Whitecap Leisure Ltd v John H Rundle Ltd & Anor, Court of Appeal - Queen's Bench Division, June 13, 2007, [2007] EWHC 1352 (QB)

Resolution Date:June 13, 2007
Issuing Organization:Queen's Bench Division
Actores:Whitecap Leisure Ltd v John H Rundle Ltd & Anor

Neutral Citation Number: [2007] EWHC 1352 (QB)

Case No: HQ 05 X0 1536



Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 13 June 2007

Before :



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Between :

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James Ramsden (instructed by O'Gorman & Co. Solicitors) for the Claimant

Richard Wilson QC and Simon Sugar (instructed by Ringrose Law Group, Solicitors) for the Defendant

Hearing dates: 6 - 14 and 29 March 2007

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JudgmentHis Honour Judge Richard Foster :

  1. At all material times the claimant company, Whitecap Leisure Limited (``Whitecap'') was the tenant of Willen Lake in Milton Keynes from where it operated a business providing leisure and hospitality facilities. The Willen Lake complex consists of a 100 acre lake and 80 acres of park which Whitecap developed so that by 2000 the facilities included a health club and other leisure facilities within a 14,000 square foot building, such that it was able to host events of national importance. By the mid 1990s it was attracting in excess of one million visitors per annum.

  2. Although during the course of the trial the court was told of various changes over the years in the structure and control of Whitecap, for the purposes of the issues raised by this case Mr Michael Charles Rollason (``Mr. Rollason'') was the individual who controlled Whitecap.

  3. As part of the ongoing development of the Willen Lake complex Mr Rollason and others at Whitecap began to research the possibility of acquiring a piece of mechanised water ski equipment for Willen Lake known as a cable tow. From the mid 1990s onwards a number of cable tow facilities within the United Kingdom were looked at. Of the five facilities within the United Kingdom, four had been manufactured by a German company, Rixens. There was another company, Sesitec, which had been formed from former employees of Rixens. There was one cable tow operation at Skegness which it is clear from Mr Rollason's evidence he thought at that time was manufactured by the defendants in this case, John H Rundle Limited (``Rundles''), but evidence adduced during the course of this trial has indicated that the Skegness facility was not as such manufactured by Rundles, although Rundles had supplied parts and equipment.

  4. It was not until 2001 that the project was advanced with the employment by Whitecap of Mr Ian Crawford Stuart (``Mr. Stuart'') in August 2001 as General Manager with a view to taking forward the research already carried out into the possibility of a cable tow facility at Willen Lake. By that stage although planning permission had been obtained and preliminary research carried out, no decision had been taken as to from which supplier to purchase the system. In his witness statement dated 30 November 2006 which stands as part of his evidence in chief in this case, Mr Stuart said this:

    ``My task on starting was to source a cable tow and this led me to visiting John H Rundle Ltd in Skegness on the invitation of Rundles to look at their construction. When I visited Rundles there was only one tower of the structure built. As a layman I was impressed by the clearly heavy and strongly galvanised construction. I have seen the specifications and video footage of a German company, Rixens, design, and at this point was more impressed with Rundles' design for this reason. We knew we would not be able to see a completed Rundles cable tow as one was not in existence but I was aware at the time of their excellent reputation within the theme park industry and was impressed by their presentation and the testimonials from Gerry Russell who was operating the cable tow operating a Rundles tower. It was a joint decision between Mike Rollason and me in Autumn 2001 to use Rundles to supply the cable. A strong factor in our reasoning for choosing Rundles was that they were a British company and should problems arise it would be easier to resolve them as the suppliers would be based not that far away in Lincolnshire, as opposed to the US or Germany. We were also impressed by Rundles' desire to build their first full cable tow system in the UK, and felt that their enthusiasm at this point would create a greater level of support and resource to this project during the construction, as it would become their only ``shop window'' for other parties interested in building the same thing.''

  5. At this time Mr Rollason was not involved in the day-to-day running of Whitecap and he told the court that he spent much of that year abroad. Nevertheless his recollection of the events leading up to the decision to purchase the equipment from Rundles accords with that of Mr Stuart. Mr Rollason was not introduced to Mr Ken Rundle (``Mr. Rundle''), the Managing Director of Rundles, until the meeting on 23 November 2001, when the purchase agreement (``the original agreement'') was signed. I shall refer further to that meeting and agreement later in this judgment.

  6. Rundles is a family business based in Lincolnshire which was established in 1913 and describes itself as specialist engineers to the leisure industry. Although this was the first supply of a complete cable tow installation it was being actively marketed by them as can be seen from the marketing literature at this time supplied by Rundles (pages 2924 to 2932 of the trial bundles) which begins thus:

    ``All the fun and excitement of waterskiing is now available from J H Rundle Ltd through our newly developed cable water ski system.''

  7. On 14 March 2000 Rundles had initially provided a quotation for ``a five mast cable ski system for installation on Willen Lake as per our drawings''. The quotation goes on to state ``From our price list a basic five mast system costs £151,000'' but the quotation also offers for that price a number of additional items including a slalom course. No mention is made in that quotation of value added tax. This was put to Mr Rundle in cross-examination, who insisted that this was an error as all their costings are always net of VAT in accordance with their standard terms of trade. I accept this and I am satisfied that the figures quoted on 14 March 2000 were VAT exclusive.

  8. It seems that matters were not further advanced until the arrival of Mr Stuart in the Autumn of 2001 because on 10 September 2001 a further quotation was issued by Rundles to Mr Stuart following a site meeting, when for a five mast cable ski system a figure of £120,000 plus VAT was quoted for the full installation, although it is clear from the face of that quotation that groundwork, supplying and laying of concrete, pontooning and any slalom courses would be additional. A specification was attached to that letter and then on 10 October 2001 Rundles quoted further for the installation of the pontooning in the sum of £26,000 plus VAT, that quotation following a meeting on 26 September 2001 when from the handwritten notes it seems that various details from the previously supplied specification were discussed.

  9. Eventually a meeting took place on 23 November 2001 when the original contract was signed. Mr Rollason's evidence in connection with this meeting was:

    ``Present at the meeting were Ian Stuart, Ken Rundle and myself and whilst an agreement in writing was subsequently signed, I certainly did not read it. Nevertheless I accept that I am bound by its terms. I had, however, regarded it as a purchase order as it was agreed at the meeting that following written alternations, a revised document with full terms was to follow from the defendants.''

    He went on to say:

    ``We expressed the view at the meeting of 23 November 2001 that we had minimal knowledge of engineering and therefore wished to have some sort of mechanism for overseeing and signing off the work that was being done. Rundles confirmed that they were aware of an independent engineering company who would both oversee and sign off their work and that they would notify us of their details.''

  10. Mr Rollason also gave evidence to this effect:

    ``At the meeting of 23 November 2001 Mr Rundle explained that if the agreement was not signed there and then the defendants would not be able to meet the deadline of 1 April 2002. As a contingency to allow for unforeseen weather conditions, it was agreed to allow a further two weeks, placing completion to be no later than 15 April 2002. Indeed, I hand-wrote on the agreement that the installation had to be fully complete by 15 April 2002.''

  11. Mr Stuart's evidence accords with that of Mr Rollason. Mr Stuart gave evidence that no attempt was made by Whitecap to change the technical details and that reliance was being placed upon Rundles' expertise as regards the technical aspects of the cable tow.

  12. The contract price was £157,000 plus VAT and the handwritten addition to the contract initialled on behalf of the parties reads as follows:

    ``Definition - completion: Full installation of cable tow and accompanying infrastructure including training and pontooning and slalom course as verified by an independent engineer.''

  13. Under the section of the contract dealing with terms of payment there is also handwritten and initialled by the parties, a provision which provides for a further part payment of 20 per cent on completion - no later than 15 April 2002.

  14. The evidence from Mr Rollason and Mr Stuart concerning what was made clear to Rundles as set out above at that meeting was unchallenged at trial and I find as facts that Rundles were aware from that meeting (if they were not already aware) that Whitecap were relying upon Rundles for technical and engineering expertise for the project. Further, although I do not need to make a finding as to whether time was of the essence of the contract, I do find that Rundles were aware that Whitecap wanted to have the system...

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