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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> P4 Ltd v Unite Integrated Solutions Plc [2006] EWHC 2640 (TCC) (27 October 2006) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2006/2640.html Cite as: [2006] EWHC 2640 (TCC)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		27/10/2006

Mr Justice Ramsey:

Introduction

1. The Claimant P4 Limited ("P4") is engaged in the business of manufacturing and supplying specialist lighting systems. In particular, it produces emergency lighting systems, which are designed to comply with the relevant British Standard, BS 5266.
2. P4 produces a FASTEL (Fully Automatic, Self-Testing Emergency Lighting) System which is self testing. This means that it avoids the necessity for a manual testing regime, which is required under BS 5266 to ensure that the lights work in an emergency. The further FASTELINK system produced by P4 is a computer addressable emergency lighting system which enables data from each of the luminaries to be monitored by a central computer which produces hard copy reports.
3. Unite Integrated Systems Plc, the Defendant ("Unite"), is part of the Unite Group Plc and is involved in the development of residential real estate and services for students and key workers.
4. On 23 September 2002 Unite entered into an agreement ("the Main Contract") with an associated company, Hiremaxi Limited ("Hiremaxi"), for the conversion of existing office buildings at the former gas works site at Orion's Point, Southampton to provide accommodation for students and nurses. The work included the design, construction, installation, and commissioning of bedrooms and ancillary accommodation. The Main Contract was in the 1998 JCT Standard Form of Building Contract, with contractors design and with a number of amendments.
5. The development at Orion's Point consisted of retaining office accommodation for Centrica PLC in one building (Block A) and converting two other buildings (Blocks B and C) into living accommodation. This required certain "severance" works to be carried out to separate Block A from the rest of the development. Block B consisted of a nine storey block and Block C was a six storey building.
6. In order to comply with the Building Regulations, Unite had to install an emergency lighting system to Blocks B and C of the development.
7. Because Unite had, over the years, carried out a number of projects to provide student accommodation, it had developed a standard specification for those projects, including the emergency lighting systems.
8. In 1997 Mr Geoff Gilliam a specification engineer who had been employed in the Unite group for a number of years approached P4 and started to specify P4 products for the emergency lighting systems on Unite's projects.
9. Unite, themselves, did not carry out any of the physical work on the projects but engaged sub-contractors to do so. Unite therefore included P4 emergency lighting in the specification for the work they subcontracted to electrical sub-contractors.
10. In the years leading up to 2002 Mr. Gilliam specified P4 products for a number of projects and this continued after he retired.
11. P4's Managing Director is Mr Peter Warner and his wife, Maureen Warner, is the Company Secretary and Financial Director of P4. Mr. Andrew Harris was the Sales Director of P4 at the relevant time in 2002 and early 2003.
12. On 14 October 2002 Mr. Harris of P4 provided Mr Johnson of Unite with a quotation (7911-1) in relation to the supply of emergency equipment for Orion's Point.
13. At that time, Unite was selecting sub-contractors for the project at Orion's Point, including a sub-contractor for the design and installation of mechanical and electrical services.
14. On 21 October 2002 Tudor Mechanical and Electrical Services Limited ("Tudor") submitted a quotation to Unite for the mechanical and electrical services work. They were subsequently awarded the sub-contract and, although no signed sub-contract was entered into, the sub-contractor proceeded on the basis of a DOM/2 Standard Form of Sub-Contract and other documents which were attached to a letter from Unite to Tudor dated 5 December 2002. I shall refer to that document as the Sub-Contract.
15. The Sub-Contract contained a general description of the emergency lighting system at clause 6.4.26 of an outline specification. P4 was named as a preferred supplier for the emergency lighting luminaries and lamps at Appendix C to that specification and at Appendix E there was a Schedule of Emergency Lighting Luminaries which included a supplier's reference number and stated that "Suppliers references refer to P4 Limited, manufacturers of FASTEL emergency lighting".
16. Tudor did not previously have a trading relationship with P4. In about January 2003 Tudor contacted P4 and this led to a quotation (7911-4) dated 16 January 2003 being sent by fax from Mr. Harris of P4 to Mr. George of Tudor for the supply of the emergency lighting system at the project at Orion's Point. That quotation was for 280 Klippa bulkhead units, 31 IP65 rated Klippa bulkhead units, one Type 830 over door illuminated exit sign, eight collector boxes and one computer interface box.
17. Early on the morning of 21 January 2003 Mr. Richard Iles of Tudor sent a fax dated 20 January 2003 to Mr. Harris enclosing an order for P4 to supply a "FASTLink Self Testing, Computer Addressable Emergency Lighting System as per your quote 7911-4".
18. Mrs. Warner of P4 then sent a fax to Tudor shortly after receiving that order. That fax enclosed an "Application for Credit Account with P4 Limited" and this form was completed and returned to P4 later on 21 January 2003. P4 then sent an order acknowledgement dated 21 January 2003. There is a dispute between the parties as to the terms under which this "January Agreement" was concluded.
19. It seems that the goods were then supplied following an oral request from Tudor to P4 for the delivery of certain goods and this was then followed by an invoice sent from P4 to Tudor for the goods delivered. The invoices noted that "This account has been assigned to and paid by Abbey National Business Cashflow Finance Ltd c/o P4 Ltd".
20. The first goods, consisting of one interface box and eight collector boxes, were delivered and subsequently invoiced on 28 February 2003.
21. On 8 August 2003 P4 sent a revised quotation 7911-4 to Mr. Iles of Tudor. It made certain changes to the original quotation, including increasing the number of "Klippa" bulkhead units from 280 to 398 and adding 58 2D circular fittings. It did not include any Type 830 illuminated signs. Tudor sent an order dated 12 August 2003 for the additional cost over the original quotation and an order acknowledgment of 13 August 2003 was sent by P4 in response, also referring to the additional cost.
22. Deliveries continued to be made and invoices were raised by P4 and sent to Tudor. On 15 September 2003 P4 sent quotation 8092-1 for additions to Mr. Iles of Tudor. Tudor sent an order dated 16 September 2003 and P4 then sent an order acknowledgment dated 18 September 2003.
23. At this stage problems occurred in the sub-contract relationship between Unite and Tudor. Tudor had been making applications for payment and being paid by Unite. In relation to Tudor's Application No. 8 for August 2003, Unite made certain deductions which were explained in a letter sent to Tudor on 15 September 2003. This led to Tudor removing all their labourers from the site at Orion's Point. Tudor requested a meeting and this took place at Tudor's offices in Birmingham on 17 September 2003. It was attended by Mr Bacon and Mr Banister of Unite.
24. The outcome of that meeting was a document "Points of agreement reached on 17 September 2003", signed by Unite and Tudor. It set out various matters as to payment, timing and other obligations. I shall refer to it as the "September Agreement". Following that agreement, Tudor then returned to site.
25. On 23 September 2003 Mr. Husband, a Construction Director of Unite, was present at the Orion's Point site because, by then, the work was in delay. He was told that the site needed further emergency light fittings and so he phoned Mr. Williams of P4 and requested the goods. He also arranged for Mr. Roger Johnson of Unite to collect them.
26. P4 prepared an enquiry/order form which recorded Mr Husband's request and named Tudor as the relevant party. P4 then sent an order acknowledgement dated 24 September 2003 and an invoice, also dated 24 September 2003. Both of these documents were addressed to Tudor.
27. On 9 October 2003 Tudor sent an urgent order to P4 for some further fittings. This was then the subject of a P4 order acknowledgement and an invoice both of which were also dated 9 October 2003.
28. However, on 15 October 2003 Tudor went into a Creditors' Voluntary Arrangement. By that date it had not paid any of P4's invoices except for the first invoice dated 28 February 2003 in the sum of £3,540.86.
29. On 17 October 2003 Mr. Williams of P4 visited the site at Orion's Point and walked around it to ascertain the level of completion of the emergency lighting system. On 20 October 2003 P4 wrote to Unite in these terms:

"The goods were supplied under the terms of the enclosed contract. As you can see, they were not Tudor's to supply until P4 had been paid for them and, until P4 had been paid, title vests in P4.

We ask therefore that all P4's goods should be held awaiting P4's collection along with any of our products that may still be in the Tudor compound. In particular, you should not fix or in any other way convert any of our goods which are not already fixed to your premises.

Be aware that all the emergency lighting within Orion's Point (with the exception of 1 No Interface Box & 8 No Collector Boxes) is the property of P4 and we reserve the right to repossess them."

30. The Creditor's Voluntary Arrangement failed and on 28 May 2004 Tudor was placed into liquidation. In the end P4 received only a further £1,692.83 from the liquidator of Tudor.
31. Therefore, although P4 rendered invoices in the total sum of £76,986.22 (including VAT) it has only been paid £3,540.86 for the first invoice together with the further sum of £1,692.83. Otherwise, the balance remains unpaid.
32. On 8 April 2005 P4 commenced these proceedings against Unite in which it relied on a Retention of Title clause in the supply contract between P4 and Tudor. As a result it claims the price of the goods from Unite as damages for conversion.
33. Unite served a Defence on 2 June 2005 and an Amended Defence on 7 July 2005. Unite made an Application for Summary Judgment against P4 under CPR part 24. That application was heard on 3 November 2005 and I gave judgment on 4 November 2005 dismissing the application. That decision is now reported at [2006] BLR 150.
34. Directions were given for the exchange of witness statements and other procedural steps leading up to the trial which commenced on 10 July 2006.
35. At the hearings, P4 was represented by Mr. Paul Marshall and Unite was represented by Miss Lucy Garrett. By the conclusion of the hearing the parties were able to agree a much reduced list of issues which arise on this claim.
36. Those issues are as follows:

(1) Did P4 contract with Tudor on terms which included a retention of title clause?

(2) Did P4 assign its right to immediate possession to Abbey National?

(3) If P4 did contract with Tudor on terms which included a retention of title clause:

(a) Is unite protected by s. 25(1) of the Sale of Goods Act 1979 (the "disposition" issue)?

(b) Did property vest in Unite under Clause 21.4.5 of DOM/2?

(c) What is the true construction and effect of the 17 September 2003 Agreement on the contract between Unite and Tudor (including the issue of whether the sub-contract works required Tudor to provide Emergency Lighting to comply with a requirement for summer lets)?

(4) The claim in respect of P4's 830 exit signs and whether they were converted by Unite.

(5) What goods belonging to P4 remained on site unfixed at 20 October 2003?

37. There are some matters which arise in terms of the pleadings. P4 seeks permission to amend its Particulars of Claim to plead:

(1) That the agreement made between P4 and Tudor on 21 January 2003 was varied by P4's quotation of 8 August 2003 so that Tudor was bound by P4's standard terms.

(2) That the order placed by Mr. Husband of Unite on 24 September 2003 gave rise to a direct liability for Unite to pay for the goods delivered as a result of that order.

38. P4 also contends that the revised quotation in August 2003 related to a new requirement for additional emergency lighting to permit the accommodation to be used for "summer letting" which requires a higher standard than for student accommodation. It also contends that this was not a requirement of the existing sub-contract between Unite and Tudor so that payments under the subcontract and the September Agreement did not cover payment for additional lights required for summer letting.
39. In this judgment I shall proceed on the basis that P4 is entitled to make the two draft amendments which it seeks to make and is entitled to raise the issue in relation to summer letting. I will then consider whether I should give any necessary permission when I have reviewed the evidence and the arguments.
40. I heard evidence from a number of witnesses. Mr and Mrs Warner, Mr. John Williams, Mr David Hollyman and Mr Andrew George were called on behalf of P4. Mr Andrew Petrie, Mr Raymond Husband, Mr Andrew Smith and Mr. Peter Bacon were called on behalf of Unite.
41. There was little conflict on the evidence. Given that the events took place in 2002 and 2003, the witnesses understandably had some difficulties in remembering details. However, in relation to most matters there were documents which assisted the witnesses to recall the facts. Where there were no documents I consider that the witnesses did the best they could to recall the events as they recalled them.
42. I now turn to consider the issues which will determine whether P4's claim against Unite succeeds.

Incorporation of Terms

43. The first group of issues concerns the terms on which P4 supplied the emergency lighting fittings to Tudor.
44. Whilst P4 provided Unite with a quotation in October 2002 and there is evidence that this was passed by Unite to Tudor, the start of the direct relationship between Tudor and P4 was evidently an approach by someone at Tudor to someone at P4 which led to Mr Harris sending Mr George the quotation (7911-4) dated 16 January 2003.
45. Initially P4 pleaded that the quotation had P4's Conditions printed on the back. It is now accepted by P4, particularly in the light of the evidence given by Mrs Warner, that the document containing P4's quotation was sent by fax by Mr Harris of P4 from his home and this fax did not have P4's Conditions either printed on the back or attached. In addition there was no reference to any such conditions on the face of the document. The evidence from Mrs. Warner shows that, because Mr. Harris sent the quotation from home, he did not have the notepaper with those conditions printed on the back. In any case the faxed one page document would not have included any terms and conditions had they been printed on the back.
46. As appears from the next document in the exchange, there was then a meeting on Friday 17 January 2003 between Mr. Harris of P4 and Mr Iles of Tudor and this led to Mr. Iles faxing a two page document dated 20 January 2003 to Mr. Harris. The fax header on the first page indicates that it was sent on 21 January 2003 at 07:58. Mr. Iles said in his fax that he was sending the order "as per your quote 7911-4". On the second page was an order for the same fittings as had been listed on P4's quotation. Although it was on Tudor's standard order form which stated "the conditions under which this order is placed are stated overleaf", there was nothing overleaf as the order was sent by fax and those conditions were not attached. Again, therefore no conditions were sent.
47. From the evidence, Mrs. Warner believes that she would have seen the order on the fax machine at about 8:30 am on 21 January 2003. As Tudor was a new client, she faxed a credit application form plus P4's Conditions of sale to the fax number on the order. The fax copy shows that Mrs Warner sent it at 9:36.
48. That P4 credit application form was then completed and the fax header shows it being faxed back to P4 on the same day at 15:48. It was signed by Mrs Gillian Turner. The standard P4 credit application form stated on its face "Please note our terms & conditions on reverse". That was a reference to P4's Conditions which Mrs Warner had sent to Tudor with the credit application. When Mrs Turner filled in the customer details on the credit application, she entered Tudor Engineering Services Ltd under the customer details. This is a different company to Tudor, being the holding company. Mrs Turner also stated on the form "NB Our payment terms are 60 days".
49. After receipt of the credit application, Mrs Warner made credit checks both on Tudor and Tudor Engineering Services Ltd in terms of creditworthiness. She was evidently satisfied by those checks and filed the credit application. There were no communications between Mrs Warner and Mrs Turner.
50. What, if any, terms were therefore incorporated into the January Agreement? P4 contends that the conduct of Tudor in taking the benefit of credit meant that the agreement could only have been on the terms of P4's Conditions which were sent through to Tudor with the credit application on 21 January 2003. It does not accept that, objectively, Tudor's order of 21 January 2003 contained all the terms of the contract but, if it did, it contends that the contract was varied by the subsequent transmission of P4's Conditions and the acceptance of those terms by Tudor's conduct in taking the goods on credit or by Tudor Engineering Services Ltd accepting those terms as agent for Tudor or by Tudor being the true party to that acceptance.
51. Unite submits that P4's offer of 16 January 2003 did not contain P4's Conditions; that this offer was accepted by Unite's order faxed on 21 January 2003; that this gave rise to a binding agreement and that there was no variation of that agreement. Alternatively Unite submits that if the reference on the face of Tudor's order to "The Conditions under which this order is placed are stated overleaf" was sufficient to be a counteroffer then P4's order acknowledgement of 21 January 2003 which expressly referred to Tudor's Order would have accepted Tudor's counteroffer.
52. On the basis of the evidence, I consider that the position is straightforward and as contended for by Unite. There was an offer made by P4's fax on 16 January 2003 which was accepted by Tudor's order dated 20 January 2003 which was communicated to P4 by fax early on the morning of 21 January 2003. P4's quotation did not incorporate P4's Conditions. I do not accept that Tudor became bound by P4's Conditions by reason of Unite passing the 14 October 2002 quotation to Tudor, if that is what happened. First, I am not satisfied that P4's Conditions were on the reverse of the quotation of 14 October 2002 sent by P4 to Unite. The copy of the document provided to me does not have the conditions on the reverse. The evidence of Mr Warner was that quotations which were not produced in the office and certain "proposals" would not incorporate P4's Conditions on the reverse and Mrs Warner frankly accepted that she could not say whether P4's Conditions were on the reverse of all quotations as it was possible that some had "slipped through the net". Secondly, even if P4's Conditions had appeared on the reverse of the 14 October 2002 quotation, I do not consider that that is sufficient notice that such conditions applied to the 16 January 2003 quotation. There is nothing to link the two documents.
53. P4's quotation was an offer in the terms written on its face. Although Tudor's acceptance referred to conditions overleaf, the document was faxed and there were no terms overleaf. Neither had there been any previous dealings between P4 and Tudor and therefore P4 did not have notice of Tudor's Conditions. In this context, I was referred to Poseidon Freight Forwarding v. Davies Turner Southern [1996] 2 LLR 388, in which the Court of Appeal upheld the judge's finding that a note on the bottom of a faxed document that "The only conditions on which we transact business are shown on the back" was not sufficient to incorporate the terms, since there was nothing shown on the back of the actual sheet as it emerged from the facsimile machine. Leggatt LJ said that what was more significant was that no attempt was made to send the terms on the back of the document.
54. The effect, in my judgment, was that the simple offer of P4 was accepted by Tudor's Order and that neither party's Conditions were incorporated. I do not accept, as P4 submits, that other terms were necessary. Neither do I accept that there was any variation by conduct. The fact that Tudor subsequently requested delivery of goods and paid one invoice but paid no others cannot, in my judgment, be conduct referable to an acceptance by Tudor of the copy of P4's Conditions sent to Mrs Turner with the credit application.
55. The further alternative submission that there was an agreement entered into by Mrs Warner sending the blank credit application form to Tudor and Mrs Turner completing that form so as to vary the agreement made earlier that day, fares no better. There is no evidence of any communication between Mrs Turner and Mrs Warner, all that happened was that a credit application form and P4's Conditions were faxed to Tudor and returned completed by Mrs Turner. I do not consider that, in those circumstances, the application for credit had any effect in imposing terms on Tudor in relation to the contract agreed early on the morning of 21 January 2003. There was no agreement that the terms would apply to the earlier agreement and I do not construe the signature of Mrs Turner on the credit application as being an agreement that P4's Conditions were to apply to it, by contractual variation or otherwise. Rather it was an application by Tudor Engineering Services Ltd so that creditworthiness could be checked and references taken up. The statement that Tudor's payment terms were 60 days did not lead to any agreement that 60 days were the terms and neither was there any agreement on 30 days which is the period under P4's Conditions.
56. If I had come to the conclusion that the application for credit was capable of varying the contract then another problem would have arisen. That application for credit was made on behalf of Tudor Engineering Services Ltd, not Tudor. P4 seeks to overcome this by contending that the intention of the parties was that it should have been Tudor, not Tudor Engineering Services Ltd, who made the application. It therefore seeks to obtain rectification of that agreement. The evidence of Mrs. Warner on this aspect is that she sent a blank form to Tudor and did not notice that it was returned by Tudor Engineering Services Ltd. Her recollection was that she independently checked the creditworthiness of Tudor Engineering Serviced Ltd because she checked on the creditworthiness of Tudor and found out that Tudor Engineering Services Ltd. was a holding company. To add comfort to P4's position she therefore also checked on the creditworthiness of Tudor Engineering Services Ltd as well.
57. I consider that Mrs Warner gave evidence of what she honestly recalled of the position in January 2003 and I have no doubt that the arrival of an order and the completion of a credit application form would not have seemed unusual at the time.
58. There can be no suggestion that, in some way, the document did not properly reflect some agreement between the parties. There is no convincing evidence to suggest that there was an erroneous recording of some agreement from Tudor's point of view or, indeed, that Tudor Engineering Services Ltd was written on the form by Mrs. Turner in error. The best that I have is the statement by Mr. Alan George who was Tudor's Contract's Manager in January 2003 and which he confirmed in evidence. He says that he believes that the application was signed on behalf of Tudor Engineering Services Ltd. by mistake. However, he was not involved in the aspects dealt with by Mrs Turner and I find that his evidence in July 2006 of what he believed happened in January 2003 to be less than convincing. It is just as likely that Mrs Turner filled in the form with the holding company's name because she wanted to put forward a better financial position. This is also reflected in the fact that the companies noted on the credit application as trade references did not trade either with Tudor or Tudor Engineering Services Ltd. but with other companies in the Tudor group. This was the effect of the evidence of Mrs Warner in a further witness statement which she made after having contacted those companies.
59. I would therefore, in any case, have rejected the case based on rectification. The same applies to the submission that there was, in some way, a mistaken reference to a party or a misnomer. P4 also seeks to rely on the fact that Tudor Engineering Services Ltd was acting as agent on behalf of Tudor in making the application. I consider this to be much more close to the true position. Mrs Turner completed the form with details of Tudor Engineering Services Ltd. and trade references for companies in the Tudor Group so as to satisfy the creditworthiness of Tudor. Mrs Turner was therefore acting in that sense on behalf of Tudor in providing that information. If I had been persuaded that Mrs Turner had, in some way varied the existing contract I would have found the agency agreement a more feasible basis for attributing the acts of Mrs Turner, also the Company Secretary of Tudor, to Tudor. However, the exchange concerning the credit application did not, in my judgment, have the effect of creating a contract between the parties which varied the agreement made earlier on 21 January 2003.
60. The final document is an Order Acknowledgement dated 21 January 2003 which was sent out by P4. This refers to no conditions and had none printed on the reverse. This refers to Tudor's Order but not to P4's Quotation. Neither does it refer to the credit application. If, therefore, contrary to my view, Tudor's Order had been a counteroffer then I would have accepted Unite's submission that the Order Acknowledgement accepted the counteroffer. However, that would not have incorporated Tudor's Conditions. I therefore find that, whatever the position, the January Agreement was not on P4's Conditions.
61. Following the January Agreement, goods to the total value of £3,540.86 were delivered and invoice no 5794 of 28 February 2003 in the sum of £3,540.86 was paid.
62. So far as this delivery of materials is concerned, it only related to an Interface Box and 8 Collector Boxes and not to the main part of the emergency lighting system which were the Klippa bulkhead units. It was only on about 11 August 2003 that 153 Klippa Bulkhead units, which formed the majority of the goods under the January Agreement, were delivered. Invoice 6086 of 11 August 2003 for £17,977.50 shows that they were delivered under delivery note 75/54 and refers to order Ac3254/36381/BB06 which is Tudor's Order of 21 January 2003.
63. A further delivery was made under delivery note 16/54 which is dated 12 August 2003. It consisted of a further 162 bulkhead units together with 4 IP65 Klippa bulkhead units and 3 Type 830 door signs. Invoice 6029 dated 13 August 2003 was raised and again it made reference to order Ac3254/36381/BB06, Tudor's Order of 21 January 2003. However, the January Agreement referred to only 280 Klippa bulkhead units and the additional units now exceeded the number in that agreement.
64. It was at this time that P4 provided the revised Quotation 7911-4. This, as I have said, increased the number of Klippa bulkhead units from 280 to 398, added 58 of P4's 2D circular fittings and changed the number of external bulkhead fittings and collection boxes. It also contained no Type 830 illuminated signs. That quotation was dated 8 August 2003. It is stamped with a date of 11 August 2003. This time it was sent by post and had P4's Conditions printed on the reverse. However, as before there was no reference to those conditions on the front of the quotation.
65. On 12 August 2003 Tudor raised order AC3254/37418/SC26 which stated:

"as per your quotation 7911-4 Revised on Date 8^th August 03

Original Quote - £34,335.50

Revised Quote - £52,815.50

Additional Cost £18,480.00 +VAT"

66. It also stated again "The conditions under which this order is placed are stated overleaf". It was faxed to P4 and is shown as being received at 17:45 on 12 August 2003. Mrs Warner confirmed that the office hours were generally 9:00 am to 5:30 pm. It therefore arrived after the P4 office had closed.
67. On 13 August 2003 P4 sent an Order Acknowledgement which was in the sum of £18,480.00, the balance of the new quotation over the former one. That made no reference to any conditions and they were none printed on the back. It merely referred to the "Customer Order No" which was a reference to Tudor's Order of 12 August 2003.
68. P4 originally pleaded simply that Tudor was bound by P4's Conditions. P4 submits that the quotation of 8 August 2003 incorporated P4's Conditions as they were printed on the reverse and the heading to the Conditions would be clearly visible through the paper. It now submits (subject to its entitlement to amend its pleadings) that if the January Agreement was not on P4's Conditions, then the terms of the 8 August 2003 quotation incorporating P4's Conditions bind Tudor, in any event. P4 submits that on 12 August 2003 Tudor placed an order for 162 Klippa Bulkhead units and these were despatched overnight on 12 August 2003. In this way, P4 contends that Tudor accepted P4's quotation of 8 August 2003 prior to receipt of Tudor's order. It also submits that this varied the terms of the January Agreement. The quotation offered amended quantities to those under the January Agreement. There was therefore a new agreement for the quantities set out in the quotation of 8 August 2003 and this agreement was on P4's Conditions.
69. Unite submits that the quotation of 8 August 2003 did not incorporate P4's Conditions. Rather, Tudor faxed an order to P4 on 12 August 2003 which incorporated Tudor's Conditions by the reference to those Conditions on the face of the order and the receipt by P4 of the copy of Tudor's Conditions which were on the reverse of the hard copy of Tudor's order of 21 January 2003. This hard copy of the order was stamped as having been received by post by P4 on 3 February 2003. Unite submits that this was a counteroffer which was accepted by P4's Order Acknowledgement dated 13 August 2003 which referred to Tudor's order but not to P4's quotation or Conditions. Alternatively, Unite submits that if the order of 12 August 2003 did not incorporate Tudor's Conditions then the order accepted P4's quotation which did not incorporate P4's Conditions and there was a simple contract on neither party's Conditions.
70. Unite objects to P4's new allegation in respect of the variation of the January Agreement which was only developed in closing submissions. It maintains that the formation of the agreement in August 2003 was on the basis pleaded above.
71. In this case, the first question is whether the offer made on 8 August 2003 was based on P4's Conditions. Were those terms incorporated into that offer? The rule in these cases is that set out in para 12-013 of Chitty on Contracts (29th Edition): "If a party tendering the document did what was reasonably sufficient to give the other party notice of the conditions, and if the other party knew that there was writing or printing on the document, but did not know it contained conditions, then the conditions will become the terms of the contract between them."
72. Did P4 do what was reasonably sufficient to give Tudor notice of the conditions? In White v. Blackmore [1972] 2 QB 651 at 664 A, Lord Denning said this:

"Applying the ticket cases, the question is whether reasonable notice was given of that condition. In my opinion it was not. It is settled law that a ticket on its face must say: "For conditions, see back." If it does not say it on the front, it is not sufficient to put a condition on the back. That was decided by the House of Lords in Henderson v. Stevenson (1875) L.R. 2 Sc. & Div. 470, and is so well settled that Anson's Law of Contract, 23rd ed. (1969), p. 146 says:

"It is the practice, for example, always to refer on the face of a ticket to the fact that there are conditions on the back. If this is not done, then following the case of Henderson v. Stevenson in 1875, the courts have consistently held that such a notification is defective." "

73. The Claimant relies upon Snow v. Woodcroft [1985] BCLC 54 where terms and conditions were printed on the back of a quotation form. Boreham J. held that the terms had been incorporated. In coming to that conclusion he stated that the question whether a party knew that there was writing on the reverse of the form could be established by evidence of that fact or inference from the facts and circumstances.
74. In that case, he accepted that there was an inference that the party must have been aware of the terms on the reverse of the document. He said at 59:

"The photocopies of that form give an inadequate and incomplete indication of its true appearance. When one sees the original it is apparent that the texture of the paper is such that, even after the relevant particulars have been typed on the face, it is clear that there is printing on the reverse. This document was received by a businessman, a director of the defendant company, whose own standard form had terms and conditions printed on the back, and who would have expected the print on the back to relate to any future contract between the parties. In the absence of any evidence to the contrary or some other significant circumstance pointing to the contrary, I should infer that he did acquaint himself with the print on the back, at least to the extent of discovering that it embodied contractual terms and conditions and, probably as to their purport."

75. In the present case, I have heard no evidence from Tudor to show whether they were aware of the Conditions of Sale. Evidently, Mrs Turner must have been aware of the existence of P4's Conditions when she received the credit application form with those Conditions but that was some seven months earlier, in January 2003. I have seen the documents, including the original document which contained P4's Conditions printed on the reverse. There was no reference on the front to there being Conditions. I have also considered whether Tudor ought to have realised that there was writing or P4's Conditions printed on the back of the quotation. I find that it was only evident that there was something printed on the reverse if the document was held up to the light, but that nothing was visible through the paper when the document is placed on a desk.
76. I have come to the conclusion that P4's Conditions were not sufficiently incorporated to form part of the quotation. This is not a case where they were referred to on the front or were otherwise drawn to the attention of Tudor. The document, unlike that in Snow v. Woodcroft, was not printed on a flimsy piece of paper so that the printing on the back was obvious.
77. P4 now relies on an inference that a conversation took place between Tudor and P4 at sometime on or prior 12 August 2003 which led to the further delivery (16/54) which P4 despatched overnight on 12 August 2003. There was no evidence of that conversation or whether it took place before or after Tudor received P4's Quotation. I do not accept that there is sufficient evidence to show that there was an oral acceptance of P4's Quotation of 8 August 2003. Indeed, to the contrary, P4's delivery note 16/54, which was only produced at the hearing, referred to the delivery being under Order No. Ac3254/36381/BB06 which was Tudor's Order of 20 January 2003. P4 therefore treated the delivery as being under the terms of the January Agreement and not as an acceptance of the quotation of 8 August 2003. Equally, P4's Invoice 6029 dated 13 August 2003 for the items on that delivery note also referred to Tudor's Order of 20 January 2003.
78. Rather, it seems to me that it was only by Tudor's Order of 12 August 2003 that, as it states, Tudor placed the order for the additional items. In my judgment, that was not a counter offer because it offered no alternative terms. It stated "Please note our terms & conditions on reverse". I do not consider that the fact that P4 had received a confirmation copy of Tudor's Order of 20 January 2003 which had, on its face, referred to the terms and conditions on the reverse and contained those terms on the reverse would mean that P4 had reasonable notice of these terms when it received Tudor's Order of 12 August 2003. Instead, just as P4's Quotation set out no Conditions, Tudor's Order also set out no alternative Conditions.
79. Again, P4 issued an Order Acknowledgement dated 13 August 2003. Under "Customer Order No." this referred to Tudor's Order of 12 August 2003. It also referred to "As per our quotation 7911-4 Revised", a reference to P4's quotation of 8 August 2003. It acknowledged an additional cost over that included in the January Agreement.
80. In the circumstances I find that, again, this agreement ("the August Agreement") was made by a simple offer and acceptance and was subject to neither P4's nor Tudor's Conditions. If, contrary to my view, P4's Quotation had incorporated P4's Conditions then I do not consider that the position would have been different. Tudor's Order referred to Tudor's Conditions and although those were not incorporated, it is difficult to treat that order as an unequivocal acceptance of P4's Conditions. It was a counter-offer on the basis of no conditions. That counter-offer would then have been accepted by P4's Order Acknowledgement.
81. Subsequent deliveries were made and invoiced one on 19 August; one on 22 August and two on 29 August 2003. These made reference to Order AC 3254/37418/SC26, Tudor's August 2003 order.
82. Those deliveries then contained all the remaining goods which were the subject of the August Agreement.
83. On 15 September 2003 P4 provided a further quotation for an additional 46 Klippa bulkhead units, together with some extra 2D fittings and collection boxes. That quotation was sent by post and had the P4 Conditions of Sale on the reverse.
84. An order was sent by Tudor (AC3254/37879/SC30) and made reference to Tudor's Conditions being stated overleaf. It seems from the fact that there is a fax number shown that this was faxed and therefore, again, did not incorporate P4's Conditions.
85. Again an Order Acknowledgement was sent by P4 which referred to Tudor's Order but not to P4's Quotation.
86. For the reasons given above, I consider again that this was a simple contract between the parties and did not incorporate either P4's or Tudor's Conditions. These goods were supplied and invoiced on 19 and 22 September 2003.
87. Then on 24 September 2003 Mr Husband of Unite phoned Mr Williams of P4 and placed an order for 24 Klippa bulkhead units and 2 circular 2D fittings. As originally pleaded by P4, that order, although placed by Mr Husband of Unite, was an order placed by Tudor: see paragraph 34 of the Amended Particulars of Claim. P4 now seeks permission to amend to add a claim on the basis that an agreement was formed by P4 with Unite and not Tudor.
88. The order was placed orally and noted by someone at P4 on an enquiry/order form on 24 September 2003. P4 sent out an Order Acknowledgment which stated that the "customer order no." was Richard Iles, who was an employee of Tudor. The document was addressed to Tudor but made no reference to P4's Conditions. There was no order from Tudor and none of the documentation refers to any terms and conditions. I do not consider that this contract was subject to either P4's or Tudor's Conditions.
89. The goods ordered on 24 September 2003 were then supplied and invoiced to Tudor on 24 September 2003
90. On 9 October 2003 at 10:17 Tudor then sent through a further order AC3214/37970, requesting the urgent supply of bulkhead units and 10 circular 2D fittings. They were delivered on 9 October 2003 and an order acknowledgment was sent to Tudor by P4 also on 9 October 2003.
91. Because Tudor's Order was faxed it did not incorporate Tudor's Conditions and P4's order acknowledgment had no conditions. The result is therefore that, again, this contract was not based on either P4's or Tudor's Conditions.
92. I therefore conclude that none of the contracts incorporated either P4's or Tudor's Conditions. As a result, P4's retention of title clause was not incorporated into any of the contracts between P4 and Tudor so that P4's claim based on that retention of title clause fails.
93. However, having heard full argument on them, I now go on to consider the other issues in this case.

Did P4 assign its right to immediate possession?

94. Unite contends that for P4 to succeed in any claim for conversion it must prove that at the time of the conversion it had an immediate right to possession.
95. It is Unite's case that any immediate right to possession of the goods which P4 had under clause 9 of P4's Conditions was assigned to Abbey National under an invoice factoring agreement between P4 and Abbey National.
96. The assignment relied upon by Unite is referred to on each invoice where it stated: "This account has been assigned to and paid to Abbey National Business Cashflow Finance Ltd c/o P4 Ltd.". The assignment was the subject of an agreement between P4 and Abbey National Business Cashflow Finance Limited ("Abbey National") made when P4 accepted Abbey National's offer made on 24 January 2003.
97. Unite refers to clauses 2 and 4.1 of the terms set out in Abbey National's letter dated 24 January 2003 and submits that P4 sold all Debts in existence at the time of the agreement and all Debts which were to come into existence, to Abbey National.
98. Unite refers to the definition of Debt at clause 17 of Abbey National's Conditions which provides that:

""Debt" the amount (or, where the context allows, a part of such amount) of any obligation or indebtedness, including any tax or duty payable, incurred by a Customer under a Supply Contract together with (where the context allows) any Related Rights pertaining to such obligation or indebtedness."

99. Unite also refers to the definition of "Related Rights" in clause 17 as "(i) all your rights under a Supply Contract…" and the definition of a "Supply Contract" as "a contract for the supply of Goods by you giving rise to a Debt purchased by us under the Agreement."
100. Unite relies on clause 4 by which all Debts are Approved Debts unless the Debt remains outstanding at the end of the Maximum Credit Period, at which time it becomes a Disapproved Debt. That Maximum Credit Period is defined at clause 17 as "the period of the length specified in Clause 4.8 starting on the date of the invoice representing that Debt". Unite points to Abbey National's letter dated 24 January 2003 which at clause 4.8 defines the period as 123 days.
101. Unite submits that as a result any rights under clause 9 of P4's Conditions were Related Rights which were assigned to Abbey National for a period of 123 days (about 4 months) from the date of the invoices. As the earliest unpaid invoice was dated 11 August 2003 and the latest was dated 9 October 2003 Unite contends that at the relevant time when the conversion is alleged to have taken place the rights under clause 9 had been assigned to Abbey National and remained with Abbey National until at least mid-December 2003.
102. P4 disputes that. It contends that the right under clause 9 has not been assigned, but in any event, the cause of action for conversion could revert to P4. It contends that Abbey National's rights in respect of the Tudor Invoices came to an end. It relies on a letter dated 18 November 2005 from Five Arrows Commercial Finance Limited ("Five Arrows") which sets out:

"Following our conversation regarding the old invoices for Tudor M/E services Ltd ("Tudor"), I can confirm that under the terms of your agreement any invoice beyond 123 days is reserved against and hence withheld from funding. Five Arrows Commercial Finance took over your Abbey Invoice Discounting facility on 1 July 2004 and continued holding this reserve so did not fund against the "Tudor" invoices.

Following your instruction we wrote off the sum of £73,933.36 in relation to the 'Tudor' debt on 18 April 2005, so removing it from your assigned ledger."

103. In addition P4, refers to clause 1.4 of Abbey National's Conditions which provides:

"We shall have the right by oral or written notice to have transferred to us by you the ownership of any other Goods (the subject of a Supply Contract) of which the ownership shall not have passed to the Customer."

104. P4 contends that there is no evidence that Abbey National gave either an oral or written notice to have ownership of the goods transferred. It further submits that the arrangement under the factoring agreement was one by which the debt, not the asset, was assigned.
105. I now consider those arguments. In principle, if the retention of title clause had been incorporated into any of the contracts between P4 and Tudor, then the claim for conversion based on that clause could only be brought by a party entitled to possession at the time of conversion: see Clerk & Lindsell on Torts (19th Ed.) at para 17-40.
106. In this case I accept Unite's submission that clauses 2 and 4.1 of the offer letter between P4 and Abbey National had the effect of assigning to Abbey National the right to payment of the sums due from Tudor in respect of P4's invoices.
107. Given the definition of Debt in clause 17 of Abbey National's Conditions, I consider that in addition to assignment of the sum due under the invoice, P4 also assigned to Abbey National the "Related Rights" which P4 had under the supply agreement which gave rise to the amount assigned. In my judgement, those Related Rights would have included the retention of title rights under clause 9 of P4's Conditions. I do not consider that P4's reliance on clause 1.4 of Abbey National's Conditions affects the position. The rights under clause 9 of P4's Conditions were Related Rights and did not require notice under clause 1.4 of Abbey National's Standard Terms to pass those rights to Abbey National.
108. On that basis, any rights under Clause 9 of P4's Conditions would have passed to Abbey National and it is Abbey National who would have been entitled to possession at the time of the alleged conversion. That, however, would not prevent P4 from acquiring the right to sue. At para 17-43 of Clerk & Lindsell on Torts the editors cite Bristol & West of England Bank v. Midland Railway Co [1891] 2 QB 653 for the proposition that "if at the time goods are converted X has title to sue for that conversion, then this right to sue will (it seems) pass to any subsequent purchaser from X." In my judgment, P4 is correct in stating that when Abbey National's rights in respect of the Tudor invoices came to an end, any rights to sue for conversion of the goods became vested in P4 and I accept that the letter from Five Arrows of 18 November 2005 establishes that those rights did come to an end.
109. Accordingly, in my judgment, P4 did have the right to sue in respect of any conversion, despite the fact that at the date of the alleged conversion any rights under P4's retention of title clause would have been assigned to Abbey National.

Is Unite protected by s.25(1) of the Sale of Goods Act 1979

110. This raises an issue as to whether Unite could, in any event, overcome a claim by P4. It also raises a question as to the scope of my judgment dated 4 November 2005 on Unite's Application for Part 24 Summary Judgment. The particular issue concerns the nature of a disposition required to give rise to the protection under s.25 (1) of the sale of Goods Act 1979.
111. In paragraph 18 of my Judgment of 4 November 2005 I said this:

"The question raised by that case was whether or not the "other disposition" within section 25 has to be a sale, or of the nature of a sale, under which title has passed. In my view it does not and the word "disposition", as submitted by Miss Garrett, is of wide application and would be wide enough in this case to include an agreement of the nature contained in clauses 21.4.5.2 or 21.4.5.3. However, that does not mean that, when the "other disposition" is in the nature of an agreement, it has the same effect as if there had been a sale. In other words, if there is a sale there is the transfer of title but, in my judgment, if there is another form of disposition which does not transfer title then section 25 of the Sale of Goods Act does not give rise to a transfer of title merely because a "disposition" is in the same phrase as a sale."

112. Unite submits therefore that an agreement for sale under the provisions of clause 21.4.5 of the Sub-Contract is sufficient to amount to a disposition under section 25(1) of the 1979 of the Sale of Goods Act.
113. P4 submits that Clause 21.4.5 of the Sub-Contract is an agreement for disposition and only becomes a disposition upon the transfer of property. P4 summits that there is no transfer of property until the payment provisions under clauses 21.4.5.2 or 21.4.5.3 have been satisfied.
114. P4 submits that there is binding Court of Appeal authority in the form of the decision in Worcester Finance v. Cooden Engineering [1972] 1 QB 210. In that case, it was held that a company which re-took possession of a car, which they had sold in exchange for a dishonoured cheque, had taken possession under a disposition. The meaning of disposition was dealt with differently by the three members of the Court of Appeal:

(1) Lord Denning at 218 said that the word "disposition" was a very wide word and cited what Stirling J. had said in Carter v Carter [1896] 1 Ch 62 at 67, that a disposition extends "to all acts by which a new interest (legal or equitable) in the property is effectively created ".

(2) Phillimore LJ at 219 said that "to constitute a disposition the dealing with the goods must go beyond the mere transfer or delivery of them: there must be some disposal which involved transfer of property"

(3) Megaw LJ at 230 said " "Disposition" must involve some transfer of an interest in property, in the technical sense of the word "property" as contrasted with mere possession."

115. These extracts show, in my judgment, that a disposition does not have to be a full transfer of property in the goods. There can be a transfer of an interest, legal or equitable, in the goods.
116. I turn now to clause 21.4.5 of DOM/2 and consider whether it creates a disposition. It is correct, as P4 submits, that there is no transfer of property in the goods until the payment provisions under clause 21.4.5.2 or 21.4.5.3 have been satisfied. However it is necessary to consider the whole of clause 21.4.5.
117. Clause 21.4.5.1 provides that, when unfixed materials and goods are "delivered to, placed on or adjacent to the Works by the Sub-Contractor and intended therefor" then they "shall not be removed except for use on the Works unless the Contractor has consented in writing to such removal, which consent shall not be unreasonably withheld".
118. They then become the property of either the Employer (under clause 21.4.5.2) or the contractor (under clause 21.4.5.3) when payment is made.
119. Evidently, the transaction between the sub-contractor and the contractor, under clause 21.4.5.2 and 21.4.5.3 is not a "sale" under the Sale of Goods Act 1979 as it is a contract for works and materials. It is however, an agreement under which, on payment, property will pass. However, prior to the passing of property which occurs on payment under clauses 21.4.5.2 or 21.4.5.3, there is in my judgment an interest in property created under clause 21.4.5.
120. Under Clause 21.4.5.1, once the unfixed materials and goods are delivered then the sub-contractor cannot remove them except to use in the works, subject to the consent of the contractor to the removal of these materials and goods. The sub-contractor therefore gives up most of the characteristics of ownership of the goods or materials, pending payment. This in my judgment amounts to a sufficient transfer of an interest, legal or equitable, in property of those goods and materials to amount to a "disposition"..
121. The contractor does not have "mere possession" of the goods and materials. As part of the disposition of the goods or materials under clause 21.4.5 the contractor obtains an interest in the property in those goods and materials and then the transfer of the property takes place under clauses 21.4.5.2 or 21.4.5.3 as appropriate.
122. I therefore find that when goods and materials are "delivered to, placed on or adjacent to the works" the agreement that leads to the passing of property under clause 21.4.5.2 or 21.4.5.3 gives rise to a sufficient "disposition" within the meaning of Section 25(1) of the Sale of Goods Act 1979. That "disposition" is not however sufficient to transfer property unless and until payment has been made under clauses 21.4.5.2 or 21.4.5.3. I now consider whether and when that has occurred.

Did property vest in Unite under DOM 21.4.5?

123. In order for property to pass under clause 21.4.5 there is a requirement for payment. Under clause 21.4.5.2 property passes to the Employer if "the value of any such materials or goods shall have been included in the amount due as an interim payment and that interim payment has been discharged by the Employer in favour of the Contractor". Alternatively, if before payment under clause 21.4.5.2 "the Contractor shall pay the Sub-Contractor for any such materials or goods", then clause 21.4.5.3 provides that property passes to the Contractor.
124. It is therefore necessary to consider whether and when payment was made in this case.
125. The payment position is dealt with by Mr. Andrew Smith in his first witness statement. His conclusion is that, although he was able to ascertain and schedule what payments were made to Unite (as Contractor) by Hiremaxi (as Employer) under the Main Contract, he could not be sure whether any given payment made by Unite to Tudor under the Sub-Contract was made before or after Unite was paid by Hiremaxi. As a result, he said that he believed that the true position was that Unite could not be certain who paid first. Consequently, Unite applied for and obtained permission to make a late amendment to paragraph 83 of the Amended Defence to plead as follows: "Unite will say that the payment of £190,000 was a payment within the meaning of clause 21.4.5.3 or 21.4.5.2 of DOM/2 and, in accordance with that clause, property in unfixed goods both on and off site passed to Unite or the Employer at the time of that payment."
126. I therefore turn to consider whether the payment of £190,000 was made either under the Main Contract or under the Sub-Contract and whether it could amount to payment as required under clause 21.4.5.2 or 21.4.5.3.
127. The scheme of Clause 21 of the Sub-Contract is as follows:

(1) Clause 21.3.1 states that each interim payment to the Sub-Contractor shall be the Contractor's gross valuation of the sums referred to in clause 21.4, less certain sums.

(2) Clause 21.4 states that the gross valuation shall be made up of the amount referred to in clauses 21.4.1 and 21.4.2 less the total amount referred to in clause 21.4.3.

(3) Clause 21.4.1 contains three sub-clauses. Clause 21.4.1.1 concerns "the total value of the sub-contract work on site"; clause 21.4.1.2 concerns "the total value of the materials and goods delivered to or adjacent to the Works for incorporation therein by the Sub-Contractor but not so incorporated" and clause 21.4.1.3 concerns the "total value of any materials or goods other than those to which clause 21.4.1.2. refers where listed by the Employer under clause 15.2 of the Main Contract Conditions and where the conditions set out in clause 15.2 have been fulfilled."

128. Unite submits that as a consequence of payments made in respect of Tudor's applications 1 to 7 and the subsequent payment of £190,000 under the September Agreement, Unite had paid Tudor under Clause 21 for 100% (less retention) of the "lighting, small power, and heating" element of Tudor's sub-contract. As P4's goods would fall under this element, Unite contends that the payment therefore included payment for all of P4's goods.
129. Unite relies on the process of payment under Clause 21 of the Sub-Contract being as follows:

(1) Clauses 21.3.1 and 21.4 oblige Unite to make interim payments which must include payment for work done and for certain goods and materials;

(2) Clause 21.4.1 draws a distinction between goods and materials which have already been included in an Interim Payment under the Main Contract and paid for by the Employer, and those which have not;

(3) Clause 21.4.1.1 requires Unite to include payment for goods which have been installed whether or not those goods have already been paid for by the Employer;

(4) Clause 21.4.1.2 requires Unite to include payment for goods which are on site but unfixed whether or not those goods have already been paid for by the Employer;

(5) On the proper construction of clause 21.4.1.3 in conjunction with clauses 15.2 and 30.1.2 of the Main Contract, as amended, Unite must include payment for off-site goods only where such goods have already been paid for by the Employer;

(6) Unite is not prevented by the subcontract from making payments in excess of those which it is obliged to make pursuant to clause 21.3.1 and 21.4;

(7) On a proper construction of clauses 21.4.5.2 and 21.4.5.3, the phrase "any such materials or goods" must refer to both on site and off site goods. This is because:

(a) Both clause 21.4.5.2 and 21.4.5.3 refer to clauses 30.2A and 30.2B of the Main Contract which both expressly refer to payment for off-site goods.

(b) The parties intended under Clause 21.4 that property in unfixed goods would pass on payment and it is unrealistic and uncommercial to suppose that the parties drew a distinction between on site and off-site unfixed goods which they did not then see fit specifically to identify in the contract;

(c) The heading to Clause 21.4.5 in the JCT form, which it is accepted can only be indicative, reads "Property in unfixed materials and goods" and makes no distinction between on and off-site goods (such as is made elsewhere);

(8) There is nothing in clause 21.4.5 to suggest that it does not apply where Unite makes a payment which is more than the payment which Unite was obliged to make pursuant to clause 21.3.1 and 21.4.1 to 21.4.3. Indeed, it would be odd if this were the case since the parties cannot have intended that if the Contractor pays the Sub-Contractor monies in advance this has the effect of disapplying the vesting provisions. The trigger for the operation of clauses 21.4.5.2 and 3 is either payment by the contractor or payment by the Employer respectively: nothing else;

130. Unite submits that payments made by it in respect of Tudor's applications 1 to 7 were payments made pursuant to the Sub-Contract and, for the reasons set out above, it does not matter whether Tudor was strictly due to be paid the entirety of their application on each occasion.
131. Unite also submits that the payment of £190,000 made under the September Agreement was also a payment made pursuant to the Sub-Contract because:

(a) The September Agreement was an agreement by the parties as to what monies remained to be paid under the Sub-Contract. It followed a dispute in relation to what sum was due under application no. 8 and it was an agreement as to what would be paid in respect of that application and what would be paid in respect of the remainder of the Sub-Contract Works;

(b) The parties treated it as a payment made under the Sub-Contract in generating a certificate and self bill invoice in respect of it (as had been done in relation to previous applications);

132. As a result, Unite submits that the payments made by Unite to Tudor, through applications 1 to 7 and payment of the sum of £190,000, amounted to 100% (less retention) of the "Lighting, Small Power and Heating" element of Tudor's Sub-Contract into which P4's goods would fall and therefore included payment for P4's goods. Accordingly, Unite had by the payment of £190,000 in September 2003, paid Tudor for P4's goods and pursuant to either clause 21.4.5.2 or 21.4.5.3, on that payment title in the goods passed to either the Employer or Unite respectively.
133. P4 does not accept that. It challenges the submission that under clause 21.4.1.3 Unite must include payment for off-site goods where such goods have been paid for by the Employer under Clause 15.2 of the Main Contract. Because of the amendments to clause 15 of the Main Contract, P4 submits that there is no mechanism for the inclusion of off-site materials in a valuation. It also contends that clauses 21.4.5.2 and 21.4.5.3 only refer to on-site materials and goods.
134. P4 also refers to Unite's acceptance that in Tudor's application no reference was made to individual components supplied by Tudor and installed and/or kept at site. P4 submits that there is no evidence that a valuation of unfixed materials and goods supplied by P4 and delivered to site, was ever undertaken for the purposes of Clauses 21.4.5.2 or 21.4.5.3. P4 contends that inclusion of a value for unfixed materials is a necessary condition for the effective operation of the vesting provisions under Clause 21.4.5.2 and under Clause 21.4.5.3 it is also necessary that the goods or materials are paid for by Unite.
135. P4 refers to the statement in Mr Bacon's Witness Statement in relation to a Part 18 Request that Unite should "identify (a) what sums were paid to Tudor in respect of goods supplied by [P4] for the FASTEL Lighting System and (b) how the said sums were paid and (c) when the sums were paid." The response was:

"Tudor have been paid £1,754,901.77 less retention of £87,745.08 plus VAT for the sub-contracted mechanical and electrical works at Orion's Point the specification for which included the design and installation of the emergency lighting system for which P4 were the actual suppliers. I believe Unite has paid Tudor 100% of the lighting, small power and heating element of the works, into which P4's goods would fall."

136. P4 submits that there is no evidence of payment by Unite for goods or materials that were unfixed on site for the purposes of Clause 21.4.5.3 or that such payment was made before the value of the goods had been included in an Interim Payment. P4 also notes that none of the goods for which it claims could have been included in the applications 1 to 7 covering the period January to July 2003 as the first invoice for which P4 makes a claim is dated 11 August 2003.
137. P4 therefore submits that Unite cannot show that the vesting mechanism under Clause 21.4.5.3 was engaged.
138. In relation to Clause 21.4.5.2, P4 submits that for the value of goods and materials to be included in an Interim Payment it is necessary that a value should be attributed to the relevant goods and materials otherwise it would be impossible to ascertain what materials vested or when they vested. Thus, P4 contends that attribution and inclusion of value in the Interim Payment and discharge of the Interim Payment are necessary conditions for vesting under clause 21.4..5.2.
139. P4 submits that reliance by Unite on a general valuation is insufficient and refers to Hudson on Building and Engineering Contracts (11th Ed.) at para 11-044 where the editor comments that in the absence of explicit terms passing the property in materials to the owner, the provisions commonly found in construction contracts for instalment or other progress payments on account calculated by reference to the value of the materials or goods brought onto site will not, by themselves, have the effect of passing any property in the unfixed materials to the owner, whether on delivery to the site or on subsequent certification or payment of their value.
140. P4 submits that Pearson J.'s judgment in Banbury Railway Company v. Daniel (1884) 54 LJ Ch 265 to the effect that, by inference, property passed in goods and materials on certification must be read in the light of the judgment of White J. in South Australia in Egan v. State Transport Authority (1982) SASR 481 where he said:

(1) At 537:

"My main reason for not following Banbury's case is that I am unable to accept the proposition that payments made with reference to the value of materials – materials being the external 'yardstick' used by the parties which, they hope, will soon be incorporated into the works – have the effect of creating any property interest in the paying owner. Payments have long been recognised as being merely agreed instalments in reduction of a lump sum price, made on that account to keep the building contractor on the job. The purpose of instalment payment is not to pay for the materials, in the sense that a purchaser of land or specific goods pays money for, or towards the purchase price. Instalment payments are made in contracts like this as a practical measure to enable the contractor to keep working under the contract; they are made also in reduction of the lump sum contract price. Such payments have been described as the lifeblood of the contract."

(2) Later at p 542:

"the progress payments were not allocated to, appropriated specifically for, or advanced against, the purchase of the materials …. Banbury … is not, or ought not to be, authority for the proposition that interim instalments or progress payments are in themselves evidence of payment for materials."

141. P4 therefore submits that Unite is unable to show that any unfixed materials were valued for the purposes of any certificate; what value was given to any unfixed materials; or when any payment was made that included the value of any unfixed materials.
142. I now consider those submissions. In my judgment the amendment to Clause 15 of the Main Contract meant that, whilst clause 15.1 remained, the provision for "listed items" to be included in Interim Payments was deleted. This means that only "unfixed materials and goods delivered to, placed on or adjacent to the Works and intended therefor" referred to in clause 15.1 were included in Interim Payments under the Main Contract. The "listed items" in Clause 15.2, being "materials or goods or items pre-fabricated for inclusion in the Works" were not included in the amended Clause 15.2. As a result, there were therefore no materials and goods "listed by the employer under clause 15.2 of the Main Contract" for the purpose of clause 21.4.1.3.
143. The reference in clause 21.4.5.2 and 21.4.5.3 to "any such materials or goods" is, in my judgment, a reference to the materials and goods referred to in clause 21.4.5.1 which are "unfixed materials and goods delivered to, placed on or adjacent to the works", that is, on-site materials and goods. I do not consider that the reference in those clauses to clauses 30.2A and 30.2B of the Main Contract means that off-site materials and goods are dealt with under clauses 21.4.5.2 and 21.4.5.3 of the Sub-Contract. Clause 30.2A of the Main Contract applies where Interim Payments are made on the basis of Stage Payments. Those Stage Payments may include on-site materials and goods: see Clause 30.2A.4. Clause 30.2B of the Main Contract applies where work is valued and Clause 30.2B.1.2 expressly refers to on-site materials and goods. In addition, Clause 30.2A.1.3 and Clause 30.2B.1.3 also refer to "amounts due pursuant to clause 15.2", that is off-site materials. Therefore Clauses 30.2A and 30.2B of the Main Contract could apply to both or either of on-site and off-site goods and materials. Given the use of the word "such" describing the relevant materials and goods in Clauses 21.4.5.2 and 21.4.5.3, I consider that this must be a reference to the materials and goods identified in Clause 21.4.5.1 which is limited to on-site materials and goods. In any event, because of the deletion of Clause 15.2 of the Main Contract, the reference to Clauses 30.2A and 30.2B could not, in this case, include off-site materials and goods. In coming to a decision on this aspect, I do not derive any assistance from the marginal heading which refers to "unfixed materials and goods" although, if anything, "unfixed" would seem to refer to goods unfixed but on-site rather than prefabricated off-site items.
144. In my judgment, as set out in Egan and as summarised in Hudson, the general valuation of a lump sum for work carried out does not indicate what materials or goods have been paid for and is insufficient for property in particular goods to pass. In this case, whilst there were express provisions for passing of property, I consider that to operate those provisions it is necessary to identify with particularity the materials and goods which are the subject of payment, if property is to pass. A general lump sum interim valuation is insufficient and does not lead, in this case, to certain goods becoming the property of Unite or the Employer under Clauses 21.4.5.3 or 21.4.5.2.
145. Up to and including valuation 7 it is therefore not possible to identify on-site goods and materials which have been paid for by payment under those provisions. In any event, valuations 1 to 7 did not include the relevant goods and materials which had not been delivered to site by the date of valuation 7 for July 2003.
146. In addition, there is no evidence to show that any particular interim payment under the Main Contract identified on-site goods and materials in respect of which payment was made by the Employer to the Contractor.
147. In those circumstances, the question whether payment was made for on-site goods and materials depends on whether it is possible to construe the payment of £190,000 as being for particular goods and materials. I deal with this issue below. First, however, I deal with an issue on the scope of Tudor's obligation under the Sub-Contract which is relevant to that payment.

Emergency Lighting for Summer Letting

148. There is one particular relevant issue as to the scope of the obligation of Tudor under the Sub-Contract. Whilst there is no dispute that Tudor was obliged to supply an emergency lighting installation, the question arises whether this included an obligation for Tudor to supply the necessary additional emergency lighting for the development to be used as a "summer let" which required an increased number of fittings or whether Tudor's obligation was limited to the supply of the lower number needed for use as a student residence.
149. P4 contends that the materials in the revised quotation in August 2003, which led to the August Agreement, were necessary so that the development could be used for summer letting and that this was not part of Tudor's original obligation and was not therefore covered by any payment under the Sub-Contract.
150. It is therefore necessary to consider, first, the obligations of Tudor under the Sub-Contract and then, secondly, the scope and extent of the obligations under the September Agreement pursuant to which the £190,000 was paid, to the extent that they differed.
151. Turning to the first issue, the obligations of Tudor under the Sub-Contract are set out in Article 1.2 which provides:

"The Subcontractor shall upon and subject to the Subcontract Documents and provisions of the Main Contract carry out and complete the Subcontract Works shown upon and described by or referenced to in those documents."

152. The Sub-Contract Works are defined as "Design and installation of mechanical and electrical services". Clause 5.1.1 also contains a requirement for Tudor to comply with the relevant provisions of the Main Contract.
153. In relation to Emergency Lighting, Numbered Document 2 of the Sub-Contract contains an outline specification which at clause 6.4.26 provides:

"A system of self test self contained emergency lighting shall be designed which shall incorporate a central addressable emergency lighting control distribution panel, providing for 3 hour support for illumination for safe exit from the building and for the illumination of exit signs. The battery life shall not be less than 5 years. The system shall be designed generally on the non-maintained principle. The emergency lighting specialist supplier shall also supply the emergency exit signs for Schedule of Emergency Lighting Luminaries."

154. Appendix E to that specification contained that Schedule of Emergency Lighting Luminaires by type, but not by number.
155. Unite relies on Clause 4.05.09 of Volume 1 of the Employer's Requirements under the Main Contract which provides:

"The Contractor shall be responsible for obtaining Building Regulations Approval, Building Notices and the Building Regulations Completion Certificate, the latter to be obtained prior to the Employer's issue of the Statement of Practical Completion.

Unite intend to directly let the accommodation outside of university term time. The Contractor will liaise with the relevant authorities to ensure that the building fully complies with building regulations and is fully complaint for its intended use.

Notwithstanding anything contained in the Articles of Agreement, Conditions or Appendices the contractor shall not be entitled to any extension of time or additional payment as a result of any delays or costs incurred in obtaining Building Regulation Approval."

156. This raises two questions. First, whether this provision is apt to incorporate a requirement for the design and installation to cover summer letting and the additional emergency lighting for that purpose. Secondly, if so, was that reference in the Employers Requirements in the Main Contract sufficient to make the obligation part of Tudor's Sub-Contract.
157. Unite submits that Clause 4.05.09 is sufficient to incorporate a requirement for the emergency lighting to be fully compliant with the intended use for summer letting, that is the direct letting of this accommodation outside university term time.
158. Unite also submits that Tudor had to comply with that Main Contract obligation. It refers first to the definition of the Main Contract in Clause 1.3 of the Sub-Contract. Unite then relies on Clause 5.1 of the Sub-Contract which required Tudor to "observe, perform and comply with all the provisions of the Main Contract as referred to in the Appendix part 1 … so far as they relate and apply to the Sub-Contract Works (or any portion of the same)." Unite points to references in Appendix Part 1 to the Employer's Requirements. At Part 1 Section A it refers to the documents relevant to the Sub-Contract Works being available for inspection and at part 1 Section D to particular documents containing the Employer's Requirements being specifically identified.
159. Unite submits that those references are sufficient to incorporate the obligation and that other issues raised by P4, such as whether Tudor did in fact check the Employer's Requirements, are irrelevant.
160. P4 contends that the requirement to provide additional emergency lighting for summer letting was not part of the original Sub-Contract. Whilst P4 does not seriously challenge the fact that Clause 4.05.09 of the Employer's Requirements would impose an obligation upon Unite to provide emergency lighting, it contends that the failure to include a specific provision for the summer letting requirement or to mention that specific part of the Employer's Requirements in the Sub-Contract Documents means that it was not intended that the requirement would apply to Tudor's Sub-Contract Works.
161. In my judgment, the provision contained in Clause 4.05.09 of the Employer's Requirements was sufficient to impose an obligation under the Main Contract requiring the Emergency Lighting to comply with the use for summer letting. The Sub-Contract Works were a subset of the Main Contract Works and the effect of Article 1.2 and Clause 5.1.1 of the Sub-Contract was to make the relevant requirements of the Main Contract part of the Sub-Contract. Whilst, it would have been better to have included an express reference to the obligation in Clause 4.05.09 of the Employer's Requirements, that was not required as a matter of law to incorporate the obligation. Article 1.1 of the Sub-Contract provided that Tudor was deemed to have notice of all the requirements of the Main Contract and the Appendix to the Sub-Contract identified the relevant documents.
162. As a result, in my judgment the requirement for the emergency lighting installations to comply with use of the development for summer letting was part of Tudor's obligation to Unite under the Sub-Contract.

Payment of £190,000 under the September Agreement

163. The second issue concerns the scope and extent of the obligations under the September Agreement, to the extent that they differed from those under the Sub-Contract and, in particular, the effect of the payment of £190,000.
164. The way in which payment was made is dealt with by Mr. Peter Bacon, who. at the time, was Regional Quantity Surveyor for Unite. Until Application No. 8 for August 2003, payment had been made by way of interim valuations of the Sub-Contract Works based on an assessment of the sums applied for by Tudor in its applications.
165. In Application No. 8, Tudor applied for payment for "Lighting, Small Power and Heating" in the sum of £260,927.00. This was on the basis that the work was 95% complete and the relevant tender sum was £274,660.00. In additions Tudor applied under item 70 for "Additional light fittings and wiring due to summer letting: TBA". In other words, Tudor contended that the summer letting obligation was a variation.
166. Mr. Bacon allowed, in full, the sum of £260,927.00 applied for by Tudor but allowed nothing extra for Item 70.
167. Mr. Bacon's valuation was then sent to Tudor on 15 September 2003 and he recalls that on 16 September 2003 Tudor removed all their labour from the site and requested a meeting which Mr. Bacon subsequently attended at Tudor's offices in Birmingham on 17 September 2003.
168. The outcome of that meeting was the September Agreement under which Tudor made various commitments to complete work by particular dates, and Unite agreed to make a further payment of £190,000 followed by a further payments to cover the costs of labour only.
169. That agreement was dated 17 September 2003 and was signed by both parties. It included the statement that "All services required for occupancy and to meet statutory requirements to be available at earliest occupation date for each block". That would necessarily include emergency lighting provision.
170. On the basis of that agreement, further sums were to be paid only in respect of the costs of labour. It follows, in my judgment, that the cost of materials was agreed to have been included in the payments made up to that date, together with the payment of £190,000. That sum of £190,000 was paid on 18 September 2003, with the VAT element being paid on 19 September 2003.
171. I therefore conclude that by 19 September 2003 Unite had paid for all the emergency lighting fittings which were necessary for Tudor to carry out the Sub-Contract Works. That would include goods delivered or installed and any goods still to be delivered and installed. It would also include the goods necessary to comply with the summer letting obligation.
172. On that basis, the question arises as to what effect that payment had in terms of Clause 21.4.5.3. In my draft judgment I had set out the conclusion which I had reached on that point. P4 applied to me to have an opportunity to address me further on this issue as it submitted that it had not been given an opportunity to do so. It is common ground that Unite's case at paragraph 83 of the Re-Amended Defence had been pleaded on the basis that the payment of £190,000 had the effect of passing property in on-site and off-site goods and materials to Unite "at the time of payment". In the light of my conclusion that the property in off-site goods and materials could not be passed to Unite, the question arose what effect, if any, that payment had in relation to passing property in the goods and materials which had not then been delivered to site but were subsequently delivered to site and had, as I concluded, already been paid for.
173. In closing oral submissions, Unite's position was that the payment of £190,000 was a payment under the sub-contract; it included the value of all goods and materials required and it therefore triggered the vesting provisions of Clause 21.4.5.3. P4's position was that the payment of £190,000 could not vest goods and materials not yet on site. Whilst it seemed to me that this raised the issue on which I had based my conclusion, I accept that the focus of the argument in closing submissions was different. It is a point of law which developed in argument. I decided that Unite should be entitled to pursue the point, P4 should have an opportunity to address me on it and any impact on costs would be dealt with when I considered costs. I therefore turn to that point.
174. Two issues are raised by my decision that the payment of £190,000 meant that by 19 September 2003 Unite had paid for all the emergency light fittings which were necessary for Tudor to carry out the Sub-Contract Works. First, was that payment effective to pass to Unite the property in goods and materials which had been delivered to site and were unfixed on 19 September and, secondly, was that payment effective to pass to Unite the property of goods and materials delivered to site after 19 September?
175. P4 submitted that the payment of £190,000 should be treated as a general lump sum interim payment and therefore was not sufficient to pass property under Clause 21.4.5.3. Alternatively, if it were sufficient to pass property, Clause 21.4.5.3 should be construed strictly and could not apply to a situation where payment was made before the goods and materials were delivered to site. Unite submitted that the payment of £190,000 was not a general lump sum payment but included payment for all the goods and materials. Under Clause 21.4.5.3, it therefore passed property in goods and materials on site on 19 September 2003 and, when goods and materials were subsequently delivered to site, on delivery to site. The first question to consider is therefore the nature of the payment of £190,000.
176. Whilst, as I have stated above, a general lump sum valuation of work will not be sufficient to vest materials and goods under Clause 21.4.5.2 or 21.4.5.3, I consider that the payment provision under the September Agreement was sufficient to do so. In my judgment, the September Agreement was intended to and did make an agreed change to the mode of payment of the Sub-Contract. I accept that, as P4 submits, the Sub-Contract Works did not change. Rather, various obligations were changed and, in particular, the mode of payment, but not the effect of payment, was changed.
177. In this context, Clause 21.4.5.3 provides that "…such materials and goods shall upon such payment by the Contractor be and become the property of the Contractor." On that basis, I consider that the payment was effective to pass property to Unite in respect of all goods and materials which had been delivered to site but were unfixed on 19 September 2003.
178. That leaves the question of whether Clause 21.4.5.3 was effective to pass property in unfixed goods and materials delivered subsequently. P4 submits that Clause 21.4.5.3 passes property in unfixed goods and materials which are delivered to site but does so "upon payment" and therefore, construing Clause 21.4.5.3 strictly, it cannot apply to unfixed goods and materials which have already been paid for. Rather it says that property in those goods and materials only passes when the goods and materials are incorporated into the works.
179. I consider that Clause 21.4.5.3 has to be construed in the light of the amended mode of payment agreed in the September Agreement. I accept that under Clause 21.4.5.3, delivery to site of unfixed goods and materials and then subsequent payment would be the normal situation but this does not answer the question of how that provision is to be construed in the light of the amendment. It seems to me that passing of property under Clause 21.4.5.3 requires two things. First, there must be delivery of goods and materials which are unfixed. Secondly, there must be payment for those goods and materials. If, as I have held, payment was made before delivery then those two conditions are satisfied when the goods and materials, which have been paid for, are delivered to site. In my judgment, objectively construing the effect of the September Agreement with Clause 21.4.5.3, property in goods and materials paid for under that agreement passed on delivery to site.
180. As a result, in my judgment, goods and materials which were present on-site on 19 September 2003 and also goods and materials subsequently delivered to site had been paid for as required under Clause 21.4.5.3. Subject to the position under Clause 21.4.5.2, they would therefore become the property of Unite either on 19 September 2003 or, because they had already been paid for prior to delivery, upon delivery to site.
181. So far as Clause 21.4.5.2 is concerned, it is not clear whether payment was made by Hiremaxi to Unite prior to Unite paying Tudor. However, in relation to the claim by P4, the position is that property in the goods and materials supplied by P4 to Tudor for the purpose of the Sub-Contract Works passed either to Hiremaxi or to Unite on the date of the September Agreement or upon subsequent delivery. Those goods and materials would, as I have found, include the goods and materials necessary to comply with the requirement for summer letting.

Extent of Incorporation at 20 October 2003

182. Another contingent issue raised by the parties concerns the extent to which P4's goods were incorporated in the works prior to 20 October 2003. It is common ground between the parties that on that date Unite were put on notice as to P4's contention that the supply agreements between P4 and Tudor included a retention of title clause. I have found that P4's contention was in error but for completeness, I set out my findings as to the extent of incorporation at 20 October 2003.
183. There is no particular record of the state of the works at 20 October 2003 and therefore evidence of the state of the emergency lighting work at that date has to be derived from the documents and the factual evidence of those who inspected the site at about that time.
184. On any view, the emergency lighting fittings was to be fixed towards the end of the project. When Tudor returned to site on the basis of the terms agreed on 17 September 2003 they continued to provide labour, plant, materials and supervision to meet the following occupancy dates:

(1) Block B: Levels 8 and 9: 26 September 2003.

(2) Block B: Levels 1 to 7: 28 September 2003.

(3) Block C: Levels 1 to 4: 4 October 2003.

(4) Block C: Levels 5 and 6: 11 October 2003.

185. Prior to partial occupation of the development the NHBC, who provided the Building Control Services for the project, required that the emergency lighting had to be completed and tested. This required the certificates to be available.
186. A "PC/Handover Schedule", part of internal Unite documentation shows partial handover of Block B, Floors 9 to 3 (excluding some areas) on 29 September 2003, with NHBC approval due on 29 September 2003.
187. A similar Schedule shows Partial Handover on 11 October 2003 of "Block B, Floors 1 and 2 and Block C (outstanding: Floors 5 and 6 Block C; Studios, Block B; Management Office, Bin Store, Bike Store, Grounds, Laundrette Block C and extensive snagging)." It is common ground and the evidence shows that there were 99 fittings in those areas which were outstanding on 11 October 2003, including 84 fittings in Block C Floors 5 and 6.
188. Mr Bacon gave evidence that Block C, Floors 5 and 6 were handed over on 25 October 2003 and he considered that on 20 October 2003 there would have been about 25 fittings which were unfixed. He had earlier given a lower estimate. Mr Williams who visited site on 17 October 2003 estimated the likely number at 50. Much evidence adduced at the hearing related to testing and certification but I have to bear in mind that the question for me to consider is the number of fittings which were not incorporated on 20 October 2003.
189. Taking account of the basis for Mr Bacon's estimate and accepting that Block C Floors 5 and 6 were handed over soon after 20 October 2003, I consider that Mr Bacon's recent estimate is likely to be more accurate than Mr Williams' estimate, albeit that Mr Bacon amended his original estimate. Given that both figures are estimates, I consider that a figure of 30 is likely to reflect the number of Klippa bulkhead units which were unfixed at 20 October 2003.

Three Type 830 Light Fittings

190. Under Invoice 6029 dated 13 August 2003 P4 invoiced Tudor for three 830-UN-3-N-SRM FASTELink Computer Addressable Over Door Signs in the total sum of £387 plus VAT. At paragraph 61 of the Amended Particulars of Claim, it is pleaded that Mr Williams saw a number of these fittings lying on the floor in the storage area during his visit on 17 October 2003.
191. In the Re-Amended Defence, Unite pleaded that P4 was not entitled to be paid for the three Type 830 units which it delivered to site in the absence of an order from Tudor.
192. P4 contends that it is entitled to succeed on its claim for conversion in relation to these fittings. It submits that Unite took these goods knowing that they had not been paid for. Mr Williams states that on his visit of 30 June 2006 he saw these three Type 830 Units had been fitted.
193. Mr Bacon and Mr Husband confirmed in evidence that they believed that they had paid for all goods provided by Tudor at the time they were installed. Unite submits that the goods were received and dealt with by them in good faith believing that they were entitled to do so.
194. I accept that there was no lack of good faith and no dishonesty by Unite. However I also accept that, on the evidence and submissions, the three Type 830 Fittings were delivered to Tudor by P4 but were not transferred under an agreement for the sale of goods. In those circumstances, this is not a case where such matters as a retention of title clause, the Sale of Goods Act 1979 or the provisions of the Sub-Contract are relevant.
195. Rather, the three Type 830 Fittings were goods in which title remained with P4 and they were incorporated into the Works by Unite. This amounts in law to conversion, even where Unite acts in good faith believing that they were entitled to do so: see Clerk & Lindsell on Torts (19th Ed.) at para 17-68.

Amendment of Pleadings

196. As I said at the outset, there are some matters which arise in terms of the pleadings and I now turn to consider those points. In doing so, I take account of the principles set out in the judgment of Lord Woolf in McPhilemy v. Times Newspapers [1999] 3 All ER 775. I also consider the fact that these amendments are sought to be made in closing and therefore late in the proceedings and the court must consider the extent to which there is prejudice: Kelly v. The Chief Constable of South Yorkshire Police (No. 1) [2001] EWCA Civ 1632 at paras 18 to 23 and Hall v Bolton Metropolitan Borough Council [2001] EWCA Civ 1717 at paras 43 and 44.
197. In relation to the amendment to plead that the agreement made between P4 and Tudor on 21 January 2003 was varied by P4's quotation of 8 August 2003 so that Tudor was bound by P4's Conditions, I have set out above my findings as to the effect of the quotation of 8 August 2003 and I find that the contention that there was a variation of the January Agreement is not sustainable. P4's pleaded case on the incorporation of P4's Conditions did not rely on a developed case in relation to the August 2003 Quotation. Mrs Warner, in her evidence, said that she knew that the Terms and Conditions had not been printed on the reverse of the quotation of January 2003 but the case on the August 2003 agreement was not developed despite the fact that Unite provided a detailed plea on the contractual position. The circumstances surrounding the August 2003 quotation and the actions by P4 and Tudor could have been the subject of further evidence and cross-examination if P4 had developed this case at an earlier stage. Given the late stage of the proceedings, I consider that there is prejudice to Unite in terms of the development of its evidence. On that basis and given my view on the sustainability of the plea, I do not consider that such an amendment should be permitted.
198. In relation to the amendment to plead that the order placed by Mr. Husband of Unite on 24 September 2003 gave rise to a direct liability for Unite to pay for the goods delivered as a result of that order, the case has proceeded on the basis of P4's plea that the order was placed on behalf of Tudor. Whilst questions were asked in cross-examination which elicited evidence that might support a case that the order was not made on behalf of Tudor, I consider that this went outside the bounds of the then pleaded issues and was, again an aspect on which further evidence might have been called and adduced in cross-examination, if this plea was to be made. I do not consider that such an amendment should be allowed given the late stage of the proceedings and the prejudice to Unite in terms of evidence.
199. In relation to the contention by P4 that the revised quotation in August 2003 related to a new requirement for additional emergency lighting to permit the accommodation to be used for summer letting and that this was not a requirement of the existing sub-contract between Unite and Tudor, I have come to the conclusion that P4's contention that the requirement for summer letting imposed an additional requirement is unsustainable. I consider that an amendment would have been necessary to have pleaded the factual basis relating to the revised quotation in August 2003 and to plead that the summer letting requirement was not part of the original Sub-Contract between Unite and Tudor. There is no such pleading and no application is made to amend. In those circumstances, I do not consider that P4 could, in any event, have relied on those contentions, even if the plea on the construction of the Sub-Contract had been sustainable.

Summary

200. I now summarise the findings on the various issues:

(1) P4 did not contract with Tudor on terms which included a retention of title clause.

(2) P4 did assign its right to immediate possession to Abbey National but P4 would still have had title to sue in respect of any claim for conversion based on a retention of title clause.

(3) If P4 had contracted with Tudor on terms which included a retention of title clause:

(a) Unite would have been protected by s. 25(1) of the Sale of Goods Act 1979 on the basis of the provisions of Clause 21.4.5 of the Sub-Contract

(b) Property in the relevant materials and goods did vest in Unite under Clause 21.4.5.3 of the Sub-Contract to the extent that it had not vested in Hiremaxi under Clause 21.4.5.2.

(c) The September Agreement amended the method of payment but did not change the effect of payment under the Sub-Contract between Unite and Tudor.

(d) The Sub-Contract Works required Tudor to provide Emergency Lighting to comply with a requirement for summer lets.

(4) P4 succeeds in its claim in respect of the three Type 830 Fittings which were converted by Unite.

(5) On 20 October 2003, there were 30 Klippa emergency lighting bulkhead units which remained on site unfixed.

201. Accordingly, P4 is entitled to damages for conversion for the 3 Type 830 illuminated signs, which I understand to be claimed in the sum of £387, but otherwise its claim for conversion fails and is dismissed.