UK Global Healthcare Limited v Secretary of State for Health and Social Care

On an application for summary judgment, the court must decide whether the opposing case has a realistic prospect of success, while avoiding a mini-trial. It may evaluate the available evidence and draw a line where the case cannot properly proceed, but must consider evidence reasonably expected at trial.

Contractual delivery dates may cease to be enforceable where a party’s conduct prevents performance, including by requiring extra-contractual steps which make timely performance impossible. A no oral modification clause does not necessarily prevent waiver or estoppel, but reliance on such doctrines requires a clear representation and, where the clause is engaged, something more than the informal variation itself. A contractual reimbursement clause may be construed not to operate where non-delivery was caused by the promisee’s breach.

The claimant supplied medical gloves to the defendant under two contracts made during the COVID-19 pandemic. The defendant paid £15,350,000 in advance. No gloves were delivered. The defendant contended that it had lawfully terminated the contracts, or that they had expired, and sought repayment of the advance payments. It also applied for summary judgment and to strike out the claimant’s claim.

The claimant alleged that the defendant had prevented delivery by requiring extra-contractual testing, wrongfully rejecting goods, failing to co-operate and waiving or becoming estopped from relying on the delivery and expiry dates. The central questions were whether those contentions had a real prospect of success and whether the reimbursement clause operated despite alleged prevention by the defendant.

1. Application dismissed. The claimant’s case was not fanciful. There were reasonable prospects of establishing at trial that the defendant had agreed to extend the delivery dates, waived strict compliance with them, or was estopped from relying on them.
2. The contracts did not give the defendant a right to pre-delivery inspections or tests of the relevant kind for the first contract or the first phase of the second contract. For later phases, it was arguable that the contractual inspection obligation was limited to checking provenance and availability. The contractual rejection right contemplated post-delivery visual inspection under clause 4.2 of Schedule 2.
3. The claimant had accommodated the defendant’s extra-contractual requests while making clear that they affected the delivery timetable and required a formal contractual variation. The defendant’s response that varying the dates made sense, together with evidence that formal amendment was being pursued, gave rise to triable issues concerning variation, waiver and estoppel. The requirement for something more than the informal modification itself, identified in MWB Business Exchange v Rock Advertising [2019] AC 119, was arguably met by the parties’ express recognition that the dates required formal amendment.
4. There was also a real prospect of establishing prevention. If the defendant’s requests made compliance with the delivery dates impossible and the contracts contained no applicable extension mechanism, time might have been put at large. The prevention principle could therefore answer the defendant’s reliance on delay as a ground for termination. The claimant might need to amend its pleadings, and permission to do so would be appropriate.
5. Separately, there were triable issues that the defendant had rejected the gloves on the basis of flawed testing, refused to reconsider despite compliant test results, and failed to co-operate in obtaining documentation for alternative gloves. If those matters were established, the termination might be unlawful and constitute a breach sounding in damages, even though the claimant had not accepted the repudiation.
6. Clause 13.1 was reasonably arguable not to require reimbursement where non-delivery resulted from the defendant’s own breach. The prevention principle of interpretation supported that construction. The court left the disputed expiry date and the wider waiver argument concerning expiry to trial. The application was dismissed.