Global Display Solutions Ltd v NCR Financial Solutions Group Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Jacobs |
| Judgment Date | 29 April 2021 |
| Neutral Citation | [2021] EWHC 1119 (Comm) |
| Date | 29 April 2021 |
| Docket Number | Case No: CL-2019-000023 |
| Court | Queen's Bench Division (Commercial Court) |
Mr Justice Jacobs
Case No: CL-2019-000023
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Stuart Ritchie QC and David Lascelles (instructed by Stevens & Bolton LLP) for the Claimants
Orlando Gledhill QC (instructed by Ashurst LLP) for the Defendants
Hearing dates: 01–04, 08–11 and 16 February 2021
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Index
| Section | Para. Number |
| A: Introduction | 1 |
| A1: The parties and the claims | 1 |
| A2: The trial | 17 |
| B: The contractual and factual background to GDS's substantive claims | 19 |
| B1: The companies and the relevant individuals | 20 |
| B2: The contractual relationship | 31 |
| B3: The forecasting process | 39 |
| B4: September 2009 – April 2011 | 41 |
| B5: April – August 2011 | 50 |
| B6: September 2011 – April 2012 | 76 |
| B7: April 2012 onwards | 82 |
| B8: Conclusion in relation to the period of false forecasting | 86 |
| B9: Which individuals were party to the giving of the false forecasts? | 92 |
| C: The causes of action arising from the events prior to 16 January 2013 | 105 |
| C1: Deceit | 105 |
| C2: Breach of contract | 110 |
| C3: Unlawful means conspiracy | 113 |
| D: January/February 2013 and the circumstances leading to the Letter Agreement | 152 |
| D1: Introduction | 152 |
| D2: December 2012 | 162 |
| D3: 1–15 January 2013 | 169 |
| D4: 16 January | 177 |
| D5: 17 January until the New York meeting on 28 January | 179 |
| D6: The New York meeting | 214 |
| D7: Correspondence and internal discussions following the New York meeting | 232 |
| D8: NCR's offer and subsequent correspondence | 236 |
| D9: The first draft of the Letter Agreement | 260 |
| D10: Subsequent events | 286 |
| E: Construction of the Letter Agreement | 288 |
| E1: The issue | 288 |
| E2: The parties' arguments | 300 |
| E3: Legal principles | 316 |
| E4: Discussion | 322 |
| F: Rectification for mutual mistake | 372 |
| F1: Legal principles | 372 |
| F2: The parties' arguments | 378 |
| F3: Discussion | 391 |
| F4: NCR's intention | 419 |
| G: Rectification for unilateral mistake | 444 |
| G1: Legal Principles | 444 |
| G2: The parties' arguments | 459 |
| G3: Discussion | 462 |
| H: Intimidation | 470 |
| H1: Legal Principles | 471 |
| H2: The parties' arguments | 502 |
| H3: Discussion | 512 |
| I: The Letter Agreement as a consequence of the deceit and conspiracy | 532 |
| J: Exemplary damages | 535 |
| J1: Legal Principles | 535 |
| J2: Should exemplary damages be awarded in the present case? | 541 |
| K: Conclusion | 549 |
Section A: Introduction
A1: The parties and the claims
The claim in these proceedings arises from the termination of a long-standing relationship between two global groups of companies. The Claimants (collectively “GDS”) are part of the GDS group which manufactures screen displays and component parts thereof, including for use in bank automatic teller machines (“ATMs”) and retail point of sale systems (“POS systems”). The Defendants (collectively “NCR”) are part of the NCR group which manufactures ATMs used by banks and POS systems. Until January 2013 GDS had supplied products to NCR or its associated companies for many years. In the light of the arguments that developed at trial, it is generally not necessary to distinguish between the various companies that collectively comprise GDS and NCR.
An aspect of the contractual supply relationship between the parties was the provision of regular forecasts from NCR setting out NCR's projected demand from GDS for the supply of products to NCR's plants around the world. The forecasts were provided on a rolling 12-month basis. GDS's case is that it used these forecasts in making decisions as to its manufacturing plans.
NCR provided forecasts over many years. NCR's last forecast was provided on 14 January 2013. In line with previous forecasts, it was for over 176,000 displays over the next 12 months. This included over 11,000 displays in December 2013, just under 12 months away. The forecast demand had a value of over US$50 million.
Two days after this forecast had been supplied, on 16 January 2013, there was a telephone call in which NCR informed GDS that it had taken the manufacture of displays in-house. This “desourcing” of GDS by NCR, and the 16 January call, was the culmination of a lengthy process, known as Project Dynamo (“Dynamo” or “Project Dynamo”), whereby NCR had worked on bringing manufacture in-house. NCR cancelled around US$ 5.1 million of existing purchase orders. It also reduced all its forecasts to zero. GDS had received no prior warning from NCR that this cancellation and reduction of forecasts would happen. NCR accepts that this is so, although there is some evidence that GDS had its suspicions that it might be desourced at some point. GDS contends that the result of NCR's action was that it faced an imminent and potentially fatal liquidity crisis for which it was unprepared. It had a substantial pipeline of stock and was geared up to meet the outstanding purchase orders and the substantial future demand indicated by NCR's forecasts.
Discussions took place between NCR and GDS at the end of January and in February 2013 concerning whether NCR would take a “last time” supply of products and if so at what price. After discussions, including a meeting in New York in January 2013, the parties signed a “Letter of Agreement, Release and Waiver” (“the Letter Agreement”). The construction of the Letter Agreement, and specifically whether it precludes the claims made by GDS in these proceedings, is a central issue in the proceedings. NCR contends that GDS's present claims have been settled. The circumstances leading to the Letter Agreement, including the discussions at the New York meeting, have been explored in considerable detail during the trial. Those circumstances are relevant to arguments advanced by NCR concerning the factual matrix in which the Letter Agreement was concluded, and claims by NCR for rectification for mutual or unilateral mistake. They are also relevant to a claim made by GDS for the tort of intimidation.
GDS's claims are advanced on various bases: breach of contract, deceit, procuring breach of contract (although this claim is no longer pursued), conspiracy, and the tort of intimidation. It disputes NCR's case that these claims are precluded by virtue of the Letter Agreement.
As a result of an order made at the case management conference, certain issues were reserved for later determination. The reserved issues were in summary as follows:
a) Reliance: did GDS rely upon any of the alleged representations and, if so, were NCR aware and did they intend that GDS would do so?
b) Loss: as a result of the alleged unlawful conduct, has GDS suffered and are they entitled to claim the loss and damages claimed?
c) Interest: is GDS entitled to interest?
In consequence, this judgment does not finally determine GDS's claims for damages whether in tort or in contract. Whilst at the start of the trial there appeared scope for disagreement as to which issues fell within and without the scope of the present trial, there was ultimately no dispute as to the issues which required resolution. The principal issues can be summarised as follows.
a) whether the claims of GDS in deceit, breach of contract and conspiracy are in principle well founded as far as liability (but not quantum) is concerned, but leaving on one side issues of reliance and the effect of the Letter Agreement;
b) whether all the claims of GDS in these proceedings are precluded by the terms of the Letter Agreement on its true construction, or as rectified pursuant to NCR's case of rectification for common or unilateral mistake;
c) whether the Letter Agreement is ineffective as a barrier against any of GDS's claims, because it was entered into as a result of NCR's intimidation or due to the continuing influence of NCR's deceit and unlawful means conspiracy, with the consequence that GDS is entitled to relief in respect of all losses suffered by virtue of their entry therein.
The first series of issues, as to whether GDS's various claims are well-founded in principle, concerns events prior to the phone call on 16 January 2013 and in particular the giving of false forecasts prior to that time. These issues are addressed in Sections B and C below.
This series of issues is narrower than once appeared, because shortly before trial NCR made certain admissions as to the falsity of the forecasts which were given in the period between the end of April 2012 and January 2013. The central factual issue, which requires resolution, is whether false forecasts in fact started to be given prior to that time: GDS's proposed start date is July 2011.
A secondary factual issue, which also requires resolution, concerns the individuals who were party to the giving of false forecasts. NCR do not accept that the evidence justifies a finding against any individual other than Mr. Evan Kaparis who, as will appear below, was a leading figure on Dynamo as well as in the relationship with GDS. GDS contends that others were involved in a conspiracy: principally two very senior individuals (superior to Mr. Kaparis) namely Mr. Bob Ciminera and Mr. Scott Delamater, but also three individuals (below Mr. Kaparis) who were involved in the relationship or operational dealings with GDS, namely Mr....
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