Claim No: IL-2024-000036 - [2025] EWHC 2172 (Ch)

I have read carefully the witness statements filed by the parties, the skeleton arguments presented by both sides, and the authorities to which I have been referred. As is usual on strike out applications, none of the witnesses was cross-examined.

Doing the best I can on the materials before me, I agree with the Claimant that the Unpaid Royalties Claim was not a pleaded issue in the Newcastle Claim at the time it was compromised. Whilst it had been referred to in pre-action correspondence, there is nothing in the pleadings as filed that refers to the Unpaid Royalties Claim in terms, nor can it be inferred from the text of those documents. In litigation, many allegations are, for better or worse, discussed between the parties in pre-action correspondence, with many not being pursued when a case is filed. What matters for the purposes of the Newcastle Claim is the pleadings in that case – by which I mean the pleadings as filed, not including the draft amended pleadings. These later documents were not part of the action until filed. They could have been withdrawn or amended at any time prior to filing. They may not have been permitted by the Court. Rather, looking at the pleadings as filed, in my judgment, the Unpaid Royalties Claim was not a pleaded issue in the Newcastle Claim.

I am less certain that it was not a “live” issue. Certainly, it had been raised in correspondence, but for the purposes of assessing this aspect of the strike out application, what matters is the Newcastle Claim as pleaded. The acceptance of the Part 36 Offer settled the pleaded case. Matters which had been discussed but not pleaded may well be relevant for Henderson v Henderson purposes, but they do not make the Unpaid Royalties Claim a pleaded issue in the Newcastle Claim.

This basis for the strike out application therefore fails: the Unpaid Royalties Claim was not a pleaded issue in the Newcastle Claim at the time the Part 36 Offer was accepted.

Turning to the submissions under Henderson v Henderson and applying a broad merits-based approach as I was urged to do, ultimately, I do not need to reach a concluded view on whether Mrs Lish ought to have known the Defendants’ position on unpaid royalties based on the pre-action correspondence or the early pleadings in the Newcastle Action. It seems to me unlikely on the face of it that Mrs Lish would not have noticed that her payments, for a period of 7 years, were in rounded numbers. Further, having been caused to wonder in July 2022 whether she was being underpaid (as she admitted) an amount I am now told could be as high as £300,000, I am not convinced that an objective person in Mrs Lish’s position would not have taken further steps to ascertain the true position, particularly as she later commenced the Newcastle Claim against Northern Block. I do not understand Lloyd LJ’s comments at [59] of Stuart v Goldberg Linde to rule out examining whether a claimant ought to have looked into their affairs. Lloyd LJ rules out a general duty to exercise reasonable diligence, but leaves open a consideration of lack of reasonable diligence in the circumstances of a particular claimant “in order to decide whether he knew enough to put him on inquiry as to try to find out more”. The Defendants’ counsel urged on me that, having been caused to wonder, Mrs Lish ought to have taken further steps to find out the position of any underpayment. There is force in that submission, particularly as it enhances the objective of Henderson v Henderson of the public (and the parties) not being abused by multiple proceedings.

It does seem to me that it is likely that Mrs Lish was on notice from as early as 2022 that, since 2015, she had not been paid the 60% royalties under the 2012 Agreement. The Defendants’ counsel describes as “entirely fanciful” Mrs Lish’s position that she was first on notice of the alleged underpayment when she received the draft Amended Defence and Counterclaim. That may put matters too highly, but it does seem to me that all the dots were there, and a reasonable person in Mrs Lish’s position would have taken steps to join them.

However, and in any event, that does not matter because Mrs Lish accepts that she had sufficient information to bring the Unpaid Royalties Claim having received and reviewed the draft Amended Defence and Counterclaim. This was, if I may say so, a sensible admission, given the clarity of that document. There was a month between service of the proposed Amended Defence and Counterclaim and acceptance of the Part 36 Offer. At the hearing, I asked Mrs Lish’s counsel if it would have been open to her once she had received the proposed Amended Defence and Counterclaim to withdraw the Part 36 Offer, to provide her with sufficient time to regroup, and, if appropriate, replead the Newcastle Claim: he accepted that Mrs Lish could have taken those steps. Alternatively, she ought to have been clear to the Defendants that the Unpaid Royalties Claim was not included in the Part 36 Offer, that is, that she no longer wished to settle the whole dispute to “move forward and progress with her own business”. In my judgment, it was not open to Mrs Lish on the basis of Dexter to allow the Newcastle Claim to settle, and then commence further proceedings against the same parties in relation to the same arrangement and the same facts. To do so places the Defendants in a very difficult position. In compromising the Newcastle Claim, the Defendants made certain admissions as to copyright ownership that ran contrary to their pleaded case that Mrs Lish was an employee: they might not have done so had they known they were facing a further claim for unpaid royalties. It is not an answer, as Mrs Lish’s counsel submitted, that the Defendants were facing the Unpaid Royalties Claim as a fresh claim when Mrs Lish was entitled to amend the Newcastle Claim to include it – the Defendants are, in effect, now facing this claim with one hand tied behind their backs given the admissions made to settle the Newcastle Claim. That underlines the abusive nature of this claim. I also do not accept Mrs Lish’s counsel’s submission that the Defendants are not vexed twice because this claim “depends on different issues that were not in dispute, or were not central to” the Newcastle Claim. I disagree – the meaning of the 2012 Agreement and any variation to it were central to the issues in the Newcastle Claim, and, as counsel for the Defendants pointed out, the Unpaid Royalties Claim involves the same parties, the same subject matter, the same agreement, the same issues and the same remedies.

Lord Bingham emphasised in Aldi the need for finality in litigation. I am also mindful of the need for efficient use of court resources and the needs of other users. A multiplicity of actions is not in the interests of court users generally (because it occupies additional court days that could be used by other litigants) and, in this case, is certainly not in the interests of the Defendants, who have given detailed evidence of the negative impact on them of these proceedings. In my judgment, the Defendants have established that the Unpaid Royalties Claim is unjustly harassing and oppressive. The Unpaid Royalties Claim is abusive, and should be struck out.