ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
His Honour Judge McKenna
(sitting as as Deputy Judge of the High Court
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE ARDEN
MR JUSTICE DAVID RICHARDS
| IMMINGHAM STORAGE COMPANY LTD
|- and -
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Mr Paul Infield (instructed by Morrisons Solicitors) for the Respondent
Hearing date : 1 February 2011
Crown Copyright ©
Mr Justice David Richards :
This is the judgment of the court.
"The background to this claim is that in October of 2008, Ibrahim Kamisa, then a director of the defendant, approached the claimant and enquired about commingled storage space for between 3-4,000 cubic metres of ultra low sulphur diesel at the claimant's Immingham terminal. On 30 October 2008, Mr Kamisa and Mrs Whitter, the defendant's company accountant, visited the terminal and met Mr Stringfellow, who is the claimant's commercial manager and the terminal manager, to discuss storage requirements. It is clear from the subsequent letter from Mrs Whitter of 20 November that the defendant was keen to proceed with storage of ultra low sulphur diesel at the claimant's facility and she said that the defendant would have no problem securing a supply of the correct grade of ultra low sulphur diesel."
"Thanks for your previous email and your expression of wishing to progress. We have looked at this very carefully and can now confirm that the very earliest start that we can offer is the 01 May as attached. As this is the only current available capacity at Immingham at this moment in time, please can you let us have a decision by 4.00 pm 03 January 2009 to avoid reallocation to other interested parties?
Sue, in order to allocate this tankage for your usage we will need to be in receipt of a faxed, signed copy of the attached quotation by the time stated above."
The quotation, which was attached to an email sent a minute later, was a two-page document, headed in bold capitals "Subject to board approval and tankage availability". It identified the defendant as the customer, the products as Derv (commingled), the installation as Immingham West Terminal, the capacity and type of the facilities, the commencement date and minimum storage period ("Subject to availability starting on 01 May 2009 for twelve months and continuing thereafter subject to minimum notice period", identified as six months in writing by either party), and the monthly charge (£22,250 per month) and method of handling.
"the storage agreement between the Company and the Customer formed by the Particulars into which these Conditions are incorporated."
"the particulars of the Agreement save that in the event that such particulars have not been signed by both parties any reference to the Particulars (including the Schedule) shall be deemed to be to such particulars as are set out in (i) any formal version of the Agreement in respect of such storage signed by the Company and sent to the Customer prior to the Products first being accepted for receipt into the Installation under the terms of the Agreement; or in the event that no such formal version of the Agreement has been sent (ii) the quotation signed by the Customer in respect of such storage notwithstanding whether or not such quotation remains subject to Board Approval; or in the event that no such quotation has been signed by the Customer (iii) the last quotation issued by the Company in respect of such storage prior to the Products first being accepted for receipt into the Installation under the terms of the Agreement save to the extent that the parties have agreed in writing to vary the terms of such quotation."
"I can confirm that we wish to proceed and we are just waiting for Imran to return from his meeting so that he can sign the quotation. He was abroad last week and therefore unable to do this before now."
This was followed up at 4.09 pm with a further email:
"Further to my last email, Mr Butt (our Company Secretary) has spoken to Imran who has authorised him to sign the quotation on behalf of the company. This has been faxed to you."
"Thanks for this and we can confirm safe receipt of your faxed agreement to proceed. We will now seek both our own internal Board Approval to proceed, along with availability of the necessary capacity and expect to be reverting to you by the end of the week latest, so as to confirm (subject to the foregoing) all aspects of our new contract together."
We are delighted to be able to accept your offer to take up 4,000m³ commingled Derv storage at our Immingham Terminals (ISCo), starting from 01 May 2009 latest. Whilst remote at present, there may be the opportunity to start a little earlier than 01 May 2009 and we will keep in close contact with you on this point and also inform you of the exact tankage allocated as this becomes available. However, for the avoidance of misunderstanding, from no later than 01 May 2009 you are assured of 4,000m³ of commingled Derv at ISCo and can now proceed to source your product accordingly.
In further confirmation of the above, our full contract for this business will now be raised over the next few days by our Head Office and sent for your signature and return.
Sue, trust the above clarifies the situation and meets with your satisfaction. Our Terminal Management/Operations Department will be in contact with you in due course, to appraise you of the necessary areas we need to cover, in order to prepare the tankage for your service."
Miss Whitter replied on the same day, using the same subject heading:
"Great news, thanks! We will notify the various parties accordingly and work towards our first shipment in May. I would be grateful if the contract could be sent electronically if possible as this will facilitate its swift return."
"Please find enclosed two originals of the contract, signed by our Managing Director, for the storage of your Products at our Immingham East Terminal. The contract will formalise the existing situation between us as detailed in our quotation to you."
There was enclosed a five-page document headed Storage Agreement Particulars, with the General Storage Conditions 2008 which were incorporated by reference in the written agreement.
"As you are well aware, the acceptance of your quotation in principal [sic] does not constitute a formal contract which was never signed by an officer of this company and therefore no agreement exists between us."
The parties' cases
"It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract, contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to, will in fact go through. In the former case, there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract entering into a contract. In the latter case, there is a binding contract and the reference to the more formal document may be ignored."
The defendant's submissions on appeal