Case No. IP-2018-000182

18.Given that the Agreement is an express, written, commercial document, IFL conceded that it must prove that there was no intention to create legal relations. I accept that the burden is a heavy one: see Edge Tools & Equipment Ltd v Greatstar Europe Ltd [2018] EWHC 170 (QB) per Martin Chamberlain QC sitting as a Deputy High Court Judge at paragraph 19. Mr Tilley also helpfully took me to Branca v Cobarro [1947] 1 KB 854 per Lord Greene MR and Immingham Storage Company Limited v Clear plc [2011] EWCA Civ 89. 19.IFL submitted that the “key piece of evidence as to the intention of the parties” is the email of 7 February 2005, some three months prior to the date the Agreement was signed. It is common ground that this email was prepared after the Warwick Meeting to record what was agreed – it was drafted by Volumatic and sent to IFL/DFL. IFL expressly relied on the following paragraph of that email: “This represents a summary of the proposed agreement – it will require legal input to finalise – this will be completed in April in order to delay the legal fee expenditure. In the meantime, DFL ([Mr Williams]) and Volumatic ([Mr Bonné]) will sign this letter/email hence agreeing the intent to go ahead in this form.” 20.In the event, April came and went and the Agreement was not signed until May. IFL submitted that the email of 7 February 2005 clearly shows that there was no intention to enter binding relations because of the reference to requiring legal input, and the use of the word “intent”, and that nothing intervened to alter that lack of intention between then and May when the Agreement was signed. There were no further meetings in that time, and the limited email exchanges have been set out above. 21.Additionally, IFL relied on the following: (a)The Agreement does not contain the level of detail to be expected for commercial parties entering into an agreement that was intended to be binding (such as a jurisdiction clause, entire agreement clause and the like); (b)The Agreement can be contrasted with various other agreements which passed between the parties, such as the draft agreements exchanged in 2004 (7 and 10 pages long) and the formal supply agreement provided in 2009 (27 pages long); (c) The language of the Agreement: (i)on its terms it is said to provide for further documentation; and (ii)refers to the “proposed acquisition of IFL’s new designs and invention”; (d)At the time the Agreement was signed, there had been some development of the Pouch but it was not complete – had the Pouch not been viable, it is nonsensical (Mr Popplewell submitted) to suggest that Volumatic should be bound to purchase quantities of it; (e)The Agreement contains clauses that require further negotiation – such as product quality assurance and delivery schedules; (f)The Agreement was not signed by DFL and DFL is not a party to it – as DFL produced the Pouches, it would be a necessary party for their supply; (g)Volumatic’s correct business name was not used – rather, the Agreement refers to Volumatic Omal Limited; and (h)The Agreement was signed by Mr Johnson who had never previously signed a supply or assignment agreement on behalf of Volumatic. 22.To the contrary, Volumatic relied on the prior legal relationship of the parties, and the following matters which it said can be taken objectively from the Agreement itself: (a)On its face, the Agreement refers to “agreement” and “agree”, and does not include language such as “heads of terms” or “letter of intent”; (b)Although prepared or reviewed by solicitors, the Agreement was not marked “subject to contract”; (c)The Agreement refers to further legal instruments being necessary, but does not say that it lacks legal force until further documentation is agreed; (d)It is on (albeit rudimentary) headed paper and was signed by both parties; (e)IFL had previously proffered longer written agreements for Volumatic to sign; and (f)Volumatic and DFL had previously entered into the Interim Confidentiality Agreement in the form of a letter, suggesting that the parties had no issues with entering into contractual relations by letter. 23.Additionally, both parties relied on the subsequent behaviour of the parties, Volumatic to suggest it was binding and IFL to suggest the reverse. 24.Applying an objective test, in my judgment, the parties did not intend the Agreement to be legally binding. It was a document designed to record the consensus reached at the Warwick Meeting – both parties conceded that the Warwick Meeting had no legal effect. Whilst the document is signed, this was done, in my judgment, not to create legal relations, but for the purposes of the parties recording the consensus – the signatures indicate the agreement of both sides that the document accurately expresses what was agreed in Warwick. This is recognised in the Agreement itself, where it records “It is recognised etc”. The Agreement is, in my judgment, no more than that. As summarised by Mr Amos in his email of 16 March 2012, the Agreement “best captures the substance of what both companies hoped to achieve”: it was not intended to create legal relations. The heavy burden that IFL set out to prove has been met. In reaching this conclusion, I have been mindful that a lack of terms of economic or other significance does not necessarily negate an intention to create legal relations. I am also mindful that there could be an intention to create legal relations even where further agreements were contemplated. But on its terms, viewed objectively, the Agreement was not, in my judgment, intended to create legal relations. I agree with IFL’s submission set out in paragraph 21(a), (b), (d) and (f) above. The arguments advanced by Volumatic, summarised in paragraph 22 above, are not inconsistent with my findings – it is not unusual that a set of minutes would be reviewed by lawyers, and even so, the use of “subject to contract”, whilst helpful, is not determinative. Similarly, the use of headed paper and the words “agreement” and “agree” are not determinative. 25.Each party argued that the behaviour of the parties following the signing of the Agreement supported its suggested interpretation – Volumatic saying that the parties largely carried out the terms of the Agreement, whilst negotiating variations, and IFL saying that the parties carried on as if the Agreement was not binding. Mr Tilley cautioned me in looking at subsequent conduct, and I accept his position on that front: what is relevant is the intention of the parties at the time the Agreement was entered into. Mr Tilley therefore cautioned me against relying on later comments by Mr Amos, who was not at Volumatic in May 2005. I agree. But that does not resolve the issue. The clear documentary evidence was that no-one involved suggested that the Agreement was binding until the email of Mr Amos of 18 October 2016, long after several sets of legal advisors had been involved on each side. Meanwhile, the parties carried on as if the Agreement was not binding, with neither party seeking to rely on its terms, including important terms such as price, royalty rate and payment terms. Also, whilst many documents were disclosed in the proceedings, and many emails were in evidence, none of them suggests that the Agreement was binding until Mr Amos’ email of 18 October 2016. To the extent Mr Amos suggested in his second witness statement that other statements were made orally, I do not accept that. When asked in crossexamination, he could not recall specific conversations, but rather relied on the notion that the issue must have come up. Rather, I conclude from the absence of such documents that the subsequent conduct over a period of more than 11 years, up until 18 October 2016, was entirely consistent with the Agreement not being binding. 26.In the alternative, IFL submitted that, if there was intention to create legal relations, it was only in relation to Stage 1. Given my finding above, I need only deal with this submission briefly. At trial, Mr Popplewell did not press this aspect of his case with great vigour, in my view, rightly. This argument is without foundation, and I reject it. Applying an objective test, there is nothing to suggest that the parties intended to be bound by part of the Agreement, but not all of it. 27.In my judgment, in entering into the Agreement, the parties did not intend to create legally binding relations. Volumatic’s case therefore fails. However, as multiple other submissions were argued, I deal with each below.