Advanced Multi-Technology for Medical Industry & Ors v Uniserve Limited

A contractual delivery schedule may be varied by an authorised agent through written communications, and the principal may also be bound by ratification or estoppel where it knowingly permits the other party to rely on the variation. Once varied, time remains of the essence if the contract so provides.

A party cannot establish breach merely through untested hearsay or an ambiguous conversation where the contract required the goods to be available for collection. A buyer’s unjustified renunciation may itself amount to an anticipatory breach. Damages for non-acceptance under the Sale of Goods Act 1979 are assessed by the loss directly and naturally resulting from that breach, with the statutory market-price measure operating as a prima facie rule.

The claimants contracted with Uniserve for the supply of 80 million medical masks during the COVID-19 pandemic. Hitex alleged that Uniserve wrongfully refused to accept and pay for most of the masks. Uniserve alleged misrepresentation, relied on failures to meet the original and revised delivery schedules, and brought related claims against Maxitrac and Dr Stead.

The court considered whether the revised schedule varied the Supply Contract, whether Hitex breached that schedule, whether Uniserve validly terminated, the measure of Hitex’s damages, and whether commission was payable under a separate Commission Contract.

1. Misrepresentation. Uniserve’s misrepresentation claim failed. The pleaded representation was not shown to have been made by Hitex, was not shown to have been intended to induce the contracts, and did not in fact induce Uniserve to contract. Uniserve relied on its own due diligence, which contradicted the earlier predictions. The unpleaded later statements could not found a deceit claim because fraud must be specifically pleaded. The entire agreement clause also excluded the claim under section 2(1) of the Misrepresentation Act 1967.
2. Revised delivery schedule. The communications of 22–26 May 2020 were intended to replace the original delivery dates. Dr Stead had specific actual authority to agree the revised schedule. In any event, Uniserve’s conduct ratified the agreement and created an estoppel. Uniserve thereby waived the earlier delivery breaches.
3. Performance and termination. The revised dates remained contractual dates and time remained of the essence. Hitex’s obligations were to have the masks available for collection. The evidence relied on by Uniserve did not establish a breach of the revised schedule. The Production Reports were the best available evidence. Uniserve therefore had no right to terminate for breach.
4. Uniserve nevertheless renounced the Supply Contract in June 2020 by making clear that it would no longer accept or pay for further deliveries. That was an anticipatory breach. Hitex accepted the renunciation by its conduct by about 13 July 2020, when it ceased accumulating stock in accordance with the schedule and acted to mitigate its loss.
5. Damages. Hitex was entitled to damages for the loss of the bargain in respect of 77 million masks. The court found an available market and assessed the recoverable loss at US$0.22 per mask, producing US$16,940,000, plus interest.
6. Commission and third-party claims. Commission was payable only for masks delivered to and cleared in the United Kingdom. No term required Uniserve to purchase all contracted masks or prevented termination of the Supply Contract. The claims by Caramel and Mr Popeck, and Uniserve’s claims against Maxitrac and Dr Stead, therefore failed. Uniserve succeeded in its US$300,000 counterclaim relating to the assigned invoice, subject to consequential directions.