Special Metals Wiggin Limited v Corrotherm International Limited [2025] EWHC 2769 (TCC)

[2025] EWHC 2769 (TCC)

Case No HT-2024-000379

IN THE HIGH COURT OF JUSTICE

KING'S BENCH DIVISION

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT

Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NL

Date 28 th October 2025

Before

Andrew Singer KC, sitting as a judge of the TCC

Between

SPECIAL METALS WIGGIN LIMITEDClaimant

CORROTHERM INTERNATIONAL LIMITEDDefendant

Mr Alexander Burrell (instructed by HCR Legal LLP) for Claimant

Mr James Culverwell (instructed by Paris Smith LLP) for Defendant

Hearing Hearing date: 16 th September 2025

APPROVED JUDGMENT

This judgment was handed down remotely at 10.30am on Tuesday 28 th October 2025 by

circulation to the parties or their representatives by e-mail and by release to the National

Archives.

Introduction

[1]This is an application for Summary Judgment. The matter was before the Court on 4th July when the Claimant was permitted to amend its Particulars of Claim and its application for summary judgment, and this application was adjourned until 16th 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.

[2]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.

[3]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.

[4]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.

[5]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:(a) Whether the Defendant has a real prospect of successfully arguing that it is not in breach of trust (including whether there is a valid trust);

(b) The correct interpretation of Clause 6 and Clause 7(b) and to what extent these clauses exclude the Defendant’s defences and counterclaim;

(c) The effect of non-compliance of the condition precedent within Clause 6 in respect of the Unpaid Contracts and whether Clause 6 otherwise has a limiting effect on claims under the Paid Contracts;

(d) Whether Clause 7(b) is reasonable having regard to the Unfair Contract Terms Act 1977 (“UCTA);

(e) Whether Clause 7(c) excludes all of the Defendant’s counterclaims for deliveries prior to 7th February 2024.

[6]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. The Parties’ Pleaded Cases

[7]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.”

[8]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].”

[9]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 25th 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.

[10]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.”

[11]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.

[12]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.”

[13]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.”

[14]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.

[15]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 25th 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 1st 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 3rd 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 10th 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 14th 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 30th 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.

[16]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.

[17]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. In the further alternative, the Defendant relies on an estoppel by convention ( in line with the matters pleaded at paragraph 25), that the Defendant notified the Claimant in accordance with the convention, that invoices were placed on hold, that the Claimant failed to adequately report on or resolve those identified issues and the Claimant is therefore estopped from demanding payment of the invoices which are the subject of the claim.

[18]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.

[19]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 29th 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.

[20]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.

[21]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.

[22]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.

[23]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.

[24]A further Notice to Admit Facts was served on 8th 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. Evidence for/against the Application

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

[26]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).

[27]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).

[28]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 23rd 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.”

[29]Apart from the witness statement from Mr Newman which I have already referred to, no further evidence was served between the hearing on 4th July 2025 and the application on 16th September. Legal Principles applicable to Summary Judgment Applications

[30]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.”

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

[32]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. The Defendant’s Preliminary Objection

[33]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.

[34]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.

[35]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.

[36]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.

[37]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. Issue 1: Does the Defendant have a real prospect of defending the claim for breach of trust (including if this is a valid trust)?

[38]The Claimant contends that Clause 4 of its Terms and Conditions creates a bare express trust in its favour in respect of its products which had been on-sold to a third party whilst not having been paid for as between the Claimant and the Defendant. Snell’s Equity (35th ed) at Paragraph 22/019 provides:

“An express trust is created by the actual intention of the person in whom the property is vested as where A declares himself a trustee of Y for B or conveys it to C on trust for B. The intention may be apparent from the express use of the words ‘trust’ in the relevant instrument or gathered by inference from A’s words or conduct.”

At Paragraph 21/027Snell’s Equity states:

“A bare (or simple) trust is one where property is vested in one person on trust for another but where the trustee owes no active duties arising from his status as trustee. His sole duty is to convey the trust property as the beneficiary directs him. An example is where property is transferred to T ‘on trust for B absolutely’. In such case T’s sole duty is to allow B to enjoy the property and to obey any direction he may give as to how the property should be disposed of.”

[39]In respect of the proper interpretation of Clause 4, the UK Supreme Court’s decision in Wood v. Capital Insurance Services Ltd

[2007] UKSC 24

at para.11 provides the now well-known test which does not require repetition in this Judgment.

[40]It is accepted that to create a valid express trust there must be certainty of intention, object and of subject (see Knight v. Knight [1843] Beav 148 at 172).

[41]The Defendant suggests that because the effect of the trust is to entitle the Claimant to immediately require payment of a sum higher than the contract price including the Defendant’s profit margin, that cannot objectively have been the intention of the parties and the creation of such a trust does not “make legal commercial or logical sense.”

[42]I accept that Clause 4 is on its face incomplete and that the sentence within Clause 4 which is said to create a bare express trust is just one sentence, but the words relied upon in Clause 4 are clearly expressed, unambiguous and are sufficiently clear and unambiguous to admit of only one proper interpretation, namely that where goods are sold on without having been paid for in full, any monies paid by the third party to the Defendant are held on trust for the Claimant. That is the “price” of selling on the Claimants’ products before they have been paid for. That makes commercial sense. The Defendant did not suggest any further facts or matters which might come to light in disclosure which would influence the Court’s role of interpreting the meaning of Clause 4 as an exercise in construction/interpretation.

[43]It also seems to me that it is perfectly clear what the object of the trust is from the words “Buyer shall be trustee for Seller”. Likewise, the subject of the trust is clear, namely the monies received by the Defendant from third party purchasers in respect of goods which were supplied by the Claimant but not paid for as at the date of the onward purchase.

[44]In my judgment, therefore, on its clear interpretation, Clause 4 does create a valid express bare trust as contended for by the Claimant.

[45]However, the issue for determination by me is not simply whether there is a valid trust but whether there is a reasonably arguable defence to a claim for breach of that trust. As to that, and as I noted during the course of oral submissions, there is no evidence before me that a request was made for trust monies to be paid to the Claimant ( the email from Ms Booth set out at paragraph 28 and requesting “payment” is on an objective reading not such a request), nor is there any evidence (as opposed to some speculative comments by the Claimant) that the monies which represent the funds received from third parties in respect of the Claimant’s unpaid goods have not been retained by the Defendant in its bank account.

[46]In other words, there is no evidence before me that there has been a failure to comply with the terms of the bare express trust contended for by the Claimant and therefore no basis at this stage for a finding of breach of trust.

[47]It does, however, seem to me that there is an even more fundamental problem with the Claimant’s contention that there is an unarguable claim for breach of trust. There is a dispute between the parties, which is accepted to be reasonably arguable, as to whether the unpaid goods complied with the express terms of the Contracts between the parties. On the basis of that alleged non-compliance, the Defendant says that it is not obliged to pay for the goods at all. If that is correct, then there would be no price to be paid for these goods, and to the extent that the price of those goods was not payable, there could also not be any room to impose a trust over monies received in respect of the onward sale of those goods, or at the very least it is arguable that the trust cannot apply to goods where the price was not payable in the first place. Since there is a live issue, which it is agreed has to go to trial as to whether the goods did or did not comply with the express terms of the contract, it is my view that there cannot be a summary determination that there is an unanswerable claim for breach of trust relating to those same goods.

[48]Putting the matter another way, the trust could only apply for as long as the underlying debt exists. So once the underlying debt is paid, the trust comes to an end. If there is at least arguably no underlying debt then there cannot be an unarguable claim for breach of trust because it is at least arguable that no trust is imposed over monies for non-compliant products where the price is not due.

[49]It follows that I do not need to deal with the Defendant’s alternative argument that the trust should be rescinded on grounds of mistake and/or that the Defendant is entitled to invoke the principle that he who comes to equity must come with clean hands so far as the Claimant’s conduct is concerned and/or that the Defendant is entitled to rely on Section 61 of the Trustee Act 1925.

[50]However in case this matter goes further and for the future conduct of this matter it may help if I set out briefly my views.

[51]I indicated during the course of the hearing that I was unimpressed by the arguments put forward in respect of mistake and I remain of that view. It does not seem to me to be a “mistake” properly so-called that a party does not believe a trust exists. That is to say, if the party is wrong in its belief and a trust does exist, that cannot be a ground for saying that the existence of the trust can be rescinded on the basis of mistake. That is a wholly circular argument.

[52]So far as coming to equity with clean hands is concerned, the main complaint made by the Defendant is as to the Claimant’s conduct in terminating the Additional Contracts. It seems to me that that defence would not in my view have been strong enough to amount to a defence to a claim for breach of trust had the breach been made out before me. I note in particular Snell at para.5-0011 and the decision of Hildyard J in CF Partners (UK) LLP v. Barclays Bank plc

[2014] EWHC 3049 (Ch)

at 1134:

“The maxim does not in my view enforce manners or require apology; it is reserved for exceptional case where those seeking to invoke [equity] put themselves beyond the pale by reason of serious immoral and deliberate misconduct such that the overall result of equitable intervention would not be an exercise but a denial of equity.”

[53]I agree with the Claimant’s submissions that the lack of an allegation of dishonesty or deliberateness in its conduct is very likely to be fatal to this defence.

[54]In respect of Section 61 of the Trustee Act 1925, again it seems to me that if breach of trust is made out at trial, the burden is then on the Defendant to demonstrate that its conduct has been honest and reasonable and that it ought fairly to be excused for breach of trust. It seems hard to square the Defendant’s contention that there was no trust at all, with its entitlement to rely on Section 61 of the Act, and whilst that may be an issue for trial it does seem to me, even at this stage, that the Defendant may well struggle to make that contention good and certainly for the purposes of this application, had I been satisfied that there was a breach of trust made out, I would not have found that reliance on Section 61 of the 1925 Act amounts to a defence with a reasonable prospect of success.

[55]It follows that the answer to Issue 1 is that the Defendant does have a real prospect of defending the claim for breach of trust, although there is on the proper construction of clause 4, a valid bare express trust as contended for by the Claimant. Issue 2: What is the correct interpretation of Clauses 6 and 7(b) and to what extent do they exclude the Defendant’s defence and counterclaims?

[56]The Claimant claims the effects of Clauses 6 and 7(b) of its Terms and Conditions are to exclude all defences and counterclaims save for set-off in respect of the Unpaid Contracts, i.e., the claim. The Claimant submits that this excludes any attempt by the Defendant to take into account its lost profit against the claim for Unpaid Contracts ; to rely on estoppel by convention; to rely on misrepresentation and rescission; and to rely on unjust enrichment.

[57]As to the defence based on lost profits, Clause 7(b) in terms refers to “… any loss of … profits …” The Defendant’s submission is that Clause 7(b) does not in terms purport to restrict any defence to liability to the Claimant. It seeks to restrict (subject to UCTA) the Claimant’s liability for any promises, representations or implied terms relating to the “description, quality or performance of the goods”. In my judgment, there is at least a reasonably arguable defence on the basis that Clause 7(b) does not restrict the buyer from relying on matters by way of defence to a claim for the price of the unpaid goods. It is not claimed that set-off is excluded which is itself a defence. It would have been easy to make clear in Clause 7(b) that defences were also being excluded, but the clauses do not say that. I note in this regard the decision of Cooke J in Air Transworld Ltd v. Bombardier Inc

[2012] EWHC 243 (Comm)

at p.75D-E:

“… the Court is unlikely to be satisfied that a party to a contract had abandoned valuable rights arising by operation of law unless the terms of the contract made it sufficiently clear this was intended. The more valuable the right, the clearer the language would need to be. Similarly, the more significant the departure from obligations implied by the law or ordinarily assumed under contracts of the kind in question, the more difficult it would be to persuade the court that the parties intended that result.”

I respectfully adopt that reasoning.

[58]The Additional Contracts counterclaim is not the subject of the summary judgment application before the Court.

[59]As to the defence of estoppel by convention, the Claimant’s submission is that this is caught by the words “or other undertaking” in Clause 7(b) and that in any event the pleaded estoppel defence is not reasonably arguable on the merits. As to whether estoppel by convention can be properly described as an “undertaking”, in my judgment it cannot, or at the very least it is strongly arguable that it is not so caught. Estoppel is not properly described as an “undertaking” and the Claimant’s Counsel did not seek to rely on any authority to that effect. It is more than a stretch of the normal meaning of the word “undertaking” for it to include the doctrine of estoppel by convention. As to whether the defence of estoppel by convention is unarguable for the purposes of this summary judgment application, in my judgment the issues addressed in the witness statements and pleadings are clearly dependent on findings of fact which may well be made at trial and it is not possible at this early stage to say that the defence of estoppel by convention is hopeless or unarguable.

[60]The Claimant also claims that any counterclaims for misrepresentation are caught by the words “… shall not be liable whether in contract or tort”. In my view, there is no answer to that point. The Defendant’s Counsel accepted that the facts underlying the claim had to relate to a contract.

[61]Lastly on this issue, I am not persuaded that a defence or counterclaim for unjust enrichment can be said to be a claim in contract or tort and the Claimant’s Counsel did not press that point in oral argument. It follows that my answer to Issue 2 is that apart from counterclaims for misrepresentation Clause 7(b) does not exclude any other defences pleaded by the Defendant. This answer is subject in any event to my answer to Issue 3. I also decline the application to strike out parts of the Amended Defence and Counterclaim since I have found that the pleaded case is reasonably arguable. Issue 3: The effect of non-compliance of the condition precedent within Clause 6 in respect of the Unpaid Contracts and whether Clause (c) otherwise has a limiting effect on claims under the Paid Contracts

[62]The Claimant’s submission is that Clause 6 contains a condition precedent to entitle the Defendant to a refund, the condition being the return of the goods if requested and since the Defendant has admitted that it did not comply with the condition precedent it therefore has no defence save for set-off and no counterclaim in respect of the Unpaid Contracts (the subject of the claim). This is subject to the Court’s decision on Issue 2 and both these issues are clearly interconnected.

[63]The Claimant asks for summary judgment/strike-out on this issue. As already noted, at the 4th July hearing the Claimant confirmed it was not seeking summary judgment in respect of the Unpaid Contracts but the Claimant does seek a summary determination that the Defendant’s counterclaims for the Paid Contracts are limited to the value of the product supplied. In the original summary judgment application, the Defendant’s alleged non-compliance with Clause 6 was the basis for the entire application.

[64]The Defendant’s response to the issue puts into question whether the Claimant had itself complied with the condition precedent in Clause 6. It also refers to an email from Mr Skerratt on 30th August 2024 when Mr Skerratt said:

“… as you know an RMA number is only provided when product is to be repaired or replaced. We are expecting to collect product that belongs to SMW (thus, that has not been paid for by Corrotherm), therefore an RMA number is not relevant.”

[65]The Defendant says that this shows that the Claimant was not operating Clause 6 itself which is in line with its pleading to that effect. The Claimant disputes that this is what was meant by Mr Skerratt’s email. This is, however, in my view a clear issue of fact which cannot be determined at the summary judgment stage. The Defendant submits that Clause 6 requires the Claimant to seek the return of its product to comply with Clause 6, i.e., to replace/refund, and since the Claimant did not so request the clause is not engaged. In my judgment, that is a reasonably arguable reading of Clause 6 and the issue of whether either party complied with Clause 6 is not one which can be determined in this application. The effects that non-compliance with Clause 6 might (my emphasis) have on the counterclaims brought by the Defendant are clearly fact sensitive and might not arise if, for example, it is ultimately decided that the Claimant was in breach of Clause 6 itself, as the Defendant contends, and the summary determination sought seems to me to be purely hypothetical and I decline to answer this issue other than by noting that it is an issue for trial.

Issue 4: Whether Clause 7(b) is reasonable having regard to UCTA

(b) is reasonable having regard to UCTA

[66]The Claimant seeks a summary determination of the reasonableness of Clause 7(b). It submits that even at this early stage the Court can and should make such a decision. The relevant reasonableness test is set out at Section 11(2) of UCTA. The Court is to have regard to the matters in Schedule 2 of the Act. The factors listed in Schedule 2 are as follows:

“(a) The strength of the bargaining positions of the parties relative to each othertaking into account (among other things) alternative means by which the customer’s requirements could have been met; (b) Whether the customer received an inducement to agree to the term or in accepting it had an opportunity of entering into a similar contract with other persons but without having a similar term; (c) Whether the customer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties); (d) Where the term excludes or restricts any relevant liability if some condition was not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable; (e) Whether the goods were manufactured, processed or adapted to the special order of the customer.”

[67]The Claimant referred me to two cases where the Courts had decided the reasonableness of the exclusion clauses at a summary judgment application. Both of these cases - Stuart Gill Ltd v. Horatio Myer & Co Ltd

[1992] QB 600

and Rohlig (UK) Ltd v. Rock Unique Ltd

[2011] EWCA Civ 18

- were cases dealing with “non-withholding” clauses, i.e., cash-flow clauses, rather than with the reasonableness of clauses which exclude remedies more widely. As the Court of Appeal pointed out in Stuart Gill at p.604G-H, not making a summary determination on such a claim at the summary judgment or preliminary issue stage would “render the clause nugatory since by the end of the final hearing it would not matter whether there was a set-off or separate judgments on claim and counterclaim.” In that regard, see also Rohlig at para.15. I don’t accept that a summary judgment application is the appropriate form of application to decide issues of reasonableness in the wider context. The two cases relied upon by the Claimant are not authorities for that proposition and are clearly distinguishable.

[68]I was also referred to Watford Electronics Ltd v. Sanderson CFL Ltd

[2001] EWCA Civ 317

; Granville Oil & Chemicals Ltd v. Davies Turner & Co Ltd

[2003] EWCA Civ 570

; and Overseas Medical Supplies Ltd v. Orion Transport Services Ltd

[1999] 2 Lloyd’s Rep 273

. Watford and Granville were both preliminary issue trials at which evidence was heard and disclosure of the relevant documents would have been provided. Both parties relied on Overseas Medical, an appeal following a trial of the issue which included cross-examination of witnesses. The Defendant referred me to Paragraph 10(3) of that case:

“In relation to equality of bargaining position the court will have regard not only to the question of whether the customer was obliged to use the services of the supplier but also to the question of how far it would have been practicable and convenient to go elsewhere.”

[69]I have already noted that there is a factual dispute about that issue on the evidence before me. That evidence is incapable of being decided on a review of the papers and will require further consideration and no doubt oral evidence from both parties as occurred in Overseas Medical. That issue of itself demonstrates that this Court cannot and should not determine whether Clause 7(b) satisfies the requirement of reasonableness under UCTA as part of this summary judgment application. The answer to this issue is that the Court cannot determine that issue as part of this application. Issue 5: Whether Clause 7(c) excludes all of the Defendant’s counterclaims for deliveries prior to 7th February 2024

[70]By the conclusion of the hearing before me, the effect of clause 7(c) was not substantially contested. For the avoidance of doubt, I am not satisfied that the word “claim” can mean legal proceedings. Any claim for the Paid Contracts which was not submitted within a year of delivery is accepted to be excluded by Cluse 7(c). It follows that the answer to Issue 5 is “No”. Clause 7(c) only excludes claims where the first notification of a defect has not been made within one year of delivery. Conclusion

[71]The answers to the issues before me are as follows: Issue 1: Yes, although there is a valid bare express trust as contended for by the Claimant, summary judgment is not awarded. Issue 2: Clauses 6 and 7(b) do not exclude any defences but do exclude counterclaims relying on misrepresentation. Issue 3: This is a reasonably arguable issue and the arguments as to compliance with the condition precedent within Clause 6 are not suitable for summary determination. Issue 4: This is a reasonably arguable issue and is not suitable for summary determination. Issue 5: Clause 7(c) excludes any counterclaims in respect of goods delivered more than a year before the first notification of defects.

[72]I leave it to the parties to draw up an appropriate Order for my approval.

[73]If any consequential issues cannot be agreed the matter will be listed for a short remote hearing at which any such issues can be determined.74. Case No HT-2024-000379

75. IN THE HIGH COURT OF JUSTICE

76. TECHNOLOGY AND CONSTRUCTION COURT(KBD)

77. B E T W E E N :

78. SPECIAL METALS WIGGIN LIMITED

79. Claimant

80. and

81. CORROTHERM INTERNATIONAL LIMITED

82. Defendant

83. APPROVED JUDGMENT