HT-2020-000448 - [2024] EWHC 2025 (TCC)

Fecha: 01-Ago-2024

Conclusions

Appeal

106.

DBS seeks permission to appeal in relation to two points of law:

(1)

Delay Payments Whether the provision of a Non-Conformance Report under Clause 6 of the Agreement was a condition precedent to the payment of Delay Payments by TCS.

(2)

VBSC Year 5 Whether Clause 2.8.8 of the Agreement provided that the VBSC for Year 5 of the Agreement should be an agreed flat charge, as contended for by DBS, or a charge based on actual transaction volumes with no cap, as contended for by TCS.

107.

At the outset of the consequentials hearing, I heard from Mr Croall and, for DBS, Mr Lavy KC, in respect of DBS’s application for permission to appeal. I refused that application. I set out my reasons below.

108.

Permission may be given where there is a real prospect of success that the Court of Appeal will take a different view on the issue: CPR 52.6(1)(a). Each of the issues raised are pure points of construction. I accept, therefore, that the restrictive rules concerning appeals from judgments of the Technology and Construction Court which raise factual issues do not apply.

Delay Payments

109.

There is no real prospect that the Court of Appeal will conclude that Clause 6 of the Agreement was not a condition precedent. The Judgment contains a careful analysis of the authorities and, at paragraph 74, a clear distillation of the relevant matters which should be borne in mind when considering whether a relevant clause is a condition precedent. No criticism is made of that analysis of the law. Each of the factors DBS point to is a matter which was considered expressly within the Judgment.

110.

Taking the specific points made by DBS at paragraphs 4.1-4.10 of its written reasons for permission to appeal in turn (the numbering below reflecting DBS’s points):

4.1: The absence of an explicit warning as to the consequence of non-compliance was taken into account, and is not determinative against construing the regime as one of condition precedent (see [74(4)]). There is express language of conditionality which sits at the heart of the proper construction;

4.2: Pointing to the absence of particular language in Clause 6.2 is irrelevant when the requisite, and express, cross reference and conditionality is in the last sentence of Clause 6.1. The clauses are obviously read together.

4.3

The suggestion that only the conditional ‘if…then…’ only applies to the first ‘then’ (the provision of the NCR) was considered expressly: see [91]. It makes no sense (either linguistically or commercially) to apply the conditional link between Clause 6.2 (the entitlement) and just the first part of Clause 6.1, effectively leapfrogging the second part of Clause 6.1 (the obligation).

4.4

The judgment expressly acknowledged that ‘shall’ was necessary, and not determinative (see [74(3)]). This is correct and the appropriate (i.e. not excessive) weight was placed on this word.

4.5

The word ‘then’ is, indeed, important, as it provides (particularly coupled with ‘if’) the requisite expression of conditionality when the words are read naturally. The addition of the word ‘only’ is not necessary to import that conditionality. DBS advanced, and advances, no sensible meaning to the use of the word ‘then’ in the last sentence of Clause 6.1.

4.6

The use of the word ‘promptly’ rather than a defined period of time was a factor specifically considered (at [74(7)] by way of principle and at [93] by way of application). Its use did not outweigh the expression of conditionality conveyed by the ordinary meaning of the rest of the clause.

4.7

Each of the remedies in Clause 6.2 provided entitlements to DBS to the potential detriment of TCS, following the preceding failure(s) by TCS referred to in Clause 6.1. The benefit of clarity as to the basis of failures relied as a condition of exercising those entitlements applies generally.

4.8

This elides two points. The judgment clearly factored in the linguistic asymmetry between Clause 6 and Clause 5 acknowledging it was a point in DBS’s favour. The judgment then dealt with commercial/purposive symmetry which acted as a counterbalance (and it is noted that DBS does not deal with the substance of that commercial/purposive symmetry or suggest it was misplaced).

4.9-4.10 The usefulness of direct analogies to other authorities is by definition limited where each clause is specific to its wording. The authorities were principally traversed in order to distil the principles articulated at [74]. That analysis was plainly correct and properly applied.

VBSC

111.

There is no real prospect that the Court of Appeal will conclude that DBS’s construction is correct.

112.

The principal basis upon which I rejected DBS’s submissions was the absence of any real meaning given in their submission to the important word ‘minimum’. On DBS’s case, the word is either otiose or positively misleading (see [812]): in particular, the word minimum in fact, depending on the circumstances, turns into a cap if DBS is right. Whilst the clause is not well drafted, this cannot possibly be right. The only answer to this is DBS’s suggestion that the word ‘minimum’ attaches to predicted volume rather than VBSC. This point was dealt with explicitly [806] and [807]: the effect of Clause 2.3.3 is to require the VBSC to be based upon actual transactions, and Clause 2.3.3 is not expressly or otherwise overridden by Clause 2.8.8.

113.

The specific points at paragraph 15 do not add to this analysis. Nevertheless:

15.1

This ignores entirely reading the clause as a whole, and in particular Clause 2.3.3. It also requires TCS to do a potentially unlimited amount of work for a potentially capped costs. It is this which turns the previously applicable regime for years 1-4 on its head.

15.2

This essentially repeats in different ways the complaint at paragraph 15.1. It ignores the fact that there is, pursuant to the construction contended for, a benefit to both parties where there are higher than anticipated volumes: whilst this brings uncapped revenue to TCS, it of course also brings the equivalent revenue to DBS from which the sums owed to TCS are paid. On DBS’s construction, higher than predicted volumes merely creates a windfall for DBS by way of revenue collected and no costs.

15.3

This focuses on the word ‘minimum’ which I have dealt with at [93] above.