Issue 6(b) – Has Volumatic come to court with unclean hands by reason of its alleged precontractual misrepresentations?
64.It is conceded that, prior to entering into the Agreement, Mr Bonné on behalf of Volumatic indicated that Volumatic would be ordering a high volume of Pouches. One account is that Mr Bonné said “in the millions”. Another account is that Mr Bonné said “10 million pouches per year”. Mr Williams suggested that he understood Mr Bonné to mean that the figure would be achieved in a year. I do not need to decide exactly what was said by Mr Bonné because it does not matter - it is clear from the evidence before me that IFL/DFL did not rely on this statement, whichever version of it was made. It was not written down at the time (or even mentioned in any written correspondence), nor was it (or any other reference to quantity) included in the Agreement or in any of the other documents passed between the parties at the time. In my judgment, it was no more than the overly enthusiastic puff of an entrepreneur: IFL/DFL appreciated that and did not rely on it. 65.Had they relied on the statement, IFL/DFL would have been wrong to do so. IFL/DFL were supplying pouches to Volumatic in 2005 at the time the statement was made, and had been since 2001. In those years, sales had been slow, and orders were in the hundreds of thousands – considerably short of “millions” or “10 million”. IFL/DFL were aware of Volumatic’s customer base, and aware that IFL/DFL did not have customers with requirements anywhere near those levels. IFL/DFL knew that a significant number of new customers would be needed in order to achieve sales of those levels. Further, 10 years later, as the business has grown steadily, annual orders remain at a quarter of the 10 million figure. Further, Mr Williams told me candidly from the witness box that he would never have been able to make 10 million Pouches had they been ordered, and certainly would have been unable to ramp up production to be able to make 10 million Pouches within a year. 66.For these reasons, I have no hesitation in rejecting IFL’s argument.
- 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
