CL-2022-000676 - [2025] EWHC 2486 (Comm)

This is a point of some significance here, because Medpro elected not to call any factual evidence. This is the conventional way of proving reliance: tendering a witness who says “we would not have committed to this contract if we had not been told X/understood Y.” – and is then tested on that and on whether (in the case of estoppel by representation) such reliance was reasonable: Jones v Lydon[2021] EWHC 2321 (Ch) [61]; Canada and Dominion Sugar Company Limited v Canadian National (West Indies) Steamships Limited [1947] AC 47 (PC), 56. In the case of estoppel by convention the evidence must be tested on the extent of the reliance – whether it is to a sufficient extent or rather on the witness’s own independent view of the matter: HMRC v Benchdollar[2009] EWHC 1310 (Ch) [52].

Here the obvious witness was either Mr Page or (possibly) Mr Barrowman. The first of these conducted the negotiations on the ground and signed the contract. There was no explanation of why he was not called. The latter appears to have been the economic principal of the business. Notably he attended court throughout the trial and plainly could have been called.

In some cases it is possible to avoid the need for hazarding a witness on this issue – if it is a case where there is clear internal documentary evidence of reliance and detriment. This is not however what Medpro has done here. Rather it asserted in its written opening: “It is plain that Medpro procured the supply of the gowns on the understanding that they met the applicable requirements”. That was plainly not a realistic case.

In conventional terms therefore Medpro cannot prove reliance.

In its written closing, Medpro shifted ground to arguing that that the position is akin to inferring reliance from materiality in insurance disputes. It submitted that the representations or assumptions were all highly material. They went to the heart of Medpro’s offer, its approval, and therefore what Medpro was required to supply.

In oral closing this was backed up by reference to Dadourian v Simms [2009] EWCA Civ 169 citing Arden LJs dictum at [99] that:

“1)

it is a question of fact whether the representee has been induced to enter into a transaction by a material misrepresentation intended by the representor to be relied upon but the representee; (2) if the misrepresentation is of such nature that it would be likely to play a part in the decision of a reasonable person to enter into a transaction it will be presumed that it did so unless the representor satisfies the court to the contrary ... (3) the misrepresentation does not have to be the sole inducement for the representee to be able to rely on it : it is enough if the misrepresentation plays a real and substantial part, albeit not a decisive part ... (4) the presumption of inducement [may be] rebutted…”

Accordingly on its own case Medpro’s case on reliance, which is fundamental to its case on all its true estoppel arguments, finally hinges on establishing material representations which are apt to engage the presumption of inducement – see Arden LJ’s mention of “such nature that it would be likely to play a part in the decision of a reasonable person” .

This therefore comes back to the absence of clear representations. But in addition the presumption of inducement cannot be deployed where reliance would not be reasonable. Here Medpro is essentially saying that its failure to comprehend what were the requirements for the multi-million pound contract which it sought to win should not lie at its door, because it relied on statements made by its counterparty (which conflicted with the contractual terms to which both parties signed up). As Mr Stanley KC noted in argument, there is a considerable oddity in a commercial case where the supplier of specialist goods says that it relied upon representations by the purchaser that the offer complied with technical standards. It follows that it would not be reasonable for Medpro to rely on DHSC’s statements or actions during due diligence as “trumping” the contractual terms.

It is also a point to note that the presumption of inducement is one generally seen in the context of representations and is not, conventionally, applied to estoppel by convention/acquiescence.