significance of the point concerning variable costs is I think this: the fixed overheads of running the warehouse would have been the same whether additional goods were being sold from it or not but variable costs would have been increased if the volume of goods sold on line had increased. Thus general overheads have not been increased by reason of the sale of infringing goods on line and would have been incurred in any event. In any event, HoF’s case is not that it would have sold different types of goods or garments had it not been selling the Pigeon Goods whether on line or in the shops, but rather it would have sold Linea brand garments of the same type and style as the Pigeon Goods but omitting the Logo. Thus the fact that there was spare capacity within the relevant warehouse at the time is not material. The real question remains – does the evidence establish that HoF would have sold non infringing products that were otherwise like for like if it had not been selling the infringing products. If it does, then it is entitled to deduct a contribution to general overheads from the gross margin made from selling the Pigeon Goods whether those goods were sold in the shops or via its web site. It is this concept that was referred to throughout the trial as the “displacement” issue.

There are a number of reasons why in my judgment it would be wrong to treat web sales differently from shop sales. First, the submission that the two should be treated separately was advanced initially on the mistaken assumption that capacity was a threshold condition. That this is so is apparent from paragraph 8.16 of Mr Geale’s report. The point that he made was a simple one – web sales were increasing year on year and if that was so then it could not have been a part of HoF’s business that was “… at capacity during the period of infringement”. He was asked in cross examination whether his evidence in relation to the web sales issue was predicated on needing to show capacity, which he acknowledged was the position – see T2/76/21-23. As he also acknowledged that was not an opinion he could maintain following Design & Display Limited (ante). Whilst he did not abandon his point that web sales and shop sales could and should be considered separately – see T2/7721-78/13 – he did accept that the issue that arose in relation to web sales was the same as that which arose in relation to shop sales namely whether the offer of infringing goods displaced the offer of non-infringing goods that would otherwise have been offered without increasing general overheads – see T2/77/6-7.

Thus whilst I accept on the material available it is possible to consider the web sales costs base separately from that for shop sales, there is no basis for doing so unless displacement is established for one but not the other. There is no basis for such an approach in the circumstances of this case. Precisely the same goods were sold on line and in the shops. There would be no commercial logic in attempting to sell for example a shirt without the Logo that was in all other respects identical in price and quality with the shirt being sold with the Logo at the same time as shirts with the Logo, whether it was offered on line or in the shops. I have no doubt however that had Linea branded goods with the Logo not been sold then the self same goods without the Logo would have been offered for sale. There is no commercial logic in that not being the case since the effect of omitting the articles altogether would have been to severely damage the commercial and retail credibility of the Linea range as a whole – seems Ms Millen’s evidence at T2/61/10 – 62/25. That is so whether the line is offered on line or in the shops.

Finally in relation to the web sales issue, it is clear, as was acknowledged by Mr Geale – see T2/77/8-16 - that web sales were at the relevant time a sharply growing part of the retail market. That being so it is hardly surprising that web sales were increasing significantly year on year. Even if that was a factor that was relevant to the capacity issue, it does not assist on the displacement point which is the real issue that arises in this case.

In my judgment the evidence available establishes that the infringing goods displaced non infringing goods of the same type and style as the infringing goods. My reasons for reaching that conclusion are as follows. I accept Mr Parkin’s evidence that HoF sold similar goods before during and after the period when infringement took place. During the infringement period, some but not all of the Linea range of casual menswear carried the Logo. However, as Mr Parkin puts it in paragraph 9 of his third statement, HoF “…went on to sell identical products without the …Logo or highly similar products after it finished selling the LINEA pigeon garments”. This is in no sense surprising. As Mr Parkin explains and I accept, the Pigeon Goods “ … were part of that existing range … Nothing substantially changed in the LINEAR menswear range with the introduction of the … Logo and nothing substantially changed in the range after the cessation of use of the … Logo”.

That what Mr Parkin says is correct is supported by the catalogues that have been disclosed and which were produced by Mr Wilson and to which Mr Parkin referred in his evidence. It is also supported by Mr Parkin’s evidence concerning the “options” available before, during and after the infringing sales period. Options are different colours and pattern offers for each style of clothing. The relevant information is reproduced in tabular form at paragraph 17 of his third witness statement. It is not necessary for me to reproduce the whole of the table in this judgment. In summary infringing sales took place in the SS12 and AW12 seasons. The number of options of LINEA goods offered remained broadly the same through the period before during and after which infringing sales took place. In summary during AW11, a total of 132 different options were offered in relation to the LINEA range, in SS12, 131 were offered, in AW 146, in SS13, 145 and AW13 132.

It is true to say that there are variations between AW and SS seasons for some products but this is driven largely by the seasons concerned. So for example 16 shorts options were offered in SS12 but none in AW12. However the options for the shorts offering for SS12 compares with 11 options for SS11 and 13 for SS13. In other cases, where there was an apparent increase in the number of options stocked over the number stocked immediately before infringement began – see for example casual shirts and jerseys – the number for AW11 was unusually low compared with the number stocked in previous non-infringing seasons and those stocked after the infringements came to an end. This material shows not merely that the options offered were broadly the same before, during and after the seasons when infringing sales took place, but broadly the same types of products were offered as well. Smart shirts and suits were offered before infringement began but not during or after the period when infringing sales took place and so does not compromise HoF’s displacement case. There was an increase in the number of jacket options offered in AW12 over those offered in AW11 but there was a further increase in the number of options offered for this type of product in AW13 and so again does not compromise HoF’s displacement case.

Mr Wyand submitted that on proper analysis of the figures produced by Mr Parkin, they showed a reduction in options by 25%. In my view this point is undermined by the fact that the reduction is accounted for to a substantial extent by the decision not to stock suits, smart shirts and ties – a decision that was maintained after infringement came to an end. It is of course arguable that the space released by those marketing decisions could have been utilised to sell non-infringing products and that the failure to do so suggests that the stores at least were not working to full capacity.

I am not able to accept that submission however. First it depends upon me accepting that capacity is the critical concept for determining the question that I am now deciding. It is not for the reasons that I have explained. Secondly, it ignores the case HoF advances, which is that the infringing goods simply replaced non-infringing goods that were or would have been identical apart from the absence of the Logo. It does not meet the point that if goods with the Logo had not been offered, the Pigeon Goods would have been replaced with the same goods but without the Logo. Thirdly it ignores also the point made by Mr Parkin in the course of his oral evidence that a drop in the options offered does not equate to a drop in the resources deployed. As he explained and I accept, the options concept helps you identify the number of different colours and patterns for each product offered but not the number of each option stocked – see T2/2/8-16 (except, obviously, when the options offered for a particular product drop to zero) – or the floor space taken up in each store by each relevant product – see T2/2/17-23. Broadly, if previously 50 units of a blue shirt and 50 units of a red shirt in otherwise the same style were stocked and a marketing decision was taken to stock 50 units of blue, 25 units of red and 25 units of green shirt, the same resource will have been expended and the same space will be taken up, just as would be the case if it was decided to stock only the blue shirts but to double the number of blue shirts stocked or if it was decided to stock more of one type of garment in preference to stocking any of another type. The further point made by Mr Wyand in cross examination – see T2/4/3-11 - that putting more of one option on offer does not mean that you would necessarily sell more is not to the point. That is a possible consequence of a marketing judgment that has no impact on the question that I am considering.

In paragraph 12 of his closing submissions, Mr Wyand submitted that the Pigeon Goods “… line was there to fulfil a particular function and HoF had no other product to do the same thing. All it could have done if HoF hadn’t infringed would have been more of the same and that was not its intention”. It is unclear to me how this can be supported factually or provide an answer in law to the point I am now considering. Evidentially, whilst I accept that the reason for using the Logo was to “freshen” the brand, it was not used on all the LINEA lines and as I have accepted that Pigeon Goods replaced goods that were substantially the same as the Pigeon Goods except for the Logo and the Pigeon Goods were themselves replaced with goods that were substantially the same except for the absence of the Logo, it is simply not correct to say that with time goods could not be sourced to replace the infringing goods. In fact however, whether non-infringing goods could be made available immediately to replace infringing goods is not the issue because the question that arises is a hypothetical one – that is whether the infringing goods have been replaced with non-infringing goods, which would have been sustained by the overheads in fact used to sustain the infringement – rather than whether infringing goods could have been removed and instantaneously replaced with non infringing goods.

Finally a similar point arises in relation to the on-line sales warehouse. It was submitted that on the evidence there was plainly a surplus capacity within that warehouse. That of itself does not assist because it is not and never has been HoF’s case that if it was not selling the Pigeon Goods it would have sold different types of garment that were non-infringing. Its case has always been that existing LINEA lines were given the Logo and that if the infringing goods had been replaced they would have been replaced with substantially similar garments but without the Logo. Thus the fact that there is spare capacity in the warehouse is not to the point because it does not demonstrate surplus capacity in any relevant sense. That is so because if that had happened then the same overheads would have been incurred even if the infringement had not occurred and the sale of the Pigeon Goods would have been replaced by sale of non-infringing products of an otherwise similar nature which would have been sustained by the overheads in fact used to sustain the infringement. Although Mr Wyand submitted that there was no explanation as to “… why [HoF] did not sell its mythical alternative products on line …” this too misses the point: it is obvious that there would be no point in offering say one heavy knit pullover with the Logo and another that was in all respects identical but without the Logo. That does not demonstrate that there was surplus capacity nor does it demonstrate that the answer to Lewison LJ’s question identified in Design & Display Limited (ante) at [39] namely whether “ … if [HoF] had not infringed … would [it] have carried on a non-infringing business which would have been sustained by the overheads in fact used to sustain the infringement …” should be answered in the negative in this case. In my judgment it should not be for the reasons that I have given.

In my judgment to be deductible in principle the expenditure must be that which is wholly or partly attributable to the trading activities of HoF as a whole incurred during the period during when the infringing goods were sold. Mr Geale (the forensic accountant called by JWL) accepted that to be the correct test in the course of his cross-examination – see T2/106/3 – 24. Mr Bezant (the forensic accountant called by HoF) agreed with this approach – see T2/138/19-140/19. In my judgment this level of agreement is almost inevitable because it is reflected in the question that Lewison LJ formulated in Design & Display Limited (ante) at [39] as the one that required answering, which he formulated by reference to the deductibility of a portion of “… the overheads in fact used to sustain the infringement…”. There are no other general principles that apply.

It is next necessary to consider the various heads of expenditure in order to decide whether in applying this test they ought to be included or excluded within the general overheads that ought in principle to be available for deduction. The items that are in dispute are those identified by Mr Wyand in paragraph 28 of his closing submissions. It follows from this that the following are agreed as being general overheads for the relevant period for which an apportioned deduction must be made:

An element of this sum is disputed because within the operations figure there is included a sum of £13.85m in respect of promotions, an unknown portion of which was for advertising expenditure directed to specific non-infringing products. In my judgment this sum should be included within the overheads to be included for deduction applying the test set out above. Mr Kavanagh gave the evidence relevant to this issue. The relevant part of his evidence is at T1/115/14-116/17. In summary his evidence was that this expenditure was the marketing, advertising and merchandising costs relating to HoF shops. He accepted that none of the expenditure was specifically in respect of the Pigeon Goods. His point was that the expenditure was to market HoF as a brand, not particular products sold within the shops other than as part of a general HoF campaign. I accept that evidence and I also accept his evidence that “…customers come to shop in House of Fraser as a brand …” – that is that advertising spend on the HoF brand benefits in part all the product lines sold within the shops and for that matter on line. Mr Kavenagh accepted that within such a campaign, some brands might be referred to specifically but as he put it “… the vast majority of our spend is on House of Fraser as a brand and not on individual brands” – see T1/129/1-2. The point is however that even where individual products are advertised, its indirect effect is to attract footfall to the shops (and for that matter visitors to the web site) and thus will encourage such visitors to consider purchasing other products while in the shop or on line – see the evidence of Mr Bezant at T2/139/10 – 140/18. I accept that evidence. In my judgment therefore the promotions figure within the operations cost must be included in whole for apportionment.

Mr Wyand submits that at least £10m ought to be excluded from this because it was in effect double counting. The basis of this submission is a rather imprecise answer given by Mr Kavanagh in cross examination. Mr Wyand submits that the effect of these answers was that the promotion costs included within the store support costs element had also been included within the store expenses. The evidence he gave in this issue in its entirety was as follows:

" … Store support centre."

And this is page 229. Here you seem to have more employees, non-selling and pensions and consultants?

A. That is correct, my Lord.

Q. What are the consultants doing in the store support centre? (Pause)

A. I'm not sure, my Lord. I think I would have to check, my Lord. I think that the charge for our contributions to the company pension scheme features into the store support centre lines, but I'm not sure where, I can't recall, my Lord.

Q. But the consultants?

A. I'm not sure, my Lord, I can't clarify, unfortunately.

Q. You see in his report, Mr Geale in C1, tab 38, identified the main items of expense within SSC and said:

"Consultants, although no further description is provided as to who is covered by this category or why these costs were incurred."

Did you see Mr Geale's report?

A. I did, my Lord.

Q. But you didn't consider it appropriate to answer that?

A. I didn't, my Lord. I didn't think that I needed to go back on every point raised by Mr Geale because I didn't think it was necessary to get into every line within the P&L, my Lord. There are many areas of spend that will feature into many lines of P&L, and I didn't go into each and every one of them, my Lord.

Q. So you considered it disproportionate for him to ask such a question. Again we have promotions in the store support centre of GBP 10 million. Can you tell my Lord what those are?

A. The total on the top, my Lord, on page 225 includes all of the subsequent pages, so it is exactly the same piece. Was it 225? So the GBP 13,858,000 identified on page 225 includes the GBP 10 million of store support centre costs.

Q. I see.

A.

So again it's relating to marketing, advertising, visual merchandising and so forth.”

Mr Malynicz submits that Mr Wyand’s submission concerning double counting is based on a mistaken understanding of Mr Kavanagh’s evidence and that all that Mr Kavanagh was saying was that the total figure included the lower figure in its make up not that both figures were included within the total claimed. In reply to this submission, Mr Wyand submitted that first Mr Kavanagh referred to different pages within the relevant exhibit to that referred to by Mr Malynicz in his submissions and whilst it is possible that Mr Kavanagh was confused, he was not asked to clarify his evidence in reply. That is correct as is apparent from the re-examination – see T1/134/13-135/22.

The document that has given rise to this difficulty is the management accounts for Period 12 – that is January 2013. They start in the trial bundle at 207. As is apparent from the contents page (B2/208) the section consisting of internal pages 15 to 23 constitute the Group results for the relevant period starting with a profit and loss account and then various different breakdowns thereafter. The statement of account on page 15 is the profit and loss account for Period 12. It includes store expenses (£324.7m odd), National Distribution Centre costs (£11.4m odd) and Store Support Costs (£54.8m odd). The pages that follow are breakdowns of what appears in the profit and loss account.

Internal page 17 (B2/225) is a detailed breakdown of the store expenses “including web”. It includes promotion costs of £13.858m within the breakdown of direct operating costs. The total of the expenses set out on that sheet is £324.7m – the total of the store costs shown in the profit and loss account. The operating costs for stores shown in the profit and loss account is the total of the broken down sums that appear within the detailed breakdown of operating costs at internal page 17 (B2/225). This demonstrates that internal page 17 (B2/225) is simply a breakdown of the detail behind the figures within the profit and loss account.

The document at B2/228 (internal page 20) is a breakdown of the NDC costs that appear in the profit and loss account as is apparent from the fact that the total shown in each is the same.

B2/229 (internal page 21) is as it is described a break down of the store support centre expenses line by line. That this is so is apparent from the fact that the total at the bottom of B2/229 is the same as the figure for SSC total costs given in the profit and loss account.

What emerges from this analysis is that (contrary to what Mr Kavanagh said in his oral evidence) the £10.079m given for SSC promotions at B2/229 (internal page 21) is not included within the £13.858m figures at B2/225 (because each of those pages is concerned with a different cost centre) although each of the sums is of course included within the profit and loss account. That being so, I conclude that in this respect, Mr Kavanagh confused himself.

Thus I cannot accept Mr Wyand’s submission summarised at paragraphs 30-31 of his written closing submissions to the effect that the SSC promotions expenses had already been included in the store expenses or that £10.079m should be deducted from the SSC costs on that account. For similar reasons I am not able to accept Mr Wyand’s submission that SSC depreciation should be deducted from SSC costs.

The final point made concerning SSC costs is concerned with the cost of consultants included within the SSC cost build up. Mr Wyand’s submission is that this costs head should be excluded in essence again because he submits there is an element of double counting. He explored this issue in cross-examination first by reference to the profit and loss account at B2/225 – see T1/113/23-114/4. Mr Kavanagh was asked to explain who the consultants were and what function they performed. His evidence was that they were people employed on the shop floor to make sales or sales people employed by concessionaires within the stores to which HoF make a cost contribution. – see T1/114/7-16. He added that “those costs are directly related to achieving the sales that we deliver as a complete business…”. I accept that evidence. Later Mr Kavanagh was asked to explain why there was a sum included for consultants within the SSC cost centre. His response was that set out in paragraph 40 above. I reject the suggestion that there has been any element of double counting in relation to consultant costs. The reasoning set out above in relation to promotion costs applies equally to consultants costs. The sum for consultants included in the breakdown of store costs at B2/225 (£16.445m) is different from and does not include the sum for consultants included within the SSC costs analysis at B2/229 (£4.463m). That sum is included within the SSC employment costs as set out in the profit and loss account as is apparent from the fact that the total for those costs in the profit and loss account is the same as the total (including consultancy costs) shown for employment costs in the breakdown of SSC costs at B2/229.

The further submission made by Mr Wyand was that Mr Kavanagh did not know what the consultancy costs within the SSC were in respect of. That is true and it is also true to say that Mr Geale had drawn attention in his report to the fact that there was no explanation as to what these costs related to. In cross examination, Mr Kavanagh accepted that to be so but said that he considered it would have been disproportionate for him to have had to go into every line within the profit and loss account. As I said at the outset of this judgment, the sums that this account is concerned with are likely to be modest on any view. The sum that I am now considering is about £4m. By the time the apportionment exercise has been carried out (something I turn to in detail below) it is likely that the effect of this sum will be very limited. However, the onus rests on HoF to demonstrate that the general overheads it relies on satisfy the test for deductibility that I referred to at the start of this section of the judgment. It would not have taken Mr Kavanagh very long to pin down what this cost was for. Whilst it was not suggested that the sum given for SSC consultancy costs did not reflect financial reality or was an error, the evidence that is available does not enable me to conclude that HoF have established that this element should be included within the deductible general overheads that satisfy the test that I have referred to above. This element must be excluded. I should make clear that had the evidence demonstrated that the costs that I am now considering was for example the cost of pension arrangements for sales consultants then I would have considered it an expense that satisfied the deductibility test. I would have reached that conclusion because the cost of employing sales consultants or contributing to the cost of employing consultants is the means by which HoF can make a comprehensive retailing offer and thus was wholly or partly attributable to the trading activities of HoF as a whole incurred during the period during which the infringing goods were sold.

In my judgment this element should be excluded from the body of general overheads for which a deduction should be applied for the reasons identified by Mr Geale in the course of his cross-examination at T2/110/20 - 111/16. Mr Malynicz QC submits that this is wrong because the charge was at least in part off set by two balancing items within HoF’s accounts. That is not the point as Mr Geale explained in cross-examination. The balance sheet does not reflect the costs that HoF seeks to deduct. It is claiming the whole sum for onerous leases as an expense that in part ought to be deducted. As Mr Wyand submitted and I accept, this head of cost cannot relate to the infringing goods because it is a cost that relates to a period prior to the period when infringing sales took place (whether or not in fact it has been carried forward year after year) and thus cannot be part of the overheads in fact used to sustain the infringement. It was suggested on behalf of HoF in closing submissions that the onerous lease cost issue was an on going issue. However that point was not put in cross examination. It would be wrong for me to make findings that would contradict the evidence of Mr Geale when the point had not been put to him. In fact this point does not assist because the issue that matters is when the cost was incurred not whether it was carried forward from year to year or not discharged until some subsequent year.

There are two broad issues that arise under this head. The first concerns the means by which a fair proportion of the deductible general overheads is arrived at. The second concerns whether there should be some further apportionment in order to reflect the fact that what is being accounted for is the profit made in respect of the defendant’s acts of registered trade mark infringement and passing off rather than the sale of the goods with the Logo on them. I refer to these issues below respectively as the “Overheads Apportionment Issue” and the “Infringement Apportionment Issue”.

This issue distilled in the course of the trial to whether one or other of what the expert accountants called “metrics” should be used. One (favoured by JWL) was based on dividing the deductible costs by the total sales area of HoF’s business and then multiplying by the area occupied by Pigeon Goods (“the Square Footage Basis”). The alternative (favoured by HoF) involved dividing the deductible costs by total sales during the relevant period and then applying the resulting percentage to the infringing sales (“the Sales Revenue Basis”).

It was in the end implicitly common ground but in any event I conclude that adopting either basis identified is artificial and will result in an apportionment that is at best acceptable within broad-brush parameters. Mr Bezant accepted that the most satisfactory way of proceeding would be to apply activity based costing – which involved identifying the driver of the cost concerned and then use that as a basis for apportionment. However that has not been done and all parties appear to accept that it would have been disproportionately expensive to adopt that course. However, to decide on one or other basis and then apply it indiscriminately to each head of deductible expense is too blunt an approach. A much more nuanced approach is required in which a judgment is reached as to which of the two bases will be appropriate to particular heads of expense, recognising that this may involve deciding which is the least unattractive in relation to each head of deductible expense. It is also possible that a fairer result will be yielded by the use of a combination of the two bases.

By the start of the trial it had been agreed between the experts and I conclude that they were right to agree that the Square Footage method is the appropriate basis for apportioning property, depreciation and establishment costs. That leaves for apportionment employment, distribution, SSC and finance costs.

Mr Wyand criticises the Sales Revenue basis for two reasons. First he maintains that it is not a satisfactory basis for apportionment because it does not necessarily show a nexus between the infringing sales and the costs. In my judgment this criticism is mistaken. I am not at this stage of the exercise concerned with the need to show a nexus between infringing sales and the costs. That is a logically prior issue that is resolved by answering Lewison LJ’s question identified in Design & Display Limited (ante) at [39] and is necessary to eliminate the unfairness identified in Dart Industries Inc (ante) at 574 – see paragraph 16 above, and by deciding which overhead expenses should in principle be included – as to which see the previous section of this judgment. Once Lewison LJ’s question question has been answered in favour of allowing a deduction for general overheads, and once the relevant overheads have been identified, the only question that remains is how to arrive at the portion of the relevant overhead that ought to be set against the gross margin achieved by selling by infringing goods. In any event, even if this is wrong the position is no better when using the Square Footage basis. Each is an artificial mechanism adopted for pragmatic reasons alone. The other general point made by Mr Wyand in challenging the Sales Revenue basis is that the performance of one department should not be reflected in the costs apportioned to another – in other words he is concerned that a high revenue department could end up having apportioned to it greater costs than in fact it incurs. In my judgment this misses the point as well – I am concerned with the general overheads of HoF and at arriving at a portion that is fairly attributable to the infringing goods sold. If all the revenues are considered then the sorts of peaks and troughs that are here being referred to become irrelevant. In any event, the point is one that can be made in relation to the Square Footage basis as well – there will be some stores that are small and generate high revenues and larger stores that generate proportionately lower revenues. Thus I do not see how these points assist other than to identify the inherent weaknesses in the metrics that the parties between them have identified as the basis for apportionment.

It was submitted on behalf of HoF that the best course would be to follow the view of the majority in Dart at p.577 that is to use the basis of allocation typically used by a manufacturer in that industry. The evidence from Mr Kavanagh that was not challenged was that HoF calculates its costs as a proportion of sales in both its audited accounts and generally. In my judgment however this approach whilst it may be appropriate for a small retailer and for manufacturing is less likely to be appropriate for all heads of cost in a multi branch, multi channel retailer selling many thousands of lines. In my judgment it is necessary to look at each of the outstanding heads of costs and ask which of the two alternative methods is likely to offer the least unrealistic outcome.

With some hesitation I have come to the conclusion that the least unrealistic way of apportioning employment costs is using the Sales Revenue basis. Although I was initially attracted to the notion that the staff employed would be governed by the size of the store concerned and thus employment costs are likely to be a function of the total Square Footage of store space available, in reality each method is artificial. The revenue based approach assumes that staff costs are a direct proportion of the value of goods sold which may not be entirely accurate but by the same token the size of a shop floor does not bear a direct proportion to the number of staff employed there. I am driven to accept that the sales revenue basis is to be preferred simply because it reflects what is HoF’s internal accounting policy, the sales revenue method is one used in management accounting on a regular basis – see T2/97/10 – and the only example of use of the Square Footage basis that Mr Geale could identify was in relation to a warehouse business and even then that required some thought – see T2/97/22-98/6.

There is an issue between the parties as to what revenues should be included against what employment costs. The calculation that Mr Kavanagh has carried out in his second confidential statement involves deducting all concession revenues and dividing only the revenues derived from the sale of house brands and own-bought goods. In my judgment this does not fairly reflect the true commercial position. The object of the exercise I am now concerned with is one which seeks to identify the element of employment cost that can fairly be set off against the gross margin made by the sale of the infringing goods. I do not see how it can be correct to arrive at the correct proportion by ignoring what Mr Kavanagh describes in his statement as part of the sales revenues made by HoF – that is £729m odd received in respect of concession sales or at any rate that part of the concession revenue that is retained by HoF. In the course of the evidence, it was said that concession goods could be paid for at any till within a store and that in accounting terms the concession goods are sold to HoF at the point of sale when a customer purchases the item. There is then an accounting between HoF and the concessionaire concerned in due course. I can accept that HoF should not be required to account in an exercise of this sort for any part of the concession revenue that is returned to the concessionaires but I do not see why it is appropriate to ignore it all together particularly given that concession goods can be purchased at any till “… regardless of whether the person operating it is an employee of [HoF] or the concessionaire…”. I will hear further submissions limited to this element of the calculation at the hand down of this judgment.

I accept that it will be appropriate to apportion finance costs by reference to the Sales Revenue basis but again taking account of what I have called the net revenues from the concessions part of HoF’s business. I do not see any logic in excluding it. The underlying logic adopted by Mr Bezant appears to have been that less finance costs will have been incurred by HoF in relation to concession sales than direct sales. That is almost certainly so but is not the point. All the relevant financial costs are included as a deductible overhead. The fact that within the make up of that overhead, less is contributed by concession sales than direct sales is not to the point. The cost attributable to concession sales has been included. That being so net receipts from concession sales must be included with the direct sale receipts in order to arrive at the correct percentage deduction.

In reality the same approach has to be adopted in relation to the remaining heads of overhead cost. There is no sensible basis for distinguishing between SSC costs and store costs. The same apportionment method should be adopted but what I have said concerning the calculation of revenue applies with equal force. The only basis on which it would be reasonable to exclude a particular revenue stream is in relation to a particular overhead to which the earning of that stream does not contribute. The only cost head that this applies to is distribution, where Mr Kavanagh’s evidence is that concessionaires bear there own distribution costs. On that basis it would be appropriate to leave concession income out of account in assessing the appropriate percentage attributable to that head of cost.

In my judgment the law in this area is now settled by Design & Display Limited (ante). In relation to this issue and having considered all the relevant authorities Lewison LJ concluded at [36] that:

“In my judgment the legal error that the judge made was to ask whether the sale of the panel plus insert would have happened separately rather than to ask himself how much of the profit on the sale was derived from the infringement. In a case in which the infringement does not “drive” the sale it seems to me that it is wrong in principle to attribute the whole of the profit to the infringement. In particular it does not follow from the fact that the customer wanted a slat wall that incorporated an insert, that the customer wanted a slat wall that incorporated the infringing insert. …

If the judge had found on the facts that the infringing insert was “the essential ingredient in the creation of the defendant’s whole product” (i.e. the incorporated panel) then he would have been justified, on the facts, in declining to apportion the profit. But I cannot see that he made that finding.”

As it seems to me the position is now that unless the middlemen line of cases applies (as to which see Woolley (ante)) or there is a finding that the infringement drove the sale, there must be an apportionment to take account of the fact that the profits to be disgorged are those properly attributable to infringing use of the mark not all the profits derived from sale of the item – see also and by way of example Cartier v. Carlile (1862) 31 Beav. 292 per Sir John Romilly MR at 298, and Hotel Cipriani SrL and another v. Cipriani (Grosvenor Street) Limited and others [2010] EWHC 628 per Briggs J (as he then was) at [8]: “… where a single head of profit is attributable to a number of causes, some of them infringing and some of them not, it is necessary and appropriate for the court to conduct an apportionment so as to work out on a broad brush basis what proportion of the profit is due to the act of infringement …” There is no justification in law for approaching the profit taking exercise differently simply because this is a trade mark infringement case – see Cipriani(ante)at [7].

It is now necessary to turn to the facts of this case. In my judgment it is simply not possible on the evidence to conclude that the infringement complained of drove the sale of the infringing products or was the essential ingredient in the infringing products. I do not propose to summarise again all the factual material set out above. However a key point is that the Logo was used on articles of clothing that formed part of the LINEA line sold by HoF; the same lines were sold both before the infringement commenced and after it had been brought to an end and essentially the same articles were sold both before and after the infringement with the only material difference being the absence of the Logo. There is no evidence that the inclusion of the Logo had any significant or lasting effect on the sales of the products concerned. What evidence there is suggests that there was no increase in either sales or margins that resulted from the use of the Logo – see the second statement of Mr Parkin at paragraph 45-47. The infringing goods were clothing. They have a value to consumers independently of the presence on the goods of the Logo. Indeed on some lines the Logo was not permanently affixed to the garments but was present on in the form of a detachable label. The products not only had on them the Logo but also the LINEA marks. The Logo was not prominently displayed in any advertising or promotional material. However, all of this material (which was not available to Arnold J) has to be balanced with the conclusions that he reached as set out earlier in this judgment. In all the circumstances, there is no difference between this case and the hypothetical example posited by Lewison LJ in Design & Display Limited (ante) at [36]: “A manufacturer sells a car which includes a patented brake. If the car did not have brakes the manufacturer could not have sold it but it did not have to have that particular brake. In those circumstances … it would be unjust to charge the manufacturer with the whole profit made on the car …”

In those circumstances, I must attempt some form of apportionment in the manner identified by Briggs J in Cipriani (ante) that is to “ … work out on a broad brush basis what proportion of the profit is due to the act of infringement …” Mr Bezant has approached the task by examining first the royalties paid by HoF to licence the use of third party brands. That work suggests a rate of about 3% of revenues applied during the period of the infringement. Mr Bezant says at paragraph 5.15 of his report and I accept that 3% would be a wrong comparator because the correct comparator would be much nearer to a bare trademark licence. That being so he has adjusted downwards the rate that HoF paid to licensees for the use of third party brands to 1.5%. I accept that approach as being in principle correct. That would result in an apportionment of about 41% of the net profits to JWL. Mr Geale was not instructed to consider this issue. I accept Mr Bezant’s evidence on this issue. I conclude therefore that JWL should recover 41% of the profits made from the sale of the infringing items calculated as set out above. Although it was suggested on behalf of HoF that I should adopt a much lower figure, in my judgment this would not strike the right balance between the conflicting factors to which I summarised in paragraph 63 above. In particular it is necessary to balance the points made by Arnold J quoted earlier in this judgment when determining the liability issues in this case with the further evidence now available concerning the use to which the Logo was put and the commercial impact that it appears to have had. The only expert evidence available to me that attempts a rational assessment is that from Mr Bezant. I accept that evidence because in my judgment it strikes the fair balance between these factors.

Following the delivery of this judgment in draft I received an email from Mr. Malynicz in which he said “… it appears that your draft judgment does not address the issue of director’s emoluments. This was a short point and it is not clear whether it remained in issue, but it perhaps ought to be addressed.” This was followed by an email from Mr. Wyand in response to my reply in which he confirmed that he had not raised the issue in either his written or oral closing submissions and that it was not an agreed issue. This was then followed by two further emails – one from Mr. Malynicz renewing his request for the issue to be dealt with and then, somewhat surprisingly, a further email from Mr Wyand in which he informed me that “Director’s emoluments is a live issue that needs to be determined”. I regard this exchange of correspondence as wholly unsatisfactory. If an issue has not been addressed in closing submissions by the party (here JWL represented by Mr Wyand) seeking to challenge the expenses relied on by the other party, it is entirely unreasonable to expect that the judge should deal with what on this basis appears to have become an academic issue. In order to avoid any further controversy, I address the issue further below. I do so with very great reservation however given the circumstances.

I consider the point made by JWL concerning directors’ emoluments (which was that they should be excluded from the overheads to be deducted from the margin made from the sale of the Pigeon Goods) unsustainable in the absence of any evidence that the directors of HoF were more highly rewarded than the industry average. This point was one of a number said to justify a global reduction in the expenses on which HoF should be permitted to rely. In principle, directors’ emoluments are part of the general overheads of a trading limited liability company that are wholly or partly attributable to its trading activities and thus in principle are expenses that HoF is entitled to take into account as part of its relevant general overheads. This point is similar to one that sometimes arises when valuing shares in a trading company on a maintainable earnings basis, when it is necessary to strip out directors’ emoluments above the average for the sector because of an assumption that the investor acquiring the company concerned would pay only industry average rates after acquisition. I am prepared to accept that directors emoluments above the industry or sector average would at least arguably not be overhead in fact used even in part to sustain the infringement. However, there is no evidence that goes to this issue. Whilst ultimately the onus would rest on HoF in relation to such an issue, it was for JWL to deploy at least some evidence that suggests HOF directors’ emoluments were in excess of the sector average for a company of the size of HoF. It would have been open to JWL to adduce such evidence, which is readily available in the form of statistics used very frequently in share valuation exercises and to seek specific disclosure of documentation relevant to the issue as well and could have done so at the start of the trial. There is no such evidence and there was no such application. Thus if this issue was one that remained in issue, I would have resolved it in favour of HoF.

Finally in his most recent email, Mr Wyand asks me to address what became known in this case as the Abu Dhabi issue. This concerns some expenses incurred in what was ultimately a venture that did not proceed in Abu Dhabi. The evidence given on behalf of HoF (which I accept) is that this sum was small in amount and limited to some air fares. I accept Mr Wyand’s point that this cost was one that ought to be excluded because it is not even partly attributable tooverheads in fact used to sustain the infringement. I also accept his submission that the fact that subsequently it was set off against another sum is irrelevant if the sum has been included within the expenses for which HoF is claiming a contribution. There is no evidence as to the amount however other than the evidence of HoF’s witnesses that the sum is so small as to make no material difference and that it would have been disproportionate to have investigated it further. The evidence that was given by HoF’s witnesses was that the cost was confined to some air fares. As I have said, I accept that evidence. It was open to JWL to apply for specific disclosure in relation to this issue had it chosen to do so but they did not. The point was relied on as justifying a global deduction from expenditures that at the start of the trial was advanced at 20% but which reduced by the closing. On the evidence in relation to this issue that is available, I am not able to accept a submission that there should be a global reduction and on the evidence that is available, the sum in issue is de minimus. In those circumstances I conclude that no deduction from the expenses claimed by HoF is justified by reference to this head of expense.

Since this judgment was circulated in draft, it has been agreed that there should be a post judgment hearing next month in order to identify the sum due on the taking of the account in the light of the conclusions set out above and to deal with all other outstanding post judgment issues. In relation to that hearing I direct as follows: