Heat Trace (UK) Ltd v Heat Trace Ltd

On summary judgment, the court asks whether the claim or defence has a real, rather than fanciful, prospect of success. It must avoid a mini-trial, while rejecting assertions unsupported by the pleaded case or contemporaneous documents.

An amendment introducing a limitation-barred claim is permissible only where it arises from the same or substantially the same facts already in issue. “Substantially the same” means more than merely similar facts and requires close attention to the additional investigation and evidence the amendment would require.

A defective-goods contractual claim ordinarily accrues on delivery. A continuing quality obligation requires clear contractual words. Services provided in the expectation of payment may support a quantum meruit even where no enforceable contract exists, although success remains fact-sensitive.

The claimant was the defendant’s United Kingdom and Republic of Ireland distributor under a 2002 Distribution Agreement. It alleged breaches of that agreement, entitlement to commission on sales to Trace Heating Projects Ltd and the Uganda Project, commercial agency, quantum meruit, and defects in cable supplied for a Network Rail project.

The claimant applied to amend its Particulars of Claim. The defendant applied to strike out the claims or obtain summary judgment and sought summary judgment on its counterclaim for unpaid cable invoices. The central issues were whether the pleaded claims had real prospects of success, whether the Network Rail claim was statute-barred, and whether the proposed amendments arose from the same or substantially the same facts.

1. Summary judgment test. Applying Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), the court considered whether each claim or defence had a real rather than fanciful prospect of success. It avoided a mini-trial but could reject assertions inconsistent with contemporaneous documents or inherent likelihood.
2. Distribution Agreement and Trace Heating Projects. The November 2013 correspondence did not clearly terminate the Distribution Agreement. The claimant therefore had a real prospect of showing that it continued until September 2017. Its claims for damages for later breaches and commission on sales to Trace Heating Projects were allowed to proceed, and related amendments were permitted. The claim for sales before 23 April 2013 was statute-barred.
3. Introducer Agreement and Uganda Project. The alleged overarching oral agreement was inadequately pleaded under CPR PD 16 paragraph 7.4 and was contradicted by the documents, which indicated ad hoc arrangements requiring agreement in each case. The claims based on the Introducer Agreement, commercial agency and estoppel had no real prospect of success. Summary judgment was granted, subject to the quantum meruit claim.
4. Quantum meruit. Applying Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, the claimant had a real prospect of proving that services were provided non-gratuitously, that the defendant obtained or might obtain a benefit, and that payment was contemplated despite the absence of an enforceable commission agreement. Permission to amend was granted.
5. Network Rail claim. The pleaded claim concerned defective cable supplied under a sale contract. Applying Viskase Ltd v Paul Kiefel GmbH [1993] 3 All ER 362 and VAI Industries (UK) Ltd v Bostock & Bramley [2003] EWCA Civ 1069, the breach accrued on delivery in November 2011. No continuing obligation was pleaded in clear terms. The original claim was statute-barred, and the proposed Joint Venture Agreement claim required substantially new factual investigation. Amendment was refused and summary judgment entered for the defendant.
6. Counterclaim. The claimant retained a real prospect of establishing a set-off based on the surviving Distribution Agreement and quantum meruit claims. Summary judgment on the counterclaim was therefore refused.