Background
10.The following recitation of facts is uncontentious, except where I indicate otherwise: (a)Since the 1980s, Volumatic has produced a cash handling device called CounterCache. Retailers place surplus high value bank notes not into the till, but into the CounterCache device for secure storage. Within the device, the notes are stored in a pouch. The original pouch was designed by a third party and since about 2001 manufactured by DFL. Thus, the individuals behind the parties have been working together for many years – including for some years before the date of the Agreement. (b)In 2004, Volumatic decided to try to improve the original pouch to overcome perceived difficulties with it. At about the same time, Volumatic conceived of an improved cash handling device, eventually named the CounterCache Intelligent (CCi). The improved pouch (referred to in the proceedings as the Pouch) was intended to be compatible with the original CounterCache product and the CCi. (c)Volumatic discussed the Pouch with DFL. IFL was incorporated in February 2004 expressly for the purpose of designing the Pouch, which DFL would then manufacture. There was a meeting in September 2004, prior to which DFL requested that Volumatic sign an “Interim Confidentiality Agreement”, which it did after amending it so as to delete a clause which provided for DFL to own “all design concepts and unique ideas”. Discussions ensued. (d)On 6 December 2004, IFL put forward a draft “Letter of Agreement”. This was never signed. IFL put forward a second draft on 21 January 2005, which was also never signed. Both provided for IFL to own the intellectual property developed by IFL/DFL. (e)On 2 February 2005, Mr Johnson sent an email to Mr Paul Bonné, then Volumatic’s managing director, setting out the text of a proposed email to Mr Williams of IFL/DFL. At trial, neither side could determine if the proposed email to Mr Williams was ever sent, but it sets out the three stage process that was described by Mr Johnson as the genesis of the Agreement. (f)On 3 February 2005 there was a meeting at the Hilton Hotel in Warwick at which the parties reached a consensus on the way forward (the
- Mr David Stone (sitting as an Enterprise Judge):
- Volumatic
- Agreement
- Pouch
- List of Issues
- Witnesses
- Background
- Warwick Meeting
- Legal Principles
- Preliminary Point
- Issue 1(a) – Did the parties have an intention to create legal relations in relation to the Agreement (alternatively Stages 2 and 3 of the Agreement)?
- Issue 1(b) – Was the Agreement sufficiently certain for it to be legally binding?
- Issue 2 – Is Volumatic estopped by convention from asserting that the Agreement (alternatively stages 2 and 3 of the Agreement) is binding?
- Issue 3 – Was the Agreement varied?
- Issue 4 – On a proper construction of the Agreement, have the conditions for assignment been satisfied?
- Issue 5 – If the conditions precedent were satisfied, did Volumatic satisfy them within a reasonable time?
- Issue 6(a) – Has Volumatic come to court with clean hands by reason of it allegedly conducting its relationship with IFL as if the Agreement were not binding on it?
- Issue 6(b) – Has Volumatic come to court with unclean hands by reason of its alleged precontractual misrepresentations?
- Issue 6(c) – Has Volumatic has come to court with unclean hands by reason of its failure to comply with its own obligations under the Agreement (including whether IFL acquiesced to the same and/or whether IFL is estopped from asserting otherwise)
- Issue 8 – Does IFL have a defence of laches?
- Issue 10 – Should the court refuse specific performance on the discretionary grounds that: (a) IFL has allegedly conducted itself on the basis that Stages 2 and 3 of the Agreement were not binding; (b) IFL has improved the Pouch at the request of Volumatic; (c) Volumatic has allegedly not complied with its own obligations under the Agreement; and/or (d) delay
- Issue 7 – Would it be inequitable to order specific performance?
- Issue 12 – Should the court order specific performance of the Agreement?
- Issue 11 – Does IFL hold the intellectual property rights in the Pouch on trust for Volumatic?
- Issue 13 – Should the Court order damages in lieu of specific performance?
- Issue 9 – Is the claim for damages statute barred?
- Issue 15 – Should IFL be ordered to grant Volumatic exclusive rights to use any know-how in respect of the Pouch?
- Conclusions