HT-2024-000379 - [2025] EWHC 2769 (TCC)

This is an application for Summary Judgment. The matter was before the Court on 4^th July when the Claimant was permitted to amend its Particulars of Claim and its application for summary judgment, and this application was adjourned until 16^th September 2025. Amended statements of case have been filed and both parties have served Skeleton Arguments addressing the issues which this Court is being asked to determine. The issue added by the Amended Particulars of Claim which has been central to the application is as to the effect of Clause 4 of the Claimant’s Terms and Conditions. That issue did not feature in the unamended Particulars of Claim or in the original summary judgment application before the Court in July.

The claim is for non-payment of invoices for the supply of a metal product, Inconel Alloy 625 Cold Drawn Pipes, of which the Claimant was the supplier and the Defendant was the purchaser. It is agreed that the sums sought relate to purchase orders issued between July 2022 and September 2023 and that the Claimant’s 2021 Terms and Conditions applied to the orders.

The Defendant alleges that some of the product delivered was defective and that by way of set-off/counterclaim it is therefore not obliged to pay the sums currently unpaid. The Defendant also counterclaims for Additional Contracts which it says were wrongly cancelled by the Claimant. Those latter issues were not part of the application before the Court.

It is also accepted for the purposes of this application that the Claimant requested the return of the products which have not been paid for and the Defendant did not return them.

This is an unusual summary judgment application because the Claimant does not seek a monetary sum but rather seeks the determination of five issues as follows:

In considering the issues before me and reaching my decision on them, I have taken into account all the materials placed before me including the written and oral submissions by both Counsel for which I am grateful. If I do not expressly deal with a point raised by either Counsel, that is not because I have not considered the same but it is because I do not regard that issue as being essential to my reasoning.

In the Amended Particulars of Claim the Claimant seeks payment for eight contracts reached between July 2022 and September 2023 and relies on its 2021 Terms and Conditions which provide that payment was due 55 days after the end of the month when the order was delivered. The Claimant relies on Clause 3 of its Terms and Conditions headed “PRICES” as follows:

“Any price specified by Seller is, unless otherwise stated, subject to modification in relation to goods whose specified delivery date is more than 6 months after the date of the contract. Except where otherwise stated any duties and taxes on the goods or contract are not included in the contract price and shall be for account of Buyer. Where the goods are sold duties and taxes paid, any change in such duties and taxes subsequent to the date of the contract shall be for account of Buyer. Buyer shall pay interest on any part of the price not paid by its due date at 3% per annum above the base rate from time to time of HSBC Bank plc from the due date until actual payment be it before or after any judgment. Queries on invoices relating to quantities prices material damage or any other matter must be raised within 14 days of the invoice date.”

Clause 4 under the heading “DELIVERY TITLE AND RISK” states:

“Unless otherwise agreed, terms of delivery shall be FCA Sellers dock per Incoterms 2020. Risk in the goods shall pass to Buyer on delivery or earlier as provided by the applicable Incoterm. No property in any of the goods shall pass to Buyer until the price has been paid in full provided that if Buyer shall in good faith and in the ordinary course of business resell the whole or any part of the goods the property in the goods (or part thereof) shall pass to Buyer at the same time as to the Purchaser and under such resale forms. In such event, Buyer shall be trustee for Seller of all monies paid by and indebtedness due from the Purchaser to Buyer under the resale. Any resale must be effected by Buyer as principal and not as agent for Seller. If Buyer fails to take or accept delivery of the goods without Seller’s prior written consent, delivery [sic].”

The Claimant seeks £1,430,206.07 pursuant to the unpaid invoices in respect of the eight contracts I have identified above. The Claimant accepts that some of the products in respect of the unpaid invoices have been returned and will give credit for any value realised in respect of that product when it is realised. The amendment to the Particulars of Claim relying on clause 4, was based on the Defendant’s Response to the Notice to Admit Facts dated 25^th June 2025 admitting that the Defendant has “sold on”to third parties some of the goods which were the subject of the Contracts as follows: £597,341.91 of stock before it discovered the quality issue and £438,781.05 of stock whilst it was waiting for that issue to be resolved for pre-existing orders. The Claimant’s legal representatives had also asked the Defendant’s legal representatives if those funds have been kept in an account and on trust for the Claimant. That question had not been responded to as at the date of the hearing. The Claimant alleges that pursuant to Clause 4 the Defendant was required to hold at least £1,036,121.96 on trust, being the monies paid to it in respect of the product sold, and in breach of Clause 4 the Defendant has failed to pay that sum to the Claimant and/or has acted in breach of trust in unlawfully dissipating the sum and/or treating such monies as its own. In the alternative, there is a claim for unjust enrichment in the same sum. The Claimant seeks interest pursuant to its Terms and/or Section 35A of the Senior Courts Act.

In its Amended Defence and Counterclaim the Defendant notes that the parties had been in a commercial relationship for approximately 30 years and that the Defendant is the dominant market force for the production of the goods in question. The goods were certified as being compliant with ISO 9001, such certification being “essential for both customers, suppliers and manufacturers in the nickel alloy manufacturing industry.”

The Defendant identifies matters which were to be included on the face of the individual purchase orders, notably the type of product and required finish; that the material was to be manufactured to a quality system compliant with ISO 9001; the industry standards which the product was to adhere to and specific testing requirements; quantities and diameters of pipe required and other special requirements such as packaging. It is the Defendant’s contention that those requirements and specifications were incorporated into the respective contracts. The Defendant also claims that the Claimant represented to the Defendant in respect of each contract that its processes for manufacturing, testing and inspecting goods complied with ISO 9001 and it followed those processes specified in the standard instructions when fulfilling each contract. The Claimant’s standard instructions include checking that the tubes are clean and free from bevelling, lubricant, swarf, oil, fluids, sawdust, dust etc. The Defendant relies on the representations it has pleaded as express alternatively implied terms of the contract. The Defendant also relies on Section 14 of the Sale of Goods Act 1979 and the implied terms in the contracts that the products would be of satisfactory quality and fit for their purpose.

The Defendant alleges that the exclusion clause at Clause 7(b) of the 2021 Terms is unreasonable and void pursuant to UCTA. In addition to the Terms relied on by the Claimant, the Defendant identifies Clause 6, WARRANTY:

“The Seller warrants only that on delivery the goods comply with their agreed specification (if any) as stated in the Acknowledgment of Order. Any goods shown not to comply with the specification will wherever practicable be replaced as originally ordered provided that Buyer has notified Seller of any suspected defect within 10 days after the discovery of such defect and if so requested by Seller has returned the goods within a reasonable period from the request. If replacement is not practicable, the price paid by Buyer for the goods will be refunded or credited to Buyer.”

In addition, the Defendant refers to Clause 10 “TERMINATION”:

“(a)

If Buyer shall commit any breach of its obligations hereunder or cease business or become subject (or any substantial part of its assets become subject) to any form of bankruptcy, winding-up, dissolution, insolvency, receivership, administration, arrangement with creditors, distress or enforcement of security, Seller may forthwith terminate the contract on written notice to Buyer without prejudice to the rights of either party accrued prior to such termination.

(b)

The Seller may terminate this contract at any time without liability by summary written notice to the Buyer if any export licence, consent or permission which the Seller determines is required from time to time, whether under the UK export control regime or, if the Seller is a subsidiary of a US company, the US export control regime or otherwise is not in place.

(c)

The Seller reserves the right to withdraw credit facilities at any time. Should the Buyer fail to pay the whole amount of any sum due under the contract by the due date the full balance outstanding on any account between the Company and the Buyer shall then become payable forthwith and the Seller shall further be entitled to cancel the contract and/or suspend supplies of goods or services under any contract between the Seller and Buyer.”

Clause 7 “EXCLUSIONS OF LIABILITY” states as follows:

“(b)

The guarantee given in Condition 6 is in lieu of and shall replace any condition warranty or other undertaking on the part of the Seller express or implied, statutory or otherwise as to the description, quality or performance of the goods or as to their fitness for any particular purpose or use in any specific conditions all of which are hereby expressly excluded. Except as provided in Conditions 6 and 7(a) the Seller shall not be liable whether in contract or tort for any loss, damage, death or injury sustained by Buyer or third parties (including, without limitation, any indirect or consequential loss or damage and any loss of production business or profits) caused directly or indirectly by the goods or otherwise howsoever arising.”

Clause 7(c) provides:

“Subject to Condition 7(a), Seller shall have no liability in respect of any claim made more than one year after delivery of the goods to Buyer.”

At Paragraph 25 of the Amended Defence and Counterclaim, the Defendant refers to a practice which it says developed to deal with complaints about defects for goods, namely that the Defendant would notify the Claimant if it or on occasion a customer discovered an actual or potential defect with products delivered and ask the Claimant to confirm if it could be identified, explained or remedied. This would generally be identified by the Claimant who would respond with advice about what it might be and what needed to done. Depending on the response, the Defendant would either deal with the issue informally or would issue a “Non-Conformance Report” and given the expressly agreed terms as to no partial deliveries and the practicalities of handling large quantities of the product, the package containing the defective product could not be separated or broken into affected and unaffected without the Defendant’s express agreement. So if the issue was escalated in this fashion the relevant invoices would be put on hold pending investigation and resolution. The resolution was either a detailed confirmation of the substance and cause of the defect and certification that it did not affect the goods or a proposal for rectification or replacement of the particular goods. The relevant invoices would be put on hold during the investigation process.

In respect of the goods which are the subject of the claim, the Defendant refers to the notification by a customer, Rohr Flansch Fitting Handles GmBH, in February 2024 that a number of ¾” pipes supplied by the Claimant to the Defendant contained “rust spots” along the bore. This issue was notified to the Claimant by an email two days thereafter. The Defendant says that its own inspection identified brown staining residue and/or debris and it sent a Non-Conformance Report on 25^th March 2024 to the Claimant. The Defendant alleges that it sought but did not obtain an explanation for the existence of those defects. It then notified the Claimant of further pipes with the same defects in April 2024 and the Claimant was told on the same request that it was possible to send a sample. In mid-April the Claimant’s Engineer, Mr Tandy, went to the Defendant’s premises to inspect the issues. It is alleged that he agreed that it was not possible to identify by simply looking down the pipes and a borescope was used. The Claimant then requested a further inspection and a return visit. There was a further visit at the end of April 2024 where it is said the Claimant’s employees saw bore contamination in all the pipes that were investigated. On 1^st May a Mr Bourton, the Interim Plant Director at the Claimant, emailed the Defendant stating that:

“Our intent is to collect all… dodgy material and return to our site for reinspection/remedial action where appropriate.”

On 3^rd May 2024 the Defendant notified the Claimant that it had discovered contamination in all pipes up to 4” in diameter. The Defendant’s position is that the parties agreed that the issue affected all of the Defendant’s stock supplied by the Claimant. On 10^th May it is said that the Claimant confirmed to the Defendant that it had identified that there was a flaw in its manufacturing process and it had put its work in progress on hold. The Defendant then stopped selling the Claimant’s products pending further clarification and confirmation of remedy. A batch of 19 boxes of material was collected on 14^th May 2024 by the Claimant from the Defendant. It is said that from the middle of May, Mr Skerratt of the Claimant visited and told the Defendant that they only wanted to recover goods that had not yet been paid for. Thereafter, the Claimant sought to “deflectthe Defendant’s concerns regarding the defects.” An email was sent by Mr Skerratt on 30^th May 2024 which it is said changed the Claimant’s position and alleged that the pipes did comply with the specification and there was no basis to reject those goods. In early June 2024 the Claimant returned the boxes that had been collected and the Defendant says that only one had been opened. The parties had a meeting in the middle of June and there was no conclusion provided during the meeting. The Claimant said it wanted to arrange a further site visit. No further report or updates were sent despite chasing emails.

The Defendant’s Response to the Claimant’s Letter Before Claim was to offer a further opportunity to comply with the obligations under Clause 6 of the Terms and Conditions by replacing or refunding the value of the defective items, but the Claimant instead issued these proceedings.

At paragraph 44 of the Amended Defence, the Defendant avers that the goods supplied under the contracts were defective in six respects and that they did not comply with the specification in that they had not been manufactured following the Claimant’s standard processes, they did not comply with ISO 9001, they were not of satisfactory quality or fit for resale or fit for use. The Defendant refers to an expert report of Dr Roffey which it will produce and disclose in due course. Paragraph 48 denies that the Claimant supplied the agreed product under the contract and continues:

“By virtue of the Claimant’s failure to supply products which complied with the specifications and terms of the contracts the Defendant’s obligation to pay any sums on the invoices was not engaged.”

In the alternative, it is alleged that the Claimant is in breach of Clause 6 of the Terms and that its failure to comply with Clause 6 in issuing these proceedings was a repudiatory breach of contract which was accepted in the Amended Defence and Counterclaim and there is no liability therefore for the sums due.

As to the claims in respect of Clause 4, the Defendant denies that Clause 4 creates any obligation to hold any monies, segregate monies or pay any monies to the Claimant. It is denied that the Defendant accepted the role of trustee and it is alleged that it was not the intention of the Defendant and Clause 4 does not operate to give the Claimant a beneficial interest in any monies or indebtedness including but not limited to any profit margin or mark-up applied. It is also averred that Clause 4 does not adequately specify the requisite elements of a trust and that any trust is void for the lack of certainty of intention subject and/or object. In the alternative, a trust if created should be rescinded on the grounds of a unilateral or common mistake. Alternatively, the Defendant alleges that the Claimant does not come to equity with clean hands and/or that it is entitled to relief pursuant to Section 61 of the Trustee Act 1925.

By its counterclaim, the Defendant claims £1,257,630.29 for monies paid for defective goods and/or in reliance on the Claimant’s misrepresentations; alternatively, diminution in value of the goods paid for. In addition, there is a counterclaim for lost profits on all defective goods and on goods ordered in reliance on the Claimant’s misrepresentations and a claim on lost profits for goods to be supplied under Additional Contracts which it says were wrongly rejected by the Claimant on 29^th April 2024. The claim is for £879,187.07. In the alternative, the Defendant claims rescission and return of the sums paid under the Paid Contracts; alternatively, in restitution or equitable compensation for the same sum, that is the sum of £1,257,630.29.

In its Amended Reply and Defence to Counterclaim the Claimant alleges that the Defendant did not inform the Claimant the purposes that its goods would be used for. It denies that the Claimant is the dominant market force in the production of the goods which it says are not unique. It is denied that the Claimant’s standard instructions form part of the contract and reliance is placed on Clause 7(b) of the Claimant’s Terms and Conditions.

The Claimant admits that it represented to the Defendant that its processes for manufacturing complied with ISO 9001. The Claimant relies on Clause 7(b) of its Terms and Conditions in excluding representations as forming terms of the contract between the parties. For the same reasons, it is denied that there were any implied terms in the contract. The Claimant avers that Clause 7(b) was reasonable pursuant to UCTA whilst noting a lack of any particularity as to the Defendant’s position. The Claimant denies that there was any custom or practice which had developed and/or was the only mechanism by which complaints about defects were addressed. It is denied that invoices were always put on hold when there was a complaint in respect of defects.

The Claimant’s position as to the various visits to the Defendant’s premises differs substantially from the Defendant’s allegations. The Claimant alleges that some of the goods returned by the Defendant did not relate to the goods supplied under the contracts. Some of them had been sold as long as ten years before that. It is accepted that goods to a value of £386,387.53 out of the £1,471,764.07 from Unpaid Contracts were returned, leaving a sum of £1,085,376.54 of stock which has not been returned.

In respect of the returned goods, the Claimant says that none of them had any defects. It refers to Clause 4 of its Terms and Conditions and in respect of those goods which have been resold the Claimant gives the Defendant a credit in the sum of £182,138.16 against its claim. In the Reply, the Claimant had also reserved its right to apply for permission to amend its Particulars of Claim for breach of trust and/or unjust enrichment (as happened in July 2025). There is a denial that the goods contained defects and that they did not comply with the contract terms. Paragraphs 47 to 49 inclusive of the Defence are denied. It is denied that there was any repudiatory breach of contract or that any estoppel by convention arose and in any event Clause 7(b) overrides any alleged common assumption or a claim for estoppel by convention. The Claimant further alleges that Clause 4 does create an obligation on the Defendant to hold on trust monies received from an indebtedness in respect of the on-sale of product which the Defendant received from the contracts and to pay those monies received directly to the Claimant. The Claimant contends that the agreement under Clause 4 is an obligation additional to a contractual debt under the contract. Any unilateral or common mistake is denied, as is any suggestion of a failure to come to equity with clean hands or any entitlement to rely on Section 61 of the Trustee Act 1925. The counterclaims are denied and reliance is again placed on Clause 7(b) of the Terms and Conditions. It is contended that the Claimant was entitled to terminate the Additional Contracts as a matter of law and/or pursuant to the terms of the contract between the parties.

A further Notice to Admit Facts was served on 8^th August 2025. The Defendant was asked (again) to admit that it has not held any sums paid to it in respect of the onward sale of product supplied to the Defendant under the contracts on trust for the Claimant, what is the total sum paid to the Defendant in respect of the onward sales, and that the Defendant has not had to provide any refunds to its customers and/or that no customers have refused to pay the Defendant in respect of products it was supplied under the Contracts or has on-sold due to any customer concerns or complaints about the quality of those products. As at the hearing of this application, no response had been provided to that Notice.

The Claimant’s evidence in support of the application was three statements from its solicitor, Mr Edwards, dated 14^th April and 1^st July 2025 and a statement from Mr Skerratt dated 1^st July 2025. The Defendant’s evidence in opposition was contained in the statement of Mr Peter Strand dated 25^th June 2025. In addition, a statement was served on behalf of the Defendant by Mr Ian Newman dated 9^th September 2025. That latter evidence identified Mr Newman’s subjective views as to the existence or operation of a “trust” between the parties.

The evidence from Mr Edwards concentrates on the effects of Clauses 6 and 7(b) of the Claimant’s Terms and Conditions. It also addresses the issue of the request for the return of all the Claimant’s goods and the effect of a condition precedent to any liability on the part of the Claimant that the goods should be returned within a reasonable period of a request (in line with the claim that was to be the subject of the un-amended summary judgment application).

The hearing before me proceeded on the basis that the claim for summary judgment as a result of failure to comply with a condition precedent was no longer being pursued in respect of the Paid Contracts (as confirmed at paragraph 68 of the Claimant’s counsel’s skeleton argument).

Mr Strand’s evidence dealt with the Defendant’s attempts to comply with Clause 6 of the contract and identified that the Claimant itself did not comply with its obligations under Clause 6. At Paragraph 35 of his statement Mr Strand identifies the estoppel for which the Defendant contends. Mr Skerratt’s statement identifies a number of competitors to the Claimant company and the differences or otherwise between their products and those of the Claimant. He also identifies the terms and conditions which apply to the contracts between these parties and his position that those terms are industry standard by reference to the terms and conditions of the Claimant’s competitors. He also notes that the Defendant has similar terms in its own standard terms and conditions. He identifies that the stock that was returned to the Claimant was thereafter returned back to the Defendant because it was not stock that related to the unpaid invoices. He then refers to his concerns that the reason why the Defendant would not return the unpaid invoice product was because they had already sold it to third parties. In that regard, he refers to an email from his colleague, Bridget Booth, dated 23^rd May 2024 where she asks:

“1.

Please can you confirm that all metal relating to the £1,430,206.09 is at a Corrotherm facility either in the UK or the Netherlands?

2.

If any material has already been sold and has not been the subject of a quality hold then please confirm when we will receive payment for these items.”

Apart from the witness statement from Mr Newman which I have already referred to, no further evidence was served between the hearing on 4^th July 2025 and the application on 16^th September.

The relevant legal principles governing an application for summary judgment were not in dispute between the parties and I gratefully adopt the summary set out by Nicklin J in Mohammed Amersi v. Charlotte Leslie and Another [2023] EWHC 1368 (KB) at para.142 as follows:

“(1)

The court must consider whether a claimant has a ‘realistic’ as opposed to a ‘fanciful’ prospect of success: Swain v. Hillman [2001] 1 All ER 91. The criteria is not one of probability; it is absence of reality: Three Rivers DC v. Bank of England (No.3) [2003] 2 AC 1 (158) per Lord Hobhouse.

(2)

A realistic claim is one that carries some degree of conviction, that means a claim that is more than merely arguable: ED&F Mann Liquid Products v. Patel [2003] EWCA Civ 472 (8).

(3)

In reaching its conclusion the court must not conduct a ‘mini-trial: Swain v. Hillman. That doesn’t mean that the court must take at face value and without analysis everything that a claimant says in his statements before the Court. In some cases it may be clear there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED&F Mann Liquid Products v. Patel (10); Optagloio v. Tethal [2015] EWCA Civ 1202 (31) per Floyd LJ.

(4)

However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgement but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v. Hammond (No.5) 2001 EWCA Civ 550; Doncaster Pharmaceuticals Group Ltd v. Bolton Pharmaceutical Company 100 Ltd [2007] FSR 63.

(5)

Nevertheless, to satisfy the requirement that further evidence ‘can reasonably be expected’ to be available at trial there needs to be some reason for expecting that evidence in support of the relevant case will or at least reasonably might be available at trial. It is not enough simply to argue that the case should be allowed to go to trial because something may ‘turn up’. The party resisting an application for summary judgment must put forward sufficient evidence to satisfy the court that she/he has a real prospect of succeeding at trial (especially if that evidence is or can be expected to be already within his or her possession). If the party wishes to rely on the likelihood that further evidence will be available at that stage, she/he must substantiate that assertion by describing at least in general terms the nature of the evidence, its source and its relevance to the issues before the court. The court may then be able to see that there is some substance in the point and that the party in question is not simply playing for time in the hope that something will turn up: ICI Chemicals Repolymers Ltd v. TTE Training Ltd [2007] EWCA Civ 725 (14) per Moore-Bick LJ; Korea National Insurance Corporation v. Allianz Global Corporate & Specialty AG [2008] Lloyds Rep IR 413 (14) per Moore-Bick LJ; and Ashraf v. Lester Dominic Solicitors & Others [2023] EWCA Civ 4 (40) per Nuggee LJ. Fundamentally the question is whether there are reasonable grounds for believing that disclosure may materially add to or alter the evidence relevant to whether the question has a real prospect of success: Okpabi v. Royal Dutch Shell plc [2021] 1 WLR 1294 (128) per Lord Hamblin …

(7)

The court may after taking into account the possibility of further evidence being available on a trial and without conducting a mini-trial still evaluate the evidence before it and in an appropriate case conclude that it should ‘draw a line’ and bring an end to the action: King v. Stiefel [2021] EWHC 1045 (Comm) (21) per Cockerill J.”

The references in Amersi to the “claimant” should be read as references to the Defendant in this matter.

In brief, the two questions which arise are whether the Defendant’s defence has a realistic prospect of success, i.e., not one which is merely arguable, and whether there is some other compelling reason not to enter summary judgment.

As a preliminary point, the Defendant’s Counsel argued that all the issues before me were not suitable for summary judgment and that they should all proceed to trial. The Defendant contends that in effect the Claimant is seeking to set up a number of preliminary issues for hearing rather than being matters which meet the test for summary judgment and that in any event the findings sought will not materially impact the need for a trial to determine the claim and counterclaim.

In response, the Claimant argues that summary judgment is open for determination of issues rather than claims and that if and to the extent that it succeeds on any of the issues before me that will narrow down the focus of the trial considerably and lead to a substantial saving in costs.

In my judgment, whilst the application before me is unusual, seeking determination of issues and does not seek any monetary relief, nevertheless the CPR clearly does provide for summary determination of issues in an appropriate case and the real question before me is whether any of the issues I have been asked to determine are capable of being summarily determined.

The fact that there will in any event be a trial on the issues which are not summarily determined in the Claimant’s favour and the other issues between the parties does not seem to me to be a knock-out blow to the entirety of the application and I decline to dismiss the application on that basis alone.

It follows that the issues between the parties need to be considered on their merits in accordance with the test for summary judgment which I have set out above. Whether any of those issues are suitable for summary determination will form part of my reasoning on each issue.