Sergio Mendes Costa v Dissociadid Ltd & Anor

In IPEC proceedings, applications are ordinarily determined on the papers. An oral hearing is required only where the court considers it necessary. Fairness requires an opportunity to make submissions, which may be provided through written materials.

Article 6(1) is not engaged by an application that does not determine civil rights. Strike-out is inappropriate where abuse-of-process arguments raise issues of fact and law. A court must address all relief clearly identified in the draft order and supporting materials, or clarify its scope. By majority, an immediate costs order for unreasonable behaviour was set aside where the application was partly unaddressed and the principal argument had real merit.

Mr Costa appealed against case management orders made in quantum proceedings arising from copyright proceedings and the respondents’ counterclaim for unlawful interference. The underlying judgment, reported at [2022] EWHC 1934 (IPEC), had found partial copyright infringement and allowed the counterclaim in relation to specified YouTube takedowns.

The appeal concerned whether the judge could determine Mr Costa’s application on the papers without a further hearing or submissions; whether the application covered requests for information and specific disclosure under Part 18; whether parts of the damages claim should be struck out; whether an immediate costs order was justified; the sequencing of a recusal application; and the judge’s failure to determine an application for an extension of time.

By a majority comprising Zacaroli and Newey LJJ, the appeal was allowed in part. Arnold LJ dissented on ground 7.

1. Hearing and written submissions. Under CPR Part 63, IPEC applications are dealt with without a hearing unless the court considers one necessary. The judge was entitled to determine the strike-out aspect on the papers because Mr Costa requested a hearing but did not explain why it was necessary. Principles of natural justice and fairness nevertheless required an opportunity to make submissions. Mr Costa had that opportunity and used it through his witness statements, reply statement and exhibited written argument. The judge was not required to provide a further opportunity. Article 6(1) was not engaged because the strike-out application did not determine Mr Costa’s civil rights; in any event, the respondents had waived an oral hearing. CPR 23.8(3) did not assist because Mr Costa had an opportunity to make representations.
2. Strike-out and scope of damages. The judge correctly refused strike-out under CPR 3.4(2)(b) and (c). The arguments concerning the scope and recoverability of sponsorship, Centus and video damages raised issues of fact and law that were unsuitable for determination on a strike-out application. The question whether the 10 November Order limited the recoverable losses remained open for determination in the quantum proceedings. Refusal of strike-out did not prevent Mr Costa pursuing those arguments at the final determination.
3. Part 18 application. The judge should have addressed the requests for further information and specific disclosure. The draft order and the parties’ evidence made clear that these matters formed part of the application. At minimum, the judge should have clarified whether Mr Costa intended to limit the application to strike-out relief.
4. Costs. The majority held that the finding of unreasonable behaviour was unsafe. The application had not been fully adjudicated, the costs had not been apportioned, and Mr Costa’s argument concerning the apparent scope of the 10 November Order was not so lacking in merit as to justify an immediate costs order. The costs order was therefore set aside. Arnold LJ considered that the first-instance judge had a wide case-management discretion and could reasonably have found the strike-out application unreasonable because it generated unnecessary costs and used scarce court resources.
5. Recusal and further directions. Applying Mireskandari v The Law Society of England and Wales [2009] EWCA Civ 864, the judge was entitled to decide the application to stay or set aside the earlier order before determining recusal, particularly because Mr Costa had actively sought a formal decision so that he could appeal. Ground 10 was formally allowed because the extension application had not been addressed, but no further order was necessary. The matter was remitted for consideration of recusal, followed by a case management conference and revised directions. The Part 18 application remained to be dealt with, without any further fee, and a hearing for the quantum determination was likely to be required.

• Court of Appeal (Civil Division): In [2025] EWCA Civ 1475, the appeal was allowed in part. The Part 18 issue and costs order were remitted or set aside, and ground 10 was formally allowed without further order.
• High Court of Justice, Intellectual Property Enterprise Court: HHJ Hacon gave judgment in [2022] EWHC 1934 (IPEC), finding partial copyright infringement and partial success on the unlawful-interference counterclaim. Subsequent case management orders dealt with the quantum proceedings, applications, costs, recusal and directions.