Allscan Services Ltd v Dougland Support Services Ltd

When considering whether a contract has been varied, the parties’ objectively ascertained intention may be relevant not only to whether a variation occurred, but also to which contractual terms were intended to change. An appellate court should not treat the written documents as determinative without addressing that issue where the evidence supports a narrower intended variation. A challenge to a factual decision may also be arguable where the appellate judge reversed the trial judge without clearly explaining whether the issue was treated as one of law or fact.

Allscan supplied health care and waste-deposit services at Bristol Airport under an agreement terminable on three months’ notice. After the contract transferred to Dougland, further services were agreed following quotations containing a term stating that the anniversary date would become the termination date.

Dougland later gave notice. The district judge found that the parties intended to vary the services and price, but not the termination provisions. On appeal, the circuit judge rejected that approach and held that the additional termination wording was incorporated. Dougland renewed its application for permission to appeal.

1. Permission. The renewed application was granted on ground 1 only. There was a compelling reason for a further appeal because the circuit judge had arguably departed from the district judge’s decision in a manner capable of amounting to an appealable error.
2. Intention and contractual variation. It was at least arguable that the parties’ objectively ascertained common intention was relevant not only to whether the contract was varied, but also to whether a particular contractual term was intended to form part of the variation. The approach in Evans v Merzario [1976] 1 WLR 1078 supported that issue being examined.
3. Factual assessment. It was arguable that the circuit judge’s reasoning did not make clear whether he considered intention legally irrelevant and confined himself to the documents, or whether he accepted its legal relevance and intended to reverse the district judge on the factual issue of intention. If the latter, the fact that the district judge had heard and seen the witnesses was material.
4. Construction point. Lord Justice Ward additionally considered it arguable that three months’ notice might be effective even if given before the anniversary date. A construction preventing notice given during the agreement from taking effect until the anniversary could surprise commercial parties. This was an additional arguable point, rather than a determination of the merits.
5. Permission was refused on ground 2 concerning quantum. Ground 3 concerning costs was treated as dependent on ground 1. The appeal was to be heard by a court of three, with no order for costs on the permission application.

• Bristol County Court: The district judge found that the parties had not intended to alter the agreed termination provisions.
• Appeal to the circuit judge: The circuit judge held that the termination wording in the January 2000 quotation was incorporated into the contract.
• Court of Appeal: Renewed permission to appeal was granted on ground 1 only; permission was refused on ground 2, with ground 3 consequential on ground 1.