Estor Ltd v Multifit (UK) Ltd

Where contractual documents do not identify the employing party, the court must determine the parties’ objective intention from the relevant facts known to both sides and their communications and conduct before acceptance. The factual matrix is admissible for that purpose, while evidence of pre-contractual negotiations is inadmissible when used to construe the meaning of contractual language. Relevant indicators may include the identity used in negotiations, payment arrangements, information supplied for credit facilities, and whether any alternative corporate party was identified. Private and uncommunicated beliefs carry little weight. Applying those principles, the employing party was the holding company whose details were supplied in the credit application and which made the initial payment.

Multifit carried out shop-fitting works after the original contractor, Hub Design Ltd, was unable to complete them. Multifit’s quotation was sent to Keith Warner, who controlled a group of companies. Warner accepted the quotation by email, but the communications did not identify whether the contracting party was Estor Ltd, Ginger Group Ltd or Ginger Westfield Ltd.

The dispute arose after an adjudicator decided that Estor was liable for Multifit’s unpaid account. In earlier proceedings, the court rejected Estor’s other challenges but directed a speedy trial of the identity issue. The question was which corporate entity had objectively contracted with Multifit.

1. Contracting party. Judgment was entered for Multifit on its counterclaim enforcing the adjudicator’s decision. The contract was between Multifit and Estor.
2. The identity of the parties is fundamental to the existence of a contract. It is a question of fact, determined from admissible evidence, including evidence which does not contradict the express terms of a written agreement: [2004] 1 AC 715.
3. The court may consider the factual matrix and the background known to the parties. It may not use evidence of pre-contractual negotiations to construe the meaning of the contractual language, although such evidence may be relevant for another purpose, such as establishing background knowledge: [2009] UKHL 38. The court adopted an objective approach to identifying the contracting party, consistent with the approach to contractual interpretation described in [1997] UKHL 28.
4. The relevant evidence included the absence of any indication that Ginger Westfield or Ginger Group Ltd was to contract, the credit-facilities form completed and signed for Estor, the provision of Estor’s corporate and VAT details, the discussion of Estor at the Birmingham meeting, and Estor’s payment before acceptance. Those matters objectively indicated that Estor was the intended employing party.
5. References after the contract to other group entities carried little weight because the parties had not then specifically considered the contracting entity. Interest, costs and Estor’s application to stay execution were reserved for further argument.

The judgment followed an earlier decision concerning the enforceability of the adjudicator’s decision, [2009] EWHC 2108 (TCC). The court directed a trial limited to the identity of the contracting party and, following that trial, entered judgment for Multifit on its enforcement counterclaim.