Case No: HC07CO0647
NEUTRAL CITATION NUMBER: [2007] EWHC 3173 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Friday, 14th December 2007

BEFORE:

THE HONOURABLE MR JUSTICE WARREN

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BETWEEN:

(1) EXPERIENCE HENDRIX LLC
(2) THE LAST EXPERIENCE
Claimant
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TIMES NEWSPAPERS LIMITED
Defendant

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Wordwave International, a Merrill Communications Company
PO Box 1336, Kingston-Upon-Thames, Surrey KT1 1QT
Tel No: 020 8974 7300  Fax No: 020 8974 7301
Email Address: tape@merrillcorp.com
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Mr Richard Arnold QC (instructed by Messrs Eversheds LLP) appeared on behalf of the Claimant 

Miss Marianne Perkins (instructed by Messrs Harbottle & Lewis LLP) appeared on behalf of the Defendant 

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Judgment

MR JUSTICE WARREN:   
1.	This is an application by the claimants for summary judgment on claims for infringement of firstly performer’s rights in performances given at the Royal Albert Hall on 24th February 1969 (“the performances”) by the late Jimi Hendrix who died in 1970 and certainly copyright in sound recordings of the performances (“the recordings”).  Mr Richard Arnold QC appears for the claimant and Miss Marianne Perkins for the defendant, Times Newspapers Limited.  Although a number of issues apparently arise on the pleadings and have been relied on by the defendants in correspondence and in Miss Perkins’ skeleton, the outcome of this application depends in reality on a single issue, which is whether the defendant’s acts complained of were licensed. 
2.	Before setting out the relevant facts and procedural history, I should mention that at the hearing yesterday, which will appear in more detail later, Miss Perkins, perhaps encouraged by me, requested an adjournment after Mr Arnold had finished presenting his application to enable further evidence to be adduced.  It was, notwithstanding that application, convenient to hear Miss Perkins’ submissions, assuming that an adjournment would not be granted.  I indicated that I would give a decision this morning on the adjournment application and, if it was not successful, that I would give a decision on the summary judgment application.
3.	The claim concerns the performances, taking Mr Arnold’s helpful skeleton.  The recording was made by a Mr Gold and Mr Goldstein in connection with a proposed film of the performances.  The first claimant claims to be the owner of the performer’s rights and the performances under sections 182(a) and (b) of the Copyright Designs and Patents Act 1988, by virtue of the chain of title which is set out in paragraph 6 of the Particulars of Claim.  The second claimant claims to be the legal owner of the copyright in the recordings, and both claimants claim to be beneficial owner of the copyright by virtue of the chain of title set out in paragraph 10 of those Particulars.  The claimant claims that the defendant has infringed those rights by authorising and procuring the manufacture of and issuing to the public of compact disks featuring copies of the recordings.  
4.	The material defence as pleaded is, as I have mentioned, that the acts complained of were licensed, so there is an assertion that the defendant’s acts  complained of were licensed and the defendant relies upon a chain of licences, beginning with the purported licence from the second claimant to Everest Record Group (“Everest”), alleged to be contained in the letter dated 27th September 1979 (“the 1979 Solomon letter”) and successive sub-licences from Everest to Charly Acquisitions Limited, to Charly Licensing APS, also known as Licence Music.com and then to the Communications Practice Limited and to itself.  That letter I should read as it plays an important part in these proceedings.  It is signed by Mr Bernard C Solomon of Trumore Later(?) and contains a heading of The Last Experience Inc, that is the second claimant, although it does not appear to be headed notepaper but is typed on.  It is addressed to the Everest Record Group and says:
“Gentlemen
This letter will confirm that since 1970 Everest has used portions of the sound track of the motion picture “The Last Experience” in producing finished albums as well as licensing said material to various companies throughout the world.  

Everest shall continue to have this right in perpetuity subject to making periodic reports of sales and licensing to The Last Experience, Inc under the terms and agreements as previously negotiated and agreed upon.”

	I will need to return to that in more detail later.

5.	That letter is relied on in the Defence where it is said:
“Subsequently, the Second Claimant licensed the Performance Rights to the Everest Record Group (“Everest”).  A letter from the Second Claimant to Everest states…”

	And it sets out the second paragraph as well as the first paragraph of that letter.

6.	Also in that pleading at paragraph 24, it is averred that:
“… subsequent to the occurrence of the events set out [earlier, that] on 27th September 1979, the Second Claimant licensed the rights in the Recordings to Everest as particularised in 12 above.”

	Reference is made again to that letter as constituting the licence.  

7.	The claimants wished to obtain clarification about the agreement alleged.  Further information was given of the Defence, where, in answer to a request specifying whether the alleged licence was oral, in writing and when and where it was agreed, the answer came:
“The licence was as detailed in the Second Claimant’s letter to Everest of 27th September 1979, disclosed to the Claimants under cover of letter dated 11th May 2007.”

	That response is not very illuminating.  However, the defendant subsequently clarified its case in solicitors’ correspondence as follows (this is in a letter to Eversheds dated 5th June 2007):
“As stated within our client’s Response dated 30th May, the licence was in writing.  The material documentation pertaining to this licence comprises of the letter from the Second Claimant to Everest dated 27th September 1979 and disclosed previously.”

	The pleaded case therefore is that the agreement was in writing and is to be found in the 1979 Solomon letter.

8.	Before turning to the arguments, I should note the chronology of these proceedings.  A letter before action was sent on 6th September 2006.  The claim form and particulars of claim were issued on 13th March 2007.  The defence was on 3rd May.  The further information which I have mentioned was given on 30th May and the letter, as I have mentioned, was 5th June 2007. 
9.	The summary judgment application was launched on 26th July and reply evidence was served on 21st September, which followed on from a consent order for evidence by 14th September, extended by agreement for seven days.  
10.	On 12th September, the day before the hearing therefore, the defendant put in further evidence in the form of a witness statement from Angela Carle Taylor, a solicitor employed by Harbottle & Lewis, the defendant’s solicitors.  Mr Arnold does not object to its inclusion, although he says it gets the defendants nowhere and he comments firstly on its lateness and secondly that it shows a recognition on the part of the defendant that on its pleaded case it would fail in resisting summary judgment.  Miss Perkins has prepared a skeleton for this hearing.  It is dated 11th December.  She says that the acts complained of were licensed.  Although there is a dispute about whether there was a licence, she says the suggestion that the second claimant did not grant a licence, it is not something which can be disposed of in a summary judgment application.  Whether or not she is right of course depends on the evidence.
11.	The evidence on behalf of the claimants is that there was no such licence and, apart from the 1979 Solomon letter, no document has been produced which is or evidences a licence.  In order to resist summary judgment on the basis that there was a licence, the defendant must produce some evidence to show that there was.  Simply assertion is not enough.
12.	In this respect Miss Perkins says in her skeleton argument that on or before 27th September 1979, that is the date of the 1979 Solomon letter, the second claimant licensed the performer’s rights to Everest Record Group, which is, I assume, a corporate entity.  She quotes from the second paragraph of the letter, but the skeleton is not, however, consistent with the pleadings and the letter from Harbottle & Lewis which I have mentioned.
13.	I need to read certain parts of Miss Taylor’s witness statement.  She mentions Mr Lambeth, and I should just deal with Mr Lambeth.  He is a solicitor who acts for Charly.  Miss Perkins told me yesterday that he acted for or acts for Mr Solomon and she did that on instructions.  That is in fact not correct, as appears from further information given by Mr Lambeth himself.  He has, however, been the liaison person, because Charly is interested in this matter, and he has been the channel of communication, such as there has been, between Harbottle & Lewis on the one hand and Mr Solomon on the other.  
14.	In paragraph 3 Miss Taylor says:
“Mr Lambeth told me that he has been liaising with Mr Bernard Solomon, the President/Secretary and Treasurer of The Everest Record Group, who resides in California in order to prepare a witness statement from Mr Solomon for the purposes of these proceedings.  For reasons set out below, Mr Solomon’s statement has yet to be finalised.  However, further to my discussions with Mr Lambeth, I am able to summarise my understanding of certain key points made by Mr Solomon during a meeting he had with Mr Lambeth in October.”

	I note that there is no evidence from Mr Lambeth relating to that, nor has he confirmed the accuracy of the report of what occurred which Miss Taylor sets out in her witness statement.  She says:

“Mr Lambeth had made efforts to meet with Mr Solomon during the summer of this year, however he was not able to meet with him until 12th October 2007.  Mr Lambeth has informed me that on 22nd August 2007 Mr Solomon went on holiday with his family for a cruise round the Mediterranean.  On the second day of the cruise he became ill and was taken to hospital in Marseille.  He suffered a heart attack…” 

	I am not going to read the rest of that paragraph, but it goes to explain to some extent why there has been no witness statement from Mr Solomon as yet, given that he was not approached by Mr Lambeth until after he had become ill.  

15.	Miss Perkins also told me yesterday on instructions that there had been previous attempts to contact Mr Solomon and I required a witness statement to be put in to confirm what she was told on instructions which has been done in a second witness statement from Miss Taylor.  I am certainly not going to read that out.  Its contents speak for themselves and it shows that there have been attempts to communicate, although not successful and they both date back to April 2007.
16.	In paragraph 6 of her first witness statement, Miss Taylor says:
“Given the information set out above, Mr Solomon’s evidence is crucial to the facts of this case.  I understand that despite Mr Lambeth’s recent attempts to contact Mr Solomon, he has been unable to follow up with him following their October meeting in order to finalise a statement.”

	I add here whether that is because of the ill-health or because Mr Solomon was unwilling to give a statement I do not know, but Mr Lambeth has told Harbottle & Lewis that he is going to California today and that he hopes to see Mr Solomon and proceed to complete the necessary evidence gathering exercise.

17.	Before turning to what Miss Taylor actually reports from Mr Lambeth, I wish to mention certain paragraphs of the Particulars of Claim, that is paragraphs 10(i) to (vi) and these are common ground.  This is in relation to the copyrights of recordings: (i) Messrs Gold and Goldstein are the first owners of the copyright; (ii) the recordings were made by Messrs Gold and Goldstein pursuant to an agreement in writing with Mike Jeffrey and Jimi Hendrix dated 12th December 1968; by an assignment dated 2nd August 1969, which I believe is a mis-print for September, Messrs Gold and Goldstein assigned the benefit of the December 1968 agreement and copyright to GHG Enterprises Inc, trading as Entertainment International.  By an agreement between Messrs Gold and Goldstein on the one hand and Bernard C Solomon on the other hand dated 29th March 1973 (“the 1973 agreement”), it was agreed that Mr Solomon would acquire title to the said copyrights by acquiring a security interest therein held by United California Bank -and re-assigned the copyrights to a California corporation to be formed by the partners, namely the second claimants.  Subsequently Mr Solomon did acquire the bank’s security interest in the copyrights and by an assignment dated 5th January 1974, Mr Solomon assigned the copyrights to the second claimant.  (vi) By an agreement between the second claimant, the estate of Michael Frank Jeffrey and Warner Brothers Records Inc dated 16th June 1979, the estate of Mr Jeffrey assigned any rights it might have under the 16th December 1968 agreement to the second claimant.
18.	As I said, those facts are common ground and are admitted in the Defence.
19.	The 1973 agreement is, as I have just mentioned, made between Mr Gold and Mr Goldstein on the one hand and Mr Solomon on the other hand.  It envisages arrangements under which a Newco would acquire the relevant rights.  The second claimant was not a party to the agreement.  Clause 6 of the 1973 agreement is of some importance, since it makes provision, among many other matters, for the allocation of powers between Mr Gold and Mr Goldstein on the one hand and Mr Solomon on the other.  
20.	In particular:
“It is agreed that as a result of GOLD and GOLDSTEIN having the right to negotiate on behalf of the said new corporation for commercial exploitation of any and all rights in and to the said motion picture and its soundtrack throughout the world, as aforesaid, SOLOMON shall not have any right whatsoever to negotiate on its behalf for same, nor shall SOLOMON have any right whatsoever to obligate or bind said new corporation or enter into any agreements on its behalf with respect to any corporate assets, including said motion picture, including the soundtrack thereof, without first obtaining the written consent of GOLD and GOLDSTEIN thereto.”

	Accordingly, as between Messrs Gold and Goldstein and Mr Solomon, Mr Solomon was to have no authority to negotiate on behalf of Newco or to enter into binding agreements on behalf of Newco.  There is no suggestion that they have ever given their consent under the 1973 agreement, let alone that they had done so in writing as it envisages.

21.	Under clause 12, by reference to schedule A, are listed all the agreements which Mr Solomon had entered into on behalf of GHG in relation to, among other matters, the rights with which this action is concerned.  Conspicuous by its absence is any mention of any agreement with Everest.  Newco was, in the event, the second claimant.  At the time of its acquisition of the relevant rights, it is common ground that Mr Solomon was the secretary of the company and a 45 per cent shareholder.  Although Miss Perkins has asserted in front of me that he remains company secretary and 45 per cent shareholder, that is on instructions denied by Mr Arnold.  There being no evidence on the point either way and only conflicting instructions, the position before me is that there is no evidence one way or the other about Mr Solomon’s current interest in and involvement with the second claimant, save that Mr Arnold accepts that he does have a 4 per cent shareholding.
22.	There were two other letters which I should mention.  The first is dated 31st August 1999.  It is written to Eversheds who now act for the claimants in this litigation and is signed by Mr Solomon as President of Everest and Secretary of the second claimant.  I do not know the context in which the letter was written, but in it Mr Solomon refers to “we” on a number of occasions.  He seems to do so sometimes referring to Everest, sometimes to the second claimant and sometimes, it would appear, to Mr Goldstein and Mr Gold.  Let me read some relevant parts.  This is a letter to Eversheds, as I have said, and Mr Solomon signs the letter on behalf of the Everest Record Group and on behalf of The Last Experience Inc.  For the first he signs as President, for the second he signs as secretary.  He says:
“We are the licensor to Charly of the Jimi Hendrix Albert Hall recordings.”

	“We” in that context can only be a reference to Everest.  He goes on to say:

“We filmed the performances at the Royal Albert Hall.”

	That can only be a reference to Mr Gold and Mr Goldstein.  He says:

“Subsequently, the album of this soundtrack was released in 1970 and licensed throughout the world and continues to be sold since 1970.”

	Then he says later in the letter:

“… in the early 1970s, Warner Bros … released an album entitled “Hendrix In The West” which embodied our performances of the songs “Little Wing” and “Voodoo Child”.  We filed suit against Warner Bros. Records in the Los Angeles Superior Court.”

	The “we” there is quite clearly a reference to the second claimant.  There seems to be a marked lack in Mr Solomon’s mind of the distinction between the legal entities concerned with these recordings and performances.

23.	The second letter I mentioned is dated 2nd December 1970.  It is a very short letter and it is written on Everest Record Group headed notepaper which is described as a subsidiary of Pickwick International Limited.  That is written to a Mr Harman at Warner Brothers Records Inc and it is signed by Mr Lee T Palmer, Vice President of the Everest Record Group:
“Dear Mr Harman, 
We received your letter of December 1st, 1970 [which I have not seen] with regard to the Jimi Hendrix sound track.  Everest Records is not involved in any manner with this recording.”

24.	Returning to Miss Taylor’s witness statement, she says this in paragraph 5:
“I understand that Mr Solomon made the following points to Mr Lambeth during their meeting:

(i) He has a detailed knowledge of the licence between The Last Experience and Everest and the letter of 27th September 1979 as well as the circumstances surrounding that licence.”

	This leaves one expectantly waiting to see later in the witness statement these details.  I am afraid disappointment follows.

“(ii) He [Mr Solomon] sold the assets of Everest in 1969 to Pickwick International…” 

	which as I have recorded appears from the letter of 1st December, to be a holding company of the Everest Record Group.
“… however he continued to run that company’s affairs from his offices at 10920 Wilshire Boulevard, Los Angeles…”

	Mr Arnold comments, not without some force, that it is very odd to see Mr Solomon continuing to run Everest when all its assets, according to what he had previously said, had been sold to Pickwick.  It goes on:
“In 1975, Everest re-formed and was run by Mr Solomon from the same offices … as The Last Experience and formerly GHG.”

	I am afraid I do not understand what that means.  To say that that the company was reformed and run by Mr Solomon as a bald statement tells me nothing.  Then Miss Taylor says:

“I understand that it was in 1975 that Mr Solomon caused the Second Claimant to licence the Recordings of Hendrix at the Royal Albert Hall to Everest.” 

	So here is a statement that it was in 1975 which is, of course, inconsistent with the pleaded case and would, in any event, not have been allowed without a breach of the 1973 agreement, whether or not the 1973 agreement was binding in any way on the second claimant between Mr Solomon vis-à-vis Mr Gold and Mr Goldstein.  Then it is said by Miss Taylor:
“[Mr Solomon] believed that he was bestowed with authority to impart any rights in the Recordings as shown to have been imparted in the documents relied on by the Defendant.” 

	No explanation is given of the basis on which he considered that he was bestowed with authority, and the only possible reference to the documents relied on can be the matters referred to in the 1979 Solomon letter.  First of all, that letter does not refer to written agreements; it merely refers to agreements and there has never produced any document which suggests that that is the case.  Mr Solomon may, I suppose, come up with it.

25.	In relation to the 1979 Solomon letter, Mr Solomon is recorded as explaining that the letter is inaccurate:
“… in the sense that it suggests Everest had been exploiting the recordings since 1970.  In actual fact GHG Enterprises Inc, The Last Experience Inc and then Everest exploited the Recordings using the name “Entertainment International”.”

	There is no evidence of this at all.  There is simply an assertion that this is what Mr Solomon has said.  It is the first occasion that it has been suggested and really no explanation is offered.

26.	Moreover, if it is correct that GHG and then the second claimant were exploiting the performances and the recordings after 1970, it was not pursuant to any licence agreement, but it was because that they were the owners of the relevant rights.  The only licence issue arises to get the rights into Everest.
27.	Miss Taylor then goes on:
“I understand that it has yet to be discerned from Mr Solomon exactly how and when the rights arrived with Everest, however he has confirmed that he caused Everest to receive the rights by at least 1979.” 

	It hardly needs me to comment that that is of itself deeply unsatisfactory evidence.  One would expect the critical issue of how these rights arrived with Everest would have been one of the major points that would have been discussed at any meeting with Mr Solomon.

28.	What I discern in this witness statement is that Miss Taylor has been given an indication that Mr Solomon might be able to give some helpful evidence, but in spite of the meeting, the defendant is at the present time unable to discern how and when the rights arrived in Everest, but it was at least by 1975.
29.	I should mention before I leave the witness statement (I should have said this before) that the last sentence refers to Everest receiving the rights by at least 1979.  That is what Miss Taylor’s witness statement says.  Miss Perkins tells me that that is simply a typo for 1975, although it has not been corrected in Miss Taylor’s second witness statement.  I do not know what the position really is, but I do not think anything turns on it.
30.	 Returning to where I was, the suggestion is that it was by 1975 that the licence had been granted, but there is no hint of the terms of the licence to Everest.  It is not suggested that there was an assignment.  There is no indication of the consideration given or the duration of the licence, save that the 1979 Solomon letter says that it is to be perpetual.  No supporting documentation has been provided to indicate payment of any consideration, and given that the second claimant is a claimant and that those bringing the claim on its behalf must have access to its records, it would be extraordinary if such documents do exist and have not been brought to my attention by those persons, if the documents are to be found in the files of the second claimant.
31.	In any case, there is precisely nothing from Mr Solomon himself about this yet.  
32.	So far as concerns the law, the general principles in relation to summary judgment are well known and I do not need to repeat them.  They are to be found in cases such as Swain and Three Rivers.  Essentially this application is not to be occasion for a mini trial or for deciding genuine disputes of facts, but a defendant is not allowed to raise spurious and shadowy defences with no merit under the guise of disputes of fact.  
33.	The decision of Sir Andrew Morritt VC in Barsdorf v Randall 15th January 2004 to which I have been referred by Miss Perkins, is a case which shows these principles at work, but it was a wholly different case because it involved fraud, and the dispute was about an identified case whereas in the present case the question relates not to whether the case which is presented is to be believed, but whether there is a case at all.
34.	I am bound to say that absent the evidence from Miss Taylor I would conclude that the case which the defendant seeks to raise on the issue of the alleged licence has no real prospect of success.  Mr Arnold has a number of arguments for reaching that conclusion.  The best arguments, which I accept, are that the 1979 Solomon letter is not itself a contractual document.  It is certainly not a complete document, since it is not signed on behalf of Everest, but more importantly perhaps, it is not easy to see how it could be an offer, providing, as it does no consideration moving from Everest.  Quite apart from that, its language is not of offer but is more consistent with the record of an earlier agreement or agreements as to which the pleaded case pleads none.
35.	That conclusion is consistent with Mr Solomon’s obligations under the 1973 agreement which precludes him from granting a licence on behalf of the second claimant, such as in issue in the present case, without the written consent of Mr Gold and Mr Goldstein, as to which there is not a hint that they gave such consent, or even oral consent.  It is also consistent with Mr Solomon’s positions as both his connection with Everest and his asserted position as secretary of the second claimant at the time, a position of conflict giving rise to considerations, at least on the basis of English law, and I have nothing to suggest that Californian law is materially different, conflict of interest and breach of fiduciary duty.
36.	Quite apart from that, the case which the defendant wishes to make, having obtained evidence from Mr Solomon, is that it is not the 1979 Solomon letter which provides the necessary licence but some earlier agreement.  If that is now the defendant’s case, I do not really see how it could assert the 1979 Solomon letter as the relevant licence, even if the matter is not adjourned.
37.	Further, the other issues which are raised in the witness statement in opposition to this application and in Miss Perkins’ skeleton either add nothing or do not afford the defence with any real prospect of success.  Moreover, Miss Taylor’s evidence, although it suggests that Mr Solomon may be able to come up with evidence to resist summary judgment, is clearly not of itself enough to establish the existence and terms of any agreement with anything like the certainty which would be needed to resist summary judgment.  In other words, if Mr Solomon were able to produce nothing more so that the court is left with the evidence already produced, including Miss Taylor’s two witness statements, this would be a case for summary judgment.  I cannot therefore avoid the question of adjourning by deciding the case is not without the need for any more evidence appropriate for summary judgment.
38.	I have nonetheless decided that I should grant an adjournment.  Although I reach this conclusion very much on balance, I consider that the overriding objective leads to the conclusion that I should give the defendant the opportunity to put in evidence from Mr Solomon.  Although I am sceptical about whether his evidence would be such as to meet the substantial points which Mr Arnold has made in his submission, Miss Taylor’s witness statement is enough to make me think that he may be able to say something to stave off summary judgment.  
39.	I appreciate of course that the claimants want this matter disposed of (in their favour, it goes without saying) and that there is real force in Mr Arnold’s arguments that it is simply too late for the defendant to resist the application on the basis of such flimsy evidence as is actually produced.  It can be argued that there is nothing of substance in Miss Taylor’s evidence and that it is all a matter of hope and speculation, if not fanciful, wishful thinking, that Mr Solomon will come up with something.  As I say, I see the force of that, but if this action is about money, there is nothing to suggest that the claimants will be prejudiced by the delay which an adjournment would produce over and above the prejudice that any litigant who is eventually successful suffers from his case not being heard.  
40.	The claimants, if they are successful on summary judgment, will be kept out of their money for some weeks longer, but that does not, even at this late stage, justify in my judgment shutting the defendant out from producing its evidence when, on the material before me, there is some reason to show that it has not been possible to obtain that evidence in recent weeks.  That, I should say, does not excuse the failure to attempt to obtain this evidence much earlier and to make more efforts than appear to have been made as soon as the defendants were made aware of the claimant’s claim in September 2005.
41.	I do not however consider that a long adjournment should be allowed.  Taking account of the Christmas and New Year holidays and given that Mr Lambeth is going to California today, I think it is fair to fix close of business (that is to say 4.30) on 3rd January as the latest time for serving and filing evidence.  If in practice it becomes impossible to produce the evidence by that time, an application will have to be made for an extension, but however hears that application will want to have clear evidence about why it has been impossible to produce a witness statement by that time.
42.	I propose to order that that defendant, unless time has been extended by agreement or by the court before 3rd January, shall be entitled to rely only on the evidence filed by that time and that, if no further evidence is filed by that time or so extended, the claimants will be entitled to enter judgment on the claim.  The claimant should have 14 days for reply evidence.  In any event, this matter should come back for a further hearing on the first available date on or after 21st January.
43.	Having heard full argument, I will reserve the matter to myself.  If it comes before me, I would be surprised if it could not be dealt with in under one hour.  There is a problem, however, in that I am engaged in a six to eight week trial commencing the week beginning 18th January.  I would anticipate being able to fit in a further hearing during the course of that trial, but if for some reason that should prove impossible, I will, I am afraid, have to release the application to another judge.  
44.	It should be a condition of an adjournment that that defendant should suffer some costs consequences.  I will indicate my thinking, I have not made a firm conclusion on it and Miss Perkins is here and will be able to make submissions to me about it, but this is what I have to say about it.  
45.	I am proposing to order that the defendant should pay the entirety of the costs of this application to date in any event.  This might be said to be a harsh order and that it would be more appropriate that the defendant should only be obliged to pay the costs thrown away as a result of an adjournment.  But I do not think that that would be just.  The claimants have come to court, having launched their application, not only in the absence of the additional evidence which the defendant now seeks to deploy, but on the basis of a pleaded case which the defendant had committed itself to after the claimants had pressed for further information.  If it is now sought to go behind that basis, the claimant should not be exposed to any costs to date.  It could be said that that result is not fair because, even if the evidence had been there in the first place, the claimants would have gone ahead with the application so that, apart from the costs thrown away, costs should be dealt with in the ordinary way at the end of the application when the final result is known.  For my part, I do not think that on the facts of the present case that that would be a fair result.  When the evidence is eventually put in, it may be that the claimants will accept that summary judgment should not be given and not proceed with the application.  If they were to do that, it seems clear to me that they should have all their costs, having made the application on the basis of a clear pleading which, if it had not been departed from, would have resulted in summary judgment. 
46.	I do not think that the position should be any different so far as concerns costs to date, even if the claimants continue with the application in the light of the evidence eventually filed and the lose the application.  The defendant might say that the fact that the claimants continued with the application means that they  would have done so, even if the evidence had been deployed right at the beginning, so the costs, other than those thrown away by the adjournment, should be dealt with in the ordinary way.  That may or may not be so, but it does not seem to me to be all that helpful, let alone conclusive.
47.	Having got this far, it would be entirely unsurprising to find that the claimants continue with the application, which, as I have said, should only take about another hour, since a substantial argument has already taken place.  It is an entirely different question whether it is appropriate to continue with the application from the question whether the application would have been made in the first place, if the defendant’s case had been known and the pleading had been different. 
48.	Further, taking account of the conduct of the defendant as required by CPR 44.3, I find the conduct of the defendant such as to warrant the order that I would propose to make.
MR JUSTICE WARREN:  Do you want to say anything about that harsh costs order, I will, of course, hear it.  It will probably take the wind out of your application for costs, Mr Arnold.
MR ARNOLD:  My Lord, has anticipated what I was going to ask for.  Can I just, before we get to the question of costs, just mention two other matters.  My Lord has held that absent any further evidence from Mr Solomon being produced by 3rd January or any extended time, my clients are entitled to judgment as matters stand?

MR JUSTICE WARREN:  Correct.

MR ARNOLD:  Can I suggest a way in which that position be formalised, which is that I should have judgment on the issues raised by the present Defence but not judgment on the claim.  Because the way it is going to have to work is that in fact, and this leads me to the second point, what the defendant is going to have to do when it puts in its further evidence, is also put in an amended pleading, because the current Defence, my Lord has held, cannot stand.  So they are going to have to re-plead.  Therefore, it seems to me that the court course is to say we have judgment on the issues raised by the existing Defence, that they have liberty as well as putting in further evidence from Mr Solomon, if they can get it, likewise to put in an amended Defence to reflect the new evidence if and when it arrives.  My Lord, that would be my suggestion on that.

		So far as costs is concerned, I would support my Lord’s preliminary thoughts.

MR JUSTICE WARREN:  I do not really like that way of dealing with the order.  I can see your point that it will need an amendment.  I do not understand.  Judgment on the current pleading would mean that you were entitled to go off and get a settlement for damages.

MR ARNOLD:  No it would not, because what I have said is judgment on the issues raised by the existing Defence, not judgment on the claim.  

MR JUSTICE WARREN:  In that case you have my judgment and you do not need an order.  What you need at the end of the day, if and when you win the summary judgment application, is a judgment.

MR ARNOLD:  Quite.  

MR JUSTICE WARREN:  What I am saying is that you can enter that judgment if they do not put any further evidence in.  It seems to me that you hold the position until 3rd January, or any extended date, and then you are entitled to enter judgment pursuant to my judgment.

MR ARNOLD:  As my Lord pleases.

MR JUSTICE WARREN:  I would prefer to do it that way.

MR ARNOLD:  We will express the order in that way.

MR JUSTICE WARREN:  Thank you.  Miss Perkins, costs?

MISS PERKINS:  I hear your Lordship’s thoughts and preliminary views on the issue of costs.  My Lord, all I would simply say is clearly the defendant at this moment does not know what Bernard Solomon is going to say.  It may be that what he says and what he produces clarifies the situation to such an extent that it is plain that there were a licence and that clearly it is something that C2 should have known.

MR JUSTICE WARREN:  It is clearly what?  Something that C2 should have known?

MISS PERKINS:  If that is the case, if that is proven to be the case, and it may well be said that that is something that was apparent all along and perhaps that is something that they would have had at least constructive knowledge of.  I hear what you say.

MR JUSTICE WARREN:  That is a fanciful submission.

MISS PERKINS:  I am in your hands.

MR JUSTICE WARREN:  I am going to make the order which I indicated I was going to make.  It will be that the defendant pay the costs of this application to date in any event.

MISS PERKINS:  My Lord, if it assists my learned friend, it would be the intention of the defendant, if the evidence of Bernard Solomon is received as anticipated or hoped, that there would indeed of course be a need for an application to amend the Defence, but it would be an application rather than just producing.

MR JUSTICE WARREN:  I hoped that would be agreed, the application itself.

MISS PERKINS:  Once the issues are crystallised and we know where we are, perhaps the claimants can take stock.

MR ARNOLD:  My Lord, just on the question of costs.  I do not have a costs schedule which only has the costs of the application.  Our costs schedule is for the entirety of the action.  Obviously we were hoping we were going to be successful.  What I would ask my Lord for is liberty to apply for either an interim payment or a summary assessment when we come back.

MR JUSTICE WARREN:  Yes.

MR ARNOLD:  If that is convenient, my Lord.

MR JUSTICE WARREN:  You may not need to come back.

MR ARNOLD:  Indeed, quite.  That is why I put it in that way.

MR JUSTICE WARREN:  If you do not come back you will need to ask for an assessment or an interim payment.  But I give you liberty to make either of those applications when you think it is appropriate.

MR ARNOLD:  I am obliged.  That is everything then.

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