Credico Marketing Ltd & Anor v Lambert & Anor

Factual and Procedural Background

The proceedings arise from a contractual relationship between Credico Marketing Limited ("Credico") and the defendants, who supplied services as independent sales advisers through one of the defendants' companies. This relationship was governed by Trading Agreements containing restrictive covenants preventing the defendants from providing similar services to others during and after the contract. In late 2020, the relationship broke down, leading Credico to initiate proceedings for breaches of these covenants. A trial on liability was held in June 2021, where the defendants were found liable and the covenants upheld. On appeal, the post-termination restraint (clause 21.2) was found unenforceable.

Subsequently, Credico advanced a broader claim alleging that the defendants engaged in unlawful means conspiracy and unlawful interference with business by inducing breaches of restrictive covenants among other marketing companies. Permission to amend the claim to include these torts was granted in July 2021, with damages claimed at nearly £2 million.

The defendants were initially represented by solicitors but later acted in person. A series of case management orders required the defendants to provide further information and pay costs. The defendants failed to comply with these orders, leading to an "unless" order striking out their amended defence and entering judgment on liability against them for the economic tort claims.

The defendants sought permission to appeal the striking out order and to rely on fresh evidence concerning impecuniosity, which was refused by the court.

Legal Issues Presented

1. Whether permission should be granted to appeal the order striking out the defendants' amended defence and entering judgment on liability.
2. Whether permission should be granted to admit fresh evidence relating to the defendants' financial position (impecuniosity) to justify non-payment of costs.
3. Whether the unenforceability of the post-termination restraint clause (clause 21.2) affects the validity of the judgment on liability entered against the defendants.

Arguments of the Parties

Defendants' Arguments

• The defendants sought to adduce fresh evidence in the form of a witness statement from Mr Lambert dated 15 June 2022 to establish impecuniosity, arguing this justified non-payment of costs and supported their case for an extension to comply with the unless order.
• They contended that indications such as acting in person and solicitors acting without charge supported their assertion of impecuniosity, even in the absence of detailed evidence.
• They argued that the judge should have granted an extension for providing further information related to the amended defence.
• They suggested that the unenforceability of clause 21.2 significantly impacted the value of Credico's claim.

Claimants' Arguments

• The claimants submitted that the defendants failed to provide adequate and timely evidence of impecuniosity before the judge, contrary to established legal principles requiring full and frank disclosure.
• They argued that the defendants had funds for legal representation and security for costs but failed to pay relatively modest sums ordered, indicating conduct aimed at delaying or frustrating proceedings.
• They maintained that the unenforceability of clause 21.2 did not undermine the judgment on liability as the claim did not depend solely on that clause.
• They opposed the admission of fresh evidence and argued the appeal should be refused.

Table of Precedents Cited

Court's Reasoning and Analysis

The court refused permission to appeal and to admit fresh evidence primarily because the defendants failed to provide adequate evidence of impecuniosity before the lower court, despite having opportunities and legal representation. The court emphasized established legal standards requiring detailed financial disclosure to justify non-payment and the denial of justice argument under Article 6 ECHR, referencing Michael Wilson v Sinclair.

The court acknowledged the defendants' late application to adduce fresh evidence but found no satisfactory explanation for its prior non-disclosure, applying the Ladd v Marshall principles to refuse its admission.

Regarding the enforceability of clause 21.2, the court analyzed the pleadings and submissions and concluded that the judgment on liability did not depend solely on the post-termination restraint. Therefore, the prior appellate decision finding clause 21.2 unenforceable did not undermine the liability judgment. The defendants remain entitled to rely on that finding in assessing causation and damages, consistent with the principles in Pugh v Cantor Fitzgerald International.

The court also expressed concern about the defendants' conduct, including delays, failure to pay costs, and apparent attempts to prolong litigation unnecessarily, which justified the refusal of further extensions.

Holding and Implications

The court REFUSED the applications for permission to appeal and to rely on fresh evidence.

The order striking out the defendants' amended defence and entering judgment on liability against them for unlawful means conspiracy and unlawful interference stands. The defendants must pay costs summarily assessed at £15,000 within 14 days.

No new precedent was established; the decision primarily enforces procedural compliance and confirms that prior appellate findings on contract enforceability do not necessarily invalidate subsequent liability judgments when claims rest on broader grounds. The defendants retain the right to rely on the unenforceability of clause 21.2 at the damages assessment stage.