Court of Appeal has jurisdiction to stay order which is not subject to appeal

06/02/15

Boxing Brands Ltd. v. Sports Direct International Plc., 5 February 2015

Boxing Brands is a company associated with Frank Warren, a boxing promoter, and the owner of trade marks in respect of the word “Queensbury”.  Sports Direct is the UK’s largest retailer of sports clothing and equipment.

After a trial on the issue as to whether the sale of clothing goods by Sports Direct would infringe Boxing Brands’ rights to the Queensbury mark, Mr. Justice Birss made an order dated 30 July 2013 that Sports Direct pay Boxing Brands 95% of its costs of that trial and £200,000 on account of those costs.

After a further trial on the issue as to whether the sale of sports equipment by Sports Direct would infringe Boxing Brands’ rights to the mark, Mr. Justice Birss made an order dated 11 March 2014 that Sports Direct pay Boxing Brands: (1) 40% of Boxing Brands’ costs of that further hearing; (2) £11,000 on account of the costs of the further hearing; and (3) a further £100,000 on account of Boxing Brands’ costs of the 2013 hearing.

Sports Direct was granted permission to appeal the 2014 Order, but did not appeal the 2013 order or the £100,000 interim payment ordered in 2014.  Sports Direct sought a stay of both the £11,000 and £100,000 interim costs orders pending the determination of its appeal on the grounds that: (1) if the appeal was successful Sports Direct would obtain costs orders which would overtop the costs orders in favour of Boxing Brands; and (2) there was a real risk that Boxing Brands would not be able to repay any costs paid by Sports Direct.  Boxing Brands resisted the stay on the grounds that: (1) the Court of Appeal had no jurisdiction to grant a stay of the £100,000 costs order because it was not subject to appeal; and/or (2) it was inappropriate to stay that order because it would provide Sports Direct with security for the costs of its appeal.  

In a reserved judgment, the Court of Appeal (Sir Colin Rimer) granted Sports Direct’s application for a stay of both costs orders pending the appeal and determined what it described as novel issues.  The Court held that, on the true construction of section 15(3) of the Senior Courts Act 1981, it had ample power to grant a stay of an order that was not subject to appeal because that was incidental to the determination of the appeal.  The Court accepted that the effect of the stay was in substance to provide Sports Direct with security for its costs of the appeal.  However, in the particular circumstances of the case, in particular where Boxing Brands has no assets other than its claim, the Court held that there was no good reason in principle why a stay should not be granted and that it was fair and just to do so.