Judgment Call

Thomas Roe
Thomas Roe

Civil Procedure

(1) Barber; (2) Jangra; (3) Ceng Overseas Ltd (a company registered in Cyprus) v (1) Rasco International Ltd; (2) Rassouli-Elchin Ayaz Mustafa, unreported. Judge Thornton QC. 28 June 2012

An interim payment was ordered in respect of a judgment against a partnership that was in the process of being wound up, notwithstanding the possibility of there being other creditors. It was not appropriate to require an undertaking or indemnity to repay the interim payment as the creditor was based in the European Union.

Application granted

For the claimants
(1) Barber; (2) Jangra; (3) Ceng Overseas Ltd

3 Hare Court’s Thomas Roe and Alexander Halban; Kapoor & Co senior solicitor Satish Kapoor

Alexander Halban
Alexander Halban

For the defendant (1) Rasco International Ltd; (2) Rassouli-Elchin Ayaz Mustafa

Keating Chambers’ Simon Hughes QC; McGrigors partner Yuri Botiuk (now with Pinsent Masons


Gallarotti v Sebastianelli. [2012] EWCA Civ 865. Arden LJ; Davis LJ; Tomlinson LJ. 3 July 2012

When determining the terms of a constructive trust the court could look at the conduct of the parties throughout their relationship. It was not restricted to examining the financial contributions made by the parties when purchasing a property. The principles to be applied were the same whether the parties were in a relationship such as husband and wife, were business associates or friends.

Appeal allowed

For the appellant

3PB’s Christopher Aylwin; Lyndales Solicitors partner Stuart Merrison

For the respondent Gallarotti

Hardwicke’s Wendy Parker; Singhania and Co partner Tony Purton

Human Rights

Birmingham City Council v Lloyd. Unreported. Gross LJ; Longmore LJ; Lord Neuberger (MR). 4 July 2012

A recorder had erred in dismissing a local authority’s claim for possession of a property occupied by the deceased tenant’s brother as a trespasser on the basis that eviction would amount to a disproportionate interference with his rights under the European Convention on Human Rights art.8. A person who had no right to remain in a property under domestic law could invoke art.8 to defend a claim for possession only in highly exceptional circumstances.

Appeal allowed

For the appellant Birmingham City Council
Arden Chambers’ Jonathan Manning and Sam Madge-Wylde instructed directly.

The respondent appeared in person.


Wilkin-Shaw (Administratrix of the estate of Charlotte Shaw (deceased)) v (1) Fuller; (2) Kingsley School Bideford Enterprises Ltd (Formerly known as Edgehill College Enterprises Ltd). [2012] EWHC 1777 (QB). Owen, J. 28 June 2012

The claimant failed to show that the death of her daughter while on a school trip training for the Ten Tors expedition on Dartmoor was the result of the negligence of the teacher who organised and supervised the training.
Claim dismissed

For the claimant Wilkin-Shaw
Clerksroom’s Dr Michael Powers QC; 1 Pump Court’s Mark McDonald; Old Square Chambers’ Brent McDonald; Ashfords Solicitors partner Charles Hattersley

For the defendants (1) Fuller; (2) Kingsley School Bideford Enterprises Ltd (Formerly known as Edgehill College Enterprises

12 King’s Bench Walk’s Ronald Walker QC; 12 King’s Bench Walk’s Neville Spencer-Lewis and Henry Charles; Plexus Law Solicitors partner Nicholas Yates

Family Law

Gow v Grant. [2012] UKSC 29. Lady Hale JSC; Lord Carnwath JSC; Lord Hope JSC (Deputy President); Lord Reed JSC; Lord Wilson JSC. 4 July 2012

The Family Law (Scotland) Act 2006 s.28 was not intended simply to enable the courts to correct any clear and quantifiable economic imbalance that might have resulted from cohabitation which ended otherwise than by the death of one of the parties. That was too narrow an approach: section 28 was designed to enable fair compensation to be awarded for contributions made or economic disadvantages suffered in the interests of the relationship where none could otherwise be claimed.

Appeal allowed

For the appellant Gow

Murray Stables’ Janys Scott QC and Kirsty Malcolm; Hughes Walker Robert Gilmour

For the respondent Grant

Compass Chambers’ Iain G Armstrong QC; Catherine Dowdalls of Arnott Anderson Advocates; Allan McDougall partner David Nicol


Phillips v Mulcaire [2012] UKSC 28. Lord Clarke JSC; Lord Dyson JSC; Lord Hope JSC (Deputy President); Lord Kerr JSC; Lord Walker, JSC. 4 July 2012

Personal information did not amount to “other intellectual property” under the Senior Courts Act 1981 s.72(5). The central purpose of the section was to fortify remedies against unlawful trading practices, not to cover the whole law of confidence. In the instant case, an investigator who had intercepted telephone messages could not rely on the privilege against self-incrimination under s.72(2)(a) because the messages contained commercial as well as personal information.
Appeal dismissed

Gavin Miller
Gavin Miller

For the appellant Mulcaire

Doughty Street Chambers’ Gavin Millar QC; 5RB’s Alexandra Marzec; Payne Hicks Beach partner Sarah Webb

For the respondent Phillips

Michael Beloff QC
Michael Beloff QC

Blackstone Chambers’ Michael Beloff QC; Hogarth Chambers’ Jeremy Reed; Taylor Hampton partner Mark Lewis

Civil Procedure.

(1) Hemming (trading as Simply Pleasure Ltd); (2) Poulton (trading as Soho Original Book); (3) Harmony Ltd; (4) Gatisle Ltd (trading as Janus); (5) Winart Publications Ltd; (6) Darker Enterprises Ltd; (7) Swish Publications Ltd v Westminster City Council.[2012] EWHC 1582 (Admin). Keith J. 12 June 2012

A defendant local authority was mistaken in thinking that acceptance of the claimant’s Part 36 offer prior to litigation would have required it to accept an important principle that it had been unwilling to concede. Acceptance of the Part 36 offer could have been treated as the local authority’s willingness to compromise a particular claim without prejudice to the stance that it might adopt in other cases.

Judgment accordingly

For the claimants
(1) to (7)

Cornerstone Chambers’ Philip Kolvin QC; Gosschalks partner Steve Dillon

For the defendant

Landmark Chambers’ Nathalie Lieven QC; Landmark Chambers’ Jacqueline Lean instructed directly by Westminster City Council


Oracle America Inc (formerly Sun Microsystems Inc) v M-Tech Data Ltd. [2012] UKSC 27. Lord Walker JSC; Lord Clarke JSC; Lord Sumption JSC; Lord Reed JSC; Lord Carnwath JSC. 27 June 2012

The exercise by a trade mark proprietor of its rights under Directive 89/104 art.5 and art.7 to control the first marketing in the European Economic Area of goods bearing its registered trade mark did not constitute anti-competitive conduct and was not contrary to the principle of free movement of goods between member states.

Appeal allowed

For the appellant Oracle America Inc (formerly Sun Microsystems Inc)

One Essex Court’s Geoffrey Hobbs QC; One Essex Court’s Guy Hollingworth; Nabarro partner Ian Lowe

For the respondent M-Tech Data Ltd

Monckton Chambers’ Christopher Vajda QC; Hogarth Chambers’ Guy Tritton; Hill Dickinson partner Harvey Stringfellow

Case of the week

Competition Law.

2 Travel Group Plc (in liquidation) v Cardiff City Transport Services Ltd. [2012] CAT 19. Lord Carlile of Berriew QC; Peter Freeman QC; Marcus Smith QC. 5 July 2012

Exemplary damages could be awarded against a company which had abused its dominant position even if the company was a small undertaking which was immune from a fine under the Competition Act 1998 s.40. The Tribunal also gave guidance on the matters to be taken into account when making such an award.

Damages assessed

2 Travel Group Plc brought a follow-on competition damages claim against Cardiff City Transport Services after the Office of Fair Trading ruled that it had abused its dominant position.

The claimant had operated “in-fill” and “no-frills” bus services on certain routes in Cardiff. The Cardiff bus company launched a competing “white service” on the same routes. Following the OFT ruling 2 Travel went into liquidation and launched its claim for loss of profits and the loss of the business.

The tribunal was required to determine: the amount of loss of profits and whether 2 Travel would have gone into liquidation even if the infringement had not occurred, the counter-factual scenario; whether exemplary damages could be ordered; whether it was appropriate to order exemplary damages against the defendants.

Damages assessed.

The claimant was deprived of revenue from the date the infringement commenced to the date of its liquidation, assessed at £33,818.79.

To assess the claim for the company as an asset it was necessary to compare what happened prior to and during the infringement against the counter-factual scenario, which assumed that Cardiff City had not operated the white service at all. 2 Travel should therefore be valued at the date of liquidation on the assumption that the infringement had never taken place.

The documentary evidence showed that 2 Travel had received several complaints for providing a poor-quality service. 2 Travel was in almost constant financial difficulty. That was why the company failed.

The infringement was therefore causally irrelevant to 2 Travel’s demise and that part of its claim failed.

Exemplary damages were aimed at punishing and deterring wrongdoers. Such a remedy was a last resort which was not to be encouraged.

To expose companies to exemplary damages in all cases where the company proceeded with conduct despite knowing it risked an abuse of a dominant position would be wrong. It was only when a risk was “unacceptable” but was nevertheless consciously disregarded that the conduct would become reckless, and potentially deserving of exemplary damages.

The key question was whether Cardiff City knew its conduct was probably unlawful or clearly unlawful. There was overwhelming evidence that the aim of Cardiff City’s white service was to exclude 2Travel from the Cardiff market.

The defendant had acted in knowing disregard of an appreciated and unacceptable risk that it was probably or clearly abusing its dominant position.

The tribunal considered that exemplary damages had to punish and deter, but they also had to bear some relation to the compensatory damages being awarded, which in the instant case were low. It was important to have regard to the economic size of the defendant, the Tribunal found, adding that as an entity with an association with a local authority the defendant would take full account of the judgment.

Cardiff City was ordered to pay £60,000 of exemplary damages to 2 Travel.

For the claimant

Monckton Chambers’ Michael Bowsher QC

Monckton Chambers’ Anneliese Blackwood

Addleshaw Goddard partner Adam Aldred

For the defendant

Brick Court Chambers’ James Flynn QC

Brick Court Chambers’ Colin West

Burges Salmon partner Laura Claydon

Burges Salmon partner Peter Morris


Laura Claydon

Laura Claydon
Laura Claydon

While 2 Travel is the first claimant to be awarded damages by the Competition Appeal Tribunal (CAT) in a follow-on damages claim, the case is also noteworthy for amplifying the constraints claimants face when assessing quantum and award of exemplary damages.

The CAT has stressed that the test for causation is the ‘but-for’ test.  The tribunal rejected wider tests asserted by 2 Travel in favour of an assessment of what would have happened in the counterfactual scenario – something lawyers and economists in this field are familiar with.

The CAT found that the claimant would have ended up in liquidation in the counterfactual and therefore the vast majority of the claim failed. In such claims, the tribunal is bound by a regulator’s decision (s.47A and s.58 CA1998). The tribunal made it abundantly clear that a claimant cannot expand the ambit of a regulator’s decision by reference to further evidence available at trial, but not available to the regulator – a claimant in such claims is stuck with the regulator’s decision.

Although an award of exemplary damages was made, such awards should be made cautiously “where compensation is inadequate to punish the defendant for his outrageous conduct.

The CAT distinguished this case from the decision in Devenish. Where defendants have been fined, or fines have been commuted to zero, exemplary damages will not be available.

Laura Claydon, head of competition, Burges Salmon