Both parties painted their own interpretation of whatever transpired at the hearing when it was decided that the trial between Group Lotus and Team Lotus be brought to a full trial in March 2011.

We’ve obtained the full transcript of the proceedings – so now, for whoever’s interested, you can read what actually happened after the jump, between Mr Silverleaf for Group Lotus Plc, Mr Morpuss for Team Lotus and Justice Peter Smith.

Claimant:
GROUP LOTUS PLC

Defendants:
1MALAYSIA RACING TEAM SDN BHD
TEAM LOTUS VENTURES LIMITED
TUNE GROUP SDN BHD
ANTHONY FRANCIS FERNANDES
1MALAYSIA RACING TEAM (UK) LIMITED

MR. MICHAEL SILVERLEAF QC and MR. BRIAN KENNELLY (instructed by SNR Denton UK LLP) appeared for the Claimant (GROUP LOTUS PLC).

MR. GUY MORPUSS QC and MS. PATRICIA EDWARDS (instructed by MacFarlanes LLP) appeared for the 1st Defendant (1MALAYSIA RACING TEAM SDN BHD).

MR. SILVERLEAF: May it please you, my Lord. In this matter I appear with my learned friend Mr. Kennelly for the claimant and my learned friends Mr. Morpuss and Ms. Edwards appear for the defendants.

MR. JUSTICE PETER SMITH: Do you appear for all the defendants today or are you just doing one?

MR. MORPUSS: Only 1MRT and that is the only defendant to this application, although MacFarlanes and I and my learned junior do represent the other defendants as well.

MR. JUSTICE PETER SMITH: Yes.

MR. SILVERLEAF: My Lord, this application today before the court is for summary judgment on a single isolated issue arising under the trade mark licence granted by Group Lotus to 1Malaysia Racing (whom I will call “1MRT” for short, if I may) in 2009 to race in Formula One under the name LOTUS RACING. Your Lordship has had a rather voluminous set of papers —-

MR. JUSTICE PETER SMITH: But no reading list.

MR. SILVERLEAF: I am very sorry, my Lord. Have you had the opportunity to read at least the skeleton arguments?

MR. JUSTICE PETER SMITH: I have read the skeleton arguments, I have read the pleadings and I have glanced at the witness statements and I have read most of the historical agreements and the 2009 —-

MR. SILVERLEAF: I am very grateful, my Lord. That should speed things up enormously.

MR. JUSTICE PETER SMITH: I think things could be sped up enormously another way. When are you proposing to have the trial of the rest of the action?

MR. SILVERLEAF: We have, I think, been given a trial window of early next year.

MR. JUSTICE PETER SMITH: How long do you estimate the trial?

MR. SILVERLEAF: I think it is 10 days, my Lord. There are two problems. One is, obviously the 2011 racing season is about to start.

MR. JUSTICE PETER SMITH: It starts in Bahrain, 17th March?

MR. SILVERLEAF: The middle of March, yes. The other is that I think the parties are agreed we need to ask the court to expedite the full trial in any event so that it takes place before the 2012 season.

MR. JUSTICE PETER SMITH: No. I think we should expedite it so that it starts before the 2011 season. I think we should have a speedy trial of the whole action before, certainly, the end of March. I think we should set a timetable to hear the whole action then. There are no resource issues in this case, given the schedules of costs that have been provided to me. Let us get it all sorted in one go.

MR. SILVERLEAF: My Lord, obviously I will have to take instructions on that. I suspect my learned friend will as well.

MR. JUSTICE PETER SMITH: We have had the pleadings. There has not been a reply and defence to the counterclaim yet, has there?

MR. SILVERLEAF: The pleadings are closed. I believe there is still outstanding a request for further information from us to the defendants which has not been answered. Apart from that, I suspect the pleadings are terminated.

MR. JUSTICE PETER SMITH: I think both ought to take instructions. I am sure we can get this trial on. I have already made inquiries of the Listing Officer and we can get a 10 day trial on this term. It is a shame you did not apply for this back in front of Briggs J in November, but the parties can do it, so far as I can see. There are no resource issues — just for lots of people. That is it.

MR. SILVERLEAF: My Lord, in that case —-

MR. JUSTICE PETER SMITH: I will rise if you like and you can both —-

MR. SILVERLEAF: I do not think I can take instructions without your Lordship rising.

MR. JUSTICE PETER SMITH: No. It is best I do not hear what you say — good or bad.

MR. SILVERLEAF: Indeed, my Lord. Can we have 10 minutes?

MR. JUSTICE PETER SMITH: Have as long as you like.

(A short adjournment)

MR. SILVERLEAF: My Lord, thank you very much for the opportunity to take instructions. Our position is that it is a tough call to do a trial that quickly but we think we can do it and if your Lordship wishes to direct a speedy trial we would be delighted. Obviously, we would like to dispose of this dispute before the season begins and, frankly, if we can dispose of it early in the season that is almost as good. I have to tell your Lordship that the only reason we did not ask for a speedy trial at the outset is that we did not think the other side would agree. I wait to hear what my learned friend says.

MR. MORPUSS: My Lord, much as we would like to see this resolved, with the best will in the world we do not see that it is going to be capable of being resolved by March or even the end of March as a trial.

MR. JUSTICE PETER SMITH: Why not?

MR. MORPUSS: It is all very well, my Lord, to just throw resources at a case, and your Lordship is right that there are plenty of solicitors and there are plenty of funds on both sides. But we have all seen cases where solicitors simply throw trainees and resources at cases. Unless those are well managed and well directed what one ends up with is people simply running round like headless chickens and it does not get one anywhere.

MR. JUSTICE PETER SMITH: That is a matter of getting resource sorted out.

MR. MORPUSS: It is, my Lord, but simply saying there are endless resources is not the answer. The question is what we can actually achieve in six to eight weeks. The concern —-

MR. JUSTICE PETER SMITH: You ought to look at my decision in Re Crowson Fabrics where I directed a trial on the Friday to start on the following Wednesday.

MR. MORPUSS: Yes, but of course —-

MR. JUSTICE PETER SMITH: And it did. That was a lot shorter than this, obviously, but I see no reason why this cannot be put in in six weeks.

MR. MORPUSS: That is what I was going to say to your Lordship. Of course, it depends very much on the case. There are a couple of concerns that we have. One is that this application was made on 20th October last year. If we had been approached then for an expedited trial it could have been approached with a view to seeing whether we could get it on in February or March before the season started — an expedited trial properly arranged and managed. It is the claimant who chose to make this application for summary judgment which we submit, if we get to it, is a hopeless application and the only way of resolving this is a trial. Because of their application everyone has been focused for the last few months on that. As far as the other four defendants go that I act for, we have not been focusing at all on the rest of the case beyond pleading out the issues in the pleadings. It has all been focused on dealing with this and we have not been off exploring the evidence that we need to produce. My learned friends have turned up with Mr. Monk, the Group Lotus employee from 1978. He criticises my side for not having an equivalent. We have approached some other witnesses may be able to call but we are at a very early stage in those inquiries. We can get on with those but trying to do it in a matter of weeks is going to be pretty difficult, my Lord.

MR. JUSTICE PETER SMITH: The history is very interesting but the history involves examining the chains of devolution of the various marks through various companies and through various agreements, does it not? That is the primary issue as to whether or not the defendants have an independent right to use TEAM LOTUS, is it not?

MR. MORPUSS: There are two limbs to it, my Lord. Your Lordship has rightly identified one of them, which is whether the chain of agreements passes through Mr. Hunt to my clients. But there is another limb to it which is the one that my learned friend takes in his skeleton on this application, which is whether the goodwill in TEAM LOTUS and Group Lotus is divisible or indivisible. That is a central question on the historic relationship between the two companies. No one has bottomed that out yet. Your Lordship has looked at the 1985 agreement and one of the things that appears in the 1985 agreement is a reference to a 1986 agreement. There is some suggestion in the papers that things changed after 1968, in the same agreement, that after 1968 there was a clear separation of the companies.

MR. JUSTICE PETER SMITH: Mr. Hunt is still around, presumably, is he not?

MR. MORPUSS: I believe so, my Lord, yes.

MR. JUSTICE PETER SMITH: And Mr. Hunt has been around during the whole of the period of these operations. You will be able to speak to Mr. Hunt. He has sold his interest in the companies, presumably for some money, and he will, no doubt, co-operate with Mr. Fernandes. Given Mr. Hunt’s stated belief that since 1995 he has been trying to get TEAM LOTUS back on to the Formula One front, he would be very keen to see this happen, would he not?

MR. MORPUSS: One would have thought so, my Lord, and it is likely he can give some helpful evidence from that period onwards.

MR. JUSTICE PETER SMITH: My view with these things is that if we pick a date and we say the trial will start then and we set a timetable and we police what goes on between now and then — it is no good looking backwards and saying, “But the claimant could have made an application earlier.” That is gone now — if there are any difficulties what I do with cases like this is I police the operation of the order to ensure that it happens.

MR. MORPUSS: Of course, my Lord.

MR. JUSTICE PETER SMITH: It is very difficult for parties, in my view, to come to court and say, “We have got this big point to be decided before the commitment of the Formula One season” and then, when they are offered a chance to have the case heard, say, “Ah but we want to kick it into the long grass for another year”.

MR. MORPUSS: My Lord, it is certainly not our desire to kick it into the long grass but we didn’t come to court saying, “We want to have this resolved”. It is my learned friend’s application for expedition which Briggs J granted. I am not trying to be difficult, but I am simply looking at the practicalities of —-

MR. SILVERLEAF: With your consent.

MR. MORPUSS: No, without our objection. We did not consent to it, if it matters. But, my Lord, there is also the question of disclosure. What is going to happen is that there are a lot of documents to come out of Group Lotus. If disclosure is going to be done in a matter of a few weeks, inevitably there will be arguments about what is proportionate to do in the disclosure exercise and, given how important the history is and how important it is to dig out documents where there are not witnesses —-

MR. JUSTICE PETER SMITH: I had the same arguments in the Candy Bros. litigation last year when they told me in March they could not possibly meet a trial timetable in May. I rejected that, I set a timetable and the trial was heard in May. Their arguments there were the same point: thousands of pounds of documents hidden away in various places and disclosure cannot take place. My view is that we set a timetable, the parties approach it with their best endeavours and if there are any difficulties then you come back to me on a liberty to apply provision and we will see where we are going. I firmly believe the parties should make an attempt to have this issue resolved before the Formula One season starts this year or has gone too far.

MR. MORPUSS: My Lord, could I just pick up on that last point which is getting it resolved before the Formula One season starts. The season, I am told, starts on 11th March in Bahrain and then it moves on to Melbourne at the end of March.

MR. JUSTICE PETER SMITH: And then there is a bit of gap.

MR. MORPUSS: On 8th April they are in Malaysia and then, on 15th April, in Shanghai. The concern we have is that from early March onwards, when the team have all gone out there, everyone is going to have disappeared and in terms of witnesses that we need from the clients or witnesses from Formula One, they are all out in the Far East for a couple of months.

MR. JUSTICE PETER SMITH: The only area where you are likely to have witnesses is over the allegations concerning the 2009 agreement as to whether or not it was broken by your clients or not and whether the claimant broke it.

MR. MORPUSS: Yes, my Lord.

MR. JUSTICE PETER SMITH: Once again, we can always adapt, in the modern world, to the hearing of evidence in the modern world to the hearing of evidence by video link or an appropriate timetabling of the case. I firmly believe that parties have a right, and, of course, have a duty to have their dispute resolved quickly and, given the importance of this case, I think it ought to be heard, if possible, sometime in March. You might lose two. It may slip into April. But the vast bulk, subject, of course, to anybody’s right to appeal (but that is a different story, that is not my concern), of the Formula One 2011 ought to take place with at least a first instance decision as to the rights between the parties. That of course, also assumes that the parties do not become sensible in the meantime and negotiate a settlement. Speedy trials concentrate people’s minds in that regard as well.

MR. MORPUSS: Of course they do, my Lord. May I add one other point, then, my Lord, which is this. An application of this sort is not going to resolve the use of TEAM LOTUS by my learned friend in the 2011 season. It is not the purpose of this application that his team can use the name TEAM LOTUS. All the entries have been made for the Formula One championships. They are sponsoring the Renault Team who have to use the word “Renault” in their name because that is their chassis name. So even if there is a speedy trial it is not going to result in my learned friend being able to use the name TEAM LOTUS this season.

MR. JUSTICE PETER SMITH: Has he got an application to do that?

MR. MORPUSS: No. That was my point, my Lord.

MR. JUSTICE PETER SMITH: No. The whole point is stopping you using it, is it not?

MR. MORPUSS: Yes. That is what they want to do. It is a dog in the manger application. They do not want to use it themselves. They want to stop us using it.

MR. JUSTICE PETER SMITH: It is a commercial dispute between two commercial organisations as to their respective rights. This regularly happens. No doubt there will be the prospect of money changing hands one way or another as leading to an inducement to resolve the dispute. If they have a right to stop you using TEAM LOTUS, they are entitled to seek to exercise it. Equally, if you have a right to use TEAM LOTUS, you should be able to do that free from them.

MR. MORPUSS: Yes.

MR. JUSTICE PETER SMITH: I am giving both sides an opportunity to have this resolved now rather than later.

MR. MORPUSS: My Lord, as I say, we are keen to have it —-

MR. JUSTICE PETER SMITH: If you do not have that and it goes off to another year and there is no application by the claimant for interim relief, you will then have, hanging over the 2011 season, the question as whether or not your clients, legitimately, are entitled to use TEAM LOTUS. If, at the end of next year, the court determines you were not, then there are going to be all manner of arguments about the relief, is there not?

MR. MORPUSS: My Lord, as I said, we are enthusiastic about getting it resolved early.

MR. JUSTICE PETER SMITH: Good. I am glad to hear it.

MR. MORPUSS: But we would like it to be done in an orderly way and we feel that March is too soon. From our point of view, if we win the trial, we want to stop them, for example, using the black and gold livery of TEAM LOTUS which they use —-

MR. JUSTICE PETER SMITH: Have you claimed that in your counterclaim?

MR. MORPUSS: That is something that we need to amend, my Lord, because it has only happened after our last round of pleadings was served. If we get into a discussion about directions, that is a direction I would ask, for leave to amend the defence and counterclaim to bring that claim. My Lord, the reality is that if you order this we will work towards it with the best will in the world but we may be coming back in a few weeks and saying it is just not possible. But, obviously, if your Lordship wants to have a trial in March we will do what we can.

MR. JUSTICE PETER SMITH: I will, of course, entertain applications, by either side if they come and tell me, “The timetable is so strict that I cannot fairly present my client’s case”. I will not force a trial if it is going to an injustice in that way, but I do believe the parties ought, at least, to make a serious attempt to have a trial as early as possible in March.

MR. MORPUSS: The final point, I would say, my Lord, is we have not been able to take any instructions from the clients and the points I have been putting to your Lordship are simply the considerations that the legal team has come up with. Our clients are out in the Far East, obviously.

MR. JUSTICE PETER SMITH: I understand that. They are all probably safely in bed now.

MR. MORPUSS: Yes.

MR. JUSTICE PETER SMITH: I would, in any event, give you liberty to apply on 24 hours’ notice back to me on any issue. That is my standard case management direction anyway. Given that, we need a timetable for a speedy trial, do we not?

MR. SILVERLEAF: It would appear so, my Lord, yes.

MR. JUSTICE PETER SMITH: If we look at March and you want 10 days, a start on either the 14th or 21st March would be a good idea, I would have thought. I think it is probably optimistic to say that we can start it for 10 days before that first Formula One in Bahrain.

MR. MORPUSS: In the interests of having the extra week, I would go for the 21st, my Lord.

MR. JUSTICE PETER SMITH: What do you say, Mr. Silverleaf, 21st start?

MR. SILVERLEAF: Would your Lordship just give me one moment. (Counsel took instructions) Yes, my Lord.

MR. JUSTICE PETER SMITH: 21st March?

MR. SILVERLEAF: 21st March.

MR. JUSTICE PETER SMITH: 21st March for 10 days. Do you want to attempt to agree a timetable between yourselves first?

MR. MORPUSS: I think that would be more sensible, my Lord, yes.

MR. SILVERLEAF: I am sure we can, my Lord.

MR. JUSTICE PETER SMITH: Yes, adding a clause, my standard clause, which is: “Liberty to apply to me at ten o’clock on any day, subject to my availability, for 30 minutes on two business days’ notice or less if urgent on any matter arising out of this order”. I am not suggesting the case comes before me at trial. I suspect it will probably go before a different judge given the IP issues, but there is no reason why I should not at least drive through the case management to trial. That is a very important provision. My experience over the years has been that that stops people taking silly stances because they come in front of me and I shout at them.

MR. MORPUSS: I am not sure we have time to take silly stances on this timetable, my Lord, anyway.

MR. JUSTICE PETER SMITH: I believe in this timetable but it is when things disappear into correspondence. Do not get involved in correspondence about issues. Come and see me informally on that liberty to apply. Take as long as you need over the directions. I will notify listing that that is the time you are aiming for.

(A short adjournment)

MR. SILVERLEAF: My Lord, we have a provisional timetable subject to your Lordship’s approval. Unless you want to, you do not need to write it down. We will prepare one.

MR. JUSTICE PETER SMITH: Yes. I am just listening.

MR. SILVERLEAF: The defendants should have leave to amend their counterclaim by 28th January. We would have liberty to amend the reply and defence to counterclaim in response by 4th February. Disclosure on the 14th. Inspection on the 16th. Witness statements on 7th March. Trial on the 21st. If your Lordship is happy with that, the parties are.

MR. JUSTICE PETER SMITH: Is no expert evidence going to be called?

MR. SILVERLEAF: Not as far as I can see. This is a case which turns entirely on fact.

MR. JUSTICE PETER SMITH: The only areas possible — No, I am not going to encourage you to think of expert evidence.

MR. SILVERLEAF: I am very pleased to hear that, my Lord. Subject to your Lordship’s approval —-

MR. JUSTICE PETER SMITH: Yes. The only add-on I would have is that skeleton arguments, reading lists, bundles, lists of authorities should be lodged by, shall we say, Wednesday the 16th and make Monday the 21st a reading day for the judge. And put my liberty to apply provision in.

MR. SILVERLEAF: I am sorry, my Lord. I was taking that as read. I do apologise.

MR. JUSTICE PETER SMITH: I have spoken to listing and Mr. Bell is very happy to have you in on that day.

MR. SILVERLEAF: Excellent.

MR. JUSTICE PETER SMITH: Costs reserved?

MR. MORPUSS: My Lord, the effect of this is that the summary judgment application is not going to be heard and was a mistake to have been brought.

MR. JUSTICE PETER SMITH: No. You can have that argument at the end of the trial.

MR. MORPUSS: Okay, my Lord.

MR. JUSTICE PETER SMITH: If you ever reach that stage. The only other thing is that dreadful word “mediation.” Is there any prospect of a mediated settlement in this case? I would suspect that the only possible time for mediation is after you have had your disclosure and exchange of witness statements. My experience is mediation does not take place when everything is still inchoate. Maybe I do not need to say to such an experienced team of lawyers that they should think about settlement before they spend 10 days in court.

MR. SILVERLEAF: We have and we are, my Lord.

MR. JUSTICE PETER SMITH: What, you are experienced and you have discussed it?

MR. SILVERLEAF: We have thought about settlement and we are thinking about it.

MR. JUSTICE PETER SMITH: Right.

MR. SILVERLEAF: One always does.

MR. JUSTICE PETER SMITH: Not always. We sometimes have lengthy cases which attract comments about tanks and things. Very well. If the order can be e-mailed to my associate and my clerk, I will sign it off.

MR. SILVERLEAF: Thank you very much indeed, my Lord. We are very grateful to your Lordship for both suggesting and directing —-

MR. JUSTICE PETER SMITH: The other thing that occurred to me is this. You are going to maintain the status quo in the sense that the defendants are going to be able to enter the existing Grand Prix that will take place before the trial as they have registered, presumably, and with all rights reserved in respect of that?

MR. SILVERLEAF: Yes, my Lord, subject, obviously, to an agreement to the contrary between the parties, whether temporary or permanent. Also, we are both subject to the rule of Formula One management. If Formula One management say we can or cannot do something, either of us, then we are not able to gainsay that because they are in control.

MR. JUSTICE PETER SMITH: They are not going to stop the defendants because the defendants are already registered to participate, are they not?

MR. SILVERLEAF: I think that is right, my Lord.

MR. MORPUSS: Yes, that is right, my Lord. We are already registered. It is too late —-

MR. JUSTICE PETER SMITH: And not calling yourself “Lotus Renault” are you, or anything like that?

MR. MORPUSS: We are not, my Lord, no.

MR. JUSTICE PETER SMITH: The claimant is not calling itself Lotus Renault?

MR. MORPUSS: It is, yes.

MR. SILVERLEAF: We are.

MR. JUSTICE PETER SMITH: You are?

MR. SILVERLEAF: Yes.

MR. JUSTICE PETER SMITH: There are going to be two Lotus ones there.

MR. SILVERLEAF: That is why we are here, my Lord.

MR. JUSTICE PETER SMITH: Both wearing the same logo?

MR. MORPUSS: Slightly different colours, my Lord.

MR. JUSTICE PETER SMITH: There will be some very valuable memorabilia available, will there not, if some of these come out in the first part of the season? I had a case like that concerning football cards. I had stopped a rival football cards case and they left an original one because I granted an injunction stopping them selling any more. Unreasonably, they asked for the original back.

MR. SILVERLEAF: Suddenly acquired added value.

MR. JUSTICE PETER SMITH: My former clerk’s son looked interested. Very well. Thank you very much.