Practice - Costa v Dissociadid Ltd.
Intellectual Property Enterprise Court (Recorder Amanda Michaels) Costa v Dissociadid Ltd. and another  EWHC 3275 (IPEC) (2 Dec 2021)
On 19 Nov 2021, the recorder Ms Amanda Michaels, sitting as a deputy judge of the High Court, heard two strikeout and summary judgment applications. One from the claimant and the other from the defendants. The applications arose in a copyright claim. The claimant accused the defendants of using scripts and other materials without his permission. The defendants said that he had agreed that they could use those materials. They counterclaimed for breach of contract, breach of a non-disclosure agreement and unlawful interference. with their YouTube channel. The defendants applied for the claim to be struck out on 3 Nov 2021. The claimant applied for parts of the defence and counterclaim to be struck out on 5 Nov 2021. Each side contended that the other side's case was bereft of merit and an abuse of process as the costs of the litigation would be out of proportion to any damages that might be awarded.
CPR 24.2 enables the court to give summary judgment on a claim or issue if it considers that the respondent has no real prospect of successfully defending the claim or issue. The deputy judge referred to para  of the judgment of Mr Justice Lewison in Easyair Ltd v Opal Telecom Ltd  EWHC 339 which set out the principles by which this jurisdiction is to be exercised:
"i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman  CP Rep 16,  1 All ER 91,  CPLR 779,  EWCA Civ 3053,  PIQR 51
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel  EWCA Civ 472 at ,
iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman,iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made,
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)  EWCA Civ 550,
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd  EWCA Civ 725."
Ms Michaels also referred to para  of Lord Justice Floyd's judgment in TFL Management Ltd v Lloyds TSB Bank Plc  EWCA Civ 1415:"Neither side sought to challenge these [Easyair] principles. I would add that the court should still consider very carefully before accepting an invitation to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross-examination in any event, … Moreover, it does not follow from Lewison J's seventh principle that difficult points of law, particularly those in developing areas, should be grappled with on summary applications: see Partco Group Ltd v Wragg, para 28(7). Such questions are better decided against actual rather than assumed facts. On the other hand it may be possible to say that the trajectory of the law will never on any view afford a remedy…"
" It is well established that when deciding whether a contract has been made during the course of negotiations the court will look at the whole course of those negotiations—see Hussey v Horne-Payne (1879) 4 App Cas 311.
 As Earl Cairns LC observed in that case at p 316:
'You must not at one particular time draw a line and say, 'We will look at the letters up to this point and find in them a contract or not, but we will look at nothing beyond'. In order fairly to estimate what was arranged and agreed, if anything was agreed between the parties, you must look at the whole of that which took place and passed between them.'
 In principle, the approach in Hussey and its rationale apply regardless of whether the negotiations are conducted in writing, orally or by conduct or by a combination of those means of communication.
 This is borne out by authority. For example, in RTS Flexible Systems Ltd v Molkerei Alois Müller Gmbh & Co KG (UK Production)  UKSC 14;  1 WLR 753, para 49 Lord Clarke of Stone-cum-Ebony JSC, giving the judgment of the Supreme Court, cited with approval a passage from Lloyd LJ's judgment in Pagnan SpA v Feed Products Ltd  2 Lloyd's Rep 601 in which he stated at p 619:
'(1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole …'
Lord Clarke JSC then commented:
'The same principles apply where, as here, one is considering whether a contract was concluded in correspondence as well as by oral communications.'
 This is illustrated by the fact that Pagnan concerned a contract allegedly concluded during the course of oral and written communications and Hussey concerned dealings involving both correspondence and meetings."
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or
(c) that there has been a failure to comply with a rule, practice direction or court order."
" … I begin by considering the proper approach to a strike out application under CPR r 3.4(2)(a).
 Paragraph 1.7 of CPR PD3A (Striking out a statement of case) states that a party may believe he can show without a trial that an opponent's case has no real prospect of success on the facts, in which case an application under CPR r 3.4(2) can be made. Paragraph 1.4(2) gives as an example where the court may conclude that particulars of claim fall within that provision, namely, those which 'are incoherent and make no sense.'
 The commentary in the White Book 2021 explains that statements of case which are suitable for striking out under that provision include those which raise an unwinnable case where continuance of the proceedings is without any possible benefit to the respondent and would waste resources on both sides: Harris v Bolt Burdon  CP Rep 70. However, an application to strike out should not be granted unless the court is certain that the claim is bound to fail: Hughes v Colin Richards & Co  EWCA Civ 266, . Unless the court is certain, the case is inappropriate for striking out: Barrett v Enfield London Borough Council  2 AC 550, 557.
 A cautious approach is therefore necessary."
" I turn to the final head of abuse of process relied on …, namely that this litigation is pointless and wasteful given – even if it were viable, which obviously [counsel] did not accept - any damages would be minimal.
. …The test is whether 'there is any realistic prospect of a trial yielding any tangible or legitimate advantage such as to outweigh the disadvantages for the parties in terms of expense, and the wider public in terms of court resources': Ames v Spamhaus Project Ltd  1 WLR 3409, ."
 In my judgment in principle a claim like Mr Soloman's could have been tried in the PCC if its true value had been recognised at the outset. When in future a judge is confronted by an application to strike out a claim on the ground that the game is not worth the candle he or she should consider carefully whether there is a means by which the claim can be adjudicated without disproportionate expenditure."
"[Sullivan] also serves as a reminder, however, of why the jurisdiction is exceptional: it is a strong thing for a court to strike out a claim on proportionality grounds if it has at least arguable merit, and the court must be alive to the risk that it might unjustifiably deprive a claimant of access to justice."
" Thus the potential gain to a claimant in litigation can be so trivial that the commitment of the resources of the English court to the resolution of the claim is an abuse of process. There can be no precise tariff for damages below which an abuse is triggered. It will always depend on the circumstances. For instance if the proceedings are heard in the IPEC the commitment of time and resources will be less than would be the case in the High Court and so there can be a lower potential benefit to the claimant without giving rise to an abuse. If the case can be transferred to the small claims track, the potential benefit can be smaller still.
 I have to weigh the potential benefit to Mr Lilley of his claim for infringement of copyright against the resources of this court that would have to be devoted to his pursuit of that claim. I do not believe that a transfer to the small claims track of the IPEC is an option. Neither party has asked for such a transfer and in fact Mr Lilley is unhappy that the action is not still in the High Court. But even if there had been an application to transfer, I would have refused. Mr Lilley's pleadings are lengthy and complex and just for this application the documents ran to 7 lever arch files and 2 further files. I do not think that this is a case that would ever be suitable for transfer to the small claims track, see CPR 63.27(3) and 26.8(1)(c) and (f).
 The authorisations which are the basis of Mr Lilley's claim for infringement of copyright complained of stopped a long time ago, in December 2006, so there is no value to Mr Lilley in an injunction. The potential benefit to him rests in damages only, which he says are very great indeed.
 I have to make an assessment of the upper limit of damages to which Mr Lilley would arguably be entitled if he were to prove infringement at trial. I must then decide whether that upper arguable limit warrants the commitment of this court's resources to Mr Lilley's claim."
". … the maximum quantum of damages which Mr Lilley could claim is about £83.
61. My best guess is that the trial of this action would take about two days. I also think that to make sure the trial is conducted with clearly defined issues and also to ensure that it does not overrun, a significant amount of case management would be necessary. That might take a day.
 I do not believe this would be an appropriate use of the court's resources when the maximum which could ever be at stake is around £83. It would be an abuse of the process. I must consider other litigants with more serious and possibly more pressing claims, the resolution of which would necessarily be delayed by the hearing of the trial of this action and any preliminary hearings in advance of the trial."
"I do not accept the Claimant's submission that it is clear that there was no agreement for the Claimant to create or edit literary works for the Channel. His emails of 20 April and 16 June 2020 refer respectively to offering to his services 'improving content' and 'help with … writing', so in my judgment it is possible that at trial the Defendants may be able to establish that the parties intended Mr Costa to write or edit content for the Channel (and that this was, as pleaded, an implied term of the Contract). If there was a binding agreement at all, it is in my view arguable that this was part of it."
She also rejected at  the argument that the claim was an abuse of process:
"In my judgment, this is not a case in which would be appropriate to strike out the claim on the basis that it is an abuse of process simply because of the small amount of damages which the Claimant may recover. It is not clear to me that there is no need for an injunction, nor can the possibility be excluded at this stage that the Claimant, if successful, might be able to claim either additional damages or an account of profits which would justify the costs of the claim. Moreover, again, the merits of the Defendants' application on this basis are undermined by the fact that striking out the claim would not resolve all of the issues between the parties or prevent the counterclaim going to trial. Striking out the claim whilst the counterclaim goes ahead is unlikely to produce valuable savings of time or costs. I therefore decline to strike out the claim upon the second limb of the Defendants' application."