HT-2020-000448 - [2024] EWHC 1185 (TCC)

A common assumption shared by both parties or an assumption made by TCS and acquiesced in by DBS: see Tinkler v Revenue and Customs Commissioners [2021] UKSC 39; [2021] 3 WLR 697 per Lord Burrows JSC at [39].

If there is said to have been a common assumption, TCS must show that it was communicated between the parties, i.e. it must have crossed the line. A common subjective assumption is insufficient. See Tinkler at [34]-[38].

The person raising the estoppel (here, TCS) must know that the person against whom the estoppel is raised (here, DBS) shares the common assumption and must be strengthened, or influenced, in its reliance on that common assumption by that knowledge; and DBS must (objectively) intend, or expect, that that will be the effect on TCS of its conduct crossing the line so that one can say that DBS has assumed some element of responsibility for TCS’ reliance on the common assumption. See Tinkler at [51].

Alternatively, an estoppel by convention based on acquiescence can only exist where the parties are subjectively in agreement; i.e. the party making the representation knows that the other party has a different understanding: ABN Amro Bank NV v Royal and Sun Alliance Insurance Plc & Ors [2021] EWCA Civ 1789; [2022] 1 WLR 1773 per Sir Geoffrey Vos MR at [87].

‘A joint re-planning exercise is underway. It is anticipated that the revised plan will be agreed by R1 Project Board on 25th August 2016. This will then inform discussions around the commercial impacts’.

‘We all focussed on regulating the position by re-planning and then we would know that the consequences of the delays were – and would in fact have already sorted them out. We could then serve the Exception Report. ….There is no doubt that [DBS] knew we needed specific information to complete the draft Exception Report that DBS could not readily provide, and the process we were all embarked upon was a collaborative one to ascertain and understand when all parties could complete the relevant tasks so that an effective-plan for delivery could be prepared. I also do not recall any occasion on which DBS asserted, prior to the service of the draft Exception Report, that TCS would not be entitled to compensation for the delays described in the Notice of Delay because it had not served the draft Exception Report within five working days.’

‘So I think even when we were trying to do the replanning, you will find that in a period of three to four or five months, each of the elements of delivery from the delivery partners, like HPE, were shifting 12, 15, 16 times. So we could not – it’s a moving feast. We just couldn’t pinpoint in terms of any of those details that is required, because for an Exception Report in our mind to be complete, we need to give some kind of a realistic assumption in terms of when these partners can deliver, based on which, when we can deliver the final outcome. And every time we prepare one, we find that they come back in the next week or session and give us a delay which is again further on. So we find multiple iterations coming from all the time. So we couldn’t collate it in any sensible shape or form, because from one reporting period to the other, so many delays are happening, so we couldn’t have a feel. Even though, again, that’s a frustration I would have in my witness statement is that we want to do it and we have expressed with DBS that we would like these teams to come together to help us prepare to do it, but it – it just doesn’t happen.’

DBS claims that there are no contemporaneous documents before the Court which record TCS making such an assumption and nothing in the internal TCS correspondence on the topic of Exception Reporting to suggest that DBS believed that DBS would not rely upon the clauses. However, the whole tenor of the communications, in circumstances where DBS themselves did not articulate any reliance upon the provisions at the time, is that the condition precedent was simply not a live point. It is unsurprising that it was not the subject of discussion internally within TCS. It is objectively obvious that TCS considered that it had had a de facto extension to provide its Exception Report, notwithstanding the absence of a formal response to their request, because of the way DBS was conducting itself in discussions and negotiations;

DBS placed weight, in cross-examination and in submissions, on the internal emails from Mr Murphy (of TCS) drawing the relevant contractual terms to the attention of his colleagues which may be said to have emphasised the potential importance of the clauses in late July 2016. There is no suggestion that TCS were unaware of the clauses: these emails make clear that they were aware of the wording of Clause 5.3. The emails also make clear, for what it is worth, that TCS genuinely considered that the production of an Exception Report that detailed the consequences of the delay was not possible in light of their dependency upon information from others (and in particular HPE, through DBS). The very fact that TCS were acutely aware of the possible point that DBS might take against them supports their belief that the point had fallen away in circumstances where substantive negotiations and planning was taking place absent any suggestion by DBS that they had forfeited their entitlement to compensation. The internal emails from Mr Murphy do not, therefore, negate in any way the existence of the assumption relied upon;

Mr Kuncheria was right to concede that no formal extension was ever granted. It is obvious that it was not, as I have found above. Indeed, had it been, the issue of estoppel would not arise. The concession was not of itself inconsistent with an estoppel existing;

I do not accept that Mr Kuncheria’s evidence (or that of other more junior TCS employees) does not support the assumption asserted. Whilst he does not use the phrase, ‘I assumed…’, his evidence (in the passages quoted above) and the correspondence surrounding the substance of the discussions and negotiations clearly demonstrate an assumption on TCS’ part that, whilst it was still necessary to produce an Exception Report, no technical point on 5 Working Days was being taken against it and that any entitlement would be determined in light of the substantive merits.

Ms Owen’s oral evidence, which I accept in this regard, was that her response of 2 August 2016 did not agree an alternative period in which the draft Exception Report could be provided. This is consistent with the conclusion I have come to above. However, her evidence was also, in summary, that (a) she understood TCS were saying that they did not have sufficient information to do so; (b) at least one of her colleagues considered this to be reasonable; (c) she had not refused the request and would have said so if she had; and (d) DBS was prepared to grant TCS more than 5 days even though the parties never came to any agreement on what the period was (Day 9/130):

Mr Whiting was, at the relevant time, Director for Finance, with additional responsibility for DBS’s Commercial operations. Mr Whiting was taken through a number of documents which dealt with commercial negotiations in the autumn of 2016, and he generally agreed that DBS did not take any point that no Exception Report had been served with 5 Working Days and/or that as a result TCS were not entitled to bring a claim. He gave evidence that the first time he could remember seeing the 5 Working Days point being taken by DBS was in the pleadings. In this context, the following exchange then took place (Day 8/20):

there was a continuing requirement on the part of DBS and acceptance on the part of TCS that an Exception Report setting out the consequences of the claimed delays was required;

TCS was bringing a claim for financial compensation for delays caused by HPE (and, in TCS’s eyes, therefore, DBS);

information for the process was required from HPE, through DBS, and the provision of that information was ongoing both for the purposes of re-planning the project and (therefore) to articulate the consequences of the delays within an Exception Report;

it was worthwhile for both parties to engage at length in discussion and negotiation of the merits of the parties’ positions in circumstances where DBS was not asserting that TCS’s right to compensation had fallen away because of a failure to have served a draft Exception Report within 5 Working Days.