Estor Ltd v Multifit (UK) Ltd [2009] EWHC 2565 (TCC)

[2009] EWHC 2565 (TCC)Case No HT 09 284
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 23 October 2009
Before
THE HONOURABLE MR JUSTICE AKENHEAD
Between
ESTOR LIMITEDClaimantMULTIFIT (UK) LIMITEDDefendant
Alexander Hickey (instructed by Fenwick Elliott) for ClaimantPaul Stafford (instructed by Blakemores) for DefendantHearing Hearing dates: 13 October 2009
JUDGMENT

Introduction

[1]This case follows the judgement given by the Court on 12 August 2009, [2009] EWHC 2108 (TCC). That judgement related to the competing applications of the parties relating to an adjudicator's decision made on 1 July 2009. The issues between the parties leading up to that judgement related to whether or not all the terms of the contract between the relevant parties were in writing; this included the primary issue which was who the employing party was to this shop fitting contract. I decided that there was in fact only one triable issue, namely who the contract was with. This trial has lasted only one day and was brought on within two months of the earlier judgement. The parties agree that there was a contract but there is an issue as to whether the employing party was Estor, Ginger Group Ltd (“GGL”) or Ginger Westfield Ltd ("Ginger Westfield"). The history[2]Estor Ltd ("Estor") was the holding company for what has been called the Ginger Group, which is a group of companies which operate hair dressing and beauty treatment salons. The salons are actually called “Ginger Group”. Mr Keith Warner (“Mr Warner”) effectively owns and runs Estor and the other Ginger companies. The group currently owns or franchises a number or hairdressing salons in the United Kingdom and abroad. In the past, he has set up new companies for new ventures. Thus it is that he set up Ginger Westfield Ltd ("Ginger Westfield") for the purposes of setting up shop in the substantial Westfield White City complex in London which was being developed up to and including 2008. Estor acquired the lease to the premises albeit that Ginger Westfield was to run the premises. Ginger Westfield although corporately set up before was not operating as an entity in practice until late October or early November 2008; for instance, it did not have and was not operating any bank account. GGL was a company which was mostly involved in the design aspects of new salons.[3]By a contract made in late September 2008, a company called Hub Design Ltd ("Hub") was employed to do these fitting out works. The price was £129,500 plus VAT and the contract ran into some seven pages but it was in a relatively simple form. The contract was signed by Mr Warner "of the Ginger Group" and the front page of the contract identifies "The Ginger Group" in effect as the employer.[4]There is no doubt that Mr Warner was anxious to ensure that the fitting out works were completed in the last week in October 2008 so that there could be a formal opening at that time. At least one of the group companies was to receive a bonus or incentive of some £40,000 if the salon was open and running by 30 October 2008. Accordingly work started in late September 2008. Hub subcontracted a sizeable part but not all of the works to Multifit (UK) Ltd ("Multifit"), the Defendant in these proceedings. Multifit's written quotation to Hub for the works was in the sum of £82,635. That quotation was based on drawings received but specifically excluded works to the resin floor and kitchen areas, which were to be done by other contractors.[5]Matters did not proceed smoothly. At a meeting held on 17 October 2008, attended by Mr Warner, four other Ginger Company employees, four Hub representatives and Messrs Khan and Singh of Multifit, Mr Warner outlined what he thought was wrong and indicated that he had lost faith in Hub. Hub offered to leave the job; at that stage, as indicated in Mr Warner's statement in the adjudication, Messrs Khan and Singh indicated that they would be prepared to "finish the job for us". It is common ground that no agreement was reached at this meeting.[6]Multifit was never provided with a copy of the Ginger Group's contract with Hub. Over the following few days, there was some communication between Hub and Mr Warner about the state of the accounts between them and some talk of a possible novation but Multifit was not made aware of this.[7]On 20 October 2008, Multifit e-mailed to Mr Warner at 2 personal email addresses its quotation, the material parts of which were: "Can you please [review] this and send me [an] order confirmation by return e-mail. I have also attached our company account form and my first quote to hub design. Summary of Works: Main contract Value £82,635 plus Vat Extras: 1. Plying floor areas £2660.00… Total cost £117,156+ VAT Balance paid so far from Hub design to Multifit UK Ltd £46,545.00 + Vat Total remaining £70,611.00 plus VAT Items Not allowed for:...”[8]There was then a meeting between Mr Warner and Mr Khan of Multifit representatives on either 21 or 22 October 2008 in Birmingham at Multifit’s offices and workshop. I will return below to this meeting and the immediate period beforehand.[9]Estor or Mr Warner had paid Hub beforehand some £100,000. On 22 October 2008, Estor paid by direct bank transfer some £17,500 to Multifit.[10]By email of 23 October 2008, Mr Warner replied to Multifit's email of 20 October 2008 (see above):
"…that's fine can you carry the work out from the [revised] quote. thank you. if have any problems just call me"
There was no hint or indication in that email as to which company was accepting Multifit's quote. It is accepted that this was in contractual terms the acceptance.[11]Thereafter, Multifit carried out the work or at least that which it was employed to do, by about the end of October 2008, although some works were done afterwards. The formal opening did take place, attended by various dignitaries and celebrities, albeit that the works were not wholly complete. Only a fraction of the incentive or bonus payment was made.[12]All the payments made to Multifit were by Estor albeit that they were made on 24, 28 and 29 October 2008, doubtless to reflect the fact that works were proceeding apace. A Summary Statement was produced by Multifit dated November 2008 which was addressed to Mr Warner or "The Ginger Group Ltd". That indicated that a total inclusive of VAT of £37,624.05 was said to be due and identified that all the four payments made in late October 2008 had been “from Estor Ltd/The Ginger Grp”[13]There was an issue as to defects in particular about the resin flooring which had been done by one of Hub's subcontractors, CT Flooring, but Mr Warner believed that Multifit had assumed responsibility for this work. Multifit had paid this subcontractor but, it was said, simply at Mr Warner's direction. Mr Warner was reluctant to pay Multifit primarily by reason of the defects which he said were present in the work carried out by Multifit or for which Multifit was responsible.[14]On 12 December 2008, Mr Warner wrote apparently on behalf of " Ginger Group", to Multifit by e-mail complaining that there were 11 areas of defect which he wished to discuss “before we settle your invoice"; this probably referred to the statement dated November 2008 which may well have been submitted either in late November or in early December. Mr Khan replied personally to Mr Warner on 16 December 2008 addressing the alleged defects. On 18 December 2008, Mr Khan wrote by e-mail to Mr Warner and his accountants in the following terms:
“The total amount due must be paid to multifit uk ltd within the next 48 hrs or we will instruct our legal team to take immediate action. Please note that the ginger group and Keith Warner will incur all legal costs and interest due. Total amount well over due: Invoice 000121 £37,624.08.”
Total amount well over due: Invoice 000121 £37,624.08.”[15]Multifit instructed a debt collection agent, Global Debt Collection, to pursue the recovery of the sum which they had claimed. On 12 January 2009, on what looks like a standard form letter, that agent sought payment on behalf of Multifit. It was addressed to "Keith Warner The Ginger Group” and sent by e-mail to one of Mr Warner’s e-mail addresses. Mr Warner “for and on behalf of Ginger Group Westfield” replied in some detail explaining that there were a large number of snagging and defect items. The letter was prefaced as follows: “I refer to your e-mail letter dated the 12 January 2009 regarding outstanding amounts allegedly owing to your clients by The Ginger Group Limited. You are claiming an amount of £37,624.08, which I would refute. I have not yet received a fully itemised invoice for this amount and, as it is part of an extensive building programme, I would expect to see a breakdown of exactly how this is made up."[16]There is little evidence as to what happened over the next two months until, on 3 April 2009, Multifit issued a Notice of Adjudication against Estor. For various immaterial reasons, this was not pursued and a second effective Notice of Adjudication was issued by Multifit against Estor and on 12 May 2009, Multifit served on Estor its Notice of Adjudication in which it claimed £37,624.05 inclusive of VAT. A Mr Slegg was the adjudicator. Multifit's Referral to Adjudication was dated 21 May 2009. The issues included related to whether the contractwas between Multifit and Estor, Ginger Group Ltd and Westfield and if so, whether it was in writing for the purposes of the Housing Grants Construction and Regeneration Act 1996.[17]In his decision dated 1 July 2009, the adjudicator decided, amongst other things, that there was a contract between Multifit and Estor; in this context, he provided some detailed reasoning. He formed the view that the contract was evidenced by the emails of 20 and 23 October 2009, Multifit's quotation of 23 September 2008, the credit reference form signed by Mr Warner and Multifit's Terms and Conditions referred to in that form. He held that there was no novation of the contract, by which Multifit was substituted for Hub. He found that £37,624 inclusive of VAT was due to Multifit from Estor, that Estor should pay £6,240 for Multifit's costs and that, in respect of his fees and expenses, Estor was to pay £17,760 exclusive of VAT. The summary judgement proceedings[18]Estor did not pay out on the decision but issued its own proceedings seeking declarations that there was no contract in writing between Estor and Multifit and that accordingly Mr Slegg's decision was unenforceable. Pleadings were exchanged. There were two applications before the Court in August 2009, the first being Estor's application for declarations that in effect Mr Slegg had no jurisdiction and the second being Multifit's for summary judgement on its Counterclaim for the enforcement of the adjudicator's decision.Estor made a number of pointsamongst others that there was no construction contract in writing as required under Section 107 of the HGCRA.[19]Reliance was placed in those proceedings on witness statements which had been submitted in the adjudication proceedings and, although not formally verified, I was prepared to proceed upon the basis that that was the evidence of the parties. Of all the issues raised by Estor, I formed the view that by reason of an apparent conflict of evidence, there would have to be a trial on the issue of whether or not Multifit’s contract was made with Estor, GGL or Ginger Westfield. In the judgement handed down on 12 August 2009, I said:
“25. I have formed the view that there is, just, what can be described as a realistic prospect of Estor establishing that it was not the company which entered into the contract with Multifit. On the one hand, there is evidence from Mr Warner which effectively denies that he agreed that Estor was to be the contracting party; it is supported by somewhat ambiguous evidence that payments to Estor were made by Westfield albeit funded by Estor. Against that, there is the credit reference which strongly suggests that Estor was intended to be the contracting party or at least possibly some kind of guarantor, coupled with the evidence of Messrs Khan and Singh that it was expressly agreed that Estor should be the contracting party; the payment regime was not necessarily inconsistent with that, with the funds being channelled through Westfield (if that is what happened). If the agreement was with Estor, it is highly probable that it was evidenced in writing by the signed credit reference application. 26. This issue can only be resolved by oral evidence. Essentially, I can not determine whose recollection is correct or who is telling the truth. Mr Warner's evidence about why he agreed to a credit reference for Estor is not so incredible that it can be dismissed summarily, even though one is not at all surprised that the adjudicator (apparently) without hearing oral evidence reached the view that he did.”
[20]I rejected all other grounds advanced by Estor for challenging the enforceability of Mr Slegg’s decision but gave directions for a speedy trial on the issue as to whether the Multifit contract was with Estor (“The Identity Issue”). The Trial of the Identity Issue[21]This took place on 13 October 2009. Written submissions were provided by Counsel for both parties. The parties supplemented the bundle of documents available in August with a few other documents. Statements from three witnesses were provided by Mr Warner, his father and Mr Khan. They all gave evidence. I formed the view that, whilst they were all honest and trying to assist the court, Mr Warner and Mr Khan were both nervous in giving evidence, in all probability because they had little experience of giving evidence and were to some extent unsettled by the experience. Broadly, I found Mr Khan’s evidence on the key events was more convincing than that of Mr Warner.[22]The bulk of the factual dispute between the parties revolved around what was said and done at the meeting which undoubtedly took place in Birmingham on 21 or 22 October 2008. A substantial part of the argument between the parties related to the inferences to be put on what was said and done at that meeting, the meeting of 17 October 2008, what happened with regard to payment and the communications between the parties following the execution of the work by Multifit. The Law[23]In Hombourg Houtimport BV and others v Agrosin Private Ltd and another [2004] 1 AC 715, the House of Lords had to consider an issue relating to the identity of parties to bills of lading. Lord Millett said, uncontroversially, at Paragraph 175:
“The identity of the parties to a contract is fundamental. It is not simply a term or condition of the contract. It goes to the very existence of the contract itself. If it is uncertain, there is no contract. Like the nature and amount of the consideration and the intention to create legal relations, it is a question of fact and may be established by evidence. Such evidence is admissible even where the contract is in writing, at least so long as it does not contradict its express terms, and possibly even where it does…”
[24]The other authorities were more directly concerned with the factual matrix or context in which a contract came into being. There is a distinction to be made between the factual matrix and pre-contractual negotiations; one can and should take the former into account. The case of Chartbrook Ltd v Persimmon Homes Ltd and others 2009 UKHL 38 confirmed the long-established practice and law in this country that evidence of pre-contractual negotiation can not be used in aid of construction. However at Paragraph 42 of Lord Hoffman’s opinion, with which the other law lords agreed, he said:
“The rule [about pre-contractual negotiation] excludes evidence of what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant. It does not exclude the use of such evidence for other purposes: for example, to establish that a fact which may be relevant as background was known to the parties…These are not exceptions to the rule. They operate outside it.”
He had said earlier at Paragraph 24 that “the background and context must always be taken into consideration”.[25]In the earlier case of Investors Compensation Scheme Ltd v West Bromwich Building Society and another [1997] UKHL 28, Lord Hoffmann said this:
“I think I should preface my explanation of my reasons with some general remarks about the principles by which contractual documents are nowadays construed. I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v. Simmonds [1971] 1 W.L.R. 1381, 1384-1386 and Reardon Smith Line Ltd. v. Yngvar Hansen-Tangen [1976] 1 W.L.R. 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of "legal" interpretation has been discarded. The principles may be summarised as follows: (1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. (2) The background was famously referred to by Lord Wilberforce as the "matrix of fact," but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man. (3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them. (4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax. (see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd.http://www.bailii.org/uk/cases/UKHL/1997/19.html[1997] 2 WLR 945 (5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had…”
[26]Whilst this dictum goes to contractual interpretation, it does highlight the need for an objective approach in ascertaining what the parties meant. Where, as here in this case, one can not ascertain from the offer and acceptance who the employing party was, it must be legitimate to consider what the parties said to each other and what they did in the period leading up to the acceptance in order to determine who that party was intended to be. It was accepted, properly, by both Counsel, that in determining a factual issue such as this, the court needs to adopt an objective approach and to consider the facts known to both parties and what was said orally or in writing between the relevant individuals. The fact that one individual went to or left a meeting, believing privately that the contract was to be with a particular party, would be of little or no weight or assistance in determining who the contract was with, unless there was reliable evidence that that belief was expressed to others at the meeting. Obviously, where there was an issue as to the identity of a party entering into a contract, if there was evidence that representatives of each party had met before the contract was signed and had said to each other that the contract was to be between X and Y, that would be admissible and relevant in determining who the parties to the contract were to be. If however the evidence about what was said and done was not as explicit and clear as that, one needs to construe or infer objectively what reasonable parties would have assumed would be the position based on what was said or done. Thus, it might well be the case that, if one party said that payments would be made by X, that would be evidence which would point, objectively albeit not necessarily conclusively, to X being one of the parties. Similarly, if X and Y in their discussions and correspondence prior to the creation of the contract only talked about X and Y in the context of their discussions, that might well be a factor which objectively pointed to those two parties being parties to the contract. The disputed facts and the findings[27]I am wholly satisfied that Multifit did not know at any material time which company, person or organisation had employed Hub. It did not have a copy of the agreement documentation as between Hub and its employer until the adjudication started. I accept Mr Khan’s evidence in this respect, which was not effectively challenged by Mr Warner in his evidence; the most that he could say is that he believed that Multifit would have had it. There would be no good reason however for Hub to provide it to Multifit, which was a subcontractor; it might well have been commercially sensitive because with it Multifit could ascertain how much profit margin Hub had.[28]Having seen Mr Warner giving evidence, I am also satisfied that he never made it clear in writing or orally to Multifit that the contract which he was proposing to enter into with Multifit would be with Ginger Westfield. There is nothing in the documentation which indicates that he ever thought that this contract had to be with Ginger Westfield. The relevant background to the contract with Multifit is that Mr Warner was desperately anxious to secure completion of the shopfitting works by 30 October 2008. He had been significantly dissatisfied with the performance of Hub but he was visibly and obviously shocked at the meeting of 17 October, attended by Mr Khan and Mr Singh when Hub announced that in effect in the circumstances they would be leaving the job. It is common ground that nothing was said at that meeting who the possible future contract with Multifit would be, following the indication by the Multifit representatives that they would be prepared to finish off all or most of the remaining works. Mr Warner must simply have been relieved that there appeared to be a ready solution to the problem created by Hub’s impending departure.[29]Although it is likely that, in corporate terms, Ginger Westfield had legally been set up, it had no operative bank account until the end of October or early November 2008. It clearly had no funds of its own. Mr Warner made it clear in evidence, and I accept, that staff were retained by Ginger Westfield only to commence work at the end of October 2008. If the involvement of Ginger Westfield in the contracts for shopfitting works was important to Mr Warner, there was and would have been no good reason for him even under the pressure of Hub’s departure not to mention this to the Multifit representatives. The Hub contract itself does not spell out clearly or otherwise that Ginger Westfield was to be the employing party: Mr Warner merely identifies that he is “Keith Warner of The Ginger Group” which is entering into that contract. That is at best ambiguous because that could mean GGL, the Ginger Group salon at the Westfield development or Mr Warner’s whole group, which included Estor, GGL and Ginger Westfield. I do not imply that Mr Warner was behaving in a deliberately ambiguous way. However, what it does underline is that he was not particularly mindful or careful about who the contracts were with from his standpoint; and that is not surprising given the urgency of the works and the short time span available.[30]This is corroborated by what happened in terms of payments. All the payments were made by Estor to Multifit and all but one to Hub. When Mr Warner received the statement dated November 2008 addressed to him and GGL and the letter from the Debt Collection agent and other communications such as Multifit’s e-mail of 18 December 2008, he did not try to suggest that the contract was not with GGL or the Ginger Group.[31]Mr Khan said in evidence, and I accept, that, following the meeting of the 17 October 2008 but before submitting Multifit’s quotation at 19.17 hrs on 20 October 2008, he did an Internet search on “the Ginger Group”; he did this because he was aware that the shops were called that and he wanted to find out what the company or companies was or were. That search showed up GGL upon which he did an Internet credit search which in his view showed an unsatisfactory state of affairs. Neither party have referred to, let alone produced, any GGL accounts. Mr Khan said that his credit search showed that GGL’s creditworthiness was less than the value of the sums which Multifit were quoting; that had the ring of truth, albeit that Mr Warner believed that GGL was in a satisfactory financial state.[32]As it is common ground that Multifit’s e-mailed quotation of 20 October 2008 was an offer, it is necessary to highlight some key features of that document and its attachments:(i) it was addressed to Mr Warner with whom the Multifit representatives had met on 17 October 2008;(ii) it was an offer capable of acceptance in that it quoted in some detail for the works, a precise price was quoted and it called for an order confirmation by return;(iii) it attached what it called "our company account form". That document which was eventually to be signed by Mr Warner on behalf of Estor is headed “Application for Credit Facilities”. It commences as follows:
“Thank you for your recent request for credit facilities, for which we will be pleased to consider upon FULL COMPLETION and RETURN of this application”
. It then has boxes to be filled in identifying the full trading title, VAT number and company registration number, the invoice address, principal directors’details and trade references. It requires bank details to be provided on the form. It then goes on as follows:
“Credit Amount Requested £_______________ per month I/We consent to My/Our Bankers providing a Credit Reference on me/us on an ongoing basis. I/We hereby apply for credit facilities to be granted to me/us and confirm that we will comply with your Trading Terms and agree to be bound by your standard terms and conditions of sale. Multifit (UK) Limited will make a search with a Credit Reference Agency, which will keep a record of that search and will share that information with other businesses. In some instances we may also make a search on the personal credit file of principal directors. Should it become necessary to review on account, then again a credit reference may be sought and a record kept . We will monitor and record information relating to your trade performance in such records will be made available to Credit Reference Agencies who will share that information with other business when accessing applications credit and fraud prevention. This form must be signed by the Partner or Director/Proprietor as appropriate”
I/We consent to My/Our Bankers providing a Credit Reference on me/us on an ongoing basis. I/We hereby apply for credit facilities to be granted to me/us and confirm that we will comply with your Trading Terms and agree to be bound by your standard terms and conditions of sale. Multifit (UK) Limited will make a search with a Credit Reference Agency, which will keep a record of that search and will share that information with other businesses. In some instances we may also make a search on the personal credit file of principal directors. Should it become necessary to review on account, then again a credit reference may be sought and a record kept . We will monitor and record information relating to your trade performance in such records will be made available to Credit Reference Agencies who will share that information with other business when accessing applications credit and fraud prevention. This form must be signed by the Partner or Director/Proprietor as appropriate” There was then room for the relevant signature.[33]It seems clear and I find that a further copy of this credit facilities document was faxed to Mr Warner, probably because for one reason or another he could not download the document sent to him with the e-mail on 20 October 2008. However, he was in no doubt that this was a document which would have to be filled in by him. There is some issue as to whether he filled it in at the following meeting or beforehand; in all probability, and I accept Mr Khan’s evidence to this effect, Mr Warner filled it in at that later meeting.[34]Again there is some factual issue between the parties as to whether the meeting took place on 21 or 22 October. As indicated in my earlier judgement, I strongly suspect that it matters not. Neither party apparently took any contemporaneous notes and none of the individuals who attended the meeting have produced any diary entries to assist resolution of this matter. None of the witnesses could remember with any certainty on which date the meeting took place. On balance, I consider that it is probable that it took place on 22 October; given that the quotation would only have been seen by Mr Warner at the earliest on the evening of 20 October 2008 and that Mr Warner received a fax with the credit facilities form thereafter, I doubt that he would have fixed to go to Birmingham until he had time to review them. Mr Warner provided his mobile telephone records for 21 and 22 October 2008 which show one call to Mr Khan on 21 October (08.57) and five on 22 October (11.22, 13.32, 15.51, 15.53 and 16.01); there are three calls to Mr Warner's accountant in London on 22 October (10.26, 12.24 and 14.32). As I am satisfied that Mr Warner phoned his accountant during his meeting with Mr Khan, it follows that one of those calls on 22 October must have been the one. If one adds to this the fact that Mr Warner dated the Credit Facilities form 22 October 2008, it becomes even clearer that the meeting was on 22 October.[35]Both Mr Warner and Mr Khan were more imprecise in their oral evidence than their written statements suggested in relation to what was done and said at the meeting on 22 October; I put that down to their nervousness in giving evidence. It is common ground that, when Mr Warner and his father arrived at Multifit’s office and workshop in Birmingham, they were first shown the workshop on the ground floor to demonstrate the quality of work produced by Multifit and some of the work being produced for the salon at the Westfield development. They then went up with Mr Khan to the office on the first floor. Mr Khan said that the meeting did not last very long and I have the impression from all witnesses that it lasted no more than about half an hour. I have no doubt that there was little discussion about the quoted prices which had been put forward by Multifit on 20 October. It is probable that there was discussion about the continued deployment of Multifit and the likely acceptability of the quotation.[36]There is no issue that there was some discussion about the Credit Facilities form. Mr Khan was convincingly adamant that Mr Warner filled out and signed the faxed version of that form in the office and that he telephoned his accountant to obtain some of the details. The signed faxed version is slightly less distinct than the original e-mailed version and the first line of the final full paragraph (“Multifit (UK) Limited will make a search with a Credit Reference Agency…”) is partly obscured but just about legible. It is also dated by Mr Warner 22 October 2008; it would be odd if he had signed it the day before to put that date on it. The most likely time at which Mr Warner telephoned his accountant during this meeting is 12.24; Mr Khan said that he thought the meeting in the office was at about "dinnertime".[37]Mr Warner clearly believed, by filling out and the signing of the form, that he was required by Multifit to do so. I can not accept that he did so believing that it was necessary to enable Multifit simply to carry out a credit search. If that was the case, most of the information on it was not necessary for that purpose (for instance the VAT number).[38]The information provided on the form all related to Estor and not to GGL or to Ginger Westfield. I found Mr Warner’s evidence as to why he signed the form and as to what he said about Estor positively unconvincing and similarly his father's. He said that Multifit (Mr Khan) wanted some comfort that he would be able to pay to complete the works and wanted to carry out a credit search. He said that he explained that Ginger Westfield was a new company and that the creditworthiness of his group of companies would be clear if the search was carried out on Estor. He said that it was going too far to read the Credit Facilities form as anything other than a request for a credit check. Mr Warner is an intelligent and commercially astute man who over many years has built up a very substantial business; he is aware of the importance of maintaining the differences between different corporate entities within the group which he controls, owns and runs. There can be no doubt however that Estor was spoken about but in the context that it was the appropriate company in respect of which the details called for by the Credit Facilities Form should be provided. Mr Khan said that, as his company was seeking Iso 9000 accreditation, this was a form which was required to be filled in by potential clients for whom credit might have to be provided; he said that, although he knew that Multifit was to be paid sums on account, there would or could be an element of credit involved in that there would be times at which the value of work equipment or materials could exceed the sums paid on account. He said in evidence that there was no point in getting the Credit Facilities form signed by someone who was not going to be the client. He was emphatic in rejecting the suggestion put to him in cross-examination that Mr Warner was simply seeking to provide a level of comfort to Multifit. I accept his evidence on all of this which was convincing. Shortly after the meeting, he did an Internet credit search of Estor and found that it was appropriately creditworthy.[39]The meeting then concluded probably no later than 1300 hrs and Mr Warner and his father returned to London although probably on the journey home he made a number of phone calls to his accountant and back to Mr Khan on the latter's mobile. What is however clear is that that afternoon Mr Warner arranged for £17,500 to be paid by Estor by bank transfer to Multifit whose bank details must have been provided by Multifit, in all probability at the meeting earlier. Mr Khan’s evidence that on 22 October 2008 he checked with Multifit’s Bank through its Online Banking Facility that this payment had been made was unchallenged and I accept it.[40]Multifit then continued with the works through to completion. Analysis and conclusions[41]The key facts are as follows:(a) Multifit did not know at any material time which corporate entity had retained Hub;(b) Mr Warner was not particularly careful about which corporate entity was to retain Hub. It was not Ginger Westfield, which was not commercially "up and running" at the time. He used the Ginger Group as a generic name for the entity which employed Hub. In his own mind, in all probability he did not think carefully enough about it but, as GGL was in his mind primarily involved in design work, it was Estor which was going to pay for the works at least initially and was in corporate terms the driving force.(c) The shopfitting works were urgent and even more so when Hub announced its departure on 17 October 2008. Mr Warner was overwhelmingly concerned by then to do whatever was necessary to secure completion by the end of October and was (and must have been) immensely relieved when Multifit indicated that it could complete the work (or at least most of it). He handled personally all the negotiations with Multifit such as they were.(d) Having received the quotation from Multifit, he attended the relatively short meeting in Birmingham at Multifit’s office on 22 October 2008 in effect to confirm the capability of Multifit to complete the works and discuss the logistical arrangements for it to do so. He filled in the Credit Facilities form with his eyes open and he did not qualify his signature to that document or filling in of the details provided as he and his father have suggested in evidence. He filled in the form because he was asked to fill in the form knowing that Multifit would amongst other things need to satisfy itself that Estor was sufficiently creditworthy to contract with.(e) The first payment on account to Multifit was made before acceptance by Mr Warner by way of bank transfer payment from Estor.(f) The acceptance e-mail followed the following day.[42]Both Counsel accept, properly in my view, that Multifit’s quotation to Mr Warner of 20 October 2008 is capable of being construed as an offer and that Mr Warner’s e-mail of 23 October 2008 was the acceptance. Both parties accept that there was a contract between Multifit and either Estor, GGL, or Ginger Westfield. Neither party contends that there was no contract. It is suggested by Counsel for Estor that Multifit could not have addressed its offer to Estor because at the time it did not know of Estor’s existence and so, it is argued, the offer must have been addressed to whoever Mr Warner was representing, that is either Ginger Westfield or GGL. On the facts however, all that Multifit knew or could be taken as knowing was that their representatives had met him personally at a meeting on 17 October 2008 and he, without representing for which company or entity he was acting, had asked them to quote. All Multifit knew was that the salon or shop, as Mr Khan put it, was to be called "the Ginger Group”. The offer was directed to Mr Warner as being in charge of the Ginger Group. The parties accept that whoever the contract was with it was not with Mr Warner personally.[43]It follows that the Court must seek to determine on the basis of the facts what the parties must be taken objectively to have agreed the employing party was to be. I have no doubt in this case that, considered objectively, the employing party was on that basis Estor. My reasons are as follows:(a) There was no hint or suggestion made by Mr Warner to Multifit that the contract which he wanted Multifit to enter into would have to be with Ginger Westfield or GGL.(b) The quotation clearly envisaged that Mr Warner would fill in the requisite details in the Credit Facilities form so that Multifit could use them as required.(c) That form is on its face an application for Credit Facilities. It must have been obvious that if all Multifit wanted it for was to do an Internet credit search the form did not have to be filled in at all; simply, as Mr Warner must have realised, the name of Estor and possibly its company registration number would alone have been required to be given. The form on its face clearly envisages that the client or employing party will be and was intended to be Estor whose details are given. For instance, the provision of Estor’s VAT number is consistent with the client being Estor. The credit facilities being requested were for Estor(d) The facts that the document was signed and filled in by Mr Warner at the meeting of 22 October, Estor’s name was mentioned and discussed, no other name was mentioned as a possible employing party at the meeting and the first direct payment was to be and was made by Estor before the acceptance point unequivocally towards Estor being mutually intended (as judged objectively) as the employing party.(e) There was no obviously good commercial reason for Mr Warner to provide Estor’s details unless he intended Estor to be the employing party. He said in evidence that he was not intending that Estor guaranteed payment; if that is right, it would be little comfort to tell a potential contractor that the holding company was worth "powder and shot" albeit that the company with whom the contractor was the contract was worth little or nothing.(f) I attach little weight to what followed the conclusion of the contract in terms of references to other possible parties. Neither Mr Warner nor Mr Khan seem to have applied their minds specifically to who the contract was with until the matter proceeded to adjudication; that is unsurprising given that each was dealing with the other at a personal level. The fact that all the payments to Multifit after 22 October 2008 all came from Estor at least to some extent corroborates a number of the findings which I have made about what Mr Warner intended. Decision[44]It follows from the above that the contract with Multifit was with Estor. Therefore, there will be judgement on Multifit’s Counterclaim which seeks to enforce the adjudicator’s decision. I will hear the parties at the handing down of this judgement on all issues relating to interest and costs as well as Estor’s application to stay execution.

Cited in 7 later judgments