The Flitcraft Appeal - Flitcraft Ltd and others v Price and another

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Jane Lambert

Court of Appeal (The Master of the Rolls, Lord Justice Nugee and Sir Christopher Floyd) Flitcraft Ltd and others v Price and another [2024] EWCA Civ 136 (27 Feb  2024)

On 31 Jan 2024, the Court of Appeal (consisting of The Master of the Rolls, Lord Justice Nugee and Sir Christopher Floyd) heard two separate appeals against orders by Nicholas Caddick KC in proceedings that had been brought by Philip Price ("Mr Price") and others against Flitcraft Ltd ("Flitcraft") and others for patent and copyright infringement and passing off.   I commented on the main trial of that action in Patents, Copyright and Passing off - Price v Flitcraft Ltd on 16 Jan 2023 and in A Patent Trial in Manchester at Last - Price v Flitcraft Ltd on 17 Jan 2023 in IP Northwest and on Mr Caddick's judgment on costs following a further hearing on 16 March 2023 in Costs - Price v Flitcraft on 7 April 2023 and in Price v Flitcraft - Permission to Appeal and Costs on 16 July 2023 in IP Northwest.  

The Appeals

In the first of those appeals, Flitcraft appealed against Mr  Caddick's order to join the Official Receiver as a party to those proceedings.   In the second, Mr Price and Supawall Ltd ("Supawall") argued that they had together succeeded in their claim and were entitled to at least some of their costs.  Judgment in both appeals was handed down on 27 Feb 2024 (see Flitcraft Ltd and others v Price and another [2024] EWCA Civ 136).  Sir Christopher delivered the main judgment in Flitcraft's appeal and Lord Justice Nugee the main judgment in Mr Price and Supawall's.  By para [57] of his judgment, Sir Christopher dismissed  Flitcraft's appeal with the concurrence of Lord Justice Nugee and the Master of the Rolls.  Lord Justice Nugee dismissed Mr Price and Supawall's appeal except for setting aside an order for an interim payment of costs to Flitwick by para [94] of his judgment with the agreement of Sir Christopher and the Master of the Rolls,

The Main Judgment

Mr Price had launched the proceedings on the basis that he was the proprietor of UK patents GB2415714C and GB2436989B and Supawall was his exclusive licensee.  He alleged that he had assigned the patents to one Fred Bridge shortly before he was adjudged bankrupt and that Mr Bridge had assigned them back to him after his discharge from bankruptcy.  Mr Caddick KC held that no assignment to Mr Bridge had ever taken place and that the patents had passed first to Mr Price's trustee in bankruptcy and then to the Official Receiver ("the OR").  Flitcraft admitted that one of its products known as "the old Injectawall product" had infringed GB2415714C. Mr Price's claim failed for want of title but Supawall could succeed in respect of the admitted infringement provided that the OR could be joined as a party to the action. 

Joining the OR to the Action

The reason for joining the OR as a party is that s.67 (3) of the Patents Act 1977 provides:

"In any proceedings taken by an exclusive licensee by virtue of this section the proprietor of the patent shall be made a party to the proceedings, but if made a defendant or defender shall not be liable for any costs or expenses unless he enters an appearance and takes part in the proceedings."

At the hearing on 16 March 2023 Mr Caddick gave permission to Supawall to join the OR as a party (Price and another v Flitcraft Ltd and others  [2023] EWHC 1222 (Pat)) 26 May 2023). His reasons for doing so are set out in para [22] of Sir Christopher's judgment:

"i) Section 67 (3) needed to be read in the context of other sub-sections of section 67 which, by sub-section (1), gave the exclusive licensee the 'same right' as the proprietor to bring proceedings and, by sub-section (2), enabled the exclusive licensee to recover its own losses or its share of the infringer's profits. Viewed in context, he held that section  67 (3) operated to ensure that the issue of remedies awarded against a defendant is determined in circumstances where the claims of both the exclusive licensee and the proprietor of a patent can be taken into account. Further, the sub-section prevents a defendant who has been sued by an exclusive licensee from being exposed to a further action by the proprietor.
ii) Although section 67 (3) was mandatory in its effect, and in this respect was different from corresponding provisions for other intellectual property rights such as copyright, registered designs and trademarks, this did not mean that proceedings taken whilst the proprietor was not joined were a nullity.
iii) Given the purpose of section 67 (3), there was no reason why the court should not exercise its powers to join the true proprietor after judgment, particularly where the judgment had been solely in relation to liability as opposed to quantum.
iv) As to discretion, the joinder of the OR did not mean that Supawall would be allowed to pursue a claim on a new and inconsistent basis or that to allow such a claim would require a wholesale amendment of Supawall's case. Supawall's claim was based on the exclusive licence which was granted before Mr Price's bankruptcy. Supawall's claim was not dependent on Mr Price's false claim to be the proprietor of the patents. Supawall's acceptance that the OR is now the proprietor was not inconsistent with how its claim was argued at trial.
v) In this respect the requirement of section 67 (3) was more procedural than substantive.
vi) The fraudulent nature of the claim being advanced by Mr Price that there had been an assignment to Mr Bridge did not affect Supawall's claim. It would be wrong for the court to decline to exercise its powers under the rules to allow joinder simply to punish Supawall or to deprive Supawall of its separate rights. This was so even though Mr Middleton had given evidence to support Mr Price's false claim – evidence which the judge had held it was unlikely that Mr Middleton thought was true.
vii) In Summers v Fairclough [2012] UKSC 26, a case where the claimant had falsely exaggerated his personal injury claim, the Supreme Court had held that it would take a very exceptional case to strike out the whole claim on the grounds of abuse. By analogy with that case, it would be wrong to refuse permission to join the OR and thereby effectively defeat Supawall's claim, which was separate from Mr Price's false claim."

No transcript of the judgment of Mr Caddick's judgment of 26 May 2023 is available, but it is likely that Flitcraft opposed the joinder of the OR on substantially the same grounds as its grounds of appeal. 

Grounds of Appeal against the Joinder of the OR

Sir Christopher summarized the first and third of Flitcraft's grounds of appeal at para [33] of his judgment:

"i) the judge should not have allowed Supawall to amend in order to join the OR and satisfy section 67 (3) of the Patents Act 1977;
ii) alternatively, the judge should have ordered Supawall, when permitting it to join the OR, to pay Flitcraft's costs of the Supawall patent claim up to the order permitting the joinder."

Ground 2 was that Flitcraft had not complied with the terms of its exclusive licence.

Whether the Judge should have allowed Supawall to join the OR

Mr Caddick had joined the OR as a party to the action because CPR 19.2 (2) (a) provides:

"(2) The court may order a person to be added as a new party if –
(a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings...."

In The Welsh Ministers v Price and another (Rev 1) [2018] WLR 738, [2018] 1 BCLC 1, [2018] 2 All ER 860, [2017] WLR(D) 749, [2018] 1 WLR 738, [2018] 1 All ER (Comm) 1108, [2017] EWCA Civ 1768, [2018] BCC 93, Sir Terence Etherton said at para [51]:

"The provisions of CPR 19.2 (2) ought, however, to be given a wide interpretation. The words "in dispute" ought to be read as "in issue". That is consistent with authority that the court's powers to add a party under CPR 19.2 can exist after judgment even though, on a literal approach, there is no longer a matter in dispute: Dunwoody Sports Marketing v Prescott [2007] EWCA Civ 461 at [23]; [2007] 1 WLR 2343. It is also consistent with cases such as Stanhope and Blenheim, in which the court permitted third parties to be joined to an application for restoration of a company to the register of companies and, for all practical purposes, it was only the intervention of the third parties which put in dispute whether or not the company should be restored."

It was therefore common ground that the court had power to add a party even after judgment and that such power involves an exercise of judicial discretion, including the decision as to what if any terms which the court sees fit to impose on the permission that it grants.  It was also well settled that an appeal court will not interfere with the exercise of judicial discretion unless that discretion is flawed.  In  Azam v University Hospital Birmingham NHS Foundation Trust [2020] EWHC 3384 (QB) Mr Justice Saini set out the principles to be applied which were approved by the Court of Appeal in ABP Technology Limited v Voyera Turtle Beach Inc [2022] EWCA Civ:

"[50] An appellate court will only interfere with a discretionary evaluation where an appellant can identify one or more of the following errors: (i) a misdirection in law; (ii) some procedural unfairness or irregularity; (iii) that the Judge took into account irrelevant matters; (iv) that the Judge failed to take account of relevant matters; or (v) that the Judge made a decision which was "plainly wrong".
[51] Error type (v)… means a decision which has exceeded the generous ambit within which reasonable disagreement is possible.
]52]. … The appellate court's role is to police a very wide perimeter and it will be rare that a judge who has exercised a discretion having regard to relevant considerations will have come to a conclusion outside that perimeter… It needs to be underlined that an appellate court in an appeal such as the present is exercising a CPR 52.21 (1) 'review' power. It is also well-established that the weight to be given to specific factors is a matter for the trial judge and absent some wholly unjustifiable attribution of weight, an appellate court must defer to the trial judge."

Flitcraft submitted that Mr Caddick's exercise of his discretion had been flawed.  Ir contended that the deputy judge had been wrong to treat s.67 (3) as more procedural than substantive. As a result, he proceeded on an incorrect understanding as to the purpose of that subsection. Failure to join the proprietor of the patent as required by s.67 (3) deprived Supawall of "standing".  

The appellant had contended that both Supawall and Mr Price had maintained throughout the case that Mr Price was the proprietor of the patent. Accordingly, the failure to join the OR was not a mere procedural oversight by Supawall, but a conscious decision not to support Flitcraft's case that the patents had passed to the trustee in bankruptcy. The amendment to join the OR was wholly inconsistent with Supawall's case. 

Finally, Flitcraft submitted that the deputy judge should not have reasoned by analogy from Summers v Fairclough as that case had been concerned with striking out.  A case need not be exceptional for permission to be refused under CPR r. 19 (2), where the applicant for joinder is seeking an indulgence from the court. If it was necessary to prove that the present case was exceptional it was necessary only to have regard to the conduct of the claimants.

The company relied on Mr Justice Upjohn's dicta on page 33 of British & International Proprietaries Ltd v Selcol Products Ltd [1957] RPC 3 in which he refused to grant an interim injunction to restrain the defendant from holding itself out as a licensee under the patent in suit:

"The first claim in this writ is for infringement of patent: but it is common ground that, having regard to Sec. 63 of the Patents Act 1949 [the predecessor of section 67], the Plaintiff Company cannot claim relief for infringement at this stage, if only for the reason that they are not the patentees but only the exclusive licensees, and there can be no action for infringement unless the patentees are Defendants in the action. That appears from Sec. 63 (2): 'In any proceedings taken by the holder of an exclusive license by virtue of this section, the patentee shall, unless he is joined as plaintiff in the proceedings, be added as a defendant.' Therefore, I am not concerned in this case at this stage with an action for infringement…" (emphasis added)

Save for agreeing that Summers v Fairclough was not dealing with an exactly analogous procedural situation to that faced by Mr Caddick, Sir Christopher rejected all of Flitcraft's arguments.

As for the purpose and effect of s.67 (3), the substantive right of an exclusive licensee to sue for infringement was granted by s.67 (1) which provides that such a licensee shall have the same right as the proprietor to bring proceedings for infringement.  S.67 (3) then requires that, in any such proceedings, the proprietor is to be made a party. Given the structure of the section as a whole, which first confers the substantive right and then imposes requirements as to the conduct of proceedings, it seemed accurate to regard s.67 (3) as more procedural than substantive.  It was true that the subsection can have a substantive effect in that the court will not grant an exclusive licensee final relief without joinder of the patentee, but any procedural provisions can have substantive consequences without detracting from their essentially procedural nature.

Sir Christopher described Mr Justice Upjohn's dicta in British & International Proprietaries Ltd v Selcol Products Ltd. as "a rather frail foundation" for Flitcraft's submission.  He said at para [38]:

"First, the passage is simply recording common ground. Secondly I do not think that Upjohn J meant to suggest that section 67 (3) has a substantive effect, in the sense that the action for infringement does not exist until the proprietor of the patent is joined. It is to be noted that Upjohn J qualified what he said by the phrase "at this stage" and allowed the case to go to trial, presumably on the basis that later joinder of the proprietor would be possible, and cure any defect in the proceedings prior to that date. Thirdly, as the injunction sought was not to restrain infringement, but to restrain the making of a false representation to be the holder of the licence, it is difficult to see why the point arose at all."

His lordship added in the next paragraph of his judgment that he should also not be taken as endorsing Mr Justice Upjohn's view that it is not possible to grant interim injunctive relief for infringement to an exclusive licensee without joinder of the proprietor. I can, as presently advised, see no reason in principle why the court could not protect the exclusive licensee's interest on an interim basis, perhaps on the basis of an undertaking to join the proprietor. However, he cautioned that the Court of Appeal had not heard argument on that point and it was not necessary for it to decide the point for the purposes of the case before it.

Sir Christopher did not think that it assisted to describe s.6 7(3) as giving the exclusive licensee "standing" because it simply raised further questions as to what was meant by that term.  In exercising its discretion to allow joinder, the court should have primary regard to the purposes of the subsection. It is designed to secure the twin objectives identified by the judge, namely ensuring that the court or tribunal which assesses damages has both the exclusive licensee and the proprietor before it so as to allocate any claimed financial relief between them, and ensuring that the defendant is not exposed to a subsequent action by the proprietor. In a case where those objectives can still fairly be achieved by joinder of the proprietor then, subject to other discretionary considerations, the court should be willing to allow it.

Turning to those other considerations he did not consider that Flitcraft was correct to assert that the joinder of the OR allowed Supawall to pursue a claim "on a totally new, inconsistent basis". The claim of a party to be an exclusive licensee under a patent is not in any sense founded on the identity of the proprietor. Ownership of the patent may change one or multiple times without affecting the status of a party as an exclusive licensee. Supawall's claim to be an exclusive licensee was not altered in any material way by the finding that the OR and not Mr Price was the proprietor.   Similarly, it would be wrong to refuse permission to join the OR simply because Mr Price had falsely maintained throughout the proceedings that he was the proprietor. Mr Caddick's findings as to the ultimate ownership of the patent destroyed Mr Price's claim but had no impact on Supawall's.

As for Summers v Fairclough, the Supreme Court was careful not to find that, except in a very exceptional case, bad conduct in relation to one part of a case (the fraudulently exaggerated claim for damages) should take away rights in relation to another part of the case where there was a valid claim. Beyond that point, the analogy breaks down.  Summers was dealing with an application to strike out whereas the present case was concerned with the exercise of a discretion to allow late joinder of a party. In contrast to Summers, the bad conduct in the case before him was simply not material to Supawall's claim.

Sir Christopher concluded that he had no doubt that the judge was entitled to hold that Supawall's conduct did not justify the refusal of the application to join the OR.

Whether the Deputy Judge should have ordered Supawall to pay Flitcraft's Costs up to Joinder

As Mr Caddick's reasons for declining to make the costs order suggested by Flitcraft were similar to those he gave for not refusing the joinder, Sir Christopher felt it necessary only to add a few observations in answer to Flitcraft's reliance on Beoco Ltd v Alfa Laval Co Ltd [[1993] EWCA Civ 22, [1994] CLC 111, [1995] QB 137, [1994] 4 All ER 464, [1994] 3 WLR 1179, 66 BLR 1 and Summers v Fairclough.

In Becco Lord Justice Stuart-Smith said on page 154 A-C:

"As a general rule, where a plaintiff makes a late amendment as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to the costs of the action down to the date of the amendment. There may, of course, be special reasons why this general rule should not be applied. An example of this is to be found in Kaines (U.K.) Ltd. v. Osterreichische Warrenhandelsgesellschaft (formerly C.G.L. Handelsgesellschaft m.b.H.) [1993] 2 Lloyd's Rep. 1, 9, where the judge was satisfied that, even if the amendment had been made earlier, the action would have been vigorously resisted. The judge disbelieved the defendant's witnesses and the plaintiff received substantial damages"

Lord Justice Stuart-Smith's "general rule" obviously had no application in a case like Flitcraft where the amendment was not in reality material to the claimant's case. Even if it had been, the deputy judge found that the case would have been vigorously defended if the amendment had been made earlier, and the Court of Appeal had no reason to suppose that he was incorrect.

In Summers at Lord Clarke said at para [53] 

"As to costs, in the ordinary way one would expect the judge to penalise the dishonest and fraudulent claimant in costs. It is entirely appropriate in a case of this kind to order the claimant to pay the costs of any part of the process which have been caused by his fraud or dishonesty and moreover to do so by making orders for costs on an indemnity basis. Such cost orders may often be in substantial sums perhaps leaving the claimant out of pocket. It seems to the court that the prospect of such orders is likely to be a real deterrent"

Sir Christopher said that the deputy judge was entirely justified in treating that principle as not being of particular relevance to Supawall's claim against Flitcraft. Neither Mr Price's false evidence nor the supporting evidence of Supawall's director Neil Middleton ("Mr Middleton") impacted the case that Supawall had made against Flitcraft. Mr Price had been ordered to pay the costs of his claim on an indemnity basis. It was Mr Price's claim which was the part of the process which had been caused by fraud or dishonesty.

Mr Caddick did not ignore the dishonest evidence that Mr Middleton gave when deciding on the costs order to be made in Supawall's claim. He took it into account in assessing the proportion of its costs which Flitcraft would have to pay. The weight to be given to the bad conduct of Supawall, and the extent of the punishment to be meted out to it for that conduct, were matters that were wholly within the proper discretion of the deputy judge. They were matters with which the Court of Appeal would not be justified in interfering.

Whether Flitcraft had complied with it's Exclusive Licence

Clause 9 (1) of Supawall's exclusive licence agreement with Mr Pronce required it to notify Mr Price of any infringements of which it becomes aware.  The following subclasses were as follows:

"(2) [Mr Price] and [Supawall] shall take all steps as may be agreed by them in pursuance of clause 9.1 including the institution of legal proceedings where necessary in the name of one of the parties or in the joint names of [Mr Price] and [Supawall] as appropriate.
"(3) If [Mr Price] notifies [Supawall] that he does not intend to take any action or fails within a reasonable period in the circumstances to take such steps as may be considered necessary or appropriate by [Supawall] …. [Supawall] shall have the right and is hereby authorised by [Mr Price] to take those steps independently. In doing so [Supawall] shall not be taken as acting as the agent or in any way on behalf of [Mr Price] but [Mr Price] shall give all reasonable assistance at [Supawall's] expense to facilitate any proceedings by [Supawall]. [Supawall] shall bear all costs but shall be entitled to retain for its own absolute benefit any damages, costs or other expenses awarded or recovered in any such proceedings."

Flitcraft submitted that it was only if Mr Price had notified Supawall that he did not intend to take proceedings for infringement that Supawall would have that right. There was no evidence that any such notification had been given.   It even argued that the agreement the licence agreement gave supremacy to Mr Price and that the only pecuniary relief it could claim would be limited to unpaid sums under a charge to the Northwest Transitional Investment Fund.

Mr Caddick had disagreed:

"It seems to me that clause 9.2 shows that both parties were seen as having rights and that they would, in general, agree how to exercise those rights against an infringer. Clause 9.3 then deals with a narrower situation where the proprietor gives notice that it does not wish to participate. I do not construe this as meaning that, in other circumstances, [Supawall] would have no rights. That would be completely contrary to the usual status of an exclusive licensee under s.67 and I do not think that that is what the parties intended, particularly given the terms of clause 9.2"

Sir Christopher agreed with the deputy Judge.  Supawall derived its right to bring proceedings for patent infringement from s.67 (1) of the Patents Act 1977. It did that by proving that it was an exclusive licensee. As Mr Caddick had said, clause 9 of the licence agreement simply regulated the bringing of proceedings as between Mr Price and Supawall. What it provided was that, normally, the two parties will co-operate, but if they cannot agree then Supawall can bring proceedings on its own.  Obviously, in those circumstances, Supawall would have to join the patentee as a defendant. The present case was obviously one where both parties had brought proceedings under clause 9.2. The clause said nothing at all about who would recover damages, the "supremacy" of Mr Price or unpaid sums due to the Fund.

Mr Caddick's Costs Order

Mr Caddick apportioned the costs as follows:

• 70% for the patents action;
• 20% for the copyright action and 
• 5% for the passing off.

He split the costs of the patent action 60% to Mr Price's claim and 40% to Supawall's.   He ordered Mr Price to pay Flitcraft's costs on an indemnity basis and Supawall to recover 30% of 75% of the claimants' costs of the action.

Mr Caddick made an interim costs order in favour of Flitcraft in the sum of £12,775.50 on the non-patent claims.

He also ordered Supawall to pay the costs of the application to join the OR to the action,

The Costs Appeal

Mr Caddick's order was complicated.   To assist the Court of Appeal Peter Knox KC ("Mr Knox") who appeared for Supawall and Mr Price on the appeal identified the items that were challenged and those that were not.  Lord Justice Nugee incorporated Mr Knox's summary into para [60] of his judgment:-

"(i) The judge apportioned the costs 75% to the patent claims, 20% to the copyright claims and 5% to the passing off claims (paragraph 12). This is not challenged.
ii) The judge then dealt with the patent claims where he said that Mr Price had failed and Supawall had succeeded in part. He said that he had to deal with those claims separately (paragraph 14, set out by Sir Christopher Floyd at paragraph 26 above). Mr Knox takes issue with this.
iii) The judge then apportioned the overall costs of the patent claims 60% to Mr Price's claim and 40% to Supawall's claim (paragraphs 15 to 17). Mr Knox also takes issue with this.
iv) The effect of these decisions was that he ordered Mr Price to pay Flitcraft's costs of his failed patent claim, being 60% of 75% of the Defendants' total costs (paragraph 19). Mr Knox challenges this on the basis already referred to (that is, both in principle and as to the 60% apportionment).
v) The judge also ordered Mr Price to pay such costs on the indemnity basis, his claim being founded on the fictitious assignment to Mr Bridge (paragraph 19). If Mr Price is liable for costs at all, that is not challenged.
vi) The judge then dealt with the costs of Supawall's patent claim. He held that Supawall was the successful party, and under the general rule would be entitled to its costs (paragraph 20). Mr Knox unsurprisingly agrees.
vii) He then (paragraph 21) decided that Supawall should not receive 100% of the costs of its patent claim but only a proportion, namely 75%, because of issues on which it had lost and Mr Middleton's evidence in support of Mr Price's fictitious claim, as explained by Sir Christopher Floyd at paragraph 31 above. Mr Knox does not challenge that aspect of his decision.
viii) The judge made Supawall pay the costs of and associated with its late application to join the OR (paragraphs 22 and 28). That is entirely to be expected and is not challenged.
ix) The overall effect of the above decisions was that Supawall would recover 30% (that is 75% x 40%) of 75% of the claimants' total costs of the action other than the costs of the joinder (paragraph 27). It can be seen that of these figures Mr Knox only challenges the 40%, accepting both the 75% apportionment of the total costs to the patent claims, and the 75% recovery to reflect patent issues on which Supawall had lost and its support for Mr Price's fictitious assignment."

Whether it was wrong to treat Mr Price and Supawall separately

Mr Knox argued that Mr Price and Supawall had won on the following issues:

• Whether the patents were held on trust for the Maple Timber Frame Partnership;
• Whether the patents were assigned to Lightspeak and Supawall's licence was terminated; and
• Whether the defendants had infringed the patents.

Their success on those issues made them the overall winners,   The fictitious assignment point had not taken long to resolve.  They should therefore receive their costs under CPR44.2 (2) (a) subject to a 25% discount for the fictitious assignment point,

Lord Justice Nugee rejected that submission.   Mr Prince and Supawall had brought separate actions based on separate titles.  Had they both won they could have sought damages on different bases.  In some cases, it is possible to treat claimants as members of the same class but that was not the case in this action.  Mr Price's claim had failed altogether and it was not right to combine it with Supawall's.   The fact that he had succeeded on some issues was irrelevant.

Whether the 60/40% Split was appropriate

The 60/40 apportionment was well within the deputy judge's discretion and the Court of Appeal had no basis for disturbing it.

Interim Payment Order against Mr Price

As Mr Price had lost his appeals over liability there was no reason why the interim payment order should not stand.

Interim Payment Order against Supawall

As the costs due to Supawall were likely to exceed those due to Flitcraft, Lord Justice Nugee set aside the interim costs order of  £12,775.50  in favour of Flitcraft.

Judgment of the Master of the Rolls

Sir Geoffrey Vos agreed with both previous judgments.

As to Mr Price's liability to pay costs on an indemnity basis and the 60/40 split between Mr Price's claim and Supawall's, the Master of the Rolls observed that the court takes a very serious view of dishonest conduct that undermines the integrity of the justice system.   His lordship quoted para [53] of Lord Clarke's judgment in Summers:

"As to costs, in the ordinary way one would expect the judge to penalise the dishonest and fraudulent claimant in costs. It is entirely appropriate … to order the claimant to pay the costs of any part of the process which have been caused by his fraud or dishonesty and moreover to do so by making orders for costs on an indemnity basis. Such cost orders may often be in substantial sums perhaps leaving the claimant out of pocket. It seems to the court that the prospect of such orders is likely to be a real deterrent."

He opined that that was why Mr Caddick was right to order Mr Price to pay Flitcraft's costs on the indemnity basis, and to penalize Supawall in costs for Mr Middleton's false evidence. He added:

"The court will take every appropriate step to deter those who contemplate bringing false claims, and thereby practising an intolerable deception on the court itself."

Comment

This is an important authority on the construction of s.67 of the Patents Act 1977, the jurisdiction to add a party to an action after judgment under CPR 192 (2) (a) and the judicial discretion as to costs.  Anyone wishing to discuss this case note may call me on 020 7404 5252 during office hours or send me a message through my contact page.