Fred Perry (Holdings) Ltd v Brands Plaza Trading Ltd & Anor

Relief from sanctions is discretionary. The court must consider all the circumstances and consciously address the factors in Rule 3.9 of the Civil Procedure Rules, but it must evaluate them in the round rather than count favourable and adverse factors. An appellate court may intervene only for an error of principle or a plainly wrong decision.

A party seeking relief cannot use the application to attack collaterally the sanction imposed by an unappealed unless order. Damages for infringement of a property right are a legal entitlement, subject to limitation and established defences, whereas an account of profits is equitable and discretionary. A judge must not determine an application using evidence which one side has not seen.

The proprietor of registered trade marks sued a company and its principal for trade mark infringement and passing off arising from dealings in alleged counterfeit sportswear. After repeated failures to comply with disclosure orders, their defences were automatically struck out under an unless order and judgment was entered for the proprietor.

Mann J refused relief from sanctions, granted injunctive and delivery-up relief, ordered an inquiry into damages or an account of profits, directed an interim payment and made provision for costs. The defendants appealed. The principal issues concerned the refusal of relief under Rule 3.9 of the Civil Procedure Rules, the scope of the financial inquiry, and the judge's reliance, when ordering an interim payment, on confidential material which the defendants had not seen.

1. Appeal allowed in part. The refusal of relief from sanctions, the inquiry into damages or an account of profits, and the costs consequences were upheld. The interim-payment order was set aside because the judge had acted on evidence which the defendants had not seen.
2. Relief under Rule 3.9 of the Civil Procedure Rules is an exercise of first-instance discretion. An appellate court may intervene only where the judge erred in principle or was plainly wrong. The listed considerations promote structured decision-making, but the exercise does not involve ticking boxes or counting factors. Their weight and relevance depend upon the circumstances. Mann J addressed each factor, considered them collectively and reached a conclusion that was both within his discretion and plainly right.
3. The defendants' challenges to the seriousness and effect of the disclosure sanction were impermissible collateral attacks upon the unappealed unless order. Whether non-disclosure prevented a fair trial was relevant when the sanction was imposed. It did not require reconsideration after the defences had already been struck out. Compliance with court orders is a fundamental aspect of the administration of justice. The repeated breaches, late application, absence of a good explanation, prejudice to the claimant and loss of the trial date justified refusal of relief.
4. The proposed fresh evidence failed the first requirement in Ladd v Marshall because it could and should have been available below. Its very late service further reflected the defendants' established pattern of delay.
5. Under section 14 of the Trade Marks Act 1994, damages for trade mark infringement are a common-law remedy arising from the infringement of a property right. Subject to the statutory limitation period, the period covered by an inquiry may be restricted only where the defendant establishes a defence such as estoppel. No such defence remained after the defence had been struck out. An account of profits is equitable and may involve discretion, but there was no basis for limiting the account on the facts pleaded.
6. An interim-payment application following judgment for damages to be assessed fell within Rule 25.7(1)(b) of the Civil Procedure Rules and had to be determined on evidence. However, it is a fundamental common-law principle that a judge must not act upon evidence seen by only one side. The interim-payment order therefore could not stand, irrespective of whether disclosure of the confidential material would have altered the result. The claimant remained free to reapply on a procedurally proper basis.

1. Court of Appeal (Civil Division): The appeal was allowed in part. The interim-payment order was set aside, but the refusal of relief from sanctions and the remaining challenged orders were upheld: [2012] EWCA Civ 224.
2. High Court, Chancery Division: Mann J refused relief from the automatic striking out of the defences, granted judgment and associated relief, ordered an inquiry into damages or an account of profits, and ordered an interim payment. No citation for that decision is stated in the judgment.