WWF-World Wide Fund for Nature & Anor v World Wrestling Federation Entertainment Inc

Damages for breach of contract are ordinarily compensatory, but the court may exceptionally award a reasonable payment measured by a hypothetical release of the contractual restriction where ordinary damages would provide no just recompense.

The assessment is based on negotiations between reasonable parties using their actual knowledge at the date of breach. The claimant’s unwillingness actually to grant a release does not prevent the assessment. The defendant’s deliberate conduct is not, by itself, relevant because the remedy is compensatory rather than punitive. Delay, causation, the claimant’s legitimate interests, the defendant’s efforts and expenditure, and any connection between the breach and subsequent profits may affect the availability and amount of relief.

The claimants had obtained judgment for damages to be assessed following breaches of an agreement restricting the defendant’s use of the initials WWF. They later sought to advance a claim for a reasonable payment, calculated by reference to a hypothetical relaxation of the restrictions.

The defendant argued that the claim was barred by delay, earlier procedural decisions, statements made in related proceedings, and the form of the judgment. It also argued that the principles in Wrotham Park Estate Co Ltd v Parkside Homes Ltd, Attorney General v Blake and Experience Hendrix LLC v PPX Enterprises Inc did not permit the claim. The preliminary question was whether the claimants were entitled to seek such damages in the inquiry.

1. Entitlement to advance the claim. The claimants were entitled to seek damages in the form of a reasonable payment as a quid pro quo for relaxing the contractual restrictions. Their entitlement to recover such an award remained for determination at the damages inquiry.
2. Nature of the remedy. The approach in Wrotham Park Estate Co Ltd v Parkside Homes Ltd, as developed in Attorney General v Blake and Experience Hendrix LLC v PPX Enterprises Inc, was generally available in appropriate cases of breach of contract. It was exceptional and discretionary. It filled a remedial gap where conventional compensation would provide no or merely illusory recompense. The remedy was compensatory, not punitive, and was distinct from an account of profits.
3. Hypothetical negotiation. The primary measure was the sum that reasonable parties would have agreed in negotiations, each making reasonable use of its bargaining position. The negotiation was assessed by reference to the parties’ actual knowledge at the date of breach. The fact that the claimant would never in reality have agreed to a relaxation was irrelevant.
4. Relevant matters. The court could consider the claimant’s reputation and legitimate interest in preventing the use of the protected initials, the defendant’s evidence about profits attributable to its own efforts, its expenditure and costs, the causal connection between the breach and profits, and the possibility of an appropriate proportion rather than all profits. The claimant ordinarily had to show a reasonable prospect of connection between the breach and subsequent profits.
5. Conduct and delay. The deliberate or cynical nature of the breach did not itself justify the award and could not convert compensation into punishment. Delay could not operate as an absolute bar on the evidence before the court, but it could affect the exercise of discretion or the amount of damages where it caused prejudice or reliance. The defendant was not precluded from raising such matters at the inquiry.
6. The claim was inadequately pleaded in its existing form, particularly as to the basis for claiming a percentage of gross profits. The parties were to be heard on directions, disclosure and any further pleading required for the damages inquiry.

First-instance decision on a preliminary issue in an existing damages inquiry. The judgment describes earlier decisions in the same litigation, including judgment on liability and injunction, but this decision did not determine an appeal.