Hewlett Packard Ltd v Severn Trent Systems Ltd

A written interim agreement may have immediate contractual effect where its language objectively records an agreement, instructs performance, identifies the payment basis and contains contractual machinery such as termination and jurisdiction clauses. Evidence that the parties privately intended a later contract cannot displace that clear objective meaning.

Summary judgment may determine an issue involving factual assertions without a mini-trial where the assertions have no real substance and are contradicted by the documents or surrounding circumstances. An agreement is not uncertain merely because some work remains to be matched to the contractual description or assessed. A fair and reasonable valuation clause may provide a sufficient basis for payment.

Hewlett Packard Ltd claimed more than £700,000 from Severn Trent Systems Ltd for services performed under an interim agreement concerning the upgrade of call-centre information technology. The agreement incorporated services and payment provisions by reference to a migration-plan proposal, applied the terms of a framework agreement, authorised expenditure up to £2.2 million, and provided for termination and payment on termination.

The High Court, Technology and Construction Court, granted Hewlett Packard summary judgment for an amount to be assessed and refused its application for an interim payment. Severn Trent sought permission to appeal, contending that the letter had no immediate contractual effect, or was conditional on a later written order, and was uncertain as to the work and price. Hewlett Packard’s contingent cross-appeal concerned the refusal of an interim payment.

1. Disposition. Permission to appeal was refused. The contingent cross-appeal therefore did not arise. The application for fresh evidence was dismissed, with costs, and detailed assessment was directed to take place at the end of the quantum hearing.
2. Contractual intention. The letter was to be construed objectively. It confirmed an agreement, instructed Hewlett Packard to proceed immediately, identified the work and payment provisions by reference to existing documents, and contained provisions for termination and jurisdiction. Those were contractual hallmarks. Its language was inconsistent with a mere statement of future intention or an agreement conditional on a later purchase order.
3. The parties’ undertaking to use their reasonable endeavours to conclude a later schedule did not postpone the interim agreement. The later schedule was intended to supersede an agreement which operated in the meantime and could itself be terminated on reasonable notice.
4. Summary judgment. The court applied the approach stated in Swain v Hillman [2001] 1 All ER 91 and Three Rivers (No.3) [2001] UKHL 16; [2001] 2 All ER 513. A summary judgment application is not a mini-trial, but the court need not accept factual assertions which plainly have no substance. This was a case in which the asserted lack of contractual intention could be rejected at an early stage by reference to the letter and the commercial circumstances.
5. Uncertainty. The migration-plan document was sufficiently identifiable, despite the inaccurate description and the fact that it was a Gant chart. It specified at least some of the work to be performed, and the fact that the precise extent of the claim remained to be established at assessment did not make the agreement void for uncertainty.
6. The payment provisions were sufficiently certain because the framework agreement supplied relevant rates and the interim agreement provided for payment for services performed and a fair and reasonable valuation where ambiguities existed.

• Court of Appeal (Civil Division): Permission to appeal was refused. The High Court’s summary judgment was left in place.
• High Court, Queen’s Bench Division, Technology and Construction Court: His Honour Judge Havery QC granted Hewlett Packard summary judgment for an amount to be assessed and refused its application for an interim payment.