Rosalina Investments Ltd & Anor v New Balance Athletic Shoes (UK) Ltd, Court of Appeal - Queen's Bench Division, May 04, 2018, [2018] EWHC 1014 (QB)

Resolution Date:May 04, 2018
Issuing Organization:Queen's Bench Division
Actores:Rosalina Investments Ltd & Anor v New Balance Athletic Shoes (UK) Ltd
 
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Neutral Citation Number: [2018] EWHC 1014 (QB)

Case No: IHQ/17/0636

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 04/05/2018

Before:

MRS JUSTICE MAY DBE

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Between:

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Andrew Onslow QC and Ruth den Besten (instructed by Fieldfisher LLP) for the Claimants

Ian Mill QC and George Molyneaux (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Defendant

Hearing dates: Tuesday 20th and Wednesday 21st March 2018

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Mrs Justice May :

Introduction

  1. This is a dispute about the existence of a contract. The Claimants (respectively ``Rosalina'' and ``Rosalina UK'', collectively ``the Companies'') claim under the terms of what they contend was a contract concluded on 16 September 2016. The Defendant (``NB'') says that there was no final agreement as the terms had not been signed.

  2. The matter has come before me on NB's application to strike out the claim and/or for summary judgment on the basis that it has no real prospect of success.

    Background

  3. The Companies hold the rights to exploit the promotional and commercial activities and services of a member of the Manchester United football team, Marouane Fellaini, both internationally and here in the UK. NB is the UK branch of a global group whose business includes the manufacture and sale of sportswear, including football boots. The global group includes a company called Warrior Sports UK Limited (``Warrior'').

  4. By a written agreement dated 28 March 2013 and signed by the parties, Rosalina granted Warrior the exclusive rights to use certain image rights associated with Mr Fellaini, in return for procuring Mr Fellaini to provide certain promotional and commercial services. The commencement date for that agreement was 17 September 2012, hence its being referred to by the parties in their communications as ``the 2012 Agreement''. The 2012 Agreement was novated with effect from 2 February 2015, Warrior's obligations thereafter being assumed by NB.

  5. The 2012 Agreement came to an end on 31 July 2016, after which the parties corresponded about the terms of an extension/renewal. Notwithstanding the expiry of the 2012 Agreement in July 2016, NB continued to provide football boots and clothing to Mr Fellaini, and he continued to wear and promote their products, until January 2017.

  6. The relationship came to an end when, on 11 January 2017, NB wrote to the Companies notifying them of its decision not to approve an extension to the contract and proposing to pay an amount based upon the terms of the proposed new contract up to 11 January 2017 ``in recognition of the services provided''. Payments of over £346,000 have been tendered to the Companies on a quantum merit basis.

  7. Fieldfisher LLP, solicitors for the Companies, responded on 27 January 2017 expressing surprise at the suggestion that no contract had been concluded, asserting that a valid agreement had been in place since September 2016, with an effective date of 1 August 2016.

  8. The Companies issued proceedings on 15 September 2017 claiming over £2m in lost retainer and damages. NB served its Defence on 17 October 2017, the Reply followed on 17 November 2017 and this application was issued on 20 December 2017.

  9. It is common ground between the parties that there was no new agreement or heads of terms which had been signed by all parties prior to the letter from NB dated 11 January 2017 referred to above. NB's case is that the parties intended conclusion of the contract to occur via signature only. The Companies say that this is not a case where any new agreement was expressly or impliedly ``subject to contract'', and that they did in fact agree terms such that a concluded contract came into existence on 16 September 2016; alternatively, if there was no concluded contract, NB was in breach of a continuing obligation under the expired 2012 Agreement to negotiate in good faith.

  10. The issues that arise on this application are therefore (i) whether there was a concluded contract as at 16 September 2016, (ii) if not, whether there is a viable claim for breach of an obligation to negotiate in good faith and (iii) the overarching consideration of the suitability of these issues for determination at this summary stage.

    Suitability for summary determination

  11. The requirements for striking out a case and/or summary judgment are to be found at CPR r.3.4(2) and CPR r.24.2 respectively. The principles to be applied have been neatly summarised by Hamblen LJ in Global Assset Capital Inc v. Aabar Block SARL [2017] 4 WLR 163 at [27]:

    (1) The court must consider whether the case of the respondent to the application has a realistic as opposed to fanciful prospect of success - in this context, a realistic claim is one that carries some degree of conviction and is more than ``merely arguable''.

    (2) The court must not conduct a ``mini-trial'' and should avoid being drawn into an attempt to resolve conflicts of fact which are normally resolved by the trial process.

    (3) If the application gives rise to a short point of law or construction then, 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''.

  12. Mr Mill QC, for NB, contended that the case as to the (non)existence of a concluded contract was suitable for summary resolution as there were no material facts in dispute. All the necessary evidence was before the court in the witness statements and attachments; he pointed out that the court's task was the same now as it would be at trial, namely to make an objective assessment of the communications passing between the parties to determine whether there was a concluded contract as at 16 September 2016 as the Companies allege. If, on the proper construction of those communications, there was no concluded contract then the Companies' case must fail and should be disposed of now. He described the alternative case based on breach of an obligation to negotiate in good faith as ``transparently hopeless''.

  13. Mr Onslow QC, for the Companies, argued that the dispute was not suitable for summary determination as his case for a contract concluded on 16 September 2016 was one with reasonable prospects of success. In any event, he said, there were good reasons for proceeding to trial with disclosure and evidence in relation to all the pleaded issues, given his alternative claim arising from the allegation of a breach of the obligation contained in the 2012 Agreement to negotiate in good faith.

  14. It is inevitable on applications such as this that argument on the substantive issues will shade into, and overlap with, the question as to whether or not the case is susceptible of summary resolution. It is almost always necessary to hear the full argument developed in order to determine whether the contentious issues should go to trial. Having heard the parties' submissions over a day and a half on this application I am satisfied, for the reasons developed further below, that the issues raised are properly susceptible of summary resolution.

    Evidence on this application

  15. NB's application was supported by a witness statement from Mr George Lubega, of CMS Cameron McKenna Nabarro Olswang LLP. This set out the background, the nature of the case and the main points in issue. Exhibited to Mr Lubega's statement were the principal documents passing between the parties relating to the alleged contract.

  16. The Companies served evidence from Kaisor Basar (``KB''), a non-practising solicitor and registered football intermediary, Colin Gibson of Fieldfisher LLP, and Stijn Debaene, partner of Fieldfisher LLP and a practising Belgian attorney (``SD'').

  17. I had available to me, in these witness statements and the exhibits thereto (principally those of Mr Lubega and Mr Gibson) all the material communications between the parties between 31 July 2016, when the 2012 Agreement came to an end, and 11 January 2017 when NB wrote notifying the Companies of its intention to cease its association with Mr Fellaini. None of this material was contentious although the meaning to be drawn from it all plainly was.

  18. The case for the Companies is pleaded at paras 9-11 of the Particulars of Claim as follows:

    ``(C) The 2016 Agreement

  19. On or about 30 July 2016 the 2012 Agreement lapsed by reason of the expiry of its term, save (insofar as material) in respect of the obligation to negotiate a renewal in good faith as set out in paragraph 6.2.3 above. Nonetheless, both [the Companies] and [NB] proceeded on the basis that [the Companies] and Mr Fellaini would continue to provide services to [NB] and to endorse [NB] products...

    [particulars were then set out at paras 9.1-9.5]

  20. Further, on 23 August 2016 counsel for [NB] (Paul Fletcher) sent a draft contract to [the Companies], which he stated would come into effect the following day. In the event, the precise terms of the agreement were the subject of limited negotiation prior to 15 September 2016, on which date Mr Fletcher provided a copy of the proposed agreement to Mr Fellaini's legal representative (Mr Debaene of Fieldfisher), requesting that he confirm whether any final changes were required.

  21. Mr Debaene responded on 16 September 2016 ``This is perfect. How do we arrange the signature. Who goes first?''. On 23 September 2016 Mr Debaene sent a further email ``Hi Paul. Shall I have the agreements signed from our side first?'' Mr Fletcher reverted ``Yes please. Please scan a copy of the signed agreement and personal...

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