We have begun. Lord Justice Coulson is sitting. He says he has a sore throat and won’t be talking much “which is a good thing."
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You can read the judgment and everything about the first trial in this handy cut-out-and-keep Common Issues Trial Menu: postofficetrial.com/2019/01/common…
“Do we have time to look at the authorities?” asks the judge.
… the broad gist is that the PO do not believe there is such a thing as a relational contract into which an obligation of good faith is baked in by law. Which the POQC says was a conclusion...
POQC says that we say Fraser J was wrong in principle. Then she has brought up what she says is a misquotation by Fraser J of another authority which leaves out a reference to relational contracts which changes the meaning of the sentence.
J: The judge dealt with all of this. He grappled with all the points of law in a six week trial.
PO yes but we believe there were areas where he...
PO v keen to point out the term of the contract was easy to terminate which stops it being a relational contract - unlike a 25 year contract referred to in the authorities.
J long term contracts have plenty of termination clauses.
POQC I am seeking to point out to this court that the way he came to this decision was unsupported. This is part of our case that our application to appeal has a real prospect of success.
We’re not in some dry Oxford drawing room. This is about a real contract
J it’s your submission that an obligation to transparency is onerous?
POQC when applied by the judge in this terms
J Okay well we’ve looked points a and b…?
J so the post office has never accepted it has to provide a system that was fit for purpose?
POQC “in an absolute sense, no my lord"
POQC stands her ground and takes him to where she wants to go in the judgment re termination to demonstrate her point
[we are still going on about good faith, fair dealing and things inferred into a contract.]
J so you can irrationally terminate a contract?
POQC that it is the right of either party to terminate irrationally, arbitrarily AND for reasonable and proper cause
POQC the answers he supplied to these questions aren’t a proper answer in law in our submission
POQC judge concluded the contractual provision inferred an obligation of good faith when it comes to suspension. We say it doesn’t, the PO has a right to act in its own interests alone when it comes...
POQC “honest cooperation my lord”
J is that not the same thing?
[a discussion about why and where implied obligations of good faith are new, and contestable]
POQC that’s why we think it’s a good case for appeal
POQC we think it is - not least the obligations Fraser J said were incidental to the obligation of good faith.
[There are some/may courtroom discussions which really don’t lend themselves to live tweeting]
J Only relevant if the good faith goes?
POQC yes - in relation to termination my Lord.
eg 924: "It would never have been in the reasonable contemplation of the parties at the time of contracting that...
The QC wonders whether they should push on through. The judge has missed the stenographer’s nod. He turns to the stenographer and asks if we should carry on, or have a break.
POQC still on her feet we’re onto Grounds 16 of the appeal. Says Fraser J is wrong in the quoting of UCTA - about the form of a type of contract and how it applies to a business.
This one’s about Commerzbank.
J that was all stuff the judge considered
POQC he did my lord
J and he came to an answer you didn’t like
POQC he came to an answer that
POQC only on termination. the rest are stand alone points.
J so in the grounds of appeal, the reference to 1122.10 is erroneous?
POQC yes my lord, it is. It should be 12. I apologise
J no no - it’s a big judgment, misreferences are to be expected...
My Lord we accept that insofar as items had been dispited by SPMRs, the common law...
J this is sticking SPMRs with errors that they hadn’t worked out - produced by the Horizon system
PG - we submit not only does the judge deserves credit for the work he did on the judgment, but he deserves it for getting it right.
J can I just ask you, because you were there - just give me a feel for the bundles - 15, 50, 500?
PG they were electronic. But they were huge. Personally I think I had 60.
J How many witnesses?
J Thanks I just had no feel for it.
PG Okay back to G1p2 - on the grounds of automatically implying a good faith term in classifying the contracts as relational. Which they said he did in error. He didn’t.
It is of much more use. There is no error of principle and we say to this court...
Also he wasn’t wrong on the fact their are relational contract. He made findings of fact on what reasonable assumptions of the parties would have been and from those facts he then proceeded to determine the features of the...
So we say it’s a hopeless ground in our submission.
Third - as to the context of the good faith term...
[we go to a bundle]
It’s not surprising that the judge, in resolving group...
These findings are completely unimpeachable. They come from findings of fact and the application of the correct principles of law as to what good faith terms may and what he found they, indeed, were.
different matters entirely unrelated to the ones under consideration as justifying suspension (or termination)."
PG now takes us to PO skeleton argument in grounds of appeal
PG so he is adopting a working definition of relational contract for this case.
Now he has adopted the idea that good faith is part of a relational contract, it would be odd if he sought to put a confusing use of the word relational into the judgment.
PG as to “honesty”. Chitty is not consistent on this. It might be less familiar territory for those writing the commentary in Chitty….
PG Chitty is not clear, but the cases are. Honesty is not the same as good faith. There is ZERO prospect of success on this point. Especially when my learned friend has consisted that apart from transparency we are agreed.
[it is! we break for lunch. 90 more minutes of PG at 2pm then the POQC has an opportunity to reply]
See you in 1 hour.
PG on his feet talking about the civil law concept of good faith and the common law concept of good faith.
PG gives an example of this process re the judges findings on the Factual Matrix. The finding was:
PG says this is judge looking at...
PG we move on to whether or not the judge applied necessity is a test.
"Of the others, there are four which...
(a) To provide adequate training and support (particularly if and when the Defendant imposed new...
PG points out in the next par that he defines terms more precisely wrt to necessity:
"I find that these two terms are to be implied...
PG says it demostrates the correct principles being applied for business efficacy. He wasn’t looking at every contract ever written he was looking at specific...
PG so he WAS considering the express terms [and then PG goes on to list exactly how and where in the judgment].
PG on termination there was a distinction between power and absolute right as to whether it was a good faith term. PO did not argue that the good faith term was not apt to control the termination provision.
PG: Common Issue 16 as it then was - termination on notice.
J Can you stick to the grounds? It’s hard to get either of you to stay on the page. It’s one of the reasons wh this judgment was 1122 paragraphs long.
PG on ground 5 - the term that...
PG after the judge investigated the relationship between the PO and the NFSP and found the NFSP...
[he hands up an authority]
J what does this go to?
PG the short point my lord
J [receiving the authority] well we’re certainly lacking in paperwork and authorities in this case, so I’m glad you’re making up the gap
J you mean “not less than”
PG they’re a...
It is wrong in law to reach that conclusion.
PG because the context weighed so heavily in this particular case that was more than an available view to the judge - we heard all the evidence about 26 month payments etc - weeks of evidence….
“not less than” might mean something else in a different contract.
[we go to suspension]
PG the judge was construing the clause in the light of other findings.
PG goes to ground 8 - material repudiatory breach of contract. There was materiality and no materiality in various elements of the contract. On the face of it it would entitle PO
PG the judge was given 6 lever arch files of documents which made up the SPMR contractual obligations and none of the Post Office witnesses couldn’t explain what was in any of them.
PG this is not a usual contract. It’s not like...
PG the judge heard gallons of evidence about the run up to the making of this contract. He heard evidence about contractual context (ie how things happened in context) and some evidence was post-contractual...
and he came to the conclusion he did.
PG you have Mr Beale one of the PO witnesses saying we “rarely” use a clause in the contract, but couldn’t give any examples either way.
PG On the facts he id he reached the view that he did that specific elements of the PO contract were onerous. This was multi-factoral with reams of evidence. And you could only appeal this if he was wrong in principle
PG the judge at par 980 says: "This judgment is unlikely to be improved by a linguistic analysis of whether...
Draconian punishment would undoubtedly qualify under any of these words, but I doubt a clause has to be as severe as that in any event."
PG it’s all about context in onerous and unusual as it states in par 982: "It is also, as stated by Henderson J (as he then was) in Carewatch at , “always necessary to have...
1010. That is, in my judgment, an onerous and ...
PG given some SPMRs would find their losses doubling every time they attempted to fix it...
PG uses the example of a SPMR suspended without pay unable to access anything...
J which ground is the related to again?
J "Think of me as VAR Mr Green, spoiling your enjoyment of the afternoon."
PG [gets back on track]
PG PO wants it both ways - when it suits it - it’s a business to business relationship and when it suits them its more like an employer an so UCTA doesn’t apply.
PG my learned friend is seeking to persuade the judge that the obligations in issue which were not obligations on the Post Office. and refers to Paragon and Nash. P&N was about setting interest rates. They were set and the customer
[judge rises for 5 minutes]
[helen davies and patrick green arguing that she only had 2 hours, why should he get 2 hrs 10?]
[PG offers that he tries to finish in 2 hours 5 mins so she can reply]
PG makes the point therefore it’s not odd for the claimants to bring UCTA into play as the issue had come up at the CoA in a different case.
PG the PO saw the branch trading statement as the accounts being stated to the principal.
Under xe the PO witnesses accepted that in fact the statement of account INCLUDED calls to the helpline.
PG the PO could have put a dispute button on Horizon, but chose not to.
PG judge found that if an SPMR deliberately render an account that is wrong you are only following the rules. The PO could have raised the issue of someone...
POQC stands up and says that the judge did not say he was only defining a relational contract for the purposes of this case. Or he would have said so. He didn’t. So the judge was asking whether the terms were part of the good faith obligation. Not whether...
Even if your lordship is against on 2a - that judge was using it as shorthand - in our submission it necessarily follows he should grant permission on the 10 grounds the judge says are part of the necessity test.
J that was part of the recusal application
POQC I’m not arguing that
J and it was piffle
POQC we are asking for your lordship to decide there if there is a realistic prospect of these terms should not have been...
J I’m not sure that follows.
POQC this term as implied in the contract we say has a realistic chance of success.
J I understand.
POQC on the issue of implied limitations of good faith with regards to termination are freestanding of UCTA and Autoclenz and so we don’t have to win on all three points for the case to be accepted.
POQC Turning to grounds 11+12 - on suspension
POQC finally onto onerous terms. judge found the clause re responsibility for all losses absent criminal behaviour onerous. It’s not.
POQC says that the situations applied in Commerzbank apply to this case.
POQC yes my lord
J has it started?
POQC 27/28 Nov
POQC my lord if that would be possible
J it may have some materiality to the mediation
POQC it can’t be ruled out
J I think that will be possible. My clerk will let the parties know if there’s a difficulty.
POQC my lord we do appreciate this.
J just from a logistical point of view I will do the reasons on a separate sheet, so whatever the result it’ll say see the reasons on a...
But that is the basis on which I will produce it and I will rely on you both to keep the academics at bay.
[Does this mean we’re not going to see the reasons…?]
Bye for now.