CA-2024-001949 & CA-2024-001935 - [2025] EWCA Civ 1212

It was Mr Popeck who introduced Uniserve to Hitex in or about April 2020. Initially he wanted Caramel to buy face masks from Hitex as a principal for resale to Uniserve, but he was reluctantly persuaded to accept the contractual structure which was adopted, namely a sale contract between Hitex and Uniserve, together with a Commission Contract with Uniserve under which he/Caramel would receive a commission rather than making a profit as a reseller.

On 9^th April 2020 an email was sent by a Mr Andrew Waller to Mr Stead. Mr Waller was a conduit for information from Caramel and Hitex to Maxitrac. It was Uniserve’s case, admitted by Hitex, that Mr Waller had authority to make the statements in the email on behalf of Hitex. The email, which was referred to at the trial as ‘the Waller email’ and which became the basis for Uniserve’s misrepresentation case, stated that:

‘… there are 5 million available on 15^th and 5 million on 22^nd April. We can then produce 5 million a week from there on in.’

However, Uniserve carried out considerable further investigation of Hitex’s production capability before the supply contract was concluded, including by a company called Majlan, Uniserve’s shipping agent in Jordan, which visited Hitex’s factory on 16^th April and again on 23^rd April 2020. That capability was largely dependent on the delivery from China of five new automated machines capable of producing up to 120 masks per minute. Although these machines were originally expected to be supplied in late March, there were delays in the machines being shipped. As matters turned out, deliveries were spread during April and were only completed on 29^th April 2020.

Following its inspection on 16^th April 2020, Majlan reported back to Uniserve that the current volume of production was 25,000 masks per day on Hitex’s existing semi-automated machine and 80,000 masks per day on the first of the automated machines which by then had been delivered; and that production was expected to increase to approximately 180,000 masks per day (so ‘maybe 1 million per week’) once the remaining machines were delivered and in production.

Uniserve was concerned that this level of production, far below what had been described in the Waller email, would be insufficient for its needs. It instructed Majlan to visit again on 20^th April 2020. This was subsequently changed to 23^rd April 2020. After that visit Majlan reported back that the first automated machine was working, a second one was being tested, and the third machine was the original semi-automatic machine, with three new automated machines still on their way; meanwhile there was at this point no cargo ready for delivery.