Lifestyle Equities CV & Anor v Sportsdirect.Com Retail Ltd & Ors

This is an application for permission to amend an already very heavily amended reply and defence to counterclaim. The pleadings have gone through a very significant number of iterations and the proposed amendment that I am now considering is contained in a draft re-re-re-amended reply. It is agreed between the parties that I should consider each of the proposed amendments in turn.

The proposed amendment that I am now concerned with sets out an assertion that by the claimants that reliance on section 2.4(c) of what is known in these proceedings as "the Agreement" cannot provide a defence to infringements resulting from acts that took place after the date of entering into the relevant agreement.

The application to amend is opposed on three grounds: first, there is no factual foundation for a claim in respect of infringement after that date in relation to the particular category of goods I am concerned with; secondly, that the proposed amendment takes no sufficient account of the terms of the Agreement in the light of the disputes between the parties at the time the agreement was entered into; third, it is opposed on the basis that the Agreement is the subject of Dutch law and the Dutch law expert witnesses have not had the opportunity of considering this point in its factual context and, therefore, quite significant disruption may be caused to the conduct of this trial as a result of the need for Dutch experts to get engaged for the first time as the trial starts on what is, it is submitted, an entirely fresh issue.

The factual issue I am concerned with appears in the current iteration of the particulars of claim, which is the re-re-re-amended particulars of claim under the subheading "the 2013 acts". Paragraph 11 pleads an allegation in relation to what is described as " … equestrian clothing bearing signs identical to the CTM and identical to the UK mark ('the 2013 clothing')". That very generalised wording is relied upon by the claimant in combination with the amended version of paragraph 16 in the same particulars of claim as being an assertion, or at any rate a platform, from which factual allegations could be made concerning infringement in relation to what is described as the 2013 clothing on and after the date when the agreement that is at the heart of these proceedings came into effect. That is so, it is submitted, because clause 16(a) of the particulars of claim, in its current version, includes the averment by way of reamendment of that:

"For the avoidance of doubt, references herein to numbered articles of the regulation are references to articles of regulation 207/209 prior to its amendment by regulation EU 2015/424 but where necessary should be readily taken as mutandis as references to the equivalent articles after such amendment."

The submission that is made on behalf of the claimants is that if you take, in combination, the opening sentence of paragraph 11 with the sentence in paragraph 16(a) quoted above, then it is obvious that a claim is being made in relation to clothes that otherwise fall within the description of the 2013 clothing in relation to infringement allegedly occurring after the June date.

The 2013 clothing infringements are particularised by paragraphs 12 and 13 of the most recent iteration of the particulars of claim in these terms:

"Copies of pages from a website operated by the first and second defendants showing the offers for sale of some items of the 2013 clothing are appended hereto as annex 2.

“13.

A copy of a photograph of an item of the 2013 clothing offered for sale and sold by the first and second defendants via their Lillywhites store in Mansfield on 3rd October 2013 is appended hereto as annex 3."

There is no mention, anywhere else in the pleading, of any factual allegation of infringing activity in relation to what is described as the 2013 clothing, other than in the section of the pleading headed "2013 acts".

The next section within the pleading is a reference to the Agreement, to which I will return in a moment. The next section of the pleading is headed "the 2014 and 2015 acts". It is common ground that there is no mention of infringing activity in that part of the pleading, or anywhere else in the pleading, by reference to the 2013 clothing. In those circumstances, the first submission which is made on behalf of the defendants in resisting the application for permission to amend is to say that there is no factual foundation for a claim in respect of infringement after the coming into effect of the Agreement and thus the amendment is to insert an immaterial averment of law.

The claimants’ submission in answer is that which I have already summarised, namely that if you read the first sentence of paragraph 11 in combination with paragraph 16(a)'s final sentence, then it is clear that an allegation is being made of generalised infringement which is not limited to any particular period. In my judgment, that submission is mistaken.

The pleading is divided up into parts. The part I am concerned with at the moment is entitled "The 2013 acts". The first sentence of paragraph 11 is concerned exclusively with an allegation as to when infringing activity in relation to the 2013 clothing commenced. The only particulars that are given in relation to infringing activity relate to pre-agreement activity and in those circumstances it would be entirely unreal to construe clause 16(a) of the particulars of claim as in some way incorporating, by reference, an allegation of infringing activity which is nowhere properly pleaded.

It was asserted, on behalf of the claimants that this point neutralised by paragraph 14(b) of the defence. That paragraph reads:

"The effect of clause 14(c) is that any potential course of action in respect of acts prior to June 2014, including in respect of the 2013 clothing, has been compromised. No admission is made herein as to whether such acts infringe the UK mark or the CTM."

That is an assertion that clause 2.4(c) compromised any claim available to the claimants in respect of the 2003 infringements that are actually pleaded. It does not in any way involve an acknowledgment that other allegations of infringement after the coming into effect of the Agreement have been made. Any such allegations would, in my judgment, have to be particularised. .

The claimants also relied on paragraph 43 of the particulars of claim, which reads:

"The claimants are not currently aware of all acts of infringement of the defendants but will seek to rely upon and claim relief in relation to all such acts."

In my judgment, reliance upon that, at this stage in the process, that is to say the first morning of the trial, is entirely inappropriate. That is a paragraph inserted in the original particulars of claim as a platform for further allegations to be made by way of amendment as and when such material comes to light by way of disclosure and the like. It cannot be relied on as a platform to make unparticularised allegations of infringement when those allegations have not so far been pleaded and long after the completion of the disclosure and witness statement stages of the case

The reality is that the application to amend is an attempt to rely upon unpleaded and unparticularised allegations of infringement in relation to goods described as the 2013 clothing, for a period after the Agreement came into effect. In my judgment, that is not a fair way of proceeding. It means that there has been no or no proper notice given to the defendants of the case that they must meet. The purpose of pleadings in English litigation is to set the agenda for trial. A pleading that does not contain allegations of fact which are going to be relied upon does not sufficiently set that agenda.

It is not now the case that parties are permitted to amend at will and certainly not when making late or, as is the case here, very late applications for permission to amend. It is clear, on the authorities that any application for permission to amend that is late or very late needs to particularise the new allegations being made in a way which avoids the need for requests for further information and the like. Since clause 16(c) carries with it an implied allegation of post-agreement infringement, the proposed amended pleading is not in a satisfactory state. That is probably sufficient to deal with the application. I should, however, mention the Dutch law point very briefly.

The issues of construction that arise in relation to the Agreement depend upon principles of Dutch law derived in the main from Supreme Court decisions by the Dutch Supreme Court. It is difficult for me to say at this stage whether (as a matter of Dutch law) clause 2.4(c), is capable of extending to any post-agreement alleged infringements. It seems highly unlikely that it would, but it cannot be ruled out. The issue is one that would need to be considered by the Dutch legal expert witnesses and may result in different opinions. The difficulty created by the need to consult Dutch legal expert witnesses on a point that has not previously been considered, arises from the very late nature of the application for permission to amend and from the fact that this is a point which, if it was to be made, could and should have been made in sufficient time to enable Dutch lawyers to be consulted. In any event, it seems to me that there would have to be further amendments to the defence in order to raise allegations of the sort identified on behalf of the defendant concerning the true scope and effect of the agreement when read together with the letter, which is rehearsed expressly in the agreement and which was a summary of the allegations then being made and the relief sought. In those circumstances, this is an application for amendment which must be refused.