Fine Lady Bakeries Ltd v EDF Energy Customers Ltd & Anor

A judge must give an independently reasoned judgment identifying the issues vital to the result and explaining why each party has won or lost. Incorporating a party’s submissions is permissible only if the judge demonstrates independent consideration of both sides.

Summary judgment is appropriate where the claim has no realistic prospect of success and there is no compelling reason for trial. Contract construction may sometimes be decided summarily, but fact-sensitive questions under Unfair Contract Terms Act 1977, including bargaining strength and insurance, generally require evidence. Novel or complex contractual and regulatory issues should not be summarily determined where they are properly arguable and require further investigation.

Fine Lady Bakeries appealed against orders of Deputy District Judge Masheder granting summary judgment to EDF Energy Customers Ltd and E.ON UK Energy Services Ltd and allowing EDF’s counterclaim.

The dispute arose from an incorrectly configured and uncommissioned electricity meter at the claimant’s production site. The claimant alleged that it had been overcharged by EDF and that E.ON had breached its meter operation agreement. It also advanced unjust enrichment, regulatory and agency arguments, and challenged contractual exclusions under the Unfair Contract Terms Act 1977.

The appeal concerned the adequacy of the lower court’s reasoning, the suitability of the claims for summary determination, and whether there was another compelling reason for trial.

1. Appeal allowed. The Deputy District Judge’s judgment was set aside and the applications for summary judgment were dismissed. The parties were given time to agree an order containing case-management directions for trial.
2. A judgment must make clear why one party has won and the other has lost. A judge need not address every submission, but must identify and explain the issues vital to the conclusion. Extensive use of counsel’s submissions is permissible only where the judgment shows that both parties’ cases were considered and independent judgment was exercised. The lower judgment failed that requirement by adopting the respondents’ skeleton arguments to an impermissible degree and failing to engage with the claimant’s arguments.
3. Under CPR 24.2, the defendant must establish that the claimant has no realistic prospect of success and that there is no other compelling reason for trial. The court must avoid a mini-trial, while recognising that summary judgment may be appropriate for a short point of law or construction where all necessary evidence is available.
4. The reasonableness of exclusion clauses under sections 3 and 11 of the Unfair Contract Terms Act 1977 was fact-sensitive. Questions concerning relative bargaining strength, the possibility of negotiating different terms and the availability of insurance required evidence not presently before the court. EDF and E.ON had not established that these issues could properly be resolved summarily.
5. The claimant’s arguments concerning the electricity regulatory framework, implied contractual obligations, meter responsibility and the interaction between regulatory duties and private law were arguable and complex. The unjust enrichment claim and EDF’s counterclaim also raised unresolved issues concerning responsibility for the meter, the meaning of the indemnity provisions and their interaction with statutory and regulatory obligations. These were not short points suitable for summary determination.
6. The construction of E.ON’s exclusion clause also required further consideration. It was not appropriate summarily to reject the argument that excluding liability for installing a meter which failed to measure the claimant’s electricity consumption would defeat the essential purpose of the agreement.

• High Court (Queen’s Bench Division): appeal against orders of Deputy District Judge Masheder dated 11 February 2019. The orders granting summary judgment to EDF and E.ON, and allowing EDF’s counterclaim, were set aside. The applications for summary judgment were dismissed.