Special Metals Wiggin Limited v Corrotherm International Limited

Summary judgment may determine discrete issues, even where the wider claim will proceed to trial, provided the issue is suitable for summary determination. The resisting party must show a realistic, rather than merely arguable, prospect of success. The court must avoid a mini-trial but may evaluate the evidence and consider reasonably expected further evidence.

A contractual clause stating that a buyer becomes trustee of money received on resale can create a valid bare express trust where certainty of intention, subject and object is established. Whether the trust has been breached may nevertheless remain unsuitable for summary determination where the underlying contractual debt is disputed. Questions involving factual compliance with contractual conditions and reasonableness under Unfair Contract Terms Act 1977 generally require trial evidence. A contractual time bar may exclude claims notified more than one year after delivery, but “claim” does not necessarily mean legal proceedings.

The claimant supplied Inconel Alloy 625 Cold Drawn Pipes to the defendant under purchase orders incorporating the claimant’s 2021 Terms and Conditions. The claimant sought summary determination of five issues concerning an alleged trust over resale proceeds, the effect of warranty and exclusion clauses, compliance with a contractual condition precedent, reasonableness under the Unfair Contract Terms Act 1977, and a contractual time bar.

The defendant alleged that some goods were defective and relied on set-off and counterclaims. The application did not determine the defendant’s separate counterclaim concerning additional contracts. The central question was whether the identified issues could properly be determined summarily and, if so, what conclusions followed from the contractual wording.

1. Summary judgment. The court may determine discrete issues under the CPR even though other issues will proceed to trial. The relevant questions were whether the defendant had a realistic prospect of success and whether there was another compelling reason for a trial. The court was required to avoid a mini-trial, while evaluating the evidence and considering evidence reasonably expected to be available at trial.
2. Clause 4 and trust. Clause 4 clearly provided that, where goods were resold before being paid for, money received from the third-party purchaser was held on trust for the claimant. The clause established certainty of intention, subject and object and therefore created a valid bare express trust. However, there was no evidence of a request for payment of trust monies or that the relevant monies had not been retained. More fundamentally, the defendant had a realistically arguable case that the goods did not comply with the contracts and that no price was payable. The trust could apply only while the underlying debt existed. Summary judgment on breach of trust was therefore refused.
3. Clauses 6 and 7(b). Clause 7(b) did not clearly exclude contractual defences to a claim for the price. It excluded counterclaims based on misrepresentation, but did not exclude defences, estoppel by convention or unjust enrichment. The estoppel issue was fact-sensitive and remained reasonably arguable.
4. Clause 6 condition precedent. Whether either party complied with the requirement concerning notification and return of goods, and what consequences followed from any non-compliance, depended on disputed facts and contractual interpretation. The issue was unsuitable for summary determination.
5. UCTA reasonableness. The reasonableness of Clause 7(b) could not be decided on the application. The relevant matters under section 11(2) and Schedule 2 of the Unfair Contract Terms Act 1977 included bargaining strength and the practical availability of alternative suppliers. The evidence required further consideration and potentially oral evidence.
6. Clause 7(c). Clause 7(c) excluded claims where the first notification of a defect was not made within one year of delivery. The word “claim” did not mean legal proceedings. The issue was answered accordingly.
7. The parties were directed to draw up an appropriate order, with consequential issues to be listed for a short remote hearing if necessary.

not stated in the judgment.