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England and Wales High Court (Chancery Division) Decisions


You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> W Clappison Ltd v Aldi Stores Ltd [2025] EWHC 1459 (Ch) (16 June 2025)
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Cite as: [2025] EWHC 1459 (Ch)

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Neutral Citation Number: [2025] EWHC 1459 (Ch)
Case No: BL-2024-000591

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)

Royal Courts of Justice
Rolls Building, Fetter Lane London EC4A 1NL
16/06/2025

B e f o r e :

MASTER BOWLES
(SITTING IN RETIREMENT)

____________________

Between:
W Clappison Limited
Claimant

- and -


Aldi Stores Limited
Defendant

- and -


The Groceries Code Adjudicator
Applicant

____________________

Harry Gillow (instructed by Gordons LLP) for the Claimant
George Spalton KC and Mark Wraith (instructed by Freeths LLP) for the Defendant
James McClelland KC and Katherine Barnes (instructed by Fieldfisher LLP) for the Applicant

Hearing date: 11 February 2025

____________________

HTML VERSION OF JUDGMENT APPROVED
____________________

Crown Copyright ©

    Master Bowles:

  1. At a costs and case management conference on 11 February 2025, I gave directions in respect of the trial of this claim. On the same occasion I heard argument in an application by the Groceries Code Adjudicator (GCA) to be joined in these proceedings, as an intervener. This judgment pertains to that application.
  2. The claim, itself, is a claim for damages for breach of contract by the claimant, W. Clappison Limited (Clappison) against Aldi Stores Limited (Aldi) and arises out of Clappison's unsuccessful tender for a contract for the supply of Brussel sprouts to Aldi in respect of the 2023/2024 sprout season. It is common ground in this litigation that the sprout season runs from September in one year to March in the next. In respect of each such season, sprouts are supplied by Aldi's suppliers under annual supply contracts entered into, following an annual tendering process. Clappison had been such a supplier since about 2013, its last supply contract, prior to its unsuccessful tender for the 2023/2024 season, being for the 2022/2023 season, terminating in March 2023.
  3. The claim turns, or will turn, on the question as to whether, when Aldi rejected Clappison's tender in respect of 2023/24 Brussel sprout season, it did so in breach of its then current supply contract with Clappison and, in particular, in breach of terms of that supply contract incorporated into that contract by reason of the provisions of the Groceries (Supply Chain Practices) Market Investigation Order 2009 (the Order). As explained later in this judgment, it is because this case will turn upon the breach, or otherwise, of the incorporated terms and because this is said to be the first time that these incorporated terms and associated guidance will be placed under the scrutiny of a court of record that the GCA wishes to intervene.
  4. Under the Order, made under the Enterprise Act 2002, a Designated Retailer, defined for current purposes as a Retailer, itself defined by the Order, having a turnover exceeding £1 billion with respect to the retail supply of Groceries in the United Kingdom, is under a duty to incorporate the Code of Practice (the Code), contained in Schedule 1 of the Order, into all its Supply Agreements.
  5. A Retailer, as defined in the Order, is any person carrying on business in the United Kingdom for the retail supply of Groceries. Groceries, as defined in the Order, includes food, other than food sold for consumption in a Retailer's store, but also includes drinks, pet food, cleaning products and other household items. A Supply Agreement, as defined in the Order, is any agreement with a Supplier for the supply of Groceries for the purpose of resale in the United Kingdom and a Supplier, as defined in the Order, means any person carrying on, or actively seeking to carry on, a business in the direct supply to any Retailer of Groceries for resale in the United Kingdom.
  6. It is not in dispute, in this case, but that Aldi is a Designated Retailer, that Clappison was a Supplier under the supply contract in place between the parties at the time when it tendered for a supply contract for the 2023/2024 Brussel sprouts season, or that that contract was a Supply Agreement, or that, consequentially, the Code was incorporated into that contract.
  7. The elements of the incorporated Code relied upon by Clappison, in this case, are paragraphs 2, 3, 4 and 16.
  8. Paragraph 2, headlined Principle of fair dealing, provides that a Retailer must at all times deal with its Suppliers fairly and lawfully. Fair and lawful dealing will be understood as requiring the Retailer to conduct its trading relationships with Suppliers in good faith, without distinction between formal or informal arrangements, without duress and in recognition of the Suppliers' need for certainty as regards the risks and costs of trading particularly in relation to production, delivery and payment issues.
  9. Paragraph 3, headlined Variation of Supply Agreements and terms of supply, provides that (1) subject to paragraph 3(2) a Retailer must not vary any Supply Agreement retrospectively and must not request or require that a Supplier consent to retrospective variations of any Supply Agreement. Under paragraph 3(2), a Retailer may make an adjustment in terms of supply which has a retroactive effect where the relevant Supply Agreement sets out clearly and unambiguously: any change of circumstances (such circumstances being outside the Retailer's control) that will allow for such an adjustment to be made; and detailed rules that will be used as the basis for calculating the adjustment to the terms of supply. Paragrah 3(3) provides that if a Retailer has the right to vary a Supply Agreement unilaterally it must give Reasonable Notice of any such variation to the Supplier.
  10. Paragraph 4, headlined Changes to supply chain procedures, provides that a Retailer must not directly or indirectly Require a Supplier to change significantly any aspect of its supply chain procedures during the period of a Supply Agreement unless the Retailer either: gives Reasonable Notice of such change to that Supplier in writing; or fully compensates that Supplier for any net resulting costs incurred as a direct result of the failure to give Reasonable Notice.
  11. Paragraph 16, headlined Duties in relation to De-listing, provides that (1) a Retailer may only De-list a Supplier for genuine commercial reasons. For the avoidance of doubt, the exercise by the Supplier of its rights under any Supply Agreement (including the Code) or the failure by a Retailer to fulfil its obligations under the Code or the Order will not be a genuine commercial reason to De-list a Supplier. Paragraph 16 (2) further provides that prior to De-listing a Supplier, a Retailer must: (a) provide Reasonable Notice to the Supplier of the Retailer's decision. In addition to the elements identified in paragraph 1(1) of the Code, for the purposes of this paragraph 'Reasonable Notice' will include providing the Supplier with sufficient time to have the decision to De-list reviewed using the measures set out in paragraphs 16(2)(b) and 16(2)(c); namely (b) inform the Supplier of its right to have the decision reviewed by a Senior Buyer; and (c) allow the Supplier to attend an interview with the Retailer's Code Compliance Officer to discuss the decision to De-list the Supplier.
  12. Paragraph 1(1) of the Code defines De-list as meaning to cease to purchase Groceries for resale from a Supplier or significantly to reduce the volume of purchases made from that Supplier and provides, further, that whether a reduction in volumes purchased is 'significant' will be determined by reference to the amount of Groceries supplied by that Supplier to the Retailer rather than the total volume of Groceries purchased by the Retailer from all of its Suppliers. It is not in dispute in this case that the effect of Aldi's rejection of Clappison's tender for the 2023/2024 Brussel sprout season was to De-list Clappison.
  13. Paragraph 1(1) of the Code, as referred to in paragraph 16(2) defines Reasonable Notice as meaning a period of notice the reasonableness of which will depend upon the circumstances of the individual case, including: the duration of the Supply Agreement to which the notice relates, or the frequency with which orders are placed by the Retailer for relevant Groceries; the characteristics of the relevant Groceries including durability, seasonality and external factors affecting their production; the value of any relevant order relative to the turnover of the Supplier in question; and the overall impact of the information given in the notice on the business of the Supplier, to the extent that this is reasonably foreseeable by the Retailer.
  14. Guidance as to De-listing Practice, including further guidance as to the meaning and interpretation of Reasonable Notice, in the context of De-listing, was issued by the GCA on 27 November 2014 and further guidance in respect of De-listing in the fresh produce sector was issued by the GCA in August 2016. It is common ground between the litigating parties that that GCA guidance forms part of the factual matrix in any determination of the proper construction and application of paragraph 16 of the Code, as incorporated into Clappison's Supply Agreement in this case.
  15. This takes me to the role of the GCA and, correspondingly, the basis and rationale of the GCA's application to intervene in these proceedings.
  16. The GCA is a creature of statute. It was created by the Groceries Code Adjudicator Act 2013 (the 2013 Act), with the broad object of enforcing and overseeing the Code and encouraging compliance. The Code, itself, had been brought into being to help curb some of the perceived imbalances in the relationships existing between retailers and suppliers in the context of the major supermarkets. The Order, however, which created the Code, did not make any provision for an ombudsman, or other entity, to secure the enforcement of the Code, or to arbitrate disputes as to the Code, or to give guidance as to the application of the Code.
  17. The GCA was created by the 2013 Act to fill that gap and, to that end, was given statutory powers to investigate and, where need be, enforce breaches of the Code, to make recommendations as to the application of the Code, to arbitrate disputes as to compliance with the Code, to advise Retailers and Suppliers as to the proper application of the Code and to publish guidance to Retailers and Suppliers as to the application of the Code.
  18. In fulfilment of his functions under the 2013 Act, the GCA, Mr Mark White, has, since his appoinyment, directly arbitrated some half dozen disputes between Retailers and Suppliers relating to the Code, as well as issuing Guidance referred to in paragraph 14 of this judgment. In the exercise of both those functions and in the exercise of his other powers and duties under the 2013 Act, he has, necessarily and inevitably, applied his mind to the correct application of the Code and, therefore, the correct construction and approach to be adopted in applying the Code within the wide range of circumstances and products embraced by the Code. He describes himself as having a unique and unrivalled expertise in the interpretation and application of the Code and of the Guidance that he has provided under the Code.
  19. It is in this context and in circumstances where, in this litigation, a number of the central provisions of the Code are in play and where, as I am told, for the first time, the Code and its application will be the subject of an authoritative determination by a court, that he applies to the court to offer his expert assistance in the resolution by the court of the issues, in so far as they relate to the proper meaning and construction of the Code, which are raised in these proceedings.
  20. In regard to the application, a number of matters are not in dispute. In particular, although this application is opposed by Aldi, it is not disputed but that, in appropriate circumstances, the court has the jurisdiction to make the requested joinder, nor, I think, that that jurisdiction is exercisable in proceedings at first instance, as well, as has more usually been the case, in proceedings on appeal.
  21. The 'agreed' source of jurisdiction is to be found in CPR 19.2(2)(a). The court may order a person to be added as a party if 'it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings'. Although in many cases, of which Nottinghamshire County Council v Bottomley [2010] EWCA Civ 756 is a good example, parties have been allowed to intervene because they will be directly, or indirectly, affected by the outcome and that, for that reason, it is desirable that they be heard in the resolution of the matters in dispute, I am not persuaded that the power to allow a party to intervene under this rule is, or should be, limited to such cases. It is manifest that both in public law cases and private law cases, such as the present, interventions have been allowed by parties having no direct, or indirect, interest in the outcome, but where their intervention has been seen by the court allowing the intervention to be desirable in assisting the court in the resolution of matters in dispute in the particular case. Examples of this, of which there are many, include, in respect of private law cases, Westlaw Service Ltd v Boddy [2010] 6 Costs Cases LR 934, in which the Solicitors Regulatory Authority was permitted to intervene to assist the court in proceedings concerning alleged breaches of the Solicitors Practice Rules and in respect of the policy considerations underlying those rules and the application of those rules, and Soreymani v Nifty Gateway LLC [2023] 1 WLR 436, in which the Competition and Markets Authority was allowed to intervene, in order to assist the court as to the potential that the first instance decision in that case, if upheld, would adversely affect the consumer rights that it was the obligation of the Authority to enforce.
  22. Although in both those cases the intervention was allowed when proceedings were before the Court of Appeal, I can see no principled basis for taking the view that a different approach to intervention should be adopted at first instance. The applicable rule is the same in the High Court as in the Court of Appeal and, if the intervention will properly assist the court on appeal, it would, as it seems to me, necessarily have had the same ability to assist the court had it been available at the earlier point in the litigation. The reality, as submitted by Mr McClelland KC, for the GCA, is that the reason why interventions tend to be made at the appellate stage is that very often prior to that stage the potential intervener simply does not have the knowledge of the dispute in respect of which it could, if permitted, assist.
  23. Whether, however, at first instance, or on an appeal, the core requirement of which the court must be satisfied, before allowing an intervention by a party having no direct, or indirect interest in the resolution of the particular dispute, is that the intervention would be desirable in assisting the court in the resolution of the dispute before the court. It is for that reason that interventions sought with a view to supporting one side or another in a particular dispute, because a particular resolution of the dispute would, or might be, advantageous to the prospective intervener in other circumstances and in respect of another putative, or prospective dispute, will not be permitted. Such an intervener is adding nothing to the material before the court and is not, in consequence, providing anything to assist the court in the resolution of the dispute, such as to render it desirable that that intervener be joined.
  24. Putting it plainly, intervention by a party having no direct, or indirect interest in the particular matters in dispute, must be desirable as an assistance to the court in resolving matters in dispute, rather than desirable in the interests, or the agenda, of the intervener.
  25. I add, before turning to the merits of the GCA's application in the light of the foregoing, that Clappison, which does not object to the GCA's intervention, put forward, in its skeleton argument, as alternative sources of jurisdiction, CPR 3.1(2)(p), which permits the court 'to take any other step or make any other order for the purpose of managing the case and furthering the overriding objective' of dealing with cases justly and at proportionate cost, and/or the inherent jurisdiction of the court..
  26. Those alternative sources appear to derive, at least in part, from remarks made by Arnold J, as he then was, in Golden Eye (International) Ltd v Telefonica UK Ltd [2012] EWHC 723 (Ch), in which he expressed the view, in respect of an application to intervene which had, in fact, been initiated by the court, that no express power existed under the CPR in respect of an intervention of the type sought by the GCA in this case.
  27. That view, expressed in the context of a consent application and without benefit of argument, was, as it seems to me, incorrect. The jurisdiction is there, under CPR 19.2(2)(a) and, as in other cases under the CPR, where a more generalised power exists alongside a specific power, it is the parameters of the specific power, intended by the rule maker to apply to a specific situation, which should be applied and should, in all ordinary circumstances, be the basis of the court exercising jurisdiction, rather than the specific power being sidelined in favour of the general.
  28. On that footing, I turn to a consideration of the desirability, or otherwise, of the GCA's proposed joinder in this case and whether that joinder would materially and significantly assist the court in the determination of the matters in dispute in this case.
  29. In opposition to the application and in support of the contention that joinder is not desirable, Aldi raises the possibility, or prospect, of a duplication of submissions and reminds the court of the observation of Lord Hoffmann, in Re E (a Child) [2009] 1 AC 536 at paragraph 3, to the effect that an intervention is of no assistance if it merely repeats points that have already been made and that an intervener should not be an additional advocate for one of the parties.
  30. Aldi's further submission is that, in this private law case, where the parties each have the benefit of high quality legal representation, there is simply no need for the GCA's intervention and, given the guidance already provided by the GCA, pursuant to its statutory role and as outlined earlier in this judgment, simply no occasion for the GCA to provide further ad hoc guidance to the court, in the context of this case.
  31. As regards duplication and as regards any further concern that the joinder of the GCA might over-complicate the proceedings and become burdensome to the court rather than beneficial, the GCA's submission as to the extent of its role in the proceedings is that, in the context a relatively lengthy trial (8 days) it should be entitled to put in no more than 30 pages of submissions and be allocated one hour for oral argument. Unlike, as appears to have been the case in other litigation, where interventions of the character sought by the GCA have been permitted, it is not the GCA's intention to make submissions to the court in support of particular findings, or a particular result. To avoid the risk of duplication the GCA suggests that its submissions should be provided in advance of the pre-trial skeleton arguments, or submissions, to be lodged by the other parties, so that, to the extent that another party wishes to adopt the GCA's submission, that submission would not need to be replicated in that other party's submission.
  32. It seems to me that the approach suggested by the GCA, reinforced by appropriate directions from the court, is more than sufficient to resolve Aldi's legitimate concerns as to wasteful duplication and as to an over-emphasis, in the proceedings, being given to the role of the GCA.
  33. As to what I will term the added value, which, in the GCA's contention, its intervention will bring to the proceedings, I am satisfied, after careful consideration, that the GCA is in a position to beneficially assist the court.
  34. The difference between this case and the usual private law case is that the central terms of the contract between Aldi and Clappison, which are in issue in this dispute, are terms incorporated into their contract by dint of the Order. They are not implied terms, arising out of the circumstances of the contract. Nor are they terms agreed between the parties, to be construed in the well understood textual and contextual manner that has, in recent years, been fully identified in decisions of the House of Lords and, latterly, the Supreme Court. While the incorporated terms will, necessarily, be applied within the context of the particular facts of this case, the court will have, as it seems to me, to be aware that the particular provisions contained in the Code and incorporated into the contract in this case are (and are intended to be) incorporated into the very wide range of other contracts as between Supplier and Retailer governed by the Code and that, in consequence, the correct meaning, interpretation and application of the terms in question must be determined not solely in the context of the facts of this particular case but in the wider context of the wide range of other cases, products and situations to which the Code applies and the wide range of other contracts in which the terms incorporated into those contracts by the Order and the Code will fall to be applied. It is in this wider context that the intervention of the GCA will be of assistance to the court.
  35. I have set out in paragraphs 16, 17 and 18 of this judgment, the provenance and role of the GCA and the experience that the GCA will have and, as I accept, has obtained in the fulfilment of that role. He is plainly well equipped to assist the court in respect of the wider context in which the incorporated terms relevant to the current dispute fall to be understood and construed.
  36. In particular, the GCA will be able, within the confines of what can properly be used by the court in determining the purposes underlying the Order and the Code and the mischief at which they are aimed, to make submissions to the court as to the intended construction of the Code and the incorporated terms of the Code having regard to that purpose and that mischief and the policy considerations and context relevant to the Code and its terms.
  37. The intervention of the GCA will, also, from the perspective of the court, provide, in respect of the proper interpretation of the Code and of the incorporated terms of the Code, the merit of objectivity. Inevitably and properly, the parties to this litigation, when dealing with questions of the construction of the Code and the incorporated terms, will seek to establish an interpretation of those terms which will advance their respective interests. In ordinary inter partes litigation that is entirely appropriate. It is less appropriate when the terms that they are construing are not particular to their specific dispute but operate and are intended to operate in a wide range of disparate circumstances and in respect of a wide range of disparate products and where the court, to properly construe the terms in question, must have regard to the wider context in which they are intended to operate. In that context, a voice in the litigation, which has no interest in the outcome, or in advancing a construction which avails one party, as against the other, but looks to the wider impact of the construction of the terms in question, is, manifestly, of value and advantage to the court.
  38. In this latter regard, the day by day experience of the GCA, in applying the Code, in providing guidance to Retailers and Suppliers as to the workings of the Code, in particular situations, and in acting as an arbitrator in respect of the Code will, as it seems to me, be of real assistance to the court in its consideration of the impact that a particular interpretation of the Code might have upon situations and circumstances other than those of the instant case. While the GCA cannot give evidence, he can, based upon experience, point to the weaknesses, or strengths, of a particular construction of the Code when tested against other circumstances in which the Code and the incorporated terms will be in play. In that context, I can see no reason why the GCA should not be able to identify, for the benefit of the court, areas of evidence which, whether generally, or in specific circumstances are likely be relevant in the application of a given construction of a particular element, or part, of the Code, or why the GCA should not be able to take that course in regard to the circumstances of the instant case.
  39. In the result and for the reasons that I have given, I shall, within the limits discussed in the preceding paragraphs of this judgment (paragraphs 36 to 38) and upon the basis set out in paragraph 31 of this judgment, accede to the GCA's application.
  40. His involvement in the litigation will not be to provide ad hoc guidance in respect of the instant case, but to provide the court with a wider overview of the intent and purpose of the Code and of the potential effect of particular constructions of the Code, in circumstances extraneous to the instant case, and, thereby, to assist the court in the proper construction of the Code and the incorporated terms in the context of the current case.

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