Case No. IP-2018-000182

11. The parties agreed the relevant legal principles, which I gratefully adopt from Mr Tilley’s skeleton argument. I have interpolated the areas where Mr Popplewell disagreed. Mr Popplewell also asserted that a number of these propositions were irrelevant, had not been pleaded or did not arise on the facts of this case, but he did not disagree with them as legal propositions. “(1) In the case of an express agreement the onus of proving there was no contractual intention is on the party who so asserts, and the burden is a heavy one: Chitty on Contracts (32nd edn) at 2168, approved in Edge Tools & Equipment Ltd v Greatstar Europe Ltd [2018] EWHC 170 (QB) (Martin Chamberlain QC) at [19]. (2)In deciding whether there was an intention to create legal relations: a.the court applies an objective test: RTS Ltd v Molkerei Alois Muller GmbH and Co KG [2010] 1 WLR 753 at [45] (Lord Clarke); and b.the lack of certain terms of economic or other significance to the parties having been finalised does not necessarily negate an intention to create legal relations: RTS at [45]. (3)An agreement is not incomplete merely because it calls for some further agreement between the parties. Whether such further agreement is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the matter in which the transaction already agreed to will in fact go ahead is a question of construction: Immingham Storage Co Ltd v Clear plc [2011] EWCA Civ 89 at [18]. There may be an enforceable agreement even if the parties contemplate entering into a further, more formal, agreement later: Edge Tools. [Mr Popplewell invited me to pay close attention to the statements in Immingham Storage on which Mr Tilley relied, asking that I note what follows immediately on from the proposition set out above: “In the former case, there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract entering into a contract. In the latter case, there is a binding contract and the reference to the more formal document may be ignored.” Mr Tilley did not disagree.] (4)Even if the putative agreement would otherwise be held to be incomplete, the parties’ performance may justify the implication of terms to give efficacy to the agreement: F.&.G. Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd’s Rep 53. (5)Where the parties contemplate a further formal agreement, execution of such agreement is not necessarily a condition that has to be fulfilled before the parties become bound; they may be bound by the original agreement unless and until it is superseded: Branca v Cobarro [1947] KB 854. (6)A contract may come into existence during and as a result of performance (rather than necessarily because of an offer and acceptance): G Percy Trentham Ltd v Archital Luxfer Ltd [1993] 1 Lloyd's Rep 25. (7)When deciding whether or not performance has taken place within a reasonable time, a court is not limited to what the parties contemplated or ought to have foreseen at the time of entry into the contract but can, with the benefit of hindsight, take account of a broad range of factors, including the nature of the cause or causes of any delay in performance: Peregrine Systems Limited v Steria Limited [2005] EWCA Civ 239 at [15]. (8)If a party is entitled to treat himself as discharged from the contract and wishes to do so he must accept the repudiation by an unequivocal overt act inconsistent with the substance of the contract: Chitty at 24-013. (9)Where a reasonable time has passed for performance but the innocent party has not sought to bring the contract to an end, the innocent party will be regarded has having made its election and decided not to terminate: Chitty at 24-002, 24-005. (10)The only ways the obligations under a binding contract can cease to be binding are (relevantly): a.if there is a variation of the obligation, which requires consideration; b.if the agreement is discharged by agreement or for breach; c.if there is an estoppel. (11)The court may have regard to post contractual conduct to establish an estoppel by convention (Lewison, The Interpretation of Contract, at 3.19). (12)Estoppel by convention requires it to be unjust or unconscionable to hold the parties to their bargain: First National Trustco (UK) Limited v Page [2019] EWHC 1187 (Ch) (Joanna Smith QC) at [100]-[114]. (13)A party to a contract may obtain specific performance of a contractual promise made to a non-party: Beswick v Beswick [1968] AC 58. (14)A claim for specific performance is not subject to a limitation period but is subject to the doctrine of laches: P&O Nedlloyd BV v Arab Metals Co and others (No 2) [2007] 1 WLR 2288 [43][47]. (15)To make out the defence of laches more than mere delay is required, there must be an element of detriment to the defendant: Snell’s Equity (33rd edn) 5-011. [Mr Popplewell disagreed with this proposition, arguing that there are cases where mere delay is sufficient. I return to his submissions below.] (16)Specific performance may be refused on the discretionary ground of “unclean hands” in circumstances where there has been a misrepresentation that justifies rescission of the contract: Snell at 17-026. [Mr Popplewell agreed with that statement, and added that there are other discretionary grounds on which specific performance may be refused. Mr Tilley did not disagree.] (17)There is no actionable misrepresentation where the statement in question: a.is an honest opinion (Chitty on Contracts at 7-008 to 7009); and/or b.is not relied upon in entering into the contract (Chitty on Contracts at 7-036). (18)Where a breach of contract consists in a failure to do something it may be classified as a “continuing breach” with the consequence that the limitation period does not start to run until the obligation ceases to be capable of performance: Midland Bank Trust Co v Hett, Stubbs & Kemp [1979] Ch 384 (Oliver J) at 435, 438-9; McGee, Limitation Periods (8th edn) at 10.03110.036. [Mr Popplewell submitted that the Court of Appeal said in Capita (Banstead 2011) Ltd (formerly known as FPS Group Ltd) and Anor v RFIB Group Limited [2015] EWCA Civ 1310 that the Midland Bank case relied on by Mr Tilley was wrongly decided. I return to this submission below.]” 12.Therefore, this is a case where the legal principles were largely agreed – the disagreement arose as to their application to the facts of the case.