Matière SAS v ABM Precast Solutions LTD

An express contractual duty of good faith takes its meaning from the contract and its commercial context. In a joint bidding arrangement, it may require honesty, fidelity to the agreed joint purpose and conduct which is commercially acceptable to reasonable and honest people. A party must not secretly pursue alternatives which undermine the joint bid, even where the other contracting party is also considering alternatives.

Loss of a chance requires proof, on the balance of probabilities, of a real and substantial chance, and that the breach was the effective or dominant cause of its loss. A claimant need not prove that the underlying benefit would probably have been obtained. Where independent factors would have produced the same outcome, the claim fails on causation.

Matière and ABM agreed to cooperate in bidding for a subcontract for the manufacture and installation of concrete tunnel components on the HS2 project. Their arrangements included a Consortium Agreement, a Professional Services Contract and, later, a Collaboration Agreement.

ABM claimed unpaid fees. By counterclaim, it alleged that Matière had breached duties of good faith by undermining a proposed Scunthorpe factory, presenting the project to Stanton Bonna, and later contracting with the main contractor without ABM. ABM claimed damages for loss of the chance to obtain the subcontract and an account of profits.

The central issues were the scope of the contractual duties, whether Matière was in breach, whether later agreements were made while the Collaboration Agreement remained in force, and whether any breach caused a recoverable loss.

1. Claim. Matière’s claim for unpaid fees succeeded in full. ABM failed to establish the alleged £35,000 overstatement.
2. Construction. The Consortium Agreement was to be construed as an informal contract by reference to its language, the agreement as a whole and the relevant factual matrix. Its good-faith obligation was tied to the performance of the Professional Services Contract. That service included the preparation and negotiation of the joint bid, because those activities were inseparable from the preparation of the Stage Two Proposals.
3. Good faith. The obligation required honesty and prohibited conduct which reasonable and honest people would regard as commercially unacceptable. In this context it also required fidelity to the bargain and the joint purpose of producing an agreed joint bid. Matière breached both agreements by privately criticising the Scunthorpe proposal, investigating alternative factories and manufacturers, and assisting plans which would reduce or remove ABM’s role. These activities undermined the joint venture, although many were undertaken at EKJV’s request.
4. The pleaded allegation that Matière presented the project to Stanton Bonna in 2019 or early 2020 was not proved. The later agreements with EKJV did not breach clause 3.2 of the Collaboration Agreement. EKJV’s termination letter confirmed that the Main Sub-Contract would not be awarded to the consortium, so the contractual termination provisions had operated and clause 3.2 was no longer effective.
5. Causation. ABM had a real and substantial chance of obtaining the subcontract in February 2020, but it had not proved that Matière’s breaches materially reduced that chance. EKJV had independently identified concerns about Scunthorpe, ABM’s pricing, technical capability, Luton performance, funding and the structure of the joint venture. EKJV would have investigated alternatives and reached the same decision without Matière’s breaches. The loss-of-chance counterclaim therefore failed. Quantum did not arise.

Judgment was entered on Matière’s claim and the counterclaim was dismissed. The parties were directed to draw up an order addressing interest and costs.