Ultraframe (UK) Ltd v Tailored Roofing Systems Ltd [2004] EWCA Civ 585 (14 May 2004)

Neutral Citation Number: [2004] EWCA Civ 585 Case No: A3/2003/1890 IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CIVIL DIVISION) ON APPEAL FROM His Honour Judge Kershaw QC Manchester Mercantile Court No. MA190473 Royal Courts of Justice Strand, London, WC2A 2LL 14th May 2004 B e f o r e : LORD JUSTICE WALLER LORD JUSTICE NEUBERGER and SIR WILLIAM ALDOUS ____________________ Between: Ultraframe (UK) Ltd Appellant - and - Tailored Roofing Systems Ltd Respondent ____________________ (Transcript of the Handed Down Judgment of Smith Bernal Wordwave Limited, 190 Fleet Street London EC4A 2AG Tel No: 020 7421 4040, Fax No: 020 7831 8838 Official Shorthand Writers to the Court) ____________________ Mark Cawson QC and Nancy Dooher(instructed by Shammah Nicholls, Manchester) for the Appellant Sue Prevezer QC and Stephen Davies (instructed by Forbes, Blackburn) for the Respondent ____________________ HTML VERSION OF JUDGMENT Crown Copyright © Lord Justice Waller: Tailored Roofing Systems Ltd (TRS) and Ultraframe (UK) Ltd (Ultraframe) following a series of previous contracts entered into a contract on or about 2 nd August 1999 under which TRS were bound to purchase supplies of conservatory roofing components exclusively from Ultraframe. TRS could give 12 months' notice to bring that obligation of exclusivity to an end. In the summer of 2000 Ultraframe, according to TRS, began a campaign to induce all customers of TRS to deal direct with Ultraframe. Ultraframe do not deny so doing but assert that TRS had acted in breach of the "exclusive" obligation by approaching a different supplier, something hotly disputed by TRS. TRS in consequence alleged that Ultraframe were in repudiatory breach of contract by conducting their campaign, and accepted that repudiation by letter dated 18 th September 2000. TRS did on any view at that stage seek supplies from elsewhere. To make good their case that Ultraframe were in repudiatory breach it was necessary for TRS to establish that certain terms were to be implied into the contract. By a reserved judgment dated 1 st August 2003 His Honour Judge Kershaw QC gave judgment against TRS holding so far as relevant to this appeal that the terms suggested by TRS were not to be implied, and that thus it was TRS and not Ultraframe who were in repudiatory breach of contract. Ultraframe also claimed the price of certain components alleged to have been delivered to TRS on or about 19 th September 2000. TRS denied that certain of the goods had been delivered, but the judge found in favour of Ultraframe on that issue also. This is an appeal by TRS in relation to the implied terms issue and the delivery of goods issue by leave given after an oral hearing, permission having at first been refused on paper. Permission to appeal was not given on a further point, at least as far as it was sought to make it free standing, but it is right to mention it at the outset. The hearing finished in October 2002, and it took eight months for the judge to produce the draft of his judgment. That is totally unacceptable unless there was some excuse for him so doing. We were told that letters and telephone calls were sent or made by the parties, who were simply told that the judgment would be available when it was available. No explanation was forthcoming for the delay either during the period of eight months or when the draft was sent to the parties, or indeed at the hearing when the judgment was formally handed down and when permission to appeal was sought from the judge. I would echo the words of Lord Justice Peter Gibson when he said in Rex Goose v Wilson Sandford & Co & Anor (1998) paragraph 112 this:- "A judge's tardiness in completing his judicial task after a trial is over denies justice to the winning party during the period of the delay. It also undermines the loser's confidence in the correctness of the decision when it is eventually delivered. Litigation causes quite enough stress, as it is, for people to have to endure while a trial is going on. Compelling them to await judgment for an indefinitely extended period after the trial is over will only serve to prolong their anxiety, and may well increase it. Conduct like this weakens public confidence in the whole judicial process. Left unchecked it would be ultimately subversive of the rule of law. Delays on this scale cannot and will not be tolerated. A situation like this must never occur again." In Goose a retrial was ultimately ordered because the findings of fact by the judge in that case could be demonstrated to have been totally unsatisfactory due in large part to the delay. But the court there recognised that to order a retrial is to subject the parties to a further round of stressful litigation, which should if possible be avoided. Mr Cawson QC who represented TRS on the appeal appreciated that so far as the main issue on the appeal is concerned - the implied terms issue - it cannot be said that it turned on important findings of fact affected by the delay, and indeed the point is one on which the Court of Appeal has all the relevant material and on which therefore it can rule. He does not accordingly seek a retrial of that issue. He simply wishes to persuade the court that the judge should have ruled that certain terms were to be implied into the contract. On the delivery issue, he suggested the position was different, the issue being one of fact where the judge did not have the help of transcripts (which we have) and where he would suggest that the judge did not deal with certain parts of the evidence. His main submission was that that issue should be retried. Miss Prevezer QC for Ultraframe did not seek to minimise the delay but submitted that the judge was right on the implied term issue. On the delivery issue she submitted that although there were areas where it could be said the judge did not deal with points, the answer the judge gave on this issue was so obviously right that no retrial was necessary and the appeal should be dismissed. IMPLIED TERMS ISSUE The relevant contract was made on 2 nd August 1999. The context in which it must be placed is as follows. Ultraframe are and were at all material times the largest manufacturer of components used in the fabrication of conservatory roofs, manufacturing the same to their own design. They either sold their components to fabricators who made the same up into flat packs for sale on to installers, or they assembled the same into flat packs themselves and sold them onto installers. Ultraframe did not appoint fabricators in defined areas and thus fabricators did not have exclusive rights to sell in particular areas. It followed that fabricators could compete one with the other and that all fabricators also competed with Ultraframe itself. Ultraframe had what was termed a "matrix" price for its components. Ultraframe offered discounts to fabricators depending on how large a turnover the individual fabricator built up. There was no "common" discount, and the matrix price was simply a guide. Ultraframe actually sold flat packs to installers at whatever price Ultraframe chose. TRS were fabricators. Over the years TRS or their predecessors (which prior to the incorporation of TRS consisted of Mr Coppell and his partner's personal business), built up their turnover and gradually achieved greater discounts with Ultraframe. Prior to 1999, TRS were not bound to use Ultraframe exclusively, but in 1999 as part of the bargain to gain a greater discount TRS agreed exclusivity subject to giving twelve months notice. Miss Prevezer took us to the documents immediately preceding the signing of the contract in 1999. Those documents do not in my view take matters any further than the express terms of the contract ultimately signed. The point Miss Prevezer makes by reference to the documents can be made by reference to the express terms. Those points are (1) in agreeing exclusivity it was never an express term of the contract between TRS and Ultraframe, that Ultraframe would not compete with TRS; and (2) it was never an express term of the contract that TRS would have any obligation to purchase a certain minimum quantity of components from Ultraframe. As regards competition, Mr Cawson showed us a passage in the cross examination of Mr Allen the managing director of Ultraframe in which he accepted that even if some competition could be expected as between Ultraframe and TRS, it would have been contrary to the spirit of the relationship between TRS and Ultraframe for Ultraframe to make a concerted attack in an effort to take all TRS' customers [page 875/6]. I will come back to the relevance of this evidence below. In the above context an agreement in writing was completed on 2 nd August 1999 in the form of a letter from Ultraframe to TRS in the following terms: "CONDITIONS OF SALE – DISCOUNT TERMS I now write to finalise the terms we have agreed. Please record your agreement by signing the attached duplicate copy of this letter and returning it to me. 1. In consideration of Ultraframe (UK) Limited ("the Supplier"):- (a) continuing to supply Tailored Roofing Limited ("the Customer" (b) increasing the previously agreed discount level for Victorian roofing components to the Customer from 28% to 29% discount with effect from 1 August 1999. 2. The Customer has agreed:- (a) To the immediate incorporation of the Supplier's standard terms of business (a copy of which is attached to this letter) into all future contracts under which the Supplier supplies the Customer with products and / or services; and (b) To purchase all its requirements for Roofing Systems from the Supplier; and (c) To supply to its USA customers, only tropical grade pvc to a specification to be provided by Ultraframe (UK) Limited. (d) To manufacture all roofs destined for the USA market in accordance with Ultraframe's design parameters. (e) To give to the Supplier not less than 12 months prior written notice to terminate the exclusive purchase obligations in (b) above. (f) In the event that the Customer gives notice in accordance with clause (e) above, Ultraframe (UK) Limited may reduce the discount level to the Customer to 25%. (g) That the customer will provide weekly stock orders, to be placed 5 days in advance, for delivery on Wednesdays. (h) All other deliveries will be supplied on our normal delivery runs (Tuesdays and Thursdays) (i) All other discounts as per the attached terms sheet will remain constant." The question is whether some term should be implied into the above written contract which would make it a breach of contract for Ultraframe to make a deliberate concerted effort to persuade TRS' customers to switch their business to dealing direct with Ultraframe. As often happens when an attempt is being made to imply a term, the suggested wording of the implication has varied from time to time. What drives the submission as to the appropriate term is the nature of what is alleged to be the breach. In this case what TRS say is that it simply cannot have been contemplated that Ultraframe would be entitled to tie TRS to buying exclusively from them, but at the same time be free to conduct a campaign to take the whole of TRS' customer base, thus preventing them actually buying Ultraframe components for those customers and preventing TRS buying components elsewhere so as to be able to survive. There must, according to TRS, be some term implied which prevents such conduct. The terms now suggested are the following: "(i) That C should not act in such a way as to deliberately prejudice or undermine the ability of D to deal with customers in the ordinary course of business, i.e. not to intentionally or deliberately injure D's business; (ii) That C should act at all time in good faith towards D" I say straight away that the approach of starting with what may at first sight appear to be unmeritorious conduct, and seeking to imply a term to prevent it is an understandable starting point But it has to be remembered that much business is carried on on the basis that all will go well and on the basis that mutual self interest will dictate a certain course of conduct even though neither wishes to be contractually bound to that course. In this case the fact that Mr Allen for example accepted in cross examination that it would be contrary to the spirit of the relationship for Ultraframe to attempt to take TRS' customers, makes obvious commercial sense when all is going well. Ultraframe wish their fabricators to sell Ultraframe components, and it makes commercial sense to leave in the main TRS to deal and sell to their customers and for Ultraframe to concentrate on customers of their own. In the same way it would make commercial sense for TRS to concentrate on their own customers rather than attempt to lure away from Ultraframe customers dealing directly with Ultraframe, simply because it would be difficult to compete on price and because TRS would prefer to keep their relations with Ultraframe congenial. But the question is whether when co-operation ceases for whatever reason there are terms binding the parties to act in certain ways. THE LAW The bases on which terms may be implied into commercial contracts are well known. Mr Cawson advanced arguments on each of the different bases. He showed us (1) The Moorcock (1889) 14 PD 64 "if it is necessary, in the business sense, to give efficacy to the contract"; (2) Shirlaw v Southern Foundry [1939] 2 KB 206 "the officious bystander";(3) Liverpool City Council v Irwin [1977] AC 239 terms necessary to complete the bargain; (4) Stirling v Maitland (1864) 5 B&S 840, a term necessary to prevent one party altering the assumed state of affairs so as to prevent a party having the benefit of a contract. Mr Cawson also sought to draw comfort from a passage in the judgement of Ormrod LJ in Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 when he said in the context of that case that Shell might not have objected to an implied term that they would not deliberately injure the business of the garage. It seems to me that one gets little help from what was actually very much a throw away comment. The question is whether the terms suggested should be implied in the particular circumstances of this case. In agreement with the judge, I have found the summary of the position by Sir Thomas Bingham MR in Philips Electronique Grand Public SA and Another v British Sky Broadcasting Ltd. QBCMI/03/0495/B illuminating and helpful dealing, as it was with a situation not totally dissimilar from the present, albeit more detailed contracts were involved: "Both parties accepted as an accurate and comprehensive statement of the law on the implication of terms into commercial contracts the formulation of Lord Simon Glaisdale on behalf of a majority of the Judicial Committee of the Privy Council in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of Shire of Hastings (1978) 52 ALJR 20 at 26: "Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for the term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express term on the contract." This passage, to which the judge paid close attention in reaching his decision, distils the essence of much learning on implied terms. But its simplicity could be almost misleading. The court's usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constraints on the exercise of this extraordinary power. There are of course contracts into which terms are routinely and unquestioningly implied. If a surgeon undertakes to operate on a patient the term will be implied into the contract that he exercises reasonable care and skill in doing so. It is inconceivable that any patient would in any imaginable circumstance commit his bodily well-being to the ministrations of a surgeon who did no undertake that obligation, or that a surgeon could hope to remain in practice without professing to discharge. Again, quite apart from statute, the courts would not ordinarily hesitate to imply into a contract for the sale of unseen goods that they should be of merchantable quality and answer to their description and conform with sample. It is hard to imagine trade conducted, in the absence of express agreement, on any other terms. But the difficulties increase the further one moves away from these paradigm examples. In the first case, it is probably unlikely that any terms will have been expressly agreed, except perhaps the nature of the operation, the fee, and the time and the place of operation. In the second case, the need for implication usually arises where the contract terms have not been spelled out in detail or by reference to written conditions. It is much more difficult to infer with confidence what the parties must have intended when they have entered into a lengthy and carefully-drafted contract that have omitted to make provision for the matter in issue. Given the rules which restrict the evidence of the parties' intention when negotiating a contract, it may well be doubtful whether the omission was the result of the parties' oversight or of their deliberate decision; if the parties appreciate that they are unlikely to agree on what is to happen in a certain not impossible eventuality, they may well choose to leave the matter uncovered in their contract in the hope that the eventuality will not occur. The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong. For, as Scrutton LJ said in Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592: "a term can only be implied if it is necessary in the business sense to give efficacy to the contract; that is, if it is such a term that it can confidently be said that if at the time the contract was being negotiated someone had said to the parties "What will happen in such a case?", they would both have replied "Of course, so-and-so will happen; we did not trouble to say that it is too clear". Unless the court comes to some such conclusion as that, it ought not to imply term which the parties themselves have not expressed." In the familiar cases already mentioned there could be little room for doubt what the parties' joint answer would have been at the question being raised at the outset. There would, almost literally, have been only one possible answer. But this may not be so where a contract is novel, known to involve more than ordinary risk and known to be more than ordinarily uncertain in its outcome. And it is not enough to show that had the parties foreseen the eventuality which in fact occurred they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred: Trollop & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601 at 609-10, 613-14." What TRS are concerned to establish is a term which allows some competition by Ultraframe but does not allow a certain kind of what it would suggest was "unfair" competition or competition which "intentionally or deliberately injured TRS' business." Analysis at the hearing indicated that the restriction was aimed at preventing a concerted effort vis à vis TRS' customers which would offer prices lower than those charged by TRS with the intention of depriving TRS of those customers. If Ultraframe are to be so prevented that can only be by virtue of implying a term or terms into the contract, and the only suggested implied terms are those put forward in Mr Cawson's skeleton argument quoted in paragraph 13 above. In my view the argument that such terms should be implied is unsustainable. My reasons for that conclusion are as follows. As to the Stirling v Maitland term if the contract had placed an obligation on TRS to buy minimum quantities from Ultraframe, and an obligation on Ultraframe to supply a minimum quantity, that would have provided an argument for imposing that kind of implied term. But there is no such term in this contract and it has not even been argued that such a term could be implied. As to the other possible bases for implying terms the factors are these. First, it is not in dispute that Ultraframe were, under the express terms of the contract, free to sell packs to installers in competition with TRS. Second, it is not in dispute that Ultraframe were entitled to charge such prices as they wished including prices lower than those charged by TRS to customers with whom they dealt direct, subject to not acting unlawfully under European and national Competition law. Third, it is not in dispute that Ultraframe were free to grant what discount they liked to its fabricators and they were free (albeit while things were going well it might not be commercially sensible) to grant a discount, which allowed a rival fabricator to undercut TRS. The decision to allow that discount would be deliberate, and would carry the obvious consequence that TRS' business might be injured. Fourth, although Mr Cawson submitted to the contrary, it seems clear that on any view, once TRS had given 12 months' notice of an intention not to be bound to exclusivity, the express terms of the agreement contemplated Ultraframe being placed in a stronger position to obtain TRS' customers. That, as it seems to me, flows from the reduction in discount expressly contemplated by clause 2(f). I cannot see how it can be arguable either by reference to "necessity" or by reference to the by-stander test or for the purpose of completing the contract, that by implication Ultraframe were to be placed under any restriction during this period as to any lawful campaign they should be entitled to conduct to secure customers who had bought Ultraframe products through TRS. Fifth although the contract does not expressly so provide, it must have been open to Ultraframe to terminate their obligation to supply TRS by giving reasonable notice. Without getting into the argument as to what length of notice would be required, again although Mr Cawson submitted to the contrary, it is difficult to contemplate an inquiry from a bystander producing the common answer "of course, Ultraframe should be restricted from a deliberate whole sale solicitation during that period", and nor could it conceivably be said to be necessary that they should be so restricted. I have dealt with the position during the notice periods because those periods provide the clearest example of times under the contract where the restrictions sought to be placed on Ultraframe simply would not be implied under any of the implied term tests. Is it I then ask rhetorically possible or even suggested that some term should be implied to cover the period prior to any notice being given? Mr Cawson in seeking to submit that the terms he sought to have implied would be applicable during the periods of the notice, recognised that it is not realistic to contemplate one term during the currency of the contract prior to the giving of notice and one term applicable after notice has been given, nor indeed has it ever been argued for some separation in this way. Nor is it possible by using rather general language such as "acting in good faith" to construct a term which may make the conduct during one period of the contract lawful, but during another unlawful. The inevitable conclusion is that applying any of the tests for implying terms, it cannot be said to be necessary to give business efficacy to this contract to imply a term which purports to restrict Ultraframe from indulging in (what is in any event a difficult concept) a form of competition which falls outside "normal healthy competition" but short of unlawful competition. My line of reasoning does differ from that of the judge. I have sought to address the conduct which TRS seek to restrict and deal with the question whether an implied term to restrict that conduct could ever be implied. It has thus been unnecessary to consider whether it would be possible to frame a term to apply to the rather nebulous form of competition sought to be restrained, or whether the proposed terms are certain enough or unambiguous enough to succeed. I would suspect that the lack of particularity of precisely what TRS would seek to impose on Ultraframe and the need to use words such as "deliberate " or "intentional" or "good faith", all of which would in any event give rise to serious problems when considering what was or was not a breach, demonstrate that the framing of the term desired was itself so difficult as to make implication impossible. But be that as it may, I would dismiss the appeal on this aspect. DELIVERY ISSUE This issue involves £21,328.92. Putting it shortly, TRS accepted that some goods had been delivered on the 19 th September 2000, but denied that others with a value of £21,328.92 had. This issue did not receive the same attention of the parties when preparing for trial that the main issue did. In the result the documentation from both sides was incomplete. The judge attempted to deal with the issue but his findings on this aspect were unsatisfactory. There were certain serious conflicts and certain important points which required consideration before any facts could be found. For example:- (1) Mr Coppell's evidence was that he rang from the Isle of Man at about 10.30 am on 19 th September 2000 to protest that certain goods had not been delivered. In his statement he limited that evidence to the goods which TRS at the trial said had not been delivered, but in his evidence in the trial he said his phone call was before TRS had "any delivery" (see page 1607 line 31). His evidence was further that he spoke to Mr Karl Beard of Ultraframe who told him that the goods, the subject of the order, had not been picked and would now be delivered on the 21 st September. But his evidence continued that he then phoned Mr Hacking at TRS who said that the goods were now on their way. He thus understood that, as of about 10.30 am on the 19 th September, the goods were in fact on their way. The evidence of the driver, Mr Demley, was that he delivered the goods on 7 am on the 19 th September. Mr Coppell and Mr Demley could not both be right but the judge started his factual findings on this aspect by simply reciting Mr Demley's evidence as the true narrative. (2) TRS' most powerful point was that although Mr Demley said he had left all despatch notes with TRS, Mr Spencer of Ultraframe said in his evidence that in fact Mr Demley had brought back certain documents. The documents brought back by Mr Demley were copies of the despatch notes which corresponded to those goods which TRS said had never been delivered. TRS further asserted that they did not know about these despatch notes having been brought back to Ultraframe when they first made their allegation that the goods, the subject thereof, had not been delivered. An obvious explanation for these despatch notes being in the possession of Ultraframe or being brought back by Mr Demley was that the goods, the subject matter of the same, had never been loaded and thus never delivered to TRS. But the judge, without reference to that point, simply concluded in his first paragraph dealing with this issue that all the goods covered by the despatch notes, listed on the driver's running sheet, which referred to all despatch notes, were loaded. (3) Although the judge referred to the fact that only one despatch note relating to the goods TRS said had not been delivered but had been signed by a loader, he did not deal in any detail with Mr Spencer's explanation as to how the disputed goods, the subject of the other despatch notes, might have been the subject of a "consolidated order". Mr Spencer went into considerable detail explaining the reference to the figure "15068" on these despatch notes in order to explain the possible existence of a consolidated order. Mr Spencer was suggesting that that consolidated order would have been signed by a loader and that that would have saved a loader signing the individual despatch notes. Mr Spencer further suggested that that consolidated order might still be on file at Ultraframe, and counsel for Ultraframe thus suggested that Mr Spencer be given the opportunity to see whether the document could be found. In fact, no such document was found. In some respects this failure of the judge was to TRS' advantage, because the explanation by Mr Spencer of why a loader's signature was not on the copies of the documents was very credible. The judge simply said "Mr Spencer suggests that this may have been because there was a multiple order, but that does not seem a convincing explanation because the form is clearly designed to record the number of packs used to pack, then goods in the warehouse, and separately, the number loaded". That certainly does no justice to Mr Spencer's explanation, but it may have been very difficult for the judge to have done so eight months after the trial without the aid of a transcript. Other criticisms of the judgment were made by Mr Cawson and he submitted that in the result, and particularly because of the feeling of injustice that his clients have, that there should be a retrial of this issue. There is force in that submission, but a retrial of this issue would put both sides to considerable further expense out of proportion to the sum involved. It was not the key issue at the trial and to make it the only issue in a further trial ought to be avoided if at all possible. I am furthermore far from clear that a judge at a further trial will be in any better position than this court to assess the probabilities, this court having the assistance of the transcript of the evidence which the judge did not have. No witness from Ultraframe could actually give evidence that he or she unloaded the goods and put them in TRS' premises. No witnesses from TRS could say that they took delivery of certain goods and could say for certain the disputed goods were not delivered. The witnesses, apart from Mr Coppell and Mr Martindale were essentially dealing with the systems that would normally been employed by the respective companies. It seems highly improbable that any witness would be able to give accurate evidence as to precisely what happened in relation to the delivery of goods, without the assistance of contemporaneous documents. If the systems which each side normally put in place had worked efficiently the dispute would not have arisen, and what each side did at the trial was to rely on the failure of the other sides' system to establish their case. Thus TRS relied on the fact that there was disagreement between the driver and Mr Spencer as to which despatch notes had been left at TRS, and on the fact that the notes which Mr Spencer said had been brought back to Ultraframe precisely matched the goods TRS said had not been delivered, and TRS relied on the fact that they did not know of Mr Spencer's evidence when they first alleged non-delivery. As already indicated this was a powerful point which the judge did not deal with at all. TRS also relied on the fact that none of despatch notes contained the signature on behalf of TRS recording acceptance of the delivery, which if Ultraframe's system had been working would have been obtained. [This point is not so strong because even the despatch notes of the goods which TRS accept were delivered contain no such signature]. TRS rely on the fact that under Ultraframe's system when goods are loaded onto the lorry, the loader should sign the despatch note. A loader did so for all those where TRS accept that delivery was made, and did so (it would appear) for only one of those where TRS say there was no delivery. Mr Spencer thought there was an explanation to which I have already referred above. Ultraframe on the other hand rely on the fact that TRS' system would have produced a "non-conformance sheet" if there had been non-delivery. It was clarified by Mr Healy that TRS' system for checking "non-conformance" was not a check as to whether the goods the subject of a despatch note had been duly delivered, which would require a copy of the despatch note, but was a check as to whether goods ordered by TRS had been delivered at all. In this case TRS never produced a "non-conformance" sheet in relation to any of the goods they asserted had not been delivered. It was never in issue that these goods had been ordered. Indeed, Mr Coppell's evidence was that he rang from the Isle of Man to chase up the order relating to these goods. There was however no "non-conformance" sheet. Furthermore Ultraframe point to the fact that by letter dated 26 th September 2000 (page 573) Ultraframe listed all the despatch notes i.e. both those relating to goods that TRS later accepted were delivered and those that remained in dispute, stating that all the goods had been delivered, it recorded that two attempts had been made since the date of delivery to obtain TRS' signatures on the despatch notes, and asked for confirmation of receipt by TRS. The response did not come until 9 th October 2000 and that stated that TRS could not trace the paperwork, and that they could not identify the goods said to have been delivered (i.e. both those said not to have been delivered and those accepted at the trial as having been delivered). The letter said the matter would be investigated further. Ultraframe rely on the fact that TRS never came back with any complaint on non-delivery and indeed when Ultraframe sought payment initially of a sum of about £90,000 in January 2001 TRS paid £26,000 without suggesting non delivery of any goods. In response to Ultraframe's letter before action TRS simply suggested that so far as Ultraframe's claim for the price of goods was concerned they had an off set by virtue of their claim for damages. No suggestion of non-delivery of goods was made. The suggestion of non-delivery was first made in the defence in the action, but TRS have never provided any explanation as to what brought it to their attention that certain goods (as they now allege) had not been delivered. What then of the other evidence? Mr Demley, the driver, thought that delivery had been made at 7 a.m. and further stated that although he would normally get TRS to sign for delivery left "all the documents with TRS" thinking he was coming back with a second delivery. He did bring the folder back to Ultraframe and he accepted that that maybe was how the documents Mr Spencer says were brought back were brought back. (See 1361 line 21) Mr Spencer gave evidence that certain copies of despatch notes were brought back. His evidence was, however, that no notes signed by TRS for any goods were brought back. He explained a possible way in which a loader's signature might be on one despatch note and not on the others, by reference to the "consolidated order", but (as already explained) the judge rejected that explanation. Mr Spencer said the delivery was in the morning and that he went that very afternoon with copies of all despatch notes to TRS and asked for the delivery notes that the driver had left, and for TRS to sign a copy so that he could take them back to Ultraframe. He said he spoke to Philip Coppell, who (he said) stated there was no problem but explained that the employee who had unloaded the delivery had gone home at lunchtime and that he could not track down the notes. He asked him to come back the following Monday when the employee would be back and he would arrange for the signatures. In his oral evidence Mr Spencer was not adamant that on this occasion he saw Mr Coppell. He said he returned on the Monday morning, taking a photocopy of all delivery notes. He asked for Mr Coppell but was told that he could not see him and he heard someone, he thought Mr Coppell, saying "tell him to go away, he's not going to get them signed", or words to that effect. Mr Coppell's evidence was (and in this he was supported by Mr Martindale) that Mr Hacking from TRS had contacted him while he was on holiday in the Isle of Man at about 10.30 a.m. on 19 th September 2002 to say that "our delivery had not arrived at its normal time". "Our delivery", according to Mr Coppell, was referring to all goods, i.e. those now asserted to have been delivered, and those asserted not to have been delivered. Mr Coppell said he rang Mr Beard who said the goods had not been picked and would not be delivered until the Wednesday. But a further conversation with Mr Hacking revealed that Mr Hacking had contacted Ultraframe and now had confirmation that the order was "on its way". [Page 1608 – line 15 – 17]. The letter of the 26 th September was sent by Ken Harrison. Ken Harrison's evidence was that he had no personal knowledge of what was in the letter, but was directed to send it. That letter explained that there had been a delivery to TRS of goods under twelve despatch notes. It further explained that all goods had been on one vehicle, although at one time the driver's folder had said there would be two vehicles, two trips. All twelve despatch notes were listed, i.e. those covering goods in relation to which there is no dispute that they were delivered and the disputed goods. The letter then continued "since the delivery we have made two attempts, on Wednesday 20 th and Monday 25 th , to gain signatures for the goods that were delivered and were received by yourselves. Unfortunately we have not succeeded and have been asked to leave. Due to the value involved we would appreciate it if you could resolve this matter by confirming receipt of the delivery. The necessary paperwork will be forwarded to you for signature, if necessary." (underlining added) TRS responded to that letter only on the 9 th October, saying:- "We cannot trace the paperwork, as already advised, nor can we identify the goods you say were delivered at this time. We are investigating the matter further and will contact you as soon as possible." That letter does not differentiate between goods in relation to which there is a dispute and those where there is not. As previously indicated there were demands for payment but still no suggestion by TRS that there had been any failure to deliver those goods which it is now suggested had not been delivered. Faced with the above, my conclusion is that if this matter were returned for a retrial by a judge his conclusion would inevitably be as follows. There was no delivery at 7 a.m. on the morning of the 19 th September as the driver, Mr Demley, purported to remember and as the judge found. Mr Coppell and Mr Martindale's evidence that they protested about non-delivery of the total consignment from the Isle of Man would be accepted. Equally however there was obviously a delivery during the morning of the 19 th September 2000, as Mr Hacking indicated to Mr Coppell had been confirmed by Ultraframe. Indeed TRS do not dispute a delivery of some goods during the morning of the 19 th September. There is not the "major or significant" discrepancy between Mr Demley and Mr Spencer, which TRS assert in their notice of appeal as regards what happened to the despatch notes. The driver always took two copies when delivering goods for Ultraframe. Normally he intended to obtain the signature of TRS on both, with the object of one being retained by TRS and the other being brought back to Ultraframe. The driver on this occasion did not get signatures on any despatch notes, thinking he was to return in the afternoon with another delivery. There evidently remained in his folder a copy of certain despatch notes, one signed by a loader the others not, but none bearing TRS signatures. There was an explanation for there being no loading signature on some notes, which would have involved there having been a signature on a "consolidated order sheet", but that sheet was never produced. It would be wrong to overturn the judge's rejection of that explanation, but rejection of that explanation does not involve concluding that the goods on those despatch notes were not loaded. There may just have been a failure in this instance to sign. Since there was a signature on one despatch note of a loader in relation to goods which TRS say were not delivered and which thus TRS rejects as inaccurate – the signature of a loader cannot be the conclusive test on any view. What in my view would drive any judge to the conclusion that all the goods, the subject of the despatch notes listed in the letter of the 26 th September, were delivered, would be the following:- a) TRS' response took until 9 th October and covered not just goods where delivery is now disputed but all of them, even those accepted as delivered. b) TRS, through Mr Coppell, did protest about non-delivery on the 19 th September in the morning because delivery of that order was important for TRS in completing its orders. If the major part of that delivery remained undelivered by the end of the 19 th September, not only would "non-conformance sheets" have been produced, but protests would have been made immediately and vociferously. c) There is no reason to reject Mr Spencer's evidence that he went round to TRS on 19 th September, and indeed on Monday 25 th September. Whether he or someone else went round on also on Wednesday 20 th , as the letter of 26 th September suggests, matters not. d) It furthermore is irrelevant whether Mr Spencer spoke to Mr Coppell or whether he spoke to someone else. TRS refused to sign the notes that he took. They refused to sign even notes in relation to goods which they now accept were delivered. The judge may have been unfair in suggesting that Mr Healy, a warehouseman, would have known about the row between Mr Coppell and Ultraframe, but it is unlikely that someone at TRS would not have been conscious as Mr Hacking had been on the morning of the 19 th September of a substantial gap in the delivery of an order, if it had existed. e) To hold otherwise would be to suggest that the letter of 26 th September 2000 was a wholly dishonest document. No-one at the time so suggested, and I am not sure that such a suggestion has been made even yet. Thus in my view a retrial would be bound to reach the same result as the judge in fact did. That being so, I would dismiss the appeal on this issue also. Lord Justice Neuberger: I agree Sir William Aldous: I agree BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII