M & C Energy Group Ltd v St Cuthbert's Mill

For summary judgment, the court asks whether the defendant has a real prospect of successfully defending the claim. Where the contractual basis of remuneration is arguable, the defendant may nevertheless accept that basis by objectively understood subsequent conduct, including signing a supply contract after being told how charges will be calculated. A party that proceeds on that basis, without objection, may waive or lose reliance on an earlier misrepresentation or estoppel. The court may grant summary judgment where no defence has a real prospect of success, while leaving the precise amount payable to an enquiry.

The claimant supplied energy-cost consultancy services to the defendant under a written agreement providing for a share of refunds and savings. The claimant arranged new gas and electricity supplies and negotiated reductions with existing suppliers. It then invoiced the defendant for 50 per cent of the alleged savings.

The Guildford County Court granted summary judgment, ordered an enquiry as to quantum, directed payment of £100,000 on account and made consequential costs orders. The defendant appealed, arguing that the contract did not determine the relevant benchmark and relying on alleged misrepresentation and estoppel concerning the basis of remuneration. The central issue was whether those matters gave the defendant a real prospect of successfully defending the claim.

1. Appeal dismissed. The judge upheld the summary judgment and the order for an enquiry as to quantum. There was no appeal against the payment on account order by itself.
2. Construction of the agreement. The agreement covered recommendations leading to cheaper utility supplies and negotiated reductions, even though its wording did not precisely fit every situation. Savings were generally the reduction produced by the recommendation, assessed by comparing the relevant charges before and after the change.
3. Acceptance by subsequent conduct. The claimant expressly identified the proposed remuneration basis for the Scottish Hydro gas contract. The defendant signed and returned the contract without objection. Objectively, that conduct accepted the stated basis of charging. The same reasoning applied to the Shell reduction.
4. In relation to electricity, the proposed baseline was implicit from the circumstances and the earlier gas arrangement. By returning a supply contract and accepting a reduced rate negotiated with E.on, the defendant accepted remuneration calculated by reference to the difference between the relevant rates.
5. Misrepresentation and estoppel. Even if the defendant had earlier been misled about the remuneration basis, it did not challenge the position when the claimant later explained its intended charges. By proceeding, it accepted the basis of charging and waived any relevant rights. Alternatively, the later offers and acceptances made the earlier discussion irrelevant.
6. Under CPR 24.2, the defendant therefore had no defence with a real prospect of success. The precise sum due remained for determination by enquiry.

• High Court (Administrative Court): appeal from the Guildford County Court dismissed. The summary judgment, enquiry as to quantum and payment on account order were upheld.
• Guildford County Court: HHJ Reid QC granted summary judgment for the claimant on 23 October 2012, ordered an enquiry as to quantum, directed payment of £100,000 on account and made costs orders. Permission to appeal was refused.
• High Court: Eady J granted permission to appeal on 20 November 2012.