Grenade (UK) Ltd v Grenade Energy Ltd & Anor

For summary judgment, the court must decide whether the defence has any real prospect of success. In a passing-off claim, admitted goodwill and misrepresentation may make damage inevitable. Loss of control of goodwill is itself capable of constituting damage, even where direct diversion of sales is uncertain. A company director is not automatically identified with the company for tort purposes. Joint tortfeasance instead requires active cooperation in bringing about the primary tort and an intention that the cooperation should do so. Where a company has one director and shareholder, the evidence may raise a presumption that its acts were instigated and controlled by that person.

The claimant marketed food and drinks under word and device marks incorporating the word Grenade. The first defendant supplied energy drinks under the name Grenade Energy Limited and used a similar logo. The second defendant was its sole director and shareholder.

The defendants admitted infringement of the claimant’s two EU trade marks, misrepresentation and the claimant’s goodwill. They nevertheless argued that the passing-off claim disclosed no real damage and that the second defendant had an arguable defence to personal liability. The claimant applied for summary judgment under CPR 24.2.

1. Summary judgment. The court applied CPR 24.2. The question was whether the defendants had any real prospect of successfully defending the passing-off and joint-tortfeasance claims.

2. Passing off. The admitted goodwill and misrepresentation made damage inevitable on the evidence. Damage could include diverted sales, but it was not necessary to establish that outcome. Loss of control of the claimant’s goodwill was itself sufficient damage. The defendants’ case on absence of damage therefore had no real prospect of success, and summary judgment was entered on passing off.

3. Joint tortfeasance. The court accepted that a director is not automatically identified with the company for tort purposes. It also accepted that personal liability requires a knowing, willing or wilful quality in the director’s participation. The relevant criteria, drawn from Sea Shepherd UK v Fish & Fish Ltd [2015] UKSC 10; [2015] AC 1229 and summarised in Vertical Leisure Ltd v Poleplus Ltd [2015] EWHC 841 (IPEC), were active cooperation in bringing about the primary tort and an intention that the cooperation should bring it about.

4. Application. As sole director and shareholder, the second defendant was a one-man company. That raised an evidential presumption that the company’s acts were instigated by him. He identified no other person responsible and did not dispute the pleaded facts. There was therefore no real prospect of his establishing that he had not procured, controlled or intended the infringing acts. Summary judgment was entered on the joint-tortfeasance claim.