University of Wales v London College of Business Ltd

Hearing dates: 3, 4 and 5 February 2015

H.H. Judge Keyser Q.C.:

Introduction

The claimant, University of Wales ("the University"), was established by Royal Charter in 1893 and is responsible for validating undergraduate and postgraduate degrees of the University of Wales for students in the UK and overseas.

The defendant ("LCB") is a limited company, which at the times material to this case carried on the business of a college with a view to profit. Between 2008 and 2012 the qualifications that it offered were validated by the University pursuant to a series of agreements and latterly a validation agreement dated 1 February 2012 ("the Validation Agreement"). Students enrolled on one of LCB's validated courses would receive, upon the successful completion of the courses, undergraduate or postgraduate degrees or other qualifications from the University. The Validation Agreement provided that LCB would pay to the University specified annual fees in respect of the validation services provided by the University.

In these proceedings, which were commenced in October 2013, the University claims £42,900 in respect of payment due under the Validation Agreement, pursuant to four invoices rendered in 2012. By a letter dated 20 December 2012 the University purported to terminate the Validation Agreement on account of LCB's failure to pay the moneys due under the invoices.

LCB denies that the invoices were properly rendered under the Validation Agreement and asserts that the University's purported termination of the Validation Agreement was ineffective and was itself a breach of contract. It also asserts that the University acted in breach of its obligations under the Validation Agreement by twice suspending enrolments at LCB during 2012. LCB asserts that these actions have destroyed its business and purports to have accepted, by letter dated 30 October 2014, the University's repudiation of the Validation Agreement. LCB counterclaims for damages arising from the University's alleged breaches of contract; it values its claim at around £25m.

At the pre-trial review on 16 December 2014 I ordered that this trial should be confined to the issues of (i) liability and quantum on the claim and (ii) liability on the counterclaim, including breach of contract or other duty but excluding causation and quantification of damage.

I am grateful to Mr Ascroft, counsel for the University, and to Mr Simms, legal director of LCB, for their helpful submissions. Mr Simms' so-called skeleton argument, which ran to 54 pages and included long passages setting out the facts of decided cases, was on that account less helpful than it might have been, for all the industry and learning that is displayed.

I shall proceed by first setting out the terms of the Validation Agreement insofar as they are relevant to the issues in these proceedings. Then I shall summarise the facts; it will not be necessary to recite all of the matters appearing from the witness and documentary evidence, although I have regard to them all. Then I shall summarise the issues arising on the claim and on the counterclaim. Finally I shall discuss the issues and state my conclusions and the reasons for them.

The Validation Agreement

The Validation Agreement contained the following material provisions.

" 2. TERM

2.1 This Agreement shall come into force on the Commencement Date and, subject to earlier termination in accordance with its terms, shall remain in force for the Minimum Term and thereafter from year to year until terminated pursuant to Clause 10.2.

2.2 The Institution shall promote and organise the Course to commence on the Course Start Date in each year of the Term."

The Commencement Date was 9 August 2011: clause 1.1 and Schedule 1. The Minimum Term was the three-year period commencing on the Commencement Date, that is, the period from 9 August 2011 to 8 August 2014 inclusive; and the Term was the period during which the Validation Agreement should remain in force: clause 1.1. The Course was the programme or programmes of academic study within the Subject intended as preparation for obtaining the Qualification (clause 1.1); the Subjects and Qualifications were set out in Schedule 1, as were the Course Start Dates for the respective Courses.

" 3 . ENTRY REQUIREMENTS

3.1 … the Institution undertakes in each year of the Term to:

3.1.1 advertise and seek candidates for the Course; and

3.1.2 enrol by the Course Commencement Date no fewer than the Minimum Number of candidates and no more than the Maximum Number of candidates to participate and receive tuition in the Course.

If by the Course Commencement Date in any year insufficient candidates have enrolled on the Course, the University shall be entitled in its discretion to terminate this Agreement forthwith by giving 30 days notice in writing to the Institution."

Schedule 1 set out, in respect of each Course, the Minimum Number and the Maximum Number of candidates to be enrolled. Schedule 2 set out the minimum qualifications required of candidates for each Course.

" 3.2 The minimum qualifications for candidates to apply for enrolment on the Course are set out in Schedule 2 and the Institution shall prior to the Course Commencement Date provide the University with written evidence satisfactory to the University that students enrolled by the Institution on the Course have achieved minimum qualifications.

3.3 Without prejudice to Clause 3.4, the University shall notify the Institution no later than 6 weeks prior to the Course Commencement Date of the Registration Information required in respect of each student. The Institution shall provide the Registration Information to the University no later than 1 week after the Course Commencement Date. The University is not required to enrol on the Course a student in respect of which it has not received all of the Registration Information required.

3.4 The Institution shall provide the University with the full name and details of each student enrolled on the Course as specified in the Guidelines on the Transfer of Data from time to time and shall forthwith notify the University if these details change or if a student withdraws or wishes to be admitted late to the Course. The University shall be entitled in its discretion to refuse to enrol on the Course any student admitted late by the Institution."

Clause 1.1.1 defined "Registration Information" as "the information and returns required by the University in respect of each student as a condition of enrolment of that student on the Course".

" 4. AWARD OF QUALIFICATION

4.1 Subject to the Institution having duly performed its obligations under this Agreement, the University agrees to award the Qualification to those students enrolled on the Course who complete the Course successfully in compliance with the University's requirements (as notified to the Institution from time to time)."

The Qualifications were set out in Schedule 1. For the most part they were Bachelors' and Masters' degrees, though there was also a Foundational Certificate and a Master's Entry Diploma.

" 5. FEES

5.1 The Institution shall pay to the University the Fees and all other sums payable under this Agreement in sterling and in accordance with the provisions of Schedule 2. Save as may be expressly set out in this Agreement, the Institution is wholly responsible for the cost and expenses of complying with its obligations under this Agreement. Payment shall be made without deduction, set-off or counterclaim."

In fact, the Fees were set out in Schedule 3.

" 6. CONDUCT OF ASSESSMENTS

…

6.4 The Institution shall permit the Examination Board to visit the Institution on the dates specified in Schedule 1 for the purpose of finalising marks awarded to candidates by the Internal Examiners and to determine the awarding of the Qualification to assessed candidates. …

6.5 The University shall have absolute discretion in those instances that it deems appropriate to delay the procedure set out in Clause 6.4 in order to ensure the conduct of any investigation which may be deemed necessary by the University in its absolute discretion into any alleged instances of unfair practice or other irregularity at the Institution. …"

" 7. QUALITY ASSURANCE

7.1 The University will hold the ultimate responsibility for the academic standard of the scheme.

7.2 The Institution agrees to implement fully the quality assurance procedures made known to it annually by the University. This includes (but is not limited to) compliance with:

7.2.1 the appropriate Regulations and Standing Orders of the University governing the Course;

7.2.2 appropriate administrative procedures relating to the registration of students and the conduct of examinations;

7.2.3 appropriate administrative procedures relating to the registration of students and the conduct of examinations;

7.2.4 Clause 6.9 (annual meeting of the Joint Board of Studies).

7.3 The University from time to time conducts reviews of its validated courses. The Institution agrees to participate fully in any University review of the Course in accordance with the written instructions of the University.

7.4 The Institution agrees to participate fully in all quality assurance and review exercises carried out by any person (including without limitation the UK's Quality Assurance Agency) who is entitled to or required to carry out such exercise whether by operation of law or otherwise.

7.5...