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

The judge dealt first with Uniserve’s defence that it was entitled to rescind the supply contract for misrepresentation. He found that the Waller email contained two statements, each of which was a statement about the future and therefore a statement of prediction or opinion. These were:

However, he rejected the misrepresentation claim on the ground, contrary to the admission in Hitex’s pleading, that Mr Waller was not authorised to make these statements on behalf of Hitex.

The judge went on to find that, on 9^th April 2020 when the representations were made, Hitex would have had grounds to believe that it could supply 5 million masks on 15^th April, but not on 22^nd April, and that it would not have had grounds to believe that it could produce 5 million masks per week from 22^nd April, so that:

‘113 … if Hitex had made the representations that were made in the Waller email (which I do not consider to be the case) at least two of these representations were either false as a statement of Hitex’s honest belief, or that Hitex would have been reckless or careless as to whether it was true or false.’

This leaves an ambiguity whether the judge would have found that the representations were made fraudulently or merely carelessly. That might have been of critical importance as the entire agreement clause in the contract would have excluded liability for a careless, but not for a fraudulent, misrepresentation.

However, the judge went on to find that Uniserve did not rely on the representations in the Waller email, but relied instead on the investigations carried out by Majlan. So Uniserve’s case would have failed on that ground also.

The judge dealt next with the issue whether the exchange of emails resulting in the revised delivery schedule created a binding variation of the contract. He found that it did and, as I have explained, Uniserve’s challenge to that finding is no longer pursued.

The next issue was whether Hitex complied with the revised delivery schedule. The judge found that it did, at any rate until the delivery due on 14^th June 2020, based on the figures shown in the Production Reports (although he does not appear to have made express findings as to the deliveries which fell due between 14^th June and 11^th July 2020). As a result, he concluded that Uniserve was not entitled to terminate the supply contract and that its purported termination on about 17^th June 2020 when Mr Stead told Mr Popeck that the contract was over was a repudiatory breach by Uniserve.

The judge rejected Hitex’s submission that it could both keep the contract alive for performance and at the same time be discharged from its obligation to have the cumulative total available for collection. The supply contract was not a severable contract with each shipment being treated as a separate contract. If the contract was kept alive for performance, Hitex’s obligation was to have available the cumulative total required on each delivery date. It was not open to Hitex to ‘recycle’ or ‘retender’ the same masks for each succeeding shipment.

If the judge had stopped there, Hitex’s claim would have failed. However, contrary to Hitex’s pleaded case that it kept the contract alive for performance, the judge concluded that Hitex accepted Uniserve’s repudiation as bringing the contract to an end. He reasoned that by 17^th or 18^th June, or certainly by 11^th July 2020, Hitex knew that Uniserve was treating itself as not bound by the contract, and that by 13^th July 2020 Hitex was not maintaining production at a sufficient rate to supply the cumulative total required by the revised delivery schedule, and took no steps to contact Majlan or Mr Stead to arrange any further collection of masks. Although he recognised that this was not the case which Hitex had advanced, he concluded that this amounted to an acceptance by Hitex of Uniserve’s repudiation of the contract, which was therefore validly terminated by Hitex on 13^th July 2020.

Accordingly the judge found that Hitex was entitled to damages for repudiation as a result of the termination of the contract by Hitex on 13^th July 2020. He found that there was an available market, and that damages should be assessed by reference to the market price as at the date of termination for face masks to be supplied ex works Jordan on about the dates provided for in the revised delivery schedule. On that basis he assessed damages in the sum of US $16.94 million.