Background

Duadata operates retail stores which sell bubble tea trading under the name MOOBOO with several stores of its own and several franchise stores across the UK.

In 2023, Ms Lin, the director of Tian Cha Le Limited (TCL), began to offer bubble tea from an outlet in Gateshead. She was previously the manager of a franchised MOOBOO outlet in Gateshead before the franchise agreement was terminated in 2024 due to complaints about the running of the store.

In 2024, Duadata filed a claim alleging that TCL was passing off its business as being connected with Duadata, adopting its menu design, menu products, signature drinks, recipes and prices.

Judgment in default was granted on 02 July 2024 along with an injunction restraining TCL from passing off. Duadata claimed damages for passing off for the period between TCL’s incorporation and the date of the judgment in default.

Inquiry as to damages 

Duadata based its damages calculation on the assertion that due to TCL’s trading it had been unable to offer a licence to a franchisee in a location very close to Gateshead and hypothesised a franchise agreement having been entered into during the period in question.

The loss was based on a sum which would have typically been paid by a franchisee on Duadata’s standard franchise terms which included:

1. an initial fee; 
2. a management fee;
3. a fee to support marketing; and 
4. VAT.

Ms Lin submitted a witness statement which argued: 

1. the similarity in menu design was limited in duration; 
2. TCL acted promptly to replace the menu complained of;
3. TCL’s business was small and not profitable;
4. there was no evidence of loss suffered by Duadata;
5. there was no causal link between TCL’s conduct and the loss claimed; and 
6. there was no contractual relationship between Duadata and TCL so Duadata was relying on a hypothetical agreement.

The court’s approach 

His Honour Judge Hacon noted that, in inquiries as to damages, loss is frequently inferred from the facts with necessary assumptions being made by the party claiming costs in relation to quantum. The issue tends to be whether those assumptions are reasonable and so Duadata was entitled to raise such a hypothesis for the purpose of quantifying its loss.

The court took the view that Duadata had done its best to assess the loss suffered and that the sum claimed was reasonable, aside from the claim for VAT which would not usually be recovered on an award for damages. Therefore, the VAT was deducted and the judge ordered TCL to pay Duadata damages of £14,350.  

Conclusion

The judgment reflects the well-established principle that damages need not be proved with exact precision provided the underlying assumptions are reasonable and grounded in evidence. The court was satisfied that the claimant had suffered loss, even though it had to be calculated on a hypothetical basis.

The decision confirms that a claimant in a passing off action may recover damages by reference to a lost opportunity to grant a franchise, even where no actual contract was in place. More broadly, the case shows that passing off remains a flexible and commercially practical cause of action.

Case details at a glance

Jurisdiction: England & Wales 
Decision level: IPEC 
Parties: Duadata Limited v Tian Cha Le Limited
Date: 08 May 2026
Citation: [2026] EWHC 1055 (IPEC)
Decision: dycip.com/ipec-2026-ewhc-1055