Background
The dispute arose from an April 2020 agreement under which Viva Enterprises Limited agreed to supply 1,000 ventilators to the claimant’s predecessor, INSABI, during the COVID-19 pandemic. In an earlier judgment, the High Court rejected the claimant’s pleaded claims in misrepresentation, repudiatory breach for non-delivery, and unjust enrichment. It nevertheless found that Viva had breached its delivery obligations and that a June 2020 agreement varied the original contract by providing for alternative performance.
Under the June agreement, Viva refunded the price of 300 ventilators and could deliver up to 500 units from the identified supplier HBK by 3 July 2020, with refunds due for undelivered units; contracts concerning another 200 units were to be cancelled. Viva delivered only 50 HBK ventilators. The court found that 465 ventilators supplied by Encore were delivered under Encore’s own contract with INSABI, not on Viva’s behalf, and that Viva and Encore had engaged in a covert scheme to claim otherwise. This consequentials judgment addressed the resulting relief, amendment of the pleadings, interest, costs, permission to appeal, and a stay.
The Court’s Holding
The court entered judgment for the claimant for US$38.48 million, representing the purchase price of the remaining 650 ventilators. Although the claimant had not pleaded the refund claim as a liquidated contractual claim under the June agreement, that agreement’s meaning, terms, and performance had been squarely placed in issue by the pleadings and agreed trial issues. The defendants had a fair opportunity to address its construction and suffered no material prejudice. The court also permitted the claimant to amend its pleadings to state the alternative contractual claim and liquidated relief expressly.
Pre-judgment interest was awarded from 1 January 2022 at the Effective Federal Funds Rate plus 1%. The court treated the claimant as the successful party overall and ordered Viva to pay 55% of the claimant’s costs on the standard basis, with pre-judgment interest on those costs at the Bank of England base rate plus 1%. Viva was also ordered to make a payment on account equal to 60% of the relevant claimed costs, excluding injunction costs, and the security lodged for the defendants’ costs was ordered released.
The court refused the defendants permission to appeal, holding that none of their four proposed grounds had a real prospect of success and that there was no compelling reason for an appeal. It nevertheless stayed payment of the US$38.48 million judgment pending determination of any permission application to the Court of Appeal because immediate enforcement could expose Viva to insolvency proceedings. Injunction-related applications and associated costs issues were adjourned for fuller argument.
Key Takeaways
- A court may grant relief flowing from the proper construction of an agreement even when the successful claim was not pleaded in precisely that form, where the relevant agreement and issues were squarely before the parties and no material prejudice results.
- A post-trial amendment may be allowed when the new cause of action arises from the same or substantially the same facts already in issue and the balance of justice favors permission.
- Overall success determined costs: despite losing its pleaded misrepresentation and other theories, the claimant recovered most of the refund it sought, while its unsuccessful claims justified reducing its recoverable costs to 55%.
Why It Matters
The decision illustrates the High Court’s focus on substantive fairness when pleadings do not perfectly match the legal basis ultimately established at trial. It also shows the limits of that flexibility: the court examined whether the defendants had notice, an opportunity to address the decisive issues, and any realistic alternative defenses before granting and permitting amendment for the liquidated refund claim.