Mechanical-Copyright Protection Society Limited & Anor v Made Television Limited & Ors

Permission to amend a pleading depends on the overriding objective and the need to conduct litigation fairly, justly and at proportionate cost. A proposed amendment ordinarily requires a real, rather than fanciful, prospect of success, supported by a coherent and properly particularised case. At an interlocutory stage the court need not determine substantive issues that will arise at trial, particularly where the opposing party consents to equivalent amendments to the existing pleading. In the IPEC, the court should balance the likely benefit of the amendment against additional costs, delay and procedural complexity. Allegations of dishonesty require proper particulars. A claim that contractual licensing arrangements are void, or that no contractual sums are payable, requires a properly pleaded and legally viable basis.

The claimants, two collecting societies, brought debt claims for licence fees under agreements governing local television stations and later added copyright infringement allegations. The defendants sought permission to file an amended Defence and Counterclaim. The claimants consented to the Defence amendments but opposed the Counterclaim, arguing that it had no real prospect of success and would complicate the proceedings.

The proposed Counterclaim substantially overlapped with issues already arising under the Defence, including the relevance of the claimants’ Code of Conduct and alleged implied contractual terms. It also raised allegations concerning treatment of other television stations, dishonesty, the defendants’ liability for fees and repayment of sums paid. The central issue was whether permission should be granted under the applicable amendment rules, having regard to prospects of success and the IPEC cost-benefit analysis.

1. Permission granted in part. The defendants were permitted to file an amended pleading containing the parts of the Counterclaim that substantially repeated issues already raised in the Defence, including paragraphs 38 and 39 subject to the required deletion of dishonesty allegations.
2. The court applied the overriding objective and the amendment principles summarised in Elite Property Holdings Ltd & Another v Barclays Bank Plc [2019] EWCA Civ 2212. The proposed case needed a real rather than fanciful prospect of success, with sufficient factual material and properly particularised elements. The principles in ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 and Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 were included in that approach.
3. It was unnecessary and inappropriate to determine at this interim stage the merits of issues that would be decided at trial in any event. The claimants’ consent to equivalent Defence amendments materially reduced the additional cost of allowing the overlapping Counterclaim. The court nevertheless weighed the additional pleading, possible delay, disclosure and limited potential benefit of the declarations sought.
4. The allegations of dishonesty were inadequately particularised and were ordered to be deleted. The pleaded position that no licence fees were payable, together with the suggested repayment claim and contention that contractual breaches rendered the agreements void, was legally incoherent or internally inconsistent and had no reasonable prospect of success. Paragraphs 45(c) and 47 and the third declaration sought were therefore excluded.
5. The amended pleading was to be filed and served within seven days. The costs of the CMC were costs in the case; the costs of the amendment application were reserved.