Case No. EWHC-1798-(IPEC)

81.Mr Smith dealt with the ownership of goodwill by the Claimants and Defendants respectively together. His position can be summarised as follows:•The Claimants have accrued goodwill in the name ‘the Rubettes’ since at least 1983 (and arguably have acquired any pre-existing goodwill for the period between 1974 and 1983);•The Claimants have accrued further goodwill in ‘the Rubettes featuring Alan Williams’ since 2003;•The Claimants may assert their goodwill in ‘the Rubettes featuring Alan Williams’ against any third party;•The Claimants may assert their goodwill in ‘the Rubettes’ against any third party other than Mr Hurd, with whom a contractual arrangement has been reached under which AWEL will trade through a band called ‘the Rubettes featuring Alan Williams’;•The Defendants have never individually had any goodwill in ‘the Rubettes’ as they never traded under that name;•To the extent that Mr Clarke or Mr Richardson had any interest in goodwill through their interest in the companies connected with the Rubettes between 1974 and 1983, that is no longer the case because: either any such interest was transferred to AWEL through a series of agreements in 1994; or the relevant goodwill (as an asset of a company) vested in the crown when those companies were dissolved.82.It follows in Mr Smith’s submission that the Claimants have relevant goodwill and the Defendants have none, meaning that the Claimants must succeed if misrepresentation and damage are shown on the facts.83.The legal and factual arguments on which Mr Smith relies are summarised below, dealing with each period of trading under ‘the Rubettes’ or ‘the Rubettes featuring Alan Williams’.1974 – 197684.The Rubettes Limited was responsible for all trading activity under the name ‘the Rubettes’ between its formation and early 1976, when it was replaced by the 1976 Company. The Defendants admitted the trading status of The Rubettes Limited at paragraph 12 of their Amended Defence (although Mr Smith acknowledges that there is also a non-admission at paragraph 13.1). That company has long since dissolved.1976 – 198385.The 1976 Company was responsible for all trading activity as ‘the Rubettes’ between early 1976 and 1980. While the money dwindled during the hiatus after 1980, it was still paid through the 1976 Company. It is common ground (admitted at paragraph 16 of the Amended Defence) that the 1976 Company carried on the business and that all the income during the period was paid to it, not to any individual. Mr Smith submits that, for so long as it was responsible for the trading activity of the band, any goodwill accrued to the 1976 Company. That company has long since dissolved.86.Mr Smith submitted that in about 1994 any rights owned by the 1976 Company were in any event assigned to AWEL under a series of agreements, both written and oral (the ‘1994 Agreements’). The circumstances surrounding these purported assignments are discussed further below. However, Mr Smith submits that whether or not any effective assignment occurred is ultimately irrelevant because on any analysis neither Mr Richardson nor Mr Clarke ever had any personal interest in any goodwill attached to ‘the Rubettes’ in the period before 1983.87.In summary, Mr Smith’s position is that the trading before 1983 either:(i)was carried out by the limited companies mentioned above; or(ii)by a series of partnerships (of which there is no evidence); or(iii)some combination of the two.88.As to option (i), Mr Smith submits that the evidence is clear that trading before 1983 was carried out by the limited companies. If so, it follows that, as companies have separate legal personalities, their assets are not owned by shareholders. He relies on section 654 of the Companies Act 1985 which provides that, if a company is dissolved, any remaining assets which have not previously been transferred (including any goodwill which remains with the company) are vested in the Crown. That would mean that band members who performed under the name ‘the Rubettes’ at any time when trade was carried on by one of the two companies in question would have no rights to the goodwill of the relevant period whether or not they had been shareholders of the relevant company.89.As to option (ii), Mr Smith submits that, if the goodwill did not accrue to the companies then, under the Partnership Act 1890 section 1(1), any unincorporated band of individuals who carry on business in common with a view to profits is treated as a partnership. If that were to be the case here, he submits that Byford v Oliver is clear authority that neither Mr Richardson nor Mr Clarke (nor indeed Mr Williams) would have the right to the goodwill of any such partnership. As set out at [19] of that Judgment, every time a member of the band left, the partnership as then constituted would be dissolved and its assets (including the name and goodwill) could at that point have been realised so that each partner could have a share in the realised value of those assets. The partners of each successive partnership at will would have had an interest in the realised value of the assets of that partnership, but not in the assets themselves. The only way in which this could have been avoided would have been for a partnership agreement to have been concluded dealing expressly with the consequences of departure of members of the partnership.90.As to option (iii), given the conclusions in respect of options (i) and (ii), Mr Smith submits this could not assist the Defendants.91.Mr Smith discussed the further possibility that some or all of the band members were trading in their own right as sole traders and that any corporate entity either accrued no goodwill (the goodwill being accrued by the individual band members jointly and severally) or that it accrued goodwill only concurrently with goodwill also being accrued by those band members who were trading as sole traders. Mr Smith submits that this analysis is incorrect, both as a matter of fact (neither Mr Clarke nor Mr Richardson has put forward any evidence that they traded in their own right while performing as ‘the Rubettes’ during the period in question) and as a matter of law (given the default position in (ii) as to the trading relationship between unincorporated bands of individuals).