England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT
CHANCERY DIVISION (Mr Justice Rattee)

		Royal Courts of Justice Strand, London, WC2A 2LL Monday 12th February 2001

LORD JUSTICE JONATHAN PARKER

INTRODUCTION

1. This is an appeal by LHS Holdings Ltd (LHS) against an Order made by Rattee J on 30 June 2000 in proceedings brought by LHS as claimant under Part 8 of the Civil Procedure Rules against Laporte plc (Laporte) as defendant. In the proceedings LHS seeks declaratory relief as to the validity and effect of a notice served on it by Laporte under the terms of a share sale and purchase agreement made between them and dated 23 December 1998. By its claim form, LHS sought primarily a declaration that the notice is not a valid notice under the agreement, coupled with alternative claims for declaratory relief on the footing that the notice is invalid only in respect of certain specific items to which it relates. However, at the hearing before Rattee J LHS abandoned its primary claim that the notice is wholly invalid and contended for the alternative relief sought. In the event, Rattee J rejected LHS' claim, declaring that (with one immaterial qualification) the notice is valid in relation to each of the items to which it relates. Rattee J gave permission to appeal.
2. The notice in issue is a "Dispute Notice" served by Laporte under clause 5(C) of the Agreement. The effect of the notice is to dispute draft accounts produced by LHS on the basis of which the final consideration under the Agreement is to be determined. Clause 5(C) requires that a Dispute Notice should set out "reasonable details of the grounds of dispute". It is LHS' case that in respect of a number of items the subject of the Dispute Notice Laporte has failed to comply with that requirement. On that basis, it seeks declaratory relief in the following terms:

"A declaration as to which of the Items referred to in [the] purported Dispute Notice are not properly the subject of a Dispute Notice because they do not give reasonable details of the grounds of the dispute within the meaning of clause 5(C) of the agreement."

3. Further or alternatively, if and to the extent that the notice is otherwise valid in relation to any item, LHS seeks:

"A determination as to what issues [Laporte] is entitled to raise pursuant to the provisions of clause 5(C)."

4. LHS appears on this appeal by Mr Andrew Myers; Laporte by Mr Michael Brindle QC.

FACTUAL BACKGROUND

5. On 23 December 1998 Laporte and LHS entered into a written Agreement for the sale to LHS of the issued shares in various companies which together formed Laporte's hygiene division. The completion date was 31 December 1998. The Agreement provides (by clause 3) that the "Provisional Consideration" of some £27.9M shall be subject to certain adjustments, and that the figure so adjusted shall be "the Consideration". The amount of the consideration is to be based upon "Completion Accounts" and a "Completion Statement" to be produced by LHS. The Completion Accounts and the Completion Statement are in turn to be based on up-to-date accounts of the subject companies, but with provision for adjustment. Clause 5(C) of the Agreement contains provisions enabling Laporte, within 30 days after receipt of the draft Completion Accounts and the Completion Statement, to serve a "Dispute Notice" in respect of them if it does not agree their contents. If no Dispute Notice is served within the prescribed period, Laporte is deemed to have agreed their contents. If, on the other hand, a Dispute Notice is served, there follows a period of 14 days during which Laporte and LHS are to use all reasonable endeavours to resolve the items in dispute, and in default either party may refer the dispute to an expert for determination.
6. I must now turn to clause 5 of the Agreement in more detail. Clause 5(A) prescribes the procedure leading to the production of the Completion Accounts. As the first step, LHS is to instruct its accountants (in the event, PricewaterhouseCoopers (PWC)) to procure the production by each of the subject companies of management accounts and consolidation returns covering the period from the end of the last accounting period until the completion date under the Agreement. (The fact that this obligation falls on the buyer rather than the seller is explained by the fact that the sale was in substance a management buyout.) The next step is for Laporte's accountants (in the event, KPMG) to audit the consolidation returns. The third step is for PWC, within 30 days after receiving the audited consolidation returns from KPMG, to deliver to Laporte (among other things) draft "Completion Accounts" based on those returns and prepared in accordance with Schedule 6 to the Agreement, together with a draft "Completion Statement" setting out the amount of the Consideration (before any adjustments pursuant to clause 3).
7. Clause 5(B) provides for Laporte's accountants and advisers to have access to LHS' staff, and to its books and records, until the Completion Accounts are agreed or adjusted in accordance with the Agreement.
8. Clauses 5(C) and 5(D) are in the following terms (so far as material):

"(C) The Seller shall be entitled at any time within the period of 30 days following receipt by it of the draft Completion Accounts, Completion Statement and Net Asset Reconciliations to dispute the draft Completion Accounts and/or the Completion Statement by notice in writing (a "Dispute Notice") to the Purchaser setting out reasonable details of the grounds for dispute. If no Dispute Notice is given by the Seller before the expiry of such 30 day period, the Completion Accounts and the Completion Statement shall be deemed to have been agreed by the Seller and the Purchaser. ......

(D) The Seller and the Purchaser shall use all reasonable endeavours to resolve any dispute(s) and agree the Completion Accounts and the Completion Statement within 14 days after the date of receipt of a Dispute Notice by the Purchaser. If they fail to do so by the expiry of 14 days after the date of receipt by the Purchaser of the Dispute Notice, the Seller or the Purchaser may refer the dispute to an independent firm of chartered accountants agreed by the parties, or in default of agreement within two Business Days of such expiry to the London office of an independent firm of chartered accountants nominated by the President for the time being of the Institute of Chartered Accountants in England and Wales (in either case, the "Expert"), with a request that the Expert determine the matters in dispute within 28 days of receiving the reference. Any reference to the Expert shall be a joint reference by the Seller and the Purchaser and in any reference, the Expert shall act as an expert and not as an arbitrator. In making such determination, the Expert shall state which of, and to what extent (if at all), those adjustments which have been requested by the Seller in its Dispute Notice are necessary to the Completion Accounts and/or the Completion Statement and the Expert shall not consider or propose any adjustments which have not been requested by the Seller in its Dispute Notice or which do not affect the Completion Statement. The determination of the Expert shall, in the absence of fraud or manifest error, be final and binding on both parties."

9. Clause 5(G) provides (so far as material) that the Completion Accounts and the Completion Statement, as agreed or as adjusted by the expert, shall in the absence of fraud or manifest error be final and binding on both parties, and that the amount of the Consideration shall be as shown in the Completion Statement.
10. Clause 24 of the Agreement makes time of the essence.
11. Schedule 6 to the Agreement is in the following terms (so far as material):

"The Completion Accounts shall comprise profit and loss accounts for the period from the Accounts Date to the Completion Date and net assets statements as at the Completion Date which shall be prepared on an aggregated basis for the Group and on an individual basis for each Company and Subsidiary, using for each Company and Subsidiary the same accounting categorisations, principles, policies, treatments and practices used in respect of it in the Accounts [a defined expression meaning the unaudited aggregated financial information of the Group for the years 1995/6/7] as there applied, including in [sic] the application of accounting discretion and judgment (the "Accounts Basis"), subject, if required, to the following modification if, under the Accounts Basis, the Working Capital Amount or the Taxation Amount are in any material respect not in accordance with accounting practices generally accepted in the United Kingdom: the Combined Working Capital and Taxation Amounts shall be adjusted by the minimum amount necessary to comply with accounting practices generally accepted in the United Kingdom, taking into account "overs" and "unders"."

12. On 3 March 1999 LHS provided Laporte with a "completion package" which included draft Completion Accounts and a draft Completion Statement. On 26 March 1999 the period of 14 days prescribed by clause 5(D) for the parties to use their reasonable endeavours to resolve any dispute was extended by agreement to 28 days.
13. On 31 March 1999 Laporte served the Dispute Notice which is the subject of these proceedings. Before considering its terms, however, it is material to note that no objection was taken by LHS to the form, validity or content of the notice until early July 1999 (more than three months later), and that in the meantime LHS and Laporte and their respective advisers had proceeded on the basis that the notice was fully valid and effective and had attempted to resolve their disputes, as required by clause 5(D) of the Agreement. To that end they had, on 16 April 1999, agreed to a further extension of the period prescribed by section 5(D) to 45 days. Indeed, matters had proceeded to the stage where, on 6 July 1999, the parties and their advisers had a preliminary meeting with the proposed expert, Mr John Magill of Messrs Deloitte & Touche. It was only at that meeting that Laporte learned for the first time that the validity of the notice was in issue.
14. I can now return to the notice itself. It took the form of a letter from Laporte to LHS, accompanied by a schedule. The material part of the letter reads as follows:

"We refer to Clause 5(C) .... of the Agreement. Unless otherwise defined in the letter or the context otherwise requires, words and expressions used in this letter and the accompanying schedule (collectively, "the Dispute Notice") shall have the same meanings as are ascribed to them in the Agreement.

Pursuant to the terms of Clause 5(C) we hereby give you notice that the Company disputes the terms and content of the draft Completion Accounts and Completion Statement prepared by [PWC], dated 2nd March, 1999.

Details of the grounds of the dispute are set out in the schedule hereto which forms a part of this Dispute Notice and should be read alongside this letter."

15. The accompanying schedule contains three columns. The first column, under the heading "Item", lists 17 disputed items. The second column, headed "Treatment in Draft Completion Accounts", contains a short description of the way in which each item has been so treated. The third column is headed "Reason for Disagreement"; and the fourth "Disagreed Amount". No issue arises in relation to the contents of the fourth column, where a figure has been entered against each item indicating the extent of the disagreement (that is to say, to use the language of clause 5(D) of the Agreement, the "adjustments which have been requested by the Seller").
16. LHS' case is based on the contents of the third column of the schedule which forms part of the Dispute Notice. In respect of eight of the listed items (that is to say, items A – G inclusive and item I) there appears in that column the rubric "UK GAAP override not appropriate/improperly applied". It is common ground that "UK GAAP" is an acronym for "generally accepted accounting principles applicable in the United Kingdom", and that the reference to "override" is a reference to the provision in the Schedule 6 to the Agreement (quoted above) to "accounting practices generally accepted in the United Kingdom". LHS contended before the judge that the use of this rubric (I will refer to it hereafter as "the UK GAAP rubric") does not comply with the requirement of clause 5(C) that a Dispute Notice must set out "reasonable details of the grounds for dispute". LHS further complained that in relation to a number of other items (including items M and N, relating to pension adjustments) the entries in the third column of the schedule were insufficiently detailed to comply with that contractual requirement. On this appeal, however, the only items in issue are the eight items in respect of which the UK GAAP rubric is used, together with items M and N (relating to pensions). It is accordingly unnecessary to refer to those parts of the judge's judgment in which he deals with the remaining items in respect of which LHS made complaint. So far as items M and N are concerned, against each item the entry in the second column reads "Purchaser has calculated the figure incorrectly", and the entry in the third column reads "Basis of calculation incorrect".

THE HEARING BEFORE RATTEE J

17. The hearing before Rattee J extended over four court days.
18. As noted earlier, it was not contended by LHS before the judge that the Dispute Notice is wholly invalid; LHS accepted before the judge that the notice is a valid Dispute Notice in the sense and to the extent that it is effective to dispute the Completion Accounts and the Completion Statement and thus to negative any deemed agreement of their contents by Laporte. LHS submitted, however, that like the proverbial curate's egg the notice is bad in parts; and under its alternative claim for relief it invited the court to declare (in effect) that the bad parts are ineffective to raise a dispute determinable by the expert pursuant to clause 5(D).
19. LHS further submitted that it was appropriate for the court to receive expert evidence as to how an accountant would understand the notice, and in particular the UK GAAP rubric.
20. Rattee J concluded that expert evidence should not be admitted, but he nevertheless allowed such evidence to be led de bene esse. He expressed his conclusion on the admissibility of the expert evidence thus (at page 12 of the transcript of the judgment):

"I accept, of course, that, if the court is satisfied by evidence that a word in, for instance, a shipping document has a special meaning to those engaged in the business of shipping, that word will be treated as having that meaning in the document. However, there is nothing in the experts' reports that I have read that suggests that the prima facie ordinary words used in Clause 5(C) of the Sale Agreement or the Dispute Notice have some special meaning to an accountant. LHS's purpose in seeking to adduce its expert evidence is not, in my view, to show that the words of the Dispute Notice have some special meaning to accountants, but to prove that those words, according to their ordinary meaning, are too generalised to constitute reasonable details of the alleged grounds for dispute in accordance with the requirement of Clause 5(C) of the Sale Agreement. In my judgment, given that the meaning of the words used is clear, whether they constitute reasonable details of the grounds for dispute is a matter for the court's decision unaided by the opinion of expert or other witnesses. Accordingly I do not consider it appropriate to admit the evidence of the two accountants who have made reports in this case."

21. As to the validity of the notice, Rattee J concluded that compliance with the requirement of clause 5(C) that the notice should contain "reasonable details of the grounds for dispute" was essential to the validity of the notice in the sense that it was not open to Laporte to pursue any dispute the grounds of which had not been specified with reasonable detail in the notice. He continued:

"In my judgment this is the only conclusion that makes commercial sense of the dispute procedure laid down by Clause 5(C) and (D) of the Sale Agreement. For Laporte to be at liberty [to] serve a Dispute Notice containing no grounds for an alleged dispute, but thereby setting the dispute procedure in motion would make nonsense of that procedure. Mr Brindle's contention that it would be sufficient to Laporte to be under a contractual obligation to provide details of its dispute at a later stage, if not included in the Dispute Notice, is unacceptable in the context of the tight timetable laid down for the implementation of that procedure."

22. Rattee J then turned to the question whether the notice contained reasonable details of the grounds for dispute. In respect of each of the items where the UK GAAP rubric had been used, he concluded that reasonable details of the grounds for dispute had been given. He reached the same conclusion in relation to items M and N, observing that the draft Completion Statement itself offered no explanation of the adjustment proposed by LHS and that one of the figures was expressed to be provisional.
23. Rattee J summarised his conclusions on this aspect of the case in the following passage in his judgment (at page 27 of the transcript):

"Thus, in my judgment the Dispute Notice served on 31 March 1999 by Laporte is a valid Dispute Notice within the meaning of Clause 5(C) of the Sale Agreement in respect of each of the lettered items referred to in it. In reaching the conclusions I have expressed in relation to each of those items, I have not overlooked [LHS'] submission that it is apparent from documentary and oral evidence that Laporte did, by 31 March 1999, have available to it information in relation to some of the items that would have enabled it to have included more detail in the Dispute Notice. In my view the availability of such information does not alter the fact that, particularly having regard to such explanations as were given by LHS's accountants for their proposed adjustments of the accounts, and the nature of Laporte's objections thereto, the Dispute Notice does give reasonable details of the grounds of the disputes raised thereby, so as to comply with the requirements of Clause 5(C) of the Sale Agreement. I am comforted in this conclusion by the fact that LHS itself clearly considered that it did, up to a point at which it had actually co-operated with Laporte in submitting the whole of the Dispute Notice to the proposed Expert, on the footing that there was no defect in the Notice."

24. Rattee J then went on to consider (and reject) alternative arguments addressed by Laporte based on waiver and estoppel.
25. By his Order, Rattee J granted declaratory relief in the following terms:

"This court declares that the document described as a Dispute Notice and dated 31st March 1999 and served by the defendant on the claimant is a valid dispute notice for the purposes of clause 5(C) of [the Agreement] as to the items described therein in relation to all items therein (save in relation to [an immaterial exception])".

THE ISSUES ON THIS APPEAL

26. As noted earlier, LHS' case on this appeal is limited to the eight items where the UK GAAP rubric has been used, and to items M and N relating to pensions. In respect of those ten items LHS invites this court to grant declaratory relief in the terms of the alternative declarations sought in its claim form, as quoted earlier.
27. Laporte has served a respondent's notice contending that Rattee J's decision should be upheld on the additional ground that the requirement in clause 5(C) of the Agreement that a Dispute Notice contain "reasonable details of the grounds for dispute" does not go to the formal validity of the notice, provided the relevant adjustment is quantified (as it was in this case). The respondent's notice also repeats Laporte's contentions in relation to waiver and estoppel; contentions which Rattee J rejected.

THE ISSUES IN THIS APPEAL

28. As to the meaning and effect of clause 5(C) of the Agreement, Mr Myers submits that the requirement that a Dispute Notice should set out "reasonable details of the grounds for dispute" is central to the contractual procedure for resolving disputes prescribed by clauses 5(C) and 5(D). He submits that, as in Thomas Witter Ltd v. TBP Industries [1996] 2 All ER 573 (a decision of Jacob J), the commercial intention underlying the contractual requirement for detail in the Dispute Notice is to ensure that disputes can be properly identified and resolved within the tight timetable within which the parties and (if a reference is made) the expert are obliged to operate. Mr Myers submits that certainty is crucial in this context. In support of this submission he cites the Court of Appeal decision in Senate Electrical v. STC [1999] 2 Lloyds LR 423, referring us in particular to the passage in paragraph 91 of the judgment of the court, where Stuart-Smith LJ says this:

"Certainty is a crucial foundation for commercial activity. Certainty is only achieved when the vendor is left in no reasonable doubt not only that a claim may be brought but of the particulars of the ground upon which the claim is to be based. .... Thus there is merit in certainty and accordingly in our judgment the point taken by the appellants [that a notice of claim served by the respondents was insufficiently particularised] is not a matter of mere technicality and it is not without merit."

29. Mr Myers submits that, by analogy with the test adumbrated by Slade LJ in Delta Vale Properties Ltd v. Mills [1990] 1 WLR 445 at 454 in respect of completion notices, the appropriate test for the court to apply in the instant case in deciding whether the notice complies with clause 5(C) is to ask whether it is "sufficiently clear and unambiguous to leave [LHS] in no reasonable doubt as to how .... [it] is intended to operate". He submits that the notice fails that test.
30. As to the consequences of non-compliance with clause 5(C), whilst Mr Myers accepts that the notice in the instant case is valid as a Dispute Notice, he contends that non-compliance with the contractual requirement for detail in relation to an item included in the notice effectively debars Laporte from referring that item to the expert for determination under clause 5(D). On that basis, he submits that the notice is only effective in relation to items in respect of which the requisite details have been provided.
31. As to the various items which are in issue on this appeal, Mr Myers submits at the outset that Rattee J was wrong to exclude expert evidence as to how accountants would understand the UK GAAP rubric in the context of a Dispute Notice. He submits that such evidence is relevant in assisting the court to assess the degree of particularity (or lack of it) imported by that rubric. Basing himself on the expert report provided to LHS, Mr Myers goes on to make the general submission that the rubric is of sufficiently general meaning to cover at least eight possible grounds of dispute. That, he submits, cannot be sufficient to meet the contractual requirement that the notice should set out "reasonable details of the grounds for dispute".
32. Mr Myers submits that Laporte could, had it wished to do so, have included very much more detail in the notice. He referred us to a "Field Report" which was prepared by KPMG for Laporte and which was disclosed voluntarily by Laporte in the course of the hearing before Rattee J. Mr Myers submits that that report demonstrates that KPMG, in co-operation with Laporte, had done a considerable amount of work in identifying and evaluating areas of dispute in relation to the Completion Accounts prior to service of the notice. He also referred us in this connection to a fax dated 19 March 1999 from LHS' actuary at PWC to Laporte's actuary, Messrs Watson Wyatt, which sets out certain calculations in relation to items M and N (pensions).
33. Generally in relation to the items in issue, Mr Myers submits that the notice leaves LHS in the dark as to what points are going to be taken by Laporte and in particular as to the extent to which issues of fact (as opposed to issues as to the application of accountancy principles) may arise.
34. For Laporte, Mr Brindle QC submits that a failure to comply with the contractual requirement that a Dispute Notice shall set out reasonable details of the grounds for dispute does not affect the validity of the notice (so much, indeed, is accepted by LHS in relation to the notice served in the instant case). Mr Brindle goes on to submit, however, that neither does such a failure affect the "validity" of any particular item included in the notice, in the sense contended for by LHS: in other words, that it does not result in the jurisdiction of the expert being limited by the exclusion of the item in question from his determination. He accepts that the requirement must have some contractual effect, but submits that in practice the only consequence of failure to comply with it will be that LHS will have a entitlement to damages, assuming that it can prove that it has thereby suffered loss.
35. In any event, Mr Brindle submits, the notice does comply with the contractual requirement for detail. He stresses the importance of determining what is or is not "reasonable" for the purposes of clause 5(C) in the context of the information contained in the draft Completion Accounts and the draft Completion Statement. He submits that, given the paucity of information in the draft Completion Accounts and the draft Completion Statement as to the basis of the adjustments proposed on behalf of LHS, clause 5(C) does not require the notice to contain any greater degree of detail.

CONCLUSIONS

36. So far as expert evidence is concerned, in my judgment the judge was right to exclude such evidence in this case, for the reasons he gave. No expert evidence is required to interpret the acronym "UK GAAP": its meaning is common ground. Nor is the notice framed in technical language. It follows that there is in my judgment no scope for expert evidence as to its meaning. Further, I agree with the judge that the expert evidence on which LHS seeks to rely is relevant only to the question whether the notice sets out "reasonable details of the grounds for dispute" for the purposes of clause 5(C), which is the very question which the court has to decide.
37. I turn next to the contractual significance of the requirement in clause 5(C) that a Dispute Notice must set out "reasonable details of the grounds for dispute".
38. As Mr Brindle rightly conceded, the mere fact that this requirement is included in clause 5(C) is a sufficient indication that it was intended to have some contractual significance and effect. However, given LHS' acceptance that the notice in question was a valid Dispute Notice for the purposes of clause 5(C) it is unnecessary to address Mr Brindle's submission that in order to be valid as a Dispute Notice it is sufficient that the notice should merely identify and quantify the particular items which are disputed. Rather, the question which arises is as to the contractual consequences where insufficient details are given in relation to a particular item or items in a Dispute Notice; and in particular whether Mr Myers is right in his submission that an item in respect of which insufficient details have been given is for that reason excluded from the contractual process for the resolution of disputes contained in clause 5(D). I intend no disrespect to Mr Myers when I refer to this as "the curate's egg argument".
39. In my judgment the curate's egg argument must be rejected, for two main reasons. First, it is inconsistent with the express provisions of clause 5(D), which provides expressly that the Expert shall address the adjustments requested by Laporte in the Dispute Notice and that he "shall not consider or propose any adjustments which have not been requested by the Seller in its Dispute Notice or which do not affect the Completion Statement". The effect of the curate's egg argument, if correct, is to add a third category of adjustments which the Expert may not consider, namely adjustments requested by Laporte the grounds for which have been insufficiently stated in the Dispute Notice.
40. Second, I am in any event unable to see any sensible commercial reason for interpreting the Agreement so as to reach the result for which Mr Myers contends. By the time a disputed item comes to be placed before the Expert for his determination under clause 5(D), the battle lines in relation to that item will have been drawn and the contested issues identified. Moreover, prior to the Expert's determination each party will in the normal way have restated its position on the issues to be determined, so that there will in practice be no room for doubt as to the grounds for dispute.
41. Nor, in my judgment, can Mr Myers derive any assistance from the authorities to which he referred us. In both Thomas Witter and Senate Electrical, the relevant issue was as to the effect of a notice served under a contractual limitation clause: a contractual context which is significantly different from that which exists in the instant case. Here, clause 5 of the Agreement presupposes not that the parties are at loggerheads but rather they are concerned to resolve any differences as to the amount of the consideration expeditiously, and it prescribes a procedure designed to achieve that aim. Indeed, I think it may fairly be said that, the aim of the clause 5 procedure being the speedy resolution of disputes, the present litigation represents just the kind of situation which the procedure was designed to avoid.
42. Nor, in my judgment, is a general statement relating to completion notices (such as is to be found in Delta Vale Properties v. Mills, on which Mr Myers also relied) of assistance in the context of the instant case.
43. Accordingly I disagree with the judge to the extent that I would hold that LHS' contentions fail on the true construction of the Agreement, without the need for the court to inquire as to the degree of detail given in the Dispute Notice in relation to any particular item under challenge.
44. In any event, were it appropriate to adopt an item by item approach I would hold, in agreement with the judge, that the Dispute Notice does contain "reasonable details of the grounds for dispute" in relation to each of the items under challenge. I agree with Mr Brindle that what is reasonable for this purpose must depend, among other things, on the amount of detail contained in the draft Completion Accounts and the draft Completion Statement, to which the Dispute Notice was in effect a response. Equally, it is material to bear in mind that under clause 5(C) the stated purpose of a Dispute Notice is to dispute the draft Completion Accounts and/or the draft Completion Statement: there is no express provision for disputing a particular item or items contained in them. In that context, and given the paucity of information in the draft Completion Accounts and the draft Completion Statement as to the grounds for the proposed adjustments, I agree with the judge that the UK GAAP rubric is sufficient compliance with the contractual requirement for detail; and that in relation to pensions the statement "Basis of calculation incorrect" similarly so complies.
45. Moreover, the proof of the pudding is in the eating. For more than three months following service of the notice LHS and their advisers found no difficulty in operating the clause 5 procedure. It was only at the stage when a reference to the expert appeared inevitable that LHS sought to take the point that the notice was insufficiently detailed. This is in my judgment the best evidence that the notice was effective in serving its practical purpose of identifying areas of dispute between the parties.
46. In his closing submissions Mr Myers invited us to give guidance to the expert as to what issues he was required to determine. We would of course wish to be as helpful as possible to the expert, and were it practical to give the kind of guidance suggested by Mr Myers we would certainly do so. In the circumstances, however, it does not seem to me that it would be practical to do so. In my judgment, the sensible course is to leave it to the expert to identify the relevant issues for his determination by reference to the submissions made to him.
47. In the light of the conclusions I have reached it is unnecessary to address Mr Brindle's further arguments relating to waiver and estoppel.
48. For the reasons I have given, I would dismiss this appeal.

LORD JUSTICE MAY

49. I agree that this appeal should be dismissed for the reasons given by Jonathan Parker LJ. whose account of the facts and the terms of the sale and purchase agreement dated 23^rd December 1998 I gratefully adopt.
50. It troubles me greatly that a dispute which turns on the interpretation of a small number of plain English words should have generated a substantial piece of expensive litigation with the Court being presented with skeleton arguments running to several tens of pages together with several hundred documents and a large file of photocopied authorities. Rattee J heard evidence and submissions over 4 days. Much of this was, I think, unnecessary and much of the evidence inadmissible. This is not to diminish the genuineness or importance of the issue, but rather to observe that the way in which modern litigation is sometimes conducted has, in this case, substantially overloaded the material that has been put before the Court.
51. The essential words which the Court has to interpret and apply are:

"[Laporte] shall be entitled … to dispute the draft Completion Accounts and/or the Completion Statement by notice in writing (a "Dispute Notice") … setting out reasonable details of the grounds of dispute."

52. Those words are plain English and require no expert evidence to enable the Court to determine what they mean. Rattee J was, in my view, right so to decide. The words must be read in their context which includes the possibility of reference to an Expert whose determination has to address the adjustments requested by the Seller in its Dispute Notice – see the latter part of clause 5(D).
53. The Dispute Notice which Laporte served on 31^st March 1999 gave details of 18 adjustments in the Completion Accounts which they challenged. The items were clearly identified. In many instances, the reason given for challenging the item was expressed as "UK GAAP override not appropriate/improperly applied". There is no dispute that the expression "UK GAAP" is a reference to "accounting practices generally accepted in the United Kingdom". It was this expression which was used in Schedule 6 of the Agreement to enable modifications to be made to the accounting documents if items were not in accordance with accounting practices generally accepted in the United Kingdom. This expression, and therefore the acronym form of it used in the Dispute Notice, is in understandable plain English and I do not consider that the Court needs expert evidence to determine its meaning. Rattee J was, in my view, correct so to decide.
54. The appellants no longer contend that the Dispute Notice was completely ineffective. This is because they now accept that some of the individual items did give reasonable details. They concentrate in this appeal on the contention that, for the other items, reasonable details of the grounds for dispute were not given. Their main submission is that a general assertion that the particular adjustment is not in accordance with accounting practices generally accepted in the United Kingdom is insufficiently particular. In my view, this submission tends to overlook the fact that the Dispute Notice concerns Laporte's entitlement under Clause 5(C) "to dispute the draft Completion Accounts and/or the Completion Statement". In this context, the identification of those items in the Completion Accounts which are disputed itself constitutes giving details of the grounds for disputing the Completion Accounts. Shifting the debate to the sufficiency of the grounds for disputing individual items, in my view, tends to be misleading. It seems to me that the purpose of the Notice is to give notice that the draft Completion Accounts and/or the Completion Statement are disputed and to initiate a process for resolving that dispute. The Notice is not in the nature of a pleading. In my view, it has been subjected to over legalistic analysis. Once the items of dispute are identified, sensible parties who do not, as I think they should not, adopt adversarial attitudes, are perfectly able to exchange their detailed contentions and either resolve them by agreement or submit them to the independent firm of chartered accountants.
55. It seems to me to be arguable at least that a Dispute Notice which identified that particular items in the Completion Accounts were challenged, without going into greater detail, would nevertheless set out reasonable details of the grounds for dispute. That question does not arise on this appeal since this Notice did give grounds for dispute for each individual item. It is not contended that the Notice had to contain a fully formulated argument why each individual item was challenged. Mr Myers says that the grounds may and probably should be succinct but that they should convey the detailed points of issue.
56. In my view, if individual grounds for dispute are necessary, those grounds may be shortly stated. The Notice is not, as I say, to be treated as a pleading and, although no doubt Laporte are limited to challenging those items in the Completion Accounts that appear in the Dispute Notice, arid arguments about whether particular contentions bearing on an item do or do not fall within the kind of brief details which are in my view to be expected should be avoided. Since, as Mr Brindle has in my view demonstrated, many of the modifications proposed by LHS in the draft Completion Accounts were themselves laconically justified by general reference to accounting practices generally accepted in the United Kingdom, I consider that the formulation of the ground of challenge which Laporte adopted for many of these items was adequate and gave reasonable details of the grounds for dispute. The court can see, without any need for expert evidence, that the item is challenged on accountancy grounds which may well be sophisticated and extensive. It may well be seen that further details will be needed. In the end, it seems to me that Mr Myers' submission would mean that the notice had either to have attached to it a document in the nature of a full accountants' report giving and explaining an entire case; or to have that detailed case reduced to an itemised précis which left nothing out. Mr Myers does not contend for the first of these. As to the second, the underlying assumption of the submission is that the notice is to be treated as a pleading which cannot be amended and of which particulars cannot be given. I do not consider that this notice is so to be treated. No doubt Laporte could not seek subsequently to challenge items in the Completion Accounts which were not identified in their Dispute Notice at all as proposed adjustments. This is to my mind obvious, but also derives from the limitation on the adjustments which clause 5(D) imposes on the expert. It is quite clear, in my view, that the machinery for resolving disputes envisaged that the parties would exchange and be entitled to rely on further details and explanations of the items which were identified. I do not see any commercially sensible reason why Laporte should be rigidly tied in the subsequent procedure to points of accountancy detail which a succinct notice might have set out for a particular item. Nor, in my view, is it a persuasive objection to the way in which this Notice was expressed that it contained a general formula capable of supporting an accountancy debate with a number of limbs. Accountancy questions of the kind likely to be raised here may well give rise to a series of detailed contentions perhaps suitable only for a closely argued submission.
57. The Dispute Notice itself was not invalid. Mr Myers does not contend that it was. It was, in my view, a sufficient notice for the plain commercial purpose for which it was required, that is to initiate a dispute resolution and notify the items in the Completion Accounts which required to be resolved. That applies to those items which the appellants seek to challenge on this appeal on the basis that the standard reference to UK GAAP was insufficiently detailed.
58. Essentially the same applies, in my view, to points raised about the German and Dutch pension adjustments. The Completion Statement has no detail at all of the basis for contending that a net adjustment of £563,000 should be made. I agree that consideration of what is reasonable detail in the Notice may take account of the extent of detail in the Completion Accounts and Completion Statement. I am quite unpersuaded by Mr Myers' submission that an actuary's letter written on 19^th March on this subject was capable of affecting the question whether these items in the Dispute Notice were adequately detailed.
59. I therefore do not consider that it is necessary to address Mr Brindle's estoppel submission. But it is notable that LHS said little, if anything, to challenge the validity of this notice between 31.3.99 and 6.7.99. The contractual negotiating machinery progressed during that period without apparent difficulty, which strongly suggests that the Notice did indeed properly serve its commercial purpose.

LORD CHIEF JUSTICE

60. I agree with both arguments
Order : Appeal dismissed with costs; order for costs in the court below to remain undisturbed; leave to appeal refused.
(This order does not form part of approved judgment)