Astea (UK) Ltd. (“Astea”) carries on business as a provider of software, in particular a software package called “ServiceAlliance” (“the Software”). It is a subsidiary of a Delaware corporation, ASTEA International Inc., but is itself a small company, with only some twenty employees.

As I understand it, the Software is designed for use independently of other systems to enable a user to undertake automated field service operations, that is to say, the provision to customers of the facility of having equipment belonging to the customer serviced at the customer’s own location, as well as at the user of the Software’s workshop. When used independently the Software is described as “out of the box” software, meaning that all that is required to use it is its installation in appropriate computer hardware. However, a customer has a number of options as to the precise form in which the facilities offered by the Software in its “out of the box” manifestation are enjoyed. These options are selected by use of something called the “AllianceStudio toolkit”. The process of selecting and giving effect to options available as standard is called “configuration”.

The Software can also be linked with other software systems so as to provide, in conjunction with them, facilities beyond those which are the core elements of the Software itself. To enable this to happen links to the other relevant software have to be created by means of what are called “interfaces”. The process of creating such interfaces is sometimes called “integration”.

The managing director of Astea is Mr. Pat Noble. At paragraph 7 of his first witness statement, dated 24 January 2003, in a passage which I accept as accurate, Mr. Noble described the three core elements of the Software in this way:-

Time Group Ltd. (“Time”) carries on business as manufacturer and retailer of personal computers. The vast majority of its sales is, and has been, historically, to individual consumers. However, a relatively small proportion of sales – apparently some 2% or so - is, and has been, made to businesses and to educational establishments. Attached to every sale is a warranty in relation to the quality of the goods sold which is valid for a period. In the case of sales to individual consumers, if a claim is made upon the warranty the relevant goods have to be returned to Time for appropriate remedial action. However, in the case of business and educational customers a Time engineer will attend the customer’s site to undertake repairs.

As I understand it, a substantial part, at least, of the retail sales operation is conducted on the telephone rather than in shops, although Time also has a significant network of retail outlets. The telephone sales operation is conducted, as is now common, through a Call Centre, which in the terminology of Time is called the “Customer Care Centre”, but to which I shall refer in this judgment simply as “the Call Centre”. The Call Centre is, and was at all times relevant to this action, also charged with responsibility for dealing, in the first instance, with claims by individual consumers under warranties in relation to equipment sold to them. In the event of a claim being accepted a repair order, called by Time a “Return Material Authorisation”, or “RMA”, is issued and the relevant goods are sent to Time’s service centre (“the Service Centre”) for repair. The Service Centre is also the base from which the field service network is operated which deals with claims by business or educational customers under warranties. It seems that a means, perhaps the principal means, by which business and educational customers of Time notify claims for repair under warranty of goods supplied is also by telephone to the Call Centre.

In order to operate the Call Centre effectively Time needed appropriate computer-based support. Until about the middle of 1999 that computer-based support was provided by a management information system called “Swan” installed on appropriate computer hardware. From about the beginning of 1999 Time was considering replacing Swan and was interested in utilising three different software packages to do so. The principal package was an office accounting package which provided a means by which customer orders could be taken and processed, stock could be managed, product manufacture could be scheduled and internal accountancy and financial functions fulfilled. In this judgment I shall call that package “the Accounting Package”. A further package which it was envisaged would be required was one to facilitate the performance of the sales functions of the Call Centre by handling calls from existing customers, providing technical assistance and passing requests for repair of equipment to the Service Centre. In this judgment I shall call that package “the Call Centre Package”. The third of the packages which was contemplated was one to manage all aspects of service and repair, whether undertaken on goods returned to the Service Centre or by attendance of a Time engineer at the premises of a business or educational customer. In this judgment I shall call that package “the Service Package”. It was obviously envisaged that the Accounting Package, the Call Centre Package and the Service Package would be integrated the one with the others by appropriate interfaces.

As matters turned out Time decided that a software product called “Tetra CS/3”, to which I shall refer in this judgment as “CS/3”, created by a company called Tetra International Ltd., but which traded under the name Sage Tetra, should be utilised as the Accounting Package. CS/3, as I understand it, is an “out of the box” software package, but it possesses the ability to be integrated with other software packages via appropriate interfaces. Time entered into an agreement in writing dated 3 March 2000 with Apex Computers Ltd., which traded under the style or title “Apex Systems”, for the supply of CS/3. Shortly after the agreement was made Apex Computers Ltd. changed its name to Lynx Commercial Systems Ltd., and its trading style to “Lynx Commercial Systems”. It is convenient to refer to that company for the purposes of this judgment by the name “Lynx”.

Time decided to produce a bespoke software package to serve as the Call Centre Package. This package was in the event produced by Time itself using the services of contracted software developers, or programmers. The Call Centre Package came to be called, and will be referred to in this judgment as, “Pulse”.

By about the beginning of April 2000 there were two main products in the running for selection as the Service Package. One of these, and that which was eventually chosen, was the Software. It will be necessary to a limited extent to consider what led up to it, but by an agreement (“the Contract”) in writing signed on behalf of Time on 14 July 2000 and on behalf of Astea on 23 July 2000 Astea granted to Time 20 full licences and 280 occasional licences to use the Software. Astea also agreed to provide services, to which in this judgment I shall refer as “the Services”, set out in Schedule C to the Contract. There was an issue in this action as to whether what I have called the Contract was, as a matter of law, a single agreement, as was contended on behalf of Time, or three agreements, as was contended on behalf of Astea. Curiously, given the analysis contended for on behalf of Astea, another theoretical possibility could be that it was two agreements. I shall return to this issue of how many agreements were contained, as a matter of law, in the Contract.

In circumstances which I set out later in this judgment Time did not make to Astea payments for which the Contract provided. In this action Astea claimed the sums which it contended were due under the Contract. Time resisted that claim principally on the ground that, by its failure to complete the Services by about 6 March 2001, Astea had repudiated the Contract, Time had accepted that repudiation, and thus, so it was said, Astea was not entitled to payment of the sums claimed. However, it was also contended on behalf of Time that, if not a breach going to the root of the Contract, and thus a repudiation, the failure of Astea to complete the Services by about 6 March 2001 was still a breach of the Contract in respect of which Time was entitled to damages. Time sought to set off the amount of the damages to which it contended it was entitled against any liability it was otherwise under to pay to Astea the sums claimed under the Contract. It was denied on behalf of Astea that it was in breach of the Contract by reason of the fact, as to which there was no dispute, that it had not completed the Services by about 6 March 2001. It was contended on behalf of Astea that it was under no contractual obligation to complete the Services by about 6 March 2001 or any other specific date. Astea’s case was that it owed an obligation to use reasonable skill and care, subject to a proviso to which I shall return, to complete the execution of the Services by 1 August 2000, but that compliance with that obligation was in any event waived. Thereafter, its only obligation was to complete the execution of the Services within a time which was reasonable in all the circumstances. It was contended that Astea was not in breach of that obligation because the causes of the delays in the completion of the execution of the Services up to about 6 March 2001 were not its fault. There were a number of other issues in the action, to the exact nature of which I shall return, but one of the answers advanced on behalf of Astea to the contention that it was in breach of the Contract by reason of non-completion of the execution of the Services by about 6 March 2001 was that, because, on proper construction, the Contract constituted three agreements, and in particular there were separate agreements in relation to the grant of licences to use the Software, on the one hand, and to undertake the provision of the Services, on the other, it was no answer to the claim in the action for payment of the balance of the agreed licence fees that there had been, if there had been, a breach of the agreement for the undertaking of the Services. It is for that reason that an issue arose as to whether the Contract as a matter of law constituted a single agreement, or three, or conceivably two, agreements.

The Contract was in a form substantially produced by Astea. It was enclosed in a cover which bore the legend, “ServiceAlliance License and Support Agreement Between”. No parties were identified on the cover, but the name of Astea appeared at the foot of it. Inside the cover was a front sheet which bore the same wording as the cover, but included the identification of the parties as “Astea International” and Time. The front sheet also gave an “Agreement No.”, SA170400001.

The first substantive page of the Contract was numbered “Page 2 of 5” and was entitled “ServiceAlliance License and Support Agreement”, with the number of the agreement underneath. The text which followed was:-

Beneath the introductory words set out in the preceding paragraph the first page of the Contract went on to set out in tabular form details of the licences granted in sections numbered I and II. Section III was not completed. Section IV provided that:-

Schedule C, which I have already mentioned was set out on a page numbered 3 of 5 in the Contract. Beneath the words “Schedule C”, which were a title at the top of the page, appeared the words “Order for Services”. There followed a table which included the name and address of Time, the identity of a contact person, in fact Mr. Derek Brotherston, and the number of the agreement, SA170400001. Beneath the table appeared the words:-

Also on page 3 of 5 were set out “Terms and Conditions for Services”. They were:-

Page 3 of 5 of the Contract was signed on behalf of Time by Mr. Richard Hope and dated 14 July 2000 and was signed on behalf of Astea by Mr. Noble and dated 23 July 2000.

Pages numbered 4 of 5, 5 of 5 and 6 of 5 of the Contract contained what were described as “ServiceAlliance License and Support Agreement Terms and Conditions” (“Astea’s Conditions”). At the foot of each of the relevant pages appeared the indication “(Rev 1.2) Sept 1999 - UK”. Astea’s Conditions were fairly obviously the written standard terms of business of Astea at the date of the Contract.

Clause 1.1 of Astea’s Conditions incidentally included a number of definitions in the course of granting a licence. The word “System” was defined as meaning “the Programs and Materials”. The word “Programs” was defined as meaning “Astea’s computer ServiceAlliance software program(s) identified on the first page of this Agreement or under any Schedule A and will consist of a set of information processing programs in machine-readable object code form only for use by you under this Agreement”. The word “Materials” was defined as meaning “the documentation related to the Software, as described above or on a Schedule A and any related support material specified”. No “Materials” seem to have been included within the Contract. The expression “Packaged Software” was defined as meaning “the Programs and the Third Party Software”, and the latter was defined as “the software products and related documentation listed as such in, or on a Schedule A to, this Agreement.” Again, it does not appear that any “Third Party Software” was included within the Contract.

Included within clause 2 of Astea’s Conditions, which was actually concerned with provision of “Software Support”, was a definition of the latter expression as meaning “software support as described in this Agreement”. In the same clause the expression “Support Period” was defined as meaning “the period from January 1 through 31 December or the remaining portion of a calendar year following the operation of the warranty period for the Packaged Software”.

By clause 6.3 of Astea’s Conditions it was provided that:-

Clause 8 of Astea’s Conditions was entitled “Termination”. By clause 8.2 provision was made that:-

Clause 10 of Astea’s Conditions was entitled “Warranty”. It was in these terms:-

Clause 11 of Astea’s Conditions was entitled “Limitations”. By clause 11.1 it was provided that:-

Following the page of the Contract numbered 6 of 5 was what was called an “Addendum”. That Addendum constituted three pages and was signed on behalf of both parties. It began:-

Following the words quoted in the preceding paragraph was a heading “Master Software Agreement Terms and Conditions”. There followed a number of alterations to terms of Astea’s Conditions. These included a new clause 11.2:-

The Addendum also included a new clause of Astea’s Conditions, clause 15, of which the material parts for present purposes were:-

What I have called “the Services” were not defined in the Contract more specifically than in Schedule C. However, in general terms they comprised both the configuration of the Software to suit the particular requirements of Time (to which part of the Services I shall refer in this judgment as “the Configuration Services”) and the integration of the Software with CS/3 and Pulse (to which part of the Services I shall refer in this judgment as “the Integration Services”).

I have already indicated that Time did not make payment of sums which Astea claimed were due under the Contract. In particular Time did not make payment of the second and third instalments of the agreed licence fees of £170,400. Those instalments together amount to £113,600. The sum payable as Value Added Tax at 17.5% on that amount is £19,880. In addition Astea rendered invoices to Time in respect of the Services which, inclusive of Value Added Tax at 17.5%, totalled £85,382.04. The breakdown of that figure was £63,483.31 claimed in respect of the time of Astea employees in providing the Services, £9,182.25 expenses and £12,716.48 Value Added Tax. Time did not pay any sum in respect of the provision of the Services. Thus in this action at the date upon which it was commenced the sum claimed on behalf of Astea was a total of £218,862.04, being £133,480 in respect of the unpaid balance of licence fees, together with Value Added Tax, and £85,382.04 in respect of the provision of the Services. A point which was taken in the Re-Amended Defence and Part 20 Claim of Time was that, under the Contract, the maximum sum which Astea could claim in respect of the time of its employees in providing the Services was £60,000 plus Value Added Tax. While not conceding that that point was sound, Mr. Cyril Kinsky, who appeared on behalf of Astea at the trial, limited the claim of Astea in respect of the time of its employees in providing the Services to the sum of £60,000 plus Value Added Tax. In the result, therefore, the sum claimed, exclusive of interest, by Astea in the action was £214,769.14, comprising, inclusive of Value Added Tax at 17.5%, £133,480 unpaid balance of licence fees, £70,500 (£60,000 plus £10,500 Value Added Tax) in respect of the time of employees in providing the Services and £10,789.14 (£9,182.25 plus £1,606.89 Value Added Tax) in respect of expenses. There was no dispute as to those figures as figures.

I have already indicated the principal line of defence advanced on behalf of Time, namely that by its failure to complete the Services by about 6 March 2001 Astea had repudiated the Contract and Time had accepted that repudiation. It was pleaded on behalf of Time that the Contract was a single agreement, such that the repudiation alleged, and acceptance thereof, put an end to all of the unperformed obligations of Time under it – in particular the obligation to pay the unpaid balance of the licence fees. As to the alleged repudiation and acceptance, the way in which Time’s case was put in the Re-Amended Defence and Part 20 Claim was as follows, omitting underlining and words deleted by amendment:-

The way in which the central plank of the defence of Time was put in its statement of case immediately threw up a number of obvious difficulties. It was not contended that it had been expressly agreed that Astea would do anything by a date proximate to March 2001. It was not contended that any notice had been given making time of the essence of the Contract in relation to Astea doing something by a date proximate to March 2001. What was contended, as at least part of Time’s case, was that Astea had agreed to complete performance of the Services by the end of October 2000 or by 6 November 2000, dates which were long past by 6 March 2001 when it was contended that the Contract was terminated by Mr. Mohsan. One might suppose that it was highly probable that strict compliance with an agreement to complete by the end of October 2000 or by 6 November 2000 had been waived by 6 March 2001 by failure to treat such failure as repudiatory earlier and permitting Astea to continue with the performance of the Services. Mr. Sa’ad Hossain, who appeared on behalf of Time, sought to circumvent that difficulty by placing heavy reliance upon the alternative case based upon an implied term that Astea would complete the Services within a reasonable time. He contended that the failure to complete the Services within a reasonable time could itself amount to a repudiation of the Contract and thus entitle Time to accept such repudiation as bringing the Contract to an end. However, that way of putting the case is very vulnerable to findings that the time taken to complete the Services by the date of the supposed termination of the Contract had not exceeded a time which was reasonable in all the circumstances or that any supposed repudiation had not in fact been accepted.

Apart from the principal line of defence contained in the Re-Amended Defence and Part 20 Claim a number of other points were taken in that statement of case. Astea was put to proof of the sums claimed in respect of the execution of the Services. However, in the event Mr. Hossain accepted, at least implicitly, that the sums charged were correct, as he based part of his attack upon Astea’s dedication of resources to performance of the Services upon the details contained in the invoices sued upon. It was contended that had Astea used reasonable skill and care in the performance of the Services and they had been completed when it was contended that they should have been, the cost of them would have been less, specifically £42,647.83. That figure is simply half of the total sum originally charged by Astea in relation to the execution of the Services. No attempt was made at trial to justify the contention that had Astea undertaken the execution of the Services with reasonable skill and care the cost to Time would have been £42,647.83, or any figure other than that in fact charged. In his closing submissions Mr. Hossain recognised this difficulty and restricted himself to contending that Astea’s charges for the period after 13 November 2000, totalling £12,848.77 including Value Added Tax, should not be allowed. There was a plea that Time would seek to set off the sums claimed in its Part 20 claim against the sums claimed by Astea.

The main contentions advanced in Time’s Part 20 claim were that the Software was of no use to it and thus as a result of the failure of Astea to complete the execution of the Services it had suffered loss in the shape of the sum which it did pay on account of the licence fees, £56,800 plus Value Added Tax, and other costs incurred in connection with attempting to integrate the Software with CS/3 and Pulse. Those other costs were said to be a sum of £89,417.50 paid to Lynx for its work on the integration of the Software and CS/3 (“the Lynx Element”), internal management and staff costs amounting to £22,307.54 (“the Management Element”) and the cost of hardware acquired to enable the Software to be run, put at £3,700. Further alleged losses were the result, it was contended, of not making savings which could have been made had the Software been successfully integrated with CS/3 and Pulse. The relevant savings were in staff costs, put at £48,330 between October 2000 and March 2001 and continuing thereafter at £12,082 per month. As an alternative to the damages claim there was a claim for repayment of the instalment of the licence fees paid as money paid for a consideration which had wholly failed.

Various factual issues were raised in the Amended Reply and Defence to Part 20 Claim served on behalf of Astea. It is not necessary to set them out at this point in this judgment. I shall set out my findings as to the material facts later. However, it was made clear in the Amended Reply and Defence to Part 20 Claim that there were issues as to the material terms of the Contract. It was also denied that any of the variations to the Contract contended for in the Re-Amended Defence and Part 20 Claim had been agreed. It was indicated that reliance would be placed upon clause 11.1 of Astea’s Conditions as excluding the terms which it was alleged on behalf of Time were to be implied into the Contract by statute, and also upon the new clause 11.2 set out in the Addendum as limiting the liability of Astea in relation to the Part 20 claim. It was initially in issue whether clause 11.2 fell to be treated as part of Astea’s written standard terms of business for the purposes of Unfair Contract Terms Act 1977 s. 3, but in his closing submissions Mr. Kinsky accepted, sensibly as it seems to me, that it did. Each of clause 11.1 and clause 11.2 was said to satisfy the requirement of reasonableness set out in Unfair Contract Terms Act 1977. In relation to clause 11.1 it was pleaded in paragraph 19 of the Reply and Defence to Part 20 Claim that:-

On the main issues as to alleged terms of the Contract, alleged variation, alleged breach, alleged repudiation and alleged acceptance the case set out in the Amended Reply and Defence to Part 20 Claim was this:-

In the Defence to the Part 20 Claim the various losses alleged on behalf of Time were denied. The point was made that:-

For present purposes it is convenient to begin a consideration of the circumstances leading up to the making of the Contract by recording that, after initial contact, Time showed sufficient interest in the possibility of acquiring the Software for Mr. Brotherston, who was at that time employed by Time as, in effect, project manager of the project for the acquisition and implementation of the Service Package, and Mr. Stephen Taylor, at that time the manager of the Service Centre, to consider it worthwhile to meet Mr. Noble at the premises of a customer of Astea called MSAS in Milton Keynes on 5 April 2000 to see the Software in action. There was little dispute between Mr. Noble, Mr. Brotherston and Mr. Taylor, each of whom gave evidence before me, as to what had happened on that occasion. The visit was followed by lunch, over which there was a general discussion about the Software. While neither Mr. Noble nor Mr. Brotherston had any very definite recollection of the discussion, it seems that there was some reference to Time needing the Service Package in time for its Christmas season in that year. Mr. Taylor’s recollection was that he explained that the Service Package would need to be installed and integrated with the Call Centre Package and the Accounting Package before Time’s pre-Christmas period, which started at the end of September. It probably is not very important exactly what was said, for Mr. Noble agreed in his evidence that he understood that the Service Package would be needed in time for Time’s Christmas season in 2000, and that that would start some time before 25 December.

There followed various technical and commercial discussions between representatives of Time and Astea the detail of which it is not material to set out. However, as matters proceeded it became increasingly clear that the likely selection for the Service Package was the Software.

In any situation in which it is necessary for software programming on a bespoke basis to take place, as it was if the Software was to be integrated with CS/3 and Pulse, a usual, and prudent, step is to seek to identify what it is exactly that the client is expecting the bespoke software to do and how he is expecting it to do it in terms of the requirements of his business. A common means of addressing these questions is to prepare a document or documents in which the business needs to be met are set out. In the case of Astea such a document is called a “Business Requirements Document”, or “BRD”. In relation to Time the task of preparing appropriate BRDs was entrusted to Mr. Ian Dundas, who was at that time European Product Manager and is now an integration consultant. Mr. Dundas first tackled the job of seeking to prepare an appropriate BRD in about the middle of April 2000.

From an e-mail sent on 15 May 2000 by Mr. Brotherston to Kevin Beel of Astea, a copy of which was put in evidence, it is plain that by that date, if not before, it was known within Astea that at that time Time was anxious that the installation of the Software be completed by 1 August 2000. Mr. Beel’s response of the same date indicated that:-

In the short term, at least, the focus of Astea’s attention was on obtaining a basis upon which it could commence work with the aim of meeting the requirements of Time for completion of the Integration Services by 1 August 2000. Mr. Noble decided that Time should at least send Astea a purchase order to enable work to proceed whilst negotiations in relation to the Contract continued. Mr. Brotherston sent a purchase order dated 8 June 2000 (“the Purchase Order”) to Mr. Beel under cover of a letter dated the same day. Attached to the Purchase Order were a number of special conditions. They included:-

The Software in its “out of the box” form seems to have been installed by Astea at Time for training purposes on 13 June 2000. Responsibility for liaison with Time to ascertain its requirements in relation to the Configuration Services, performance of the Configuration Services and the conducting of what were called “workshops” was entrusted by Astea primarily to Mr. Nigel Vant, who was at that time employed by Astea as a business consultant. Much of the work for which Astea claims in this action in relation to performance of the Services was actually undertaken by Mr. Vant, but he is not central to the facts relevant to the matters which I have to decide. The Configuration Services were not complete by the date of the alleged acceptance by Time of a repudiation of the Contract on the part of Astea, but the focus of attention in relation to the alleged repudiation was the non-completion of the Integration Services, rather than the non-completion of the Configuration Services.

An internal e-mail sent on 8 June 2000 by Mr. Brotherston to Mr. Keith Anyon of Time, a copy of which was put in evidence, indicated that by that stage it had been accepted within Time that completion of the Integration Services would not be achieved by 1 August 2000, for Mr. Anyon was being asked to look at the list of functions which he would require to be working for that date.

Mr. Ian Mapp, who was, until the end of 2000 European Operations Manager of Astea, and then became European Product Director, sent to Mr. Brotherston an e-mail on 18 June 2000 in which he set out how Astea then saw progress towards achieving Time’s wishes in relation to completion of the Integration Services. What he said was this:-

there will be no electronic transfer of data from existing systems;

we will assist in the definition of reports from ServiceAlliance, but Time will be responsible for their production.

Astea match documented process flows to ServiceAlliance to identify any potential gaps

documenting of interface specification begins

3 day workshop to identify screen/business rule changes and follow draft ServiceAlliance processes

Milestone: confirmed processes

Milestone: agreed interface specifications

Coding work on interfaces begins

2 days of setup for production environment – database, clients

AllianceStudio work begins on changes, including knowledge transfer to Time personnel

Milestone: documented ServiceAlliance processes

Milestone: training materials produced

Milestone: Reporting Requirements Defined

Project Review Meeting

delivery /testing of interfaces begins

user training begins

manual data loading begins

Milestone: User Training completed

Milestone: Interfaces signed off

Milestone: System signed-off for production

Milestone: Cutover to ServiceAlliance

live running initial support

Project Sign-off meeting

Mr. Tahir Mohsan, the managing director of Time, gave evidence at the trial. I have to say that I did not find him to be at all a satisfactory witness. Over a number of matters his evidence in chief or initially in cross-examination was shown to be incorrect by reference to contemporaneous documents. It was suggested by Mr. Kinsky to Mr. Mohsan in terms that he was simply making up some of his evidence as he went along. I was initially sympathetic to the view that Mr. Mohsan is a gentleman who, at the time of the events which have given rise to this action, and now, has many calls upon his attention and not an especially good memory, particularly in relation to matters which he considered at the time they were happening not to be especially significant. Unhappily it became plain to me that, in relation to the evidence which he gave as to a meeting, to which I shall come, between him and Mr. Noble on 6 March 2001, what Mr. Mohsan said was so far at variance from contemporaneous documents of which he himself was the author, that his evidence was untrue to his knowledge. It also became plain to me that an alteration in Mr. Mohsan’s evidence in relation to the basis upon which an assessment of the amount charged to Time by Lynx for work in connection with the integration of the Software and CS/3 was the result of Mr. Mohsan making up his revised evidence on the point in the witness box. Those conclusions have coloured my approach to all of his evidence. However, whether, as Mr. Kinsky suggested, Mr. Mohsan was to an extent making up his evidence of matters in addition to those which I have specifically mentioned, or whether his recollection of relevant events, other than as to those matters to which I have referred, is simply very poor, the net result was the same, namely that I did not feel that I could rely upon the evidence of Mr. Mohsan save in respects in which it was corroborated by contemporaneous documents.

An example of the unreliability of the evidence of Mr. Mohsan is that he assured me that in his belief a contract was concluded between Time and Astea in the terms of the Purchase Order, that there were no negotiations between Time and Astea after the despatch of the Purchase Order, and that he was unaware of the fact that the Contract was in prospect or had been concluded until much later than the summer of 2000. That evidence cannot be reconciled with his receipt, which he did not dispute, of an e-mail dated 2 July 2000 from Mr. Brotherston and his response to that e-mail. In the e-mail dated 2 July 2000 Mr. Brotherston wrote:-

Mr. Mohsan did not respond to the e-mail dated 2 July 2000 sent by Mr. Brotherston which I have quoted in the preceding paragraph. That prompted Mr. Brotherston to send a further e-mail to Mr. Mohsan, dated 7 July 2000. In that e-mail Mr. Brotherston wrote:-

In a facsimile transmission dated 3 July 2000 to Mr. Mohsan Mr. James Spencer of Lynx wrote, so far as is presently material, as follows:-

It is clear that all was not plain sailing in relation to the installation of CS/3 or Pulse. In an e-mail dated 10 July 2000 to Mr. Brotherston Mr. Keith Anyon, who was, at that time, and remains, employed by Time as Business Process Re-engineering Analyst (Internal systems) and had a particular focus on service operations, wrote, with reference to “Astea/Lynx” :-

By 11 July 2000 Mr. Dundas had produced four BRDs in respect of the integration of the Software with CS/3 and one in relation to the integration of the Software with Pulse. The four BRDs in respect of the integration of the Software with CS/3 were each titled with a reference to CS/3 but were otherwise called, “Customer Synchronisation and Installed Base Creation”, “Product Master Synchronisation”, “Integration – Stock Movement in ServiceAlliance” and “Integration – Billing and Cost of Sales”. The BRD in relation to Pulse was simply entitled “Call Centre System Integration”. Those BRDs were sent by e-mail on 11 July 2000 by Mr. Dundas to Mr. Brotherston, Mr Anyon and Mr. Steven Devine, at that time IT Manager of Time. They were copied to, amongst others, Mr. Khalid Elbarjaj, a developer employed by Astea at its Dutch office. The reason for copying the BRDs to Mr. Elbarjaj was that it was envisaged that it would be he who undertook the programming work necessary in order to effect the interfaces between the Software and Pulse and CS/3. The whole purpose of preparing a BRD was in order to obtain confirmation from a client that its requirements from a business point of view had been correctly understood by Astea, or clarification of what those business requirements were. In the event there was no reaction on behalf of Time to the BRDs to which I have referred until a meeting to discuss them took place on 30 and 31 August 2000. However, Mr. Anyon did send an e-mail on 12 July 2000 to Mr. Brotherston enquiring as to the procedure for signing off the five BRDs.

The problems with CS/3 and Pulse, coupled with the time which it took to negotiate the terms of the Contract as executed, seem to have prompted Time to put back the date as at which it expected the Software to become operational, a point sometimes referred to in the contemporaneous documentation as “Cutover”. It appears that Mr. Brotherston told Mr. Beel of this decision on about 13 July 2000, the day before Mr. Hope signed the Contract on behalf of Time. Mr. Beel reported on the conversation in an e-mail dated 13 July 2000 to Mr. Noble, as follows:-

Mr. Anyon returned to the theme of having to devote his time to the important tasks of trying to get Pulse and CS/3 to work in an e-mail to Mr. Taylor and to Mr. Brotherston dated 14 July 2000. He said:-

Meanwhile thought was being given within Astea to the question of allocating resources to do the work which needed to be done in relation to the Integration Services. At that time all of the programming resources of Astea were based at its office in the Netherlands. Mr. Bart van den Hurk of that office sent an e-mail to Mr. Mapp on 17 July 2000 in which he said:-

Mr. Mapp anticipated that it might be difficult for him to find the programming resources which he needed at the time he would need them. He thus enquired of Astea’s American parent company as to whether it had spare capacity. He sent an e-mail to Mr. Bruce Breder on 17 July 2000 in which he said:-

A full licence key to the Software was handed over by Astea to Time on 21 July 2000. As I have already recorded, the Contract was signed on behalf of Astea on 23 July 2000.

While the formal position of Time on its statement of case was that it required Astea to prove the accuracy of the time and expenses sought to be charged on Astea’s invoices in relation to the provision of the Services, Mr. Hossain in fact relied upon the invoices in question as an accurate record of time spent in cross-examining Mr. Mapp, in particular, to the effect that the resources devoted to providing the Services in a timeous fashion were inadequate. I am satisfied that that was an appropriate course to take and that the invoices were an accurate record of the time spent and expenses incurred. Mr. Hossain made a helpful analysis of the invoices which demonstrated that Mr. Elbarjaj worked on the programming of the interface between the Software and CS/3, or on the configuration of the Software, on 10 and 11 August 2000, 14 to 18 August 2000 inclusive, 28 to 31 August 2000 inclusive, 1 September 2000, three other unidentified days in September 2000, 5 October 2000 and 8 to 13 October 2000, inclusive. In addition the invoices rendered in connection with the Services showed that Mr. Vant worked on providing the Services, principally, on the evidence, in conducting workshops and doing other work at the premises of Time in Burnley, on 3 July 2000, 9 to 11 July 2000 inclusive, 28 July 2000, on twelve days in August 2000, six days in September 2000, thirteen days in October 2000, ten days in November 2000, three and a half days in December 2000 and two days in January 2001. In addition to this time the invoices to which I have referred indicate that Mr. Tonen did indeed spend the contemplated two days on working on the Services during August 2000, and that Mr. Mapp himself spent a total of one and a quarter days on the provision of the Services.

As at 25 July 2000 the implementation of both CS/3 and Pulse was in crisis. That is clear from the fact that by an e-mail of that date to a large number of Time personnel Mr. Mohsan’s secretary indicated the timing of daily meetings which were to take place with him that week in relation to the implementation of CS/3. The next day she sent an e-mail indicating that the meetings were thenceforth to take place three times each day. It had been envisaged that both CS/3 and Pulse would commence running, or, in the language of the projects, “go live”, on 31 July 2000. In an e-mail sent early on that day Mr. Devine requested Mr. Anyon to make sure that no one used either CS/3 or Pulse. He repeated that message to a wider readership a little later on the same day. It was not until 5 August 2000 that Mr. Anyon indicated that Pulse could be used, although it was running slowly.

On 31 July 2000 Astea raised its first clutch of invoices. The first sought payment of the first two one-third instalments of licence fees in respect of the Software. Invoices were also raised in respect of the time and expenses of Mr. Vant and Mr. Dundas in respect of work in connection with the Services during the month of July 2000.

After the anticipated date for the Software to become operational was deferred from 1 August to 1 September 2000 Time seems to have taken no steps to prepare for that to happen. That failure to take any steps prompted Mr. Mapp to send to Mr. Brotherston an e-mail on 7 August 2000 in which he said:-

In an e-mail to Mr. Elbarjaj sent on 12 August 2000 Mr. Mapp asked him to specify what he considered would be the delivery dates for the interface packages upon which he was working. Mr. Elbarjaj replied on 14 August 2000 indicating that he thought that CS/3 Billing and Cost of Sales would be complete by 17 August 2000, CS/3 Stock Movement would be complete by 4 September 2000, CS/3 Customer Synchronisation and Installed Base would be complete by 13 September 2000, CS/3 Product Master Synchronisation would be complete by 20 September 2000, and Call Centre System Integration would be complete by 19 October 2000, each estimate being made on the assumption that he spent all his time on the Integration Services. In the light of those estimates it was obvious to Mr. Mapp on 16 August 2000 that it was unlikely that the dates proposed by Mr. Brotherston in his e-mail of 7 August 2000 could be met unless Mr. Elbarjaj was given some assistance in the required programming work. Mr. Mapp does not appear at that time to have sought to identify any source of such assistance. He may have had in mind that on the Time side there seemed to be a concentration of effort on resolving problems with CS/3 and Pulse, accompanied by a lack of attention to the question of the Software, as was evidenced in part by the fact that he had to raise with Mr. Brotherston what was the plan for completion of the Services, rather than Mr. Brotherston raising it with him.

A “kick off” meeting to get the project for the operational implementation of the Software after completion of the Services started was held on 16 August 2000. Mr. Anyon made up a list of action points following the meeting. There were a number of fundamental matters to be addressed. According to Mr. Anyon’s list these included:-

“Determine the user platform, requirements, and traffic to identify real hardware requirements including fat, thin and concurrent users.

Test the current available hardware that exists with the service alliance package…

Set up a test network utilising the proposed hardware solution….

Complete specification of integration/interfaces and produce a prioritised list of additional requirements to inc. Accounts

Review the details of the integration/interfaces spec and agree a testing plan….

Produce a project plan.”

As was plain from the terms of Mr. Anyon’s list of action points, by this stage the sufficiency of the BRDs prepared by Astea still had not been considered by Time. In an internal Time e-mail sent on 17 August 2000 Mr. Anyon confirmed the need, set out in his list of action points, to agree the BRDs by 25 August 2000.

From an e-mail sent by Mr. Taylor on 21 August 2000 it appears that by then he had seen and considered an implementation plan for the Software which:-

From an internal Time e-mail sent on 21 August 2000 by Mr. Paul Russell to Mr. Brotherston which was put in evidence it seems that by that time Astea was getting restive about the fact that the invoices rendered on 31 July 2000 had not been paid. Mr. Russell said in his e-mail that Astea were chasing for payment of the first and second instalments of the licence fees and sought confirmation from Mr. Brotherston that it was in order to make payment. In an e-mail of the next day to Mr. Mohsan’s secretary Mr. Anyon indicated that he had been contacted not for the first time by Astea seeking payment of the £133,000 which represented the first two instalments of the licence fees.

While, ultimately, it appeared, at least to Mr. Mapp, according to his evidence before me, that Mr. Vant may have misunderstood the position, Mr. Vant certainly had the impression that the problems which Time was having with Pulse meant that it was considering an enhanced role for the Software. He expressed his fear that this might be so in an e-mail dated 21 August 2000 to Mr. Noble. It is not necessary for me to make any finding as to what prompted Mr. Vant to write as he did in the e-mail, or what grounds he may have had for the fear which he expressed, although there was some evidence that Mr. Devine was giving the question of an enhanced role for the Software active consideration at the time. In any event, that Mr. Vant was contemplating that Time might be thinking of abandoning Pulse was undoubtedly consistent with the difficulties which it is clear Time was having with Pulse in August 2000.

Time was, and is, essentially a family company in which not only does Mr. Tahir Mohsan have a leading part, but also four of his brothers have prominent roles. The brothers who feature in the history of the matters with which I am concerned are, respectively, Zuber and Zia.

Another issue which moved into prominence towards the end of August 2000 which had some impact on the progress of moving the Software to the point of being operational was the question of the computer hardware necessary to enable the Software to run satisfactorily once integrated with CS/3 and Pulse. That issue had been the subject of a number of action points which resulted from the “kick off” meeting on 16 August 2000. Mr. Anyon sent an e-mail on 22 August 2000 to, among others, Mr. Zuber Mohsan seeking to prompt him to discuss with Mr. Dundas the requirements for setting up the Software on a network for testing and inputting of data. In the event Time took the view, at least initially, that the hardware requirements communicated by Astea were excessive. The failure to acquire and instal appropriate hardware created problems, to some of the detail of which I shall return. For the present it is enough to record that in an e-mail sent on 25 August 2000 to Mr. Brotherston, to await his return from holiday, Mr. Taylor described the issue in relation to hardware as “critical”, because “Tahir and Zuber insist the application server architecture is maintained and Service Alliance conflicts with this strategy.” Mr. Brotherston’s reply, in an e-mail dated 27 August 2000 was:-

On 24 August 2000 Astea raised two further invoices addressed to Time. One was for the final instalment of the licence fees due on 1 September 2000. The other was in respect of the time of Mr. Elbarjaj in providing the Services during the month of August 2000.

Mr. Dundas sent a revised server specification in relation to the requirements of the Software as an attachment to an e-mail dated 30 August 2000 to Mr. Brotherston.

I have already mentioned the fact that the sufficiency and accuracy of the BRDs was not addressed on behalf of Time until a meeting on 30 and 31 August 2000. That meeting was attended by Mr. Brotherston, Mr. Anyon and Mr. Taylor on behalf of Time and by Mr. Vant on behalf of Astea. Mr. Anyon went on holiday immediately afterwards. He did, however, prepare notes of the meeting before leaving. From those notes it cannot be said that the matter of agreeing or modifying the BRDs was dealt with at all satisfactorily. A number of points were raised, but effectively how matters were left was that Astea was to proceed on the basis that the points, “need to be addressed by Astea and, where necessary, update the Specifications accordingly or respond to questions that have been raised.”

On 31 August 2000 Astea raised an invoice in respect of the time of Mr. Tonen in undertaking the Services.

Work on the resolution of problems with CS/3 continued as at the end of August 2000. As an attachment to an e-mail with a wide circulation sent on 31 August 2000 Mr. Devine distributed an up to date list of the outstanding issues surrounding CS/3. On the same day Mr. Tahir Mohsan wrote to Mr. Spencer of Lynx and set out how Time saw the situation with CS/3 at that stage. The main points which he made were:-

At the beginning of September 2000 it appears that enthusiasm for the Software at Time was waning, other than with Mr. Brotherston and Mr. Taylor. An important part of the background to this seems to have been the problems which had been experienced with CS/3 and Pulse, and also with a new electronic point of sale (“EPOS”) software package which had been introduced in Time’s retail stores. Senior management at Time, in the shape of Mr. Tahir Mohsan’s brothers Zia and Zuber, appear, from e-mails which they each generated on 1 September 2000, to have wanted to try to make Astea accept responsibility for all aspects of the Software, including in particular integration with CS/3 and Pulse. Mr. Zia Mohsan’s e-mail was addressed to Mr. Brotherston. His reply included:-

Also on 1 September 2000 Mr. Taylor sent an e-mail to Mr. Devine on the subject of the hardware necessary to enable the Software to operate satisfactorily. He wrote:-

essentially we (the users) have completed 98% of the functional spec and process design which is fully documented

the integration spec has also been agreed with a few questions left to be clarified, this will be completed on Tuesday 5/9 ready for sign off (integration development has now been started by Astea)

the hardware platform/configuration/spec has been agreed between Astea, Zuber and Derek

An e-mail sent by Mr. Vant to Mr. Mapp on 4 September 2000 indicated that Mr. Vant had doubts as to how realistic it was at that time to expect that the Software would be operational by 18 September 2000. However, at the Time end Mr. Brotherston was also expressing some concerns, focused on the question of necessary hardware. In an e-mail of 4 September 2000 to Mr. Zuber Mohsan he wrote:-

A meeting about the Software was held internally within Time on 5 September 2000. The outcome was recorded by Mr. Taylor in an e-mail of the same date to Mr. Zia Mohsan and others. Part of the outcome as recorded was that additional resource for integration of the Software needed to be found and that further work needed to be undertaken on Pulse to prepare for integration. As an attachment to an e-mail of 5 September 2000 to Mr. Brotherston Mr. Taylor sent an implementation plan concerning the Software which provided for cut over to the Software on 3 October 2000. However, about the plan the e-mail itself said:-

On 6 September 2000 a further internal meeting concerning the Software took place within Time. Mr. Brotherston, who was the project manager of the Software programme at the Time end, was not invited. His perception, and that of Mr. Taylor, seems to have remained that only the two of them at Time were at all interested in achieving the successful implementation of the Software. Mr. Taylor in an e-mail to Mr. Brotherston sent on 6 September 2000 wrote, among other things:-

It appears that one consequence of the dissatisfaction of Time with the performance of Lynx in relation to CS/3 was that Time did not pay invoices rendered by Lynx. That was the subject of correspondence between Lynx and Time, including a letter dated 7 September 2000 from Mr. Peter Lloyd, the managing director of Lynx, to Mr. Tahir Mohsan. The material part of the letter was in these terms:-

In the action between Time and Lynx Time sought an interim injunction preventing Lynx from activating the time lock on CS/3. A number of affidavits were sworn in support of that application, including one by Mr. Devine on 29 November 2000. In that affidavit Mr. Devine gave an account, the accuracy of which he confirmed in his evidence before me, and which I accept, of the difficulties which Time experienced with CS/3 after it was supposed to have “gone live” on 28 July 2000. What he said was:-

As was plain from the evidence of Mr. Anyon, Mr. Taylor and Mr. Devine before me, the very real problems with CS/3 and Pulse, the former of which affected essentially the totality of Time’s business, were the main focus of attention within Time during the period from the end of July 2000 up to at least settlement of the litigation between Time and Lynx just before Christmas 2000. Between about the end of August and the end of November 2000 the commitment of Lynx to resolving the difficulties was affected adversely by the continuing failure of Time to pay sums considered by Lynx to be due. Both the problems and the time taken to solve them had a significant impact upon the work of integrating the Software with CS/3 and Pulse, not least because it was necessary for Lynx and Astea to co-operate to a degree in order to achieve an effective interface between the Software and CS/3. On the Lynx side the work of developing the interface was sub-contracted to VI Software Ltd. (“VI”). For a period while the litigation between Time and Lynx was proceeding Lynx was not prepared to instruct VI to have any dealings with Astea, and that delayed work on testing integration software, as I shall relate.

While non-payment of the invoices of suppliers with whose efforts he was not content may have seemed to Mr. Tahir Mohsan a sensible tactic, its effect so far as Astea was concerned was in September 2000 to provide a disincentive to commit resources payment for which was considered uncertain. This was explained to Mr. Mohsan by Mr. Brotherston in an e-mail of 12 September 2000. Mr. Brotherston wrote:-

Mr. Brotherston emphasised the point in an e-mail sent on 14 September 2000 to Mr. Zia Mohsan. He said:-

It seems from the terms of an e-mail sent by Mr. Brotherston to Mr. Tahir Mohsan’s secretary on 20 September 2000 that Astea’s persistent requests for payment were fended off temporarily by a promise that Mr. Mohsan would speak to Mr. Noble about the matter. However, that had not happened and it is plain from an e-mail which Mr. Brotherston sent Mr. Zia Mohsan on the same day that Astea was again becoming restive so that:-

The question of payment of Astea had not been resolved by 22 September 2000. On that date Mr. Brotherston sent Mr. Tahir Mohsan an e-mail in which he said:-

The matter of payment of Astea was not resolved until 27 September 2000, by which time Astea activities had been suspended for about two weeks. In an e-mail dated 25 September 2000 to Mr. Zia Mohsan Mr. Brotherston warned that:-

In an e-mail sent on 26 September 2000 to Mr. Brotherston Mr. Anyon again mentioned the “need to have equipment that is to the required specification from Astea”. Mr. Zuber Mohsan at length announced in an e-mail dated 28 September 2000 to Mr. Taylor that the required upgrading of hardware to enable testing of the Software on a five user system would take place.

Mr. Elbarjaj arranged to visit the premises of Time in Burnley on 5 October 2000. In advance of his visit Mr. Taylor prepared an agenda for the meeting with him and a revised project plan. The agenda and project plan were sent as attachments to an e-mail to Mr. Devine and others dated 2 October 2000. The agenda specified the first item for discussion as “Actions required to achieve go-live date 30^th October 2000”. That reference to “go-live” was to the Software starting to run. The revised project plan recorded 30 October 2000 as the date for “implementation phase” of the Software and 13 November 2000 as the date for “Cut over to Service Alliance”. The dates set out in the revised project plan represented further modification of dates previously indicated by Time. They were again the product of revised requirements on the part of Time as a result of its continuing difficulties with CS/3 and Pulse and the resources which Time had to deploy to grappling with those difficulties, which in consequence were not available to devote to pursuing the project in relation to the Software. Those continuing difficulties were mentioned by Mr. Keith Bond, the manager of the Call Centre, in an e-mail sent on 2 October 2000 to Mr. Devine in which he said of Pulse:-

Mr. Anyon prepared minutes of the meeting with Mr. Elbarjaj on 5 October 2000 which were put in evidence. The other people who attended the meeting were Mr. Vant of Astea and Mr. Michael Bredbury and Mr. Jonathan Cleaver, who were both engaged on the development of Pulse. Mr. Elbarjaj was recorded as reporting that only two of the four integration packages for CS/3 and the Software had been completed, namely CS/3 Billing and Cost of Sales and CS/3 Stock Movement in Service Alliance, while the others had not been started. He was also recorded as reporting that the integration package between the Software and Pulse had not been started either. That may be a true record of what Mr. Elbarjaj said. It may be a correct statement of what the position was as at 5 October 2000. However, it is surprising as it is not easy to reconcile with other evidence put before me. As I have already set out, as at 14 August 2000, according to his timetable of projected activities to develop the software needed for integration of the Software with CS/3 and Pulse, Mr. Elbarjaj was envisaging that CS/3 Billing and Cost of Sales would be complete by 17 August 2000, CS/3 Stock Movement would be complete by 4 September 2000, CS/3 Customer Synchronisation and Installed Base would be complete by 13 September 2000, CS/3 Product Master Synchronisation would be complete by 20 September 2000 and Call Centre System Integration would be complete by 19 October 2000. The lengths of time which Mr. Elbarjaj indicated he then estimated to complete those integration packages were, respectively, 5 days, 7 days, 7 days, 5 days and 20 days. As, on the evidence of the invoices by which charges were made for his time, Mr. Elbarjaj had commenced work on the integration of the Software and CS/3 on 10 August 2000, by the time he gave his estimate on 14 August 2000 that it would take him 5 days to complete CS/3 Billing and Cost of Sales he had already been working on it for at least two days, and so should have been in a position to make a fairly accurate estimate. On the evidence of the invoices Mr. Elbarjaj in the event only worked on 15 days on CS/3 integration and on 4 days on what was described as “Customisation”, yet the integrated Software was delivered and installed by about 14 November 2000. There was some evidence that another developer in the Dutch office of Astea, Mr. Carlo Alberding, also worked on the integration of the Software, but no charge was sought to be made specifically for his time. A time sheet put in evidence showed Mr. Alberding spending 5 October 2000 working on CS/3 integration. In the result there was no clear evidence about how long it in fact took Astea developers to complete the work of integration of the Software with CS/3 and Pulse, and thus no clear evidence as to how accurate or otherwise the estimates made by Mr. Elbarjaj on 14 August 2000 proved to be. If his estimates were accurate the amount of time charged for his work prior to 5 October 2000 should have got him further forward than simply completing the two packages recorded in Mr. Anyon’s minutes of the meeting of 5 October 2000 as having been completed by then. The integration packages which were recorded in the minutes of the meeting of 5 October 2000 as not having been started Mr. Elbarjaj had estimated would take him 32 days to complete, yet in the event only 27 or so working days elapsed between 5 October 2000 and the date upon which the integrated Software was delivered and installed. Of those 27 or so days, Mr. Elbarjaj himself spent four working on “Customisation”, which I take to be configuration, and one, 12 October 2000, at another meeting at Time to which I shall come. Mr. Noble told me in cross-examination, and I accept, that in October 2000 the only developers employed by Astea in Europe were Mr. Elbarjaj and Mr. Alberding.

Whatever may be the position concerning the accuracy of the record of progress made by Mr. Elbarjaj up to 5 October 2000 as set out in the minutes of the meeting on that date, the minutes did not record any expression of dissatisfaction with the recorded progress or any reservations as to the attainability of the then desired implementation date of 30 October 2000. Some of the “Discussions and Decisions” set out in the minutes were:-

“Feedback on RMA acceptance by Service Alliance to Pulse still needs to be defined. There are several options including an error log and/or E-mail or separate error monitoring application/process etc.

The Interface Table that was originally in the Pulse Database will now be in the Service Alliance Database….

Existing Notes for customers will come through as Customer Attachments in Service Alliance i.e. the Notes will be viewed against the customer details

New Notes will come through as a Repair Order Attachment.

We agreed that we would DTS the following:

Companies 2 & 7 data.

The last 3 months of the rest.

The link from Service Alliance to Time’s Despatch process in CS/3 will be controlled by Service Alliance….”

The performance of CS/3 at this stage seems to have been the major question concerning Mr. Tahir Mohsan in relation to the software used by Time. In a letter dated 6 October 2000 to Mr. Spencer he wrote, so far as is presently material:-

After the meeting on 5 October 2000 Mr. Elbarjaj returned to the Netherlands. Mr. Elbarjaj and Mr. Bredbury exchanged e-mails on 10 and 11 October 2000 concerning various questions relating to the integration of the Software with Pulse. Mr. Elbarjaj then came back to Burnley for a meeting on 12 October 2000.The purpose of the meeting was for him to meet representatives of VI and Lynx to discuss the integration of the Software with CS/3. Mr. Anyon again attended this meeting and prepared minutes following it. The minutes included:-

It was required that more resource should be assigned to this task to allow for completion by the end of October. Nigel Vant has spoken to Ian Map [sic], Ian will respond by Monday, 16/10/2000 with a schedule….

Installation of all 5 parts of the Integration work Monday, 30/10/2000…

Khalid spent time with both Stuart and Mike Bredbury to resolve any issues he or they had, he was happy that all his points had been addressed and that he now had a point of contact with VI.”

Once more Mr. Elbarjaj returned to the Netherlands and was in contact by e-mail with Mr. Bredbury on 13 October 2000 and again on 16 October 2000.

On 16 October 2000 Mr. Mapp sent an e-mail to Mr. Anyon in which he indicated that, having looked at the work of integration between the Software and CS/3 and Pulse as then contemplated by Mr. Elbarjaj, and having considered the available capacity of Astea, he had in mind a staged delivery of integrated software which would not be fully completed until the end of November 2000. That prompted a response from Mr. Brotherston in an e-mail of 17 October 2000 in which he wrote:-

Mr. Brotherston’s comments in his e-mail dated 17 October 2000 seem to have caused Astea to consider whether it was correct that nothing had changed since July 2000 so far as the work of integrating the Software with CS/3 and Pulse was concerned. Mr. Elbarjaj produced a list of work which he regarded as additional to that originally taken on. The items which he identified were:-

After the despatch of the e-mail quoted at the end of the preceding paragraph Mr. Brotherston and Mr. Noble spoke. The outcome was recorded by Mr. Brotherston in an e-mail of 18 October 2000 to Mr. Taylor:-

Mr. Noble confirmed the conversation with Mr. Brotherston in an e-mail to him sent on 18 October 2000. He said:-

Mr. Elbarjaj and Mr. Bredbury exchanged e-mails each day during the week commencing 16 October 2000, but no charge was sought to be made by Astea for any work done by Mr. Elbarjaj that week. Mr. Bredbury finished his work on the project at the end of the week, on 20 October 2000. Mr. Cleaver took over from him. At that stage the work Mr. Bredbury had been doing on the interface between Pulse and the Software was not complete.

Mr. Noble made a progress report in relation to work on the interface between the Software and Pulse to Mr. Brotherston in an e-mail of 20 October 2000. It was:-

In an e-mail to Mr. Anyon sent on 23 October 2000 Mr. Elbarjaj indicated that he was being held up on his integration work and testing by lack of information from VI. Mr. Anyon replied on the same day with information concerning despatch. His e-mail concluded:-

The delays in provision of information by Time to Astea appear to have encouraged Mr. Noble again to raise the practicality of completion of the installation of the integration software by 30 October 2000. In a conversation with Mr. Brotherston he suggested putting delivery back by a week. Time agreed to that. Mr. Anyon confirmed that agreement in an e-mail to Mr. Noble sent on 24 October 2000:-

There were put in evidence a fair number of e-mail exchanges between Mr. Elbarjaj and both VI and those working on Pulse, like Mr. Cleaver, in the week commencing 23 October 2000. It seems that Mr. Elbarjaj again did work in that week for which Astea did not in fact seek to charge. At the end of that week, in an e-mail sent on 27 October 2000 to Mr. Anyon, Mr. Noble returned to the theme of information supplied late by Time and its implications for Astea’s work. The relevant part of the e-mail was in these terms:-

While there was almost no contemporaneous documentary evidence of Mr. Alberding working on the interfaces of the Software and CS/3 and Pulse, in an e-mail to Mr. Mapp sent on 1 November 2000 Mr. Noble wrote:-

Unhappily, after the illness of Mr. Alberding Mr. Elbarjaj himself went sick for a couple of days, and that put the date for installation of the integration software by Astea back to the week of 13 November 2000. Again Time seems to have accepted the position, which was recorded in a Lotus Notes document created by Mr. Anyon on 6 November 2000 in advance of a meeting with Mr. Brotherston and others within Time scheduled for the following day.

In the event Mr. Elbarjaj returned to the premises of Time at Burnley on 14 November 2000 to instal the integration software. That appears to have been completed, initially at least, by the end of 15 November 2000. Some parts of the work of installation appear to have continued until about 24 November 2000, although there is a degree of confusion on the evidence to what extent what Mr. Elbarjaj in fact did in the week commencing 20 November 2000 was properly to be regarded as installation of software which he had already produced, and to what extent it was modification of that software to provide facilities not originally included, or participating in the testing of the Software by Time.

Once the integration software had been installed by Astea the next main operation before the Software could become operational was testing of the Software as installed and integrated with CS/3 and Pulse by Time as user to make sure that the Software met its needs. In this phase the pace of work was primarily set by Time as the party undertaking the testing. The role of Astea in relation to testing was essentially to have an appropriate person available to assist Time with any problems with the Software encountered during testing. However, as is plain from e-mails already quoted in this judgment, there were some aspects of work desired by Time to the Software by way of addition or modification which had been put back into the user testing phase in order not to delay further the completion of the integration software. Mr. Vant’s perception of what remained to be done by Astea he set out in an e-mail to Mr. Mapp and Mr. Noble sent on 16 November 2000. He said:-

In an e-mail sent on 16 November 2000 to Mr. Anyon Mr. Allan Darlington of VI recorded that he would have to write a new program to enable data for Time’s 1 and 4 customers from a certain date to be transferred into the Software. He also said that he did not know how long the actual transfer of the data would take once the program had been written.

I need not, for the purposes of this judgment, descend into much detail in respect of the testing by Time of the Software. That process had not been completed by 21 February 2001 when an internal meeting took place within Time to which I should give some attention. However, it is appropriate to notice some of particular features of the period of testing.

In an e-mail dated 22 November 2000 to Mr. Anyon Mr. Mapp set out how Astea then saw the position in relation to outstanding work which it was to do. He wrote:-

By 24 November 2000 relations between Time and Lynx had deteriorated to such an extent that Mr. Lloyd of Lynx sent a formal notification to Time that Lynx would terminate its contract with Time unless Time paid all sums alleged by Lynx to be outstanding by 30 November 2000. It seems that that threat was implemented, with the result that as from 30 November 2000 there were no Lynx or VI personnel at Time’s premises able to assist with testing of the Software and the interfaces with CS/3.

Apart from the work being done by Mr. Elbarjaj, Astea also sent Mr. Keith Louden to Burnley in order to deal with the question of the production of labels by the Software. This was a self-contained task in relation to which no particular issue arises, but whilst involved in the work which he was actually sent to Burnley to do Mr. Louden’s assistance was enlisted by Time in trying to diagnose problems encountered during testing of the Software in conjunction with CS/3 and Pulse. This involvement arose, it seems, because after about the week of 20 November 2000 Mr. Elbarjaj returned once more to the Netherlands and provided assistance to Time during the testing phase from there. When Mr. Louden was on site at Burnley he was, as it were, flagged down by Time and asked to be the channel of communication with Mr. Elbarjaj, in particular explaining to him the symptoms of problems encountered by Time during testing. The real difficulty appears to have been that neither Mr. Anyon, nor anyone else involved with the testing at the Time end had sufficient knowledge or experience to be able to try to identify correctly whether particular symptoms manifested during testing indicated problems with the Software or with CS/3 or Pulse. An issue with which Time personnel seemed quite ill-equipped to deal was the problem of the rejection by the Software of data coming from CS/3 or Pulse which the Software regarded as invalid because it was not in the form in which the Software was expecting to be offered data. Mr. Anyon frankly acknowledged his limitations in an e-mail to Mr. Brotherston and Mr. Devine sent on 28 November 2000.

The problem with transfer of “Company 1” records from CS/3 to the Software which I have already mentioned first surfaced as a major issue in an e-mail which Mr. Anyon sent to Mr. Mapp and Mr. Elbarjaj on 1 December 2000. It seems to have been particularly frustration over that which prompted Mr. Brotherston to seek to insist that Mr. Louden, who was not himself a developer and could do no more than try to help to diagnose a problem and explain it to Mr. Elbarjaj, should remain at Burnley until all interfaces had been completed and tested by Time. That requirement was communicated to Astea by an e-mail from Mr. Anyon to Mr. Mapp sent on 1 December 2000. He replied the same day:-

to uncover any error records from the data synchronisation (you will probably start on this anyway)

to install the latest software for the RMA Engine machine

to structure a series of tests that will cover all foreseeable circumstances of the interfaces

to execute those test [sic] in conjunction with yourselves

to liaise with Khalid if changes/fixes are required.”

The problem with transfer of “Company 1” records continued over a number of days. In an e-mail sent on 3 December 2000 to Mr. Anyon Mr. Mapp suggested that the cause of the problem was that the data being offered to the Software was being rejected by the Software as invalid. Mr. Elbarjaj confirmed that diagnosis in an e-mail dated 4 December 2000 to Mr. Anyon. Mr. Elbarjaj dealt with the problem. He continued for the time being to deal with others. However, he had given notice to Astea to terminate his employment and he left its employ at Christmas 2000.

In an e-mail dated 12 December 2000 to Mr. Noble Mr. Brotherston recorded that:-

As Mr. Tahir Mohsan accepted in cross-examination, in the early part of 2000 when the possibility of acquiring the Software was under consideration, what he and the senior management of Time anticipated was a continuing rapid expansion of the market for personal computers. What in fact happened in the last quarter of 2000 was the collapse of the market. Radical measures had to be taken by Time to reduce costs. In particular, a considerable number of employees were made redundant. By reason of the periods of notice to which some of the dismissed employees were entitled the process of departures of those made redundant lasted from about December 2000 to April 2001

A settlement of the litigation between Time and Lynx was agreed on 20 December 2000. So far as is presently material the terms of settlement, which were set out in a formal written agreement, involved Time paying, in relation to a claim of Lynx to be paid a total of £1,069,570, sums totalling £504,000.

By an e-mail dated 22 December 2000 Mr. Noble informed Mr. Anyon that:-

In an e-mail to Mr. Mapp sent on 17 January 2001 Mr. Anyon informed him that:-

The process of testing by Time of the Software and its integration with CS/3 and Pulse continued along what seems to have been an orderly, if not very speedy, path until 21 February 2001. The witnesses called on behalf of Time all acknowledged that relevant Astea personnel were helpful and attentive during this period of testing, although there was a suggestion that time might have been saved if Mr. Elbarjaj or another developer had been on site at Burnley during the testing prior to the first arrival on site of Mr. Shergold on 23 January 2001. The suggestion involved the notion that diagnosis of a problem might have been faster if a developer had been on site rather than someone like Mr. Louden describing a problem to him over the telephone or in an e-mail. However, there was no hard evidence that time would have been saved, and I came to the conclusion that the significance of having someone like Mr. Elbarjaj on site was psychological rather than practical. In other words, if a developer had been present it would have made Time feel more confident that the resolution of problems was being taken seriously by Astea, but in practical terms would have made little or no difference to the speed with which issues were tackled. There was criticism by Mr. Hossain of the time which it took Mr. Shergold to become familiar with the Software and with the work which Mr. Elbarjaj had been doing. I have set out the effect of Mr. Shergold’s evidence on the point, which I accept. However, the time which it took him to become familiar with the Software and with the work of Mr. Elbarjaj is immaterial unless it caused work to be delayed which would not have been delayed but for his need to master a product new to him. There was no evidence of any such delay.

On 21 February 2001 an internal meeting took place within Time. The meeting was attended by Mr. Tahir Mohsan, Mr. Zuber Mohsan, Mr. Zia Mohsan, Mr. Brotherston, Mr. Devine and Mr. Anyon. In advance of the meeting Mr. Anyon was asked to prepare, and did prepare, a document called “Service Alliance Update”. That document was in the following terms:-

Products load complete

Customers load complete.

Installed Base (Customers and Invoiced Items).

Site creation for customers with different Invoice and Delivery Addresses (VI Proposal)

Modification work on Serial Numbers almost complete (VI).

Warranties to be attached to Customer Items.

Address Data mismatch in Pulse causing the RMA to fail.

Serial Numbers being worked on by VI needed to complete the creation.

Process testing to be done.

Not currently working in Astea – to be worked on after the RMA process is completed.

Some are done more need to be done.

Work done by Jon Cleaver, needs to be linked to Service Alliance.

Work done by Jon Cleaver – needs testing once the RMA process is working.

Dependent on the above work being completed

Dependent on all above.

Priority that Time gets from Astea due to length of time the project has overrun.

No delivery – no payment to Astea.

Number of Astea staff available.

Initial Development work done in Holland.

Much of the work done remotely, very slow process.

Staff turnover at Astea – 3 developers have worked on this project at different times.

Loss of staff here – Jon Cleaver.”

Exactly what prompted the summoning of the meeting on 21 February 2001 was somewhat obscure. Although the status report in relation to the Software which I have quoted in the preceding paragraph was prepared for the meeting, Mr. Tahir Mohsan also asked his secretary to prepare an “Action Sheet” for the meeting. He told me that the purpose of having such a sheet at a meeting which he attended was so that a record could be made of what actions were to follow from the meeting. Rather puzzlingly, the “Action Sheet” for the meeting on 21 February 2001 was entitled, “Action Sheet IV Quotation meeting 21. 02. 01 @ 2.30 pm”. The reference to “IV Quotation” was not satisfactorily explained. The “Action Sheet” bore upon it in the manuscript of Mr. Tahir Mohsan these words:-

Mr. Brotherston, Mr. Devine and Mr. Anyon each gave evidence about the meeting on 21 February 2001. None of them had any very definite recollection of it, but Mr. Brotherston did say at paragraph 62 of his first witness statement:-

Mr. Tahir Mohsan in his second witness statement, at paragraph 18, commented upon the paragraph in the first witness statement which I have quoted in the preceding paragraph. He indicated that his recollection was different. He said that:-

The apparent suggestion in Mr. Mohsan’s second witness statement that he decided at or before the meeting on 21 February 2001 that Time did not wish to proceed with the Software because of the time which it had taken to complete the integration software and the configuration of the Software to the requirements of Time was not borne out by the fact that after the meeting which he attended the further meeting involving Mr. Anyon, Mr. Taylor, Mr. Bond and Mr. Flanagan took place. The notes of that meeting made by Mr. Anyon recorded that it was a “Meeting to discuss the effect of not using Service Alliance”. The terms of the notes indicate that the purpose of it was to seek to evaluate the implications if a decision was made not to continue with the Software. The notes included:-

Repair Demand Balancing

Changes to the Configuration of Customer equipment after the Repair

Capture of Labour and Material cost of Repair.

Specific Service Centre Stock Management

Component usage analysis by Engineer

Component reliability analysis.

Reliability of the system

Level of support if there are more users.”

Mr. Brotherston in his first witness statement at paragraph 64 explained that following the meeting which he attended on 21 February 2001 he sought to arrange the meeting between Mr. Tahir Mohsan and Mr. Noble which Mr. Mohsan had asked him to arrange. It is clear that Mr. Mohsan did at some point between 21 February 2001 and 24 February 2001 ask Mr. Brotherston to arrange such a meeting, and the date fixed was 6 March 2001. In an e-mail to Mr. Mohsan sent on 24 February 2001 Mr. Brotherston wrote as follows:-

In advance of the meeting of 6 March 2001 between Mr. Tahir Mohsan and Mr. Noble Mr. Mohsan’s secretary prepared an “Action Sheet” for it. The only people who attended the meeting were Mr. Mohsan and Mr. Noble. Mr. Mohsan made some manuscript notes on the “Action Sheet”, but otherwise there seems to have been no precisely contemporaneous record of it. However, there was correspondence shortly after the meeting between Mr. Noble and Mr. Mohsan the terms and tenor of which, in my judgment, indicate plainly the substance of the discussion. Mr. Noble and Mr. Mohsan each gave evidence at the trial of what happened at the meeting. Mr. Noble’s account was supported by the correspondence to which I have referred and the relevant parts of which are set out in the succeeding paragraphs of this judgment. Mr. Mohsan’s account was at considerable variance from the correspondence and his explanations for the discrepancies implausible. As I have already indicated, I am satisfied that the evidence of Mr. Mohsan concerning the discussion at the meeting was untrue to his knowledge.

Mr. Mohsan’s manuscript notes made at the meeting on 6 March 2001 said only this:-

In his first witness statement Mr. Noble gave a full account of the meeting on 6 March 2001. That account was:-

One of the remarkable aspects of the evidence of Mr. Tahir Mohsan in relation to his meeting with Mr. Noble on 6 March 2001, which on any view was a very important meeting, was that in his first witness statement he dealt with it in rather general terms. Then, having seen the detailed account in Mr. Noble’s first witness statement, in his second witness statement Mr. Mohsan gave rather more detail. It seemed to me that Mr. Mohsan wanted to have a good understanding of what Mr. Noble’s evidence as to the meeting was before committing himself to any very definite account of his own.

In his first witness statement Mr. Mohsan said this about the meeting on 6 March 2001:-

In his second witness statement Mr. Mohsan expanded upon the account of the meeting of 6 March 2001 given in his first witness statement as follows:-

The account given by Mr. Tahir Mohsan in his two witness statements of the meeting on 6 March 2001 does not seem to me to be remotely plausible. It was not made more plausible by the way Mr. Mohsan told the story in the witness box. In its essentials the tale which Mr. Mohsan would have me believe is that, after lengthy and inexcusable delays on the part of Astea in putting the Software into operational condition, he summoned Mr. Noble to a meeting for the express purpose of terminating the Contract, and did so, but yielded to the entreaties of Mr. Noble to take pity upon his personal position by accepting that in the first instance the project in relation to the Software should be represented as on hold, although it was actually terminated, to give Mr. Noble a chance to see if Astea could find another customer which would be prepared to take over the Software from Time. That story just makes no commercial sense. If in truth Mr. Mohsan did believe that Astea was in breach of the Contract by reason of the delay in completing the implementation of the Software, and he had decided on that account to terminate the Contract, there was no obvious reason for him to do anything other than tell Mr. Noble the glad tidings and send him on his way. There was certainly no reason for Mr. Mohsan to show compassion to this, on his version, incompetent company and its managing director, or to take any interest in trying to assist it avoid problems with its parent company. If, on the other hand, Time was, from Mr. Mohsan’s perspective, stuck with an obligation to pay over £200,000 for software for which the business case had disappeared in the light of the collapse of the market in the United Kingdom for personal computers, there was every incentive, if Astea was willing, to seek to slough off that obligation by finding someone prepared to take an assignment of the licences granted under the Contract. That, I am satisfied, is the reality of the position, and that analysis is confirmed by the contemporaneous exchanges between Mr. Mohsan and Mr. Noble, to which I am about to turn. Before I do, it is material to record that in cross-examination Mr. Mohsan, unworthily as it seemed to me, identified what he described as aggressive United States accounting practices, with which he sought to associate the notorious names of Enron Corporation and other recent spectacular business failures in the United States, for the fact that Astea had booked as revenue for the then current year the licence fees payable under the Contract. In my judgment there was no substance in any suggestion that what Astea had done was in any way inappropriate. As of 1 September 2000 the totality of the licence fees was due, and it needed to be accounted for in the books of Astea accordingly. Not to have done so would inevitably have led to problems in relation to corporation tax and Value Added Tax.

The ingratiating tone of the letter which Mr. Mohsan wrote to Mr. Noble on 6 March 2001 shortly after their meeting is wholly inconsistent with his account of what had happened at that meeting. What he said was:-

Mr. Mohsan did not keep his promise to get back to Mr. Noble later in the week beginning 5 March 2001. Mr. Noble caused Astea to suspend further work on integration of the Software, as agreed with Mr. Mohsan, but otherwise did not press for action immediately on the question of resolving outstanding issues between Time and Astea. Having heard nothing, he did write a letter to Mr. Mohsan dated 22 March 2001 in which he said:-

Mr. Noble’s letter dated 22 March 2001 drew forth no response from Mr. Mohsan. Mr. Noble sent him a letter by recorded delivery on 5 April 2001 which was in these terms:-

It was quite obvious, in my judgment, from the terms of Mr. Noble’s letters dated, respectively, 22 March 2001 and 5 April 2001, that he was expecting that Time would make some further payment to Astea, and was looking for some part of the sum which Astea considered to be due to be paid shortly, if legal action was to be avoided. In that context the terms of Mr. Mohsan’s reply to the letter of 5 April 2001 are surprising if Mr. Mohsan had any genuine belief that the Contract had been terminated by him for default on the part of Astea. He wrote, in a letter dated 17 April 2001 to Mr. Noble:-

At this point Astea resorted to its solicitors, Messrs. McGrigor Donald, now known as KLegal. A letter dated 26 April 2001 was written by that firm to Time, marked for the attention of Mr. Tahir Mohsan, requiring payment within seven days of sums claimed to be due, failing which further action would be taken. There was no reply to that letter. Messrs. McGrigor Donald then, under cover of a letter dated 11 May 2001 sent a statutory demand in relation to the outstanding invoices. That action prompted Time to instruct its own solicitors, Messrs. Halliwell Landau. That firm first wrote to Messrs. McGrigor Donald on 24 May 2001 indicating that it had been instructed and was taking detailed instructions. What those instructions were was set out in a letter dated 7 June 2001, namely:-

In the context of resisting the statutory demand Mr. Tahir Mohsan made a witness statement which he signed and dated 18 June 2001. In that statement, at paragraph 8, he dealt very briefly with his meeting with Mr. Noble on 6 March 2001. What he said was:-

In the event it was common ground between Mr. Hossain on behalf of Time and Mr. Kinsky on behalf of Astea that by 6 March 2001 the obligation of Astea in relation to completion of the Services was to complete them within a reasonable time. Mr. Kinsky submitted that that was the only obligation as to time which Astea had ever been under because the term of the Contract that, “Provided Time Group has provided timely assistance and cooperation on its part, the scheduled date of implementation by Astea shall be 1 August 2000.” was known not to be achievable by the date the Contract was signed on behalf of the parties and was not intended to amount to a binding contractual obligation. Alternatively, he submitted, if the term did impose a binding contractual obligation, it was an obligation to use reasonable endeavours, or, as he put it, reasonable skill and care, to meet the target date, which obligation was superseded by the modification of the target date by Time for its own reasons. With the waiver on the part of Time of the benefit of any term of the Contract requiring Astea to do anything by a particular date, submitted Mr. Kinsky, there arose in place of such obligation an obligation to complete the Services within a reasonable time. Mr. Hossain took the position that it was academic whether Astea had ever accepted any obligation to complete the Services by any particular date because on any view the last such date for which he would have been able to contend, 30 October 2000, or 6 November 2000, or 14 November 2000, was long past by the date as at which Time contended that it had treated the failure of Astea to complete the Services as repudiatory of the Contract and had accepted such repudiation as bringing the Contract to an end, 6 March 2001. For that reason he too proceeded on the basis that the relevant obligation was to complete the Services within a reasonable time.

Despite the agreement of Counsel that the relevant obligation on the part of Astea was to complete the Services within a reasonable time there was some difference of emphasis as to the precise nature of that obligation. Mr. Hossain submitted that in assessing what was a reasonable time I should take into account in particular the facts that the parties had a common timetable, that that timetable was broken down into elements, one of which was testing, in relation to which Mr. Mapp had originally thought it appropriate to allow one week, that on the evidence Astea was short of staff able to undertake the Services in the period up to 30 October 2000, and that Astea should have allocated to the provision of the Services that manpower necessary to achieve the timetable contemplated by Mr. Mapp when he prepared the e-mail of 18 Juen 2000. Mr. Hossain further submitted that I should consider delay to the completion of the Services in five periods, first from 11 July 2000 to 4 October 2000, second from 5 October 2000 to 14 November 2000, third from 15 November 2000 to 31 December 2000, fourth from 1 January 2001 to 14 February 2001, and finally from 15 February 2001 onwards. He also submitted that Astea should have directed Mr. Elbarjaj to spend all of his time working on the integration of the Software with CS/3 and Pulse as from about 10 August 2000 and should have allocated a second developer to work on the project as from about 16 August 2000. In other words, the focus of Mr. Hossain’s submissions as to what an obligation upon Astea to complete the Services within a reasonable time meant was upon what Astea did, and upon what else it might have done in order to make more swift progress, although he did accept that Astea did not have to take responsibility for delays which were outside its control.

Mr. Kinsky, on the other hand, submitted that the obligation upon Astea to complete the Services within a reasonable time was an obligation to complete the Services within a time which was reasonable in the circumstances in which Astea in fact undertook the Services, although it was not open to Astea to seek to rely upon its own failings as extending what a reasonable time would otherwise have been.

The distinction between these two approaches seemed to be that Mr. Hossain in effect was contending that Astea was bound to complete the Services as fast as humanly or technically possible, subject only to being excused in respect of delays over which it had no control, while Mr. Kinsky sought to persuade me that the question was not so much how fast the Services could have been performed by Astea had it chosen to allocate to doing so the greatest possible resources and to maintain them for as long as necessary, but rather, considering all of the circumstances, how long, as things turned out, it was reasonable for Astea to take.

Both Mr. Hossain and Mr. Kinsky endeavoured to seek support for their respective emphases from the well-known decision of the House of Lords in Pantland Hick v. Raymond & Reid [1893] AC 22. The leading speech in that case was that of the Lord Chancellor, Lord Herschell. At pages 28 and 29 of the report Lord Herschell said this:-

I was also referred by Mr. Kinsky to the speech of Lord Watson at pages 32 and 33 of the report, where he said:-

In Pantland Hick v. Raymond & Reid the issue was whether the consignee of a cargo was in breach of a contractual obligation to discharge the relevant vessel within a reasonable time, that is to say, a single obligation to do something within a reasonable time, rather than an obligation to do a number of things, where there was a single cause of delay, namely a strike of dockworkers, over which the consignee had no control and the effect of which, while it lasted, was to prevent totally performance of the obligation. In such a situation the application of the principle laid down by the House of Lords is straightforward. The application of the principle becomes more complicated if there is not a single thing which has to be done, but a number of things, and if there is not a single cause of delay, but a number of concurrent or interacting causes. Whether, where, under a contract, there are a number of things to be done to perform it, each of those things is to be done within a time which is reasonable for the doing of that thing on its own, or all of the things are to be done within a time which is reasonable for the doing of the aggregate is in my judgment, a question of construction of the contract with which one is concerned. I shall return to the issue of the construction of the Contract and to the question of whether, upon proper construction the Contract amounted in law to a single agreement or to two or three. In any case in which it is not said that there was a single all-embracing cause of delay, or a series of such causes, the focus of attention is likely to be upon the allocation of resources to performance of the relevant contractual obligations. In any sphere of commercial or personal life it is necessary for decisions to be made as to the relative priority of matters which need to be dealt with and as to the resources which it is appropriate to allocate to such matters. It would, I think, be wrong in principle to proceed upon the basis that an obligation to do something within a reasonable time was equivalent to an obligation to do it as soon as was practicably possible, subject only to not being held responsible for causes of delay outwith one’s control. After all, an obligation to do something under a contract within a reasonable time will only arise if either the parties have expressly agreed that that is the time within which performance will be given or, more commonly, the parties have not stipulated any particular time by which performance is to take place or the benefit of any such stipulation has been waived. What it seems to me the application of the test formulated by the House of Lords in Pantland Hick v. Raymond & Reid involves in a case such as the present is a broad consideration, with the benefit of hindsight, and viewed from the time as at which one party contends that a reasonable time for performance has been exceeded, of what would, in all the circumstances which are by then known to have happened, have been a reasonable time for performance. That broad consideration is likely to include taking into account any estimate given by the performing party of how long it would take him to perform; whether that estimate has been exceeded and, if so, in what circumstances; whether the party for whose benefit the relevant obligation was to be performed needed to participate in the performance, actively, in the sense of collaborating in what was needed to be done, or passively, in the sense of being in a position to receive performance, or not at all; whether it was necessary for third parties to collaborate with the performing party in order to enable it to perform; and what exactly was the cause, or were the causes of the delay to performance. This list is not intended to be exhaustive.

The next issue which arises for consideration is in what circumstances it can be said that a contract has been repudiated by reason of the fact that a party has been in breach of an obligation to complete performance of some contractual duty within what would have been a reasonable time. I was reminded by Mr. Hossain of the decision of the Court of Appeal in Charles Rickards Ltd. v. Oppenheim [1950] 1 KB 616. In that case the purchaser of a Rolls-Royce motor chassis wished to have a body built upon it and entered into an agreement for that to be done by a fixed date. The body was not completed by the stipulated date, but the purchaser continued to press for delivery. Delivery did not take place and eventually the purchaser gave a notice that unless delivery of the car with a completed body was effected within four weeks he would cancel the contract. The car was not delivered within the period of four weeks. However, thereafter the plaintiffs sought to deliver the car and, when delivery was not accepted, they sued for the sum due to them under the contract. The leading judgment was that of Denning LJ. He analysed the circumstances which I have summarised in this way, at pages 622 to 624 of the report:-

A little later, at page 626 of the report, Denning LJ said:-

Mr. Hossain submitted that the ability of a party to a contract to give such a notice as was given in Charles Rickards Ltd. v. Oppenheim making time of the essence of performance of a contractual obligation by a specified date depended upon it having been a term of the relevant contract originally that the particular obligation in question be performed by a date as to which time was of the essence of the contract and the benefit of that term having been waived. In any other case, he submitted, the effect of giving what purported to be such a notice was purely evidential, a failure to comply with a notice requiring performance within a specified time, if that was in fact a reasonable time, being evidence of an intention not to perform the relevant contractual obligation. In support of that submission he drew to my attention a passage from the speech of Lord Simon of Glaisdale in United Scientific Holdings Ltd. v. Burnley Borough Council [1978] AC 904 at pages 946E-947A:-

I accept the submissions of Mr. Hossain to which I have referred in the preceding paragraph. It seems to me that, correctly understood, the principle laid down by the Court of Appeal in Charles Rickards Ltd. v. Oppenheim is, as such, of limited application, being confined to cases in which the benefit of an express stipulation as to a date for performance has been waived and it is sought thereafter to reinstate a requirement that time is of the essence in relation to performance by a later date. It is clear, in my judgment, from the explanation for his decision, with which the other members of the Court of Appeal agreed, which Denning LJ gave between pages 622 and 624 of the report, in the passage which I have quoted, that it was not intended to extend to any case in which time for performance had not originally been of the essence of the contract. However, it is not only in that class of case that the question can arise whether the failure on the part of a contracting party to perform his obligations within a reasonable time can amount to a repudiation of the contract. This is important in the present case because no notice seeking to make time of the essence in relation to completion of the Services was ever given on behalf of Time. In a case in which time never was of the essence, or in which the benefit of a stipulation that time should be of the essence has been waived and no attempt has been made to reinstate it, the question can still arise whether a delay in performance beyond a reasonable time amounts to a repudiation of the contract which can be accepted on ordinary principles. The issue arose in Universal Cargo Carriers Corporation v. Citati [1957] 2 QB 402, a decision of Devlin J. That the issue can arise and how it should be approached were explained by the learned judge at the beginning of his judgment, at page 426 of the report:-

The decision of Devlin J. in Universal Cargo Carriers Corporation v. Citati was referred to and approved by the Court of Appeal in Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 QB 26, of which decision I was reminded by both Mr. Hossain and Mr. Kinsky. In particular I was reminded of the test of the circumstances in which a party could be said to have repudiated a contract set out in the judgment of Diplock LJ at page 66 of the report:-

Mr. Hossain submitted that the failure of Astea to complete the Services by 6 March 2001 at the latest amounted to a repudiation of the Contract, applying the test of Diplock LJ. While Mr. Kinsky did not dispute that the formulation of Diplock LJ was a convenient statement of the relevant test, he did submit that its application did not in the circumstances of the present case lead to the conclusion for which Mr. Hossain contended. As an alternative submission he contended that as the Contract, properly viewed, was not one single contract, but separate contracts in relation to the grant of the licences, on the one hand, and in relation to the Services, on the other, with a possible further subdivision between Schedule C and the Addendum, any repudiation on the part of Astea constituted by failure on the part of Astea to complete the Services within a reasonable time was a repudiation of the contract in relation to the Services only and not also a repudiation of the contract by which Time was granted licences to use the Software, which had been discharged by performance upon grant.

The application of the test of repudiation formulated by Diplock LJ in Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. is most straightforward in a case in which no performance at all of the obligations of one of the contracting parties has taken place and there is a straightforward refusal of performance. In any case in which there has been any degree of performance before the alleged repudiation the application of the test requires a qualitative judgment of whether failure to perform the remainder of the obligations of the relevant party will deprive the other party of substantially the whole benefit of the contract judged against the commercial purpose of the contract. It is likely to be necessary to consider not only what has been done, but alsothe value of that to the other party if nothing else is done. However, a flat refusal to continue performance will probably amount to a repudiation however much work has been done. On the other hand, if considerable work has been done in performance of a party’s contractual obligations and what is alleged to amount to a repudiation is not a flat refusal to perform, but an indication of an intention to continue to perform at a speed considered by the other party to be unreasonably slow, it may be very difficult to conclude that in those circumstances what is being offered will deprive the other party of substantially the whole benefit of the contract. On the contrary, it may appear that the innocent party will eventually gain exactly the benefit contemplated. The question will be whether, by reason of the time which will need to elapse before that happens, in commercial terms the party entitled to performance will be deprived of substantially the whole of the benefit which it was intended he should derive from the contract.

Mr. Hossain accepted, rightly in my judgment, that, even if Astea had committed a repudiatory breach of the Contract, that of itself did not bring the Contract to an end. It was necessary for Time to accept such repudiation. He submitted that it was not necessary for a decision to accept a repudiation to be made instantaneously upon the occurrence of the repudiatory breach. The innocent party in such a situation was entitled to a period in which to reflect and make a decision. He relied in support of that submission upon paragraph 87 of the judgment of Rix LJ in Stocznia Gdanska SA v. Latvian Shipping Co. [2002] 2 All ER (Comm) 768. In that paragraph Rix LJ said:-

Mr. Kinsky submitted that, in fact, in the light of the inclusion within Astea’s Conditions of clause 8.2, it was not open to Time in any event, even if there had been what would otherwise be a repudiatory breach of the Contract, to bring the Contract to an end by accepting such repudiation. He submitted that clause 8.2 provided exclusively for the circumstances in which the Contract, or any agreement contained within it, could be brought to an end. Thus, he submitted, no written notification of any default having been given in this case, it was not open to Time to terminate the Contract. Mr. Kinsky relied in support of this submission on the decision of Mr. Timothy Lloyd Q.C., as he then was, in Country and Metropolitan Homes Surrey Ltd. v. Topclaim Ltd. [1996] Ch. 307. The issue in that case was the proper construction and effect of condition 6.8 of the Standard Conditions of Sale, 2^nd edition, in relation to the giving of a notice to complete a contract for the sale of land. Mr. Lloyd held that that condition provided exclusively for the circumstances in which a notice to complete could be given in respect of a contract which incorporated the terms of the Standard Conditions of Sale, 2^nd edition, and that any right at common law to serve a notice to complete was thereby excluded. In the course of his judgment Mr. Lloyd considered the earlier decisions of Walton J. in Rightside Properties Ltd. v. Gray [1975] Ch. 72 and of Mr. Gerald Godfrey Q.C. in Dimsdale Developments (South East) Ltd. v. De Haan (1983) 47 P&CR 1 in relation to clauses as to the service of notices to complete in other sets of conditions governing sales of land. Taking the decision of Mr. Lloyd with the decisions to which he referred together, it seems to me, and I do not think that in the end Mr. Kinsky really disputed this, that the question whether a term in a contract which provides expressly for circumstances in which it can be terminated should be treated as excluding any right at common law to terminate in other circumstances or as conferring a cumulative right, is a question of construction of the term in question. Mr. Hossain submitted that in the case of clause 8.2 of the Contract it was plain that the right granted was in addition to, and not to the exclusion of, common law rights. He relied in particular upon the fact that under clause 8.2 a notice could be served in the event of any breach of contract, not merely a breach which would be repudiatory at common law. I accept the submission of Mr. Hossain. In my judgment, as was pointed out by Lord Diplock in Modern Engineering (Bristol) Ltd. v. Gilbert Ash (Northern) Ltd. [1974] AC 689 at page 717:-

Another point which Mr. Kinsky sought to take in reliance upon Astea’s Conditions was that under clause 6.3, “Astea will also have the option to extend, on a day-for-day basis, the related delivery schedule for each day an invoice [for out of pocket expenses] is past due”, so that for so long as Astea had rendered invoices in respect of expenses which were unpaid, time was at large. Mr. Hossain’s answer to that point, which strikes me as complete, was that whether or not Astea had that option it never sought to exercise it.

Mr. Kinsky submitted that the entitlement of Astea to payment of the sums which it claimed in this action was not contingent upon whether or not it was taken to have repudiated the Contract and that repudiation had been accepted. He relied in support of that submission upon a number of cases. One was Hyundai Heavy Industries Co. Ltd. v. Papadopoulos [1980] 1 WLR 1129. The views of the majority in that case on the basic principle can, I think, be considered as encapsulated in the reference by Lord Edmund-Davies at page 1141 of the report to the observations of Dixon J in McDonald v. Dennys Lascelles Ltd.(1933) 48 CLR 457 at page 476 as follows:-

Mr. Hossain submitted that in fact, if Astea had repudiated the Contract and that repudiation had been accepted by Time, Astea was not entitled to payment of the sums which it claimed. He contended that the reason for that conclusion was that, in the event postulated, there would have been a total failure of consideration. He relied upon an unreported, decision of H.H. Judge John Toulmin, C.M.G., Q.C., South West Water Services Ltd. v. International Computers Ltd., in which judgment was handed down on 29 June 1999. In particular he relied upon these observations at page 93 of the judgment which followed a consideration of a number of authorities in relation to a total failure of consideration:-

I reject the submission of Mr. Kinsky that the Contract should be viewed in law as two or three contracts, namely one in relation to the grant of the licences to use the Software, one in relation to the provision of the Services, and perhaps treating the Addendum as a separate contract. That analysis strikes me as wholly artificial from a commercial point of view, and unjustified by a consideration of the form and contents of the Contract itself. From a commercial perspective what Time wanted was not the Software in isolation, although it was, I find, capable of use as free-standing, “out of the box” software. What it wanted was the Software customised to its requirements and integrated with CS/3 and Pulse. The Contract was in form a single agreement behind a front sheet and title page and given a single agreement number. It called itself a “ServiceAlliance License and Support Agreement”, not just a licence. It was, apart from the Addendum, continuously paginated. Schedule C in which the nature of the Services was set out cross-referred to the licence and was given the same number as the agreement generally. The description “Schedule C” itself indicated that that part of the document was a subsidiary part of something larger. By Schedule C it was expressly provided that the Services were to be provided, “In accordance with the Software Agreement”. Astea’s Conditions, which followed Schedule C as the document was presented, were, from their terms, plainly intended to apply both to the grant of the licences and to the Services. Some provisions of Astea’s Conditions, and the terms relied upon by Mr. Kinsky, clauses 6.3 and 8.2, are good examples, could only in practice apply to the provision of the Services. The sole purpose of the Addendum was to modify Astea’s Conditions. While one has to admire the ingenuity of Mr. Kinsky in analysing the Contract as two or three agreements, it seems to me to represent a triumph of analysis over reality.

In the light of my conclusion in the preceding paragraph I find that the Contract was a single agreement and that it was, following the waiver on the part of Time of any insistence that the Services should be completed by 1 August 2000, a term of that agreement by implication of law that Astea should perform the totality of its obligations under that agreement within a time which was reasonable in all the circumstances as they in fact transpired for performance of those obligations in aggregate. Had it been necessary to do so, I should have found that the obligation in clause 15.5 of the Addendum, “Provided Time Group has provided timely assistance and cooperation on its part, the scheduled date of implementation by Astea shall be 1 August 2000”, was not an absolute obligation, subject to satisfaction of the stated condition, but, as a matter of construction, an obligation to use reasonable endeavours to achieve that date. The expresssion “date of implementation” in that sub-clause was qualified by the adjective “scheduled”. If the sub-clause were construed as creating an absolute obligation, subject to the stated condition, the word “scheduled” would serve no purpose. It would be mere surplusage. In my judgment the court should proceed, in construing a term in a contract, on the initial premise that each word included in the express term has been included for a purpose, and should seek to identify, and to give effect to, that purpose, so far as is consistent with the broad approach to construction of written documents indicated by Lord Hoffman in Investors Compensation Scheme v. West Bromwich Building Society [1998] 1 WLR 896 at pages 912- 913, of which I was reminded by Mr. Kinsky. While used as an adjective in clause 15.5 of the Addendum, the word “scheduled” is actually the past participle of the verb “to schedule”. According to The New Shorter Oxford Dictionary, 4^th edition, the primary meaning of the verb “to schedule” is “Put or enter in a schedule or list; spec(a) put (something) on a timetable or on a programme of future events”. In my judgment in clause 15.5 the word “scheduled” has the meaning of being put on a programme of future events, and in that sense the date stated was in the nature of a target to be attained if possible, not a date which was to be attained come what may. That date not having been met, or indeed required to be met if possible as matters turned out, the Contract was silent as to any obligation as to the time within which the obligations undertaken by Astea thereunder were to be performed, and thus the usual term which I have indicated fell to be implied as a matter of law.

Although it is not strictly necessary to reach any conclusion about the matter, it does not seem to me that the effect of Mr. Brotherston’s e-mail of 17 October 2000 or any later communications prior to the installation of the integration software on about 14 November 2000 was to vary the Contract so as to substitute a definite date for performance of the Services in place of the target date of 1 August 2000. The context of the discussion of all relevant dates was a further target to be aimed at, and moreover a target for achievement of a step which both parties recognised was intermediate to completion of the performance required of Astea under the Contract because it related only to the delivery and installation of integration software, not to the completion of the testing by Time of the Software as integrated.

What Astea had to do in order to perform its obligations under the Contract was, essentially, first to provide the Software in “out of the box” form to Time and to grant licences to use it; second, to customise it; third, to develop interfaces to enable it to be integrated with CS/3 and Pulse; and fourth, to assist with the testing of the Software by Time so as to ensure that the objectives of the earlier phases of the work were achieved. Obviously to an extent these operations could overlap, in that, for example, customisation could proceed after development of integration software during the testing phase, because the customised product would not, as such, be required until the Software became operational, which would not be until after successful testing had been completed. In fact, the Software in its “out of the box” form was provided to Time before the Contract was made and the licences took effect upon the making of the Contract. In reality, therefore, the consideration of what would have been a reasonable time for performance of the obligations of Astea under the Contract must be concentrated on the later operations. Of those later operations, the customisation of the Software was within the control of Astea as to how long it took, subject only to being made aware of exactly what customisation Time required. The integration of the Software with CS/3 and Pulse required, first, the development of those packages of software as intended to be used by Time to the point at which they were sufficiently developed or designed for development of interface software by Astea to be practicable, and, second, the provision to Astea of the information as to CS/3 and Pulse requisite to enable Astea to develop the interface software. The testing phase was substantially under the control of Time as to time, for the identification of any difficulties with the interface software and the resolution of those difficulties depended upon the pace of testing undertaken by Time.

Where under a contract work has to be done, and has been done, over a period, and the question arises whether the period over which the work was done exceeded what was a reasonable time, the onus is upon him who asserts that to demonstrate it. That is not simply to restate the burden of proof in civil litigation, but to point out the practical reality. There is no reason for a court to conclude that work could have been done any quicker than it was in fact done unless reasons can be identified as to why that is the correct conclusion. I make that rather obvious point because in the circumstances of the present case the manner in which the case of Time was presented betrayed little recognition of it. It is often the case, where the court is concerned with the undertaking of technical operations and with the issue what would have been a reasonable time for the completion of those operations, that expert evidence is led as to the period or periods which relevant operations ought to have taken as operations if entrusted to persons of appropriate expertise, or as to the expectations of the relevant industry as to the resources which it would have been appropriate to devote to the operations, or as to the impact which particular occurrences ought to have had. However, no expert evidence was led in the present case. In opening Time’s case Mr. Hossain made clear that that case depended upon two main assertions, namely that a comparison of the time scale estimated by Mr. Mapp in his e-mail of 18 June 2000, and Mr. Elbarjaj’s own estimate of 14 August 2000 of how much work was involved in the development of the necessary integration software to interface the Software, CS/3 and Pulse, with the indications in Astea’s invoices of how much time Mr. Elbarjaj in fact spent in developing the integration software showed that Astea had devoted insufficient resources to the development of the integration software, and that time was lost as a result of the changes in the Astea personnel working on the project. As matters turned out the latter point seemed to become that the resignation of Mr. Elbarjaj and his replacement by Mr. Shergold resulted in Mr. Shergold being either ineffective, or of reduced effectiveness, while he familiarised himself first with the Software and then with the Integration Services which had been performed before he joined Astea. The significance attached to the point about how much work Mr. Elbarjaj in fact did never seemed to come to a firm landing. In particular there was a considerable fog around the comparison of his own estimate of the time necessary and the charges made for his time. The only sensible conclusion seemed to be either that his own estimate was excessive or that in the event resources for which no charge was made were devoted to the necessary work. However that may be, Mr. Hossain submitted that if only Mr. Elbarjaj had started work sooner, or, once he had started work, had devoted all his time and attention to the project, or had had more help, the integration software would have been completed and installed sooner, which would have meant that testing started earlier, which in turn would have meant that the problems encountered during testing would have been identified earlier and solved before they in fact were, so that by 6 March 2001 everything would have been finished. This was all put on the basis of being a common sense conclusion.

The simplicity of the analysis for which Time contended concealed or ignored, as it seemed to me, fundamental difficulties. The most obvious was that, as Mr. Brotherston accepted at the time, and was not disputed before me, Time itself was not ready to receive installation of the integration software earlier than 30 October 2000 because of the continuing problems with CS/3 and Pulse. Thereafter there was a delay of two weeks in installation, principally on account of delay in provision of necessary information and illness. It may be that, had Astea put Mr. Elbarjaj to work sooner, or required him to work full time on the project, the impact of that illness might have been avoided and the integration software would have been ready for installation as soon as Time was able to receive it. However, what is quite clear is that the process of testing by Time took far longer than Mr. Mapp had contemplated back in June 2000. The reasons for this were not seriously investigated at the trial, although continuing problems with CS/3 and Pulse were revealed by the evidence. All of the Time witnesses who were cross-examined about it accepted that the Astea staff involved at this stage were willing and helpful. There was no suggestion that any particular operation of testing, or of modifying software to resolve difficulties encountered during testing, took longer than it should because of a failure of Astea to make staff available or to devote sufficient resources to problem resolution. There was a general suggestion that, had a developer been on site in December 2000 to observe problems as they arose, rather than Mr. Elbarjaj having the problems described to him by Mr. Louden, they might have been resolved sooner, but no solid grounds for that contention were advanced. I have referred to the general point made concerning Mr. Shergold. However, no instance was specified in which his absence from effective duty or inexperience resulted in work not being done which Astea should have done, or in it taking longer than it ought reasonably to have done. In the end the whole flavour of Time’s case that Astea had exceeded a reasonable time for completing the Services was of a “No frills” effort involving minimum expense and effort, at least on the part of everyone on the Time side other than Mr. Hossain, who put up an impressive struggle on Time’s behalf with minimal material. I am not satisfied on the evidence that Astea did exceed a reasonable time in performing its obligations under the Contract, or that it would have done so had it taken as long as Mr. Noble estimated in March 2001 it was likely to to achieve completion.

Even if, contrary to my finding, Astea had been in breach of the Contract as at 6 March 2001 by having taken longer than a reasonable time to perform its obligations under the Contract, it does not seem to me that such a breach would have been repudiatory. Astea had not refused to complete the Services. It was not suggested that as at about 6 March 2001 the resources devoted by Astea to completion of the Services – essentially Mr. Shergold on call as required – were inadequate. It was not suggested that Mr. Noble’s indication of an intention to complete the Services was not genuine. In all the circumstances, had I been persuaded that there had been a breach of contract, I should have held that it was one the consequences of which sounded in damages only.

If I had found that there was a breach of the Contract on the part of Astea in taking longer than what would have been a reasonable time to complete performance of its obligations under the Contract and that that breach was repudiatory, I should still have found that that repudiation was not accepted. I have already indicated that I do not accept the evidence of Mr. Tahir Mohsan as to his conversation with Mr. Noble at their meeting on 6 March 2001 and that I prefer the evidence of Mr. Noble, which I am satisfied is correct in every material respect. Perhaps anticipating that conclusion, or at any rate wishing to guard against it, Mr. Hossain contended that Time accepted the alleged repudiation by preventing, alternatively not requiring, further performance by Astea of its obligations under the Contract, or by resisting the statutory demand served on behalf of Astea, or by defending this action, or by advancing a Part 20 claim in this action. Once more these arguments demonstrate the devotion of Mr. Hossain to performance of his duty to his client. However, in my judgment there is no substance in any of these analyses. Whilst recognising the validity of the point made by Rix LJ in Stocznia Gdanska SA v. Latvian Shipping Co. in the passage quoted earlier in this judgment, what happened in the present case was not that Time took an opportunity to consider whether to accept a repudiation on the part of Astea, but that it indicated by Mr. Mohsan that it did not require Astea to continue performance for the time being – the project was put “on hold”. That was not done to enable Time to consider whether to terminate the Contract, it was done to give Mr. Mohsan a chance to try and think of a way of manoeuvring Astea into a position in which it accepted that Time was not going to pay the sums due under the Contract. I am completely satisfied that what prompted Mr. Mohsan to wish no longer to proceed with the Software was not any perceived dissatisfaction with the speed at which it was to become operational, but a change of mind on his part as to whether the benefits to Time in its changed circumstances justified the payment of the sum due to Astea.

For the reasons which I have given I find that Astea is entitled to the sums claimed in this action as modified by Mr. Kinsky in opening Astea’s case and that the Part 20 claim of Time fails and is dismissed.

Even if I had found that Astea was in breach of the Contract as alleged on behalf of Time, I should still have found that Time had failed to establish that it had suffered any loss by reason of such breach. I should have reached that conclusion on two separate grounds. The first is that I do not accept the evidence of alleged losses put forward on behalf of Time, for reasons which I am about to set out. The second is that I should have found that Time had failed to mitigate any losses by permitting Astea to complete the Services.

Before turning to consider in detail the evidence relied upon on behalf of Time as proving its alleged losses it is material to note that the elements of loss claimed in any event involve impermissible duplication. Time sought to claim both the amount of expenditure said to have been incurred without benefit in connection with the anticipated installation of operational integrated Software, comprising the Lynx Element, the Management Element, and the alleged cost of computer hardware “necessary for the implementation of the System” in an amount of £3,700, and compensation for loss of the benefits of savings of staff costs which it was contended would have followed from successful implementation of an operational, integrated Software. So far as the latter were concerned, it was contended that reductions of three employees, from seven to four, would have been achieved in the “Customer/Admin/Upgrades” department of Time, of six employees, from twenty-seven to twenty-one, in the Logistics department, and of two employees, from twenty-nine to twenty-seven, in the Inventory department. The cost of employing each of the superfluous employees was said to be £8,500 per annum basic wage, plus £1,000 per annum bonus, plus oncosts at 11%. The alleged amounts of wages which could have been saved, so it was said, were claimed from October 2000 to March 2001, amounting to a total of £48,330, with the claim continuing at a rate of £12,082 per month thereafter until December 2002. Mr. Kinsky submitted that Time could not, as a matter of law, recover both compensation for the alleged non-realisation of the benefits expected in terms of savings of staff wages from successful operation of the Software once integrated with CS/3 and Pulse and the costs which would have had to have been incurred in any event in order to achieve those benefits. I think that that proposition is self-evident. However, just in case it was not, Mr. Kinsky reminded me that it had seemed to Sir Raymond Evershed MR to be self-evident in Cullinane v. British “Rema” Manufacturing Co. Ltd. [1954] 1 QB 292. At page 302 of the report Sir Raymond said:-

Whilst noting that there was impermissible duplication in Time’s Part 20 Claim, so that, if proved, Time could not recover the full amount of each alleged element of claim, in fact in my judgment Time did not prove any of the elements in any amount whatever.

The evidence in relation to the Lynx Element was particularly unsatisfactory. A breakdown dated 9 November 2000 apparently prepared by Lynx of sums claimed from Time recorded as the sum due in respect of “Astea Integration (X-DTET)” as at that date as £22,000. At paragraph 8.6 of a witness statement made by him dated 18 December 2000 for the purposes of the litigation between Lynx and Time Mr. Devine verified the sum of £22,000 as what Lynx had charged for the work of integrating the Software into CS/3. The composition of the figure of £22,000, a round sum, was not indicated in any evidence put before me. An earlier version of the breakdown, setting out costs as at 16 September 2000, indicated that what was envisaged at that stage was that Lynx, having spent nothing up to that point, would incur contractor costs of £7,040 in the future in relation to “Astea Link”. None of the figures which I have mentioned so far in this paragraph are anywhere near the claimed figure of £89,417.50. That figure first appeared in Mr. Tahir Mohsan’s witness statement dated 18 June 2001 made in response to the service of a statutory demand on behalf of Astea. At paragraph 15 of that witness statement appeared this sentence:-

The evidence in support of the Management Element was that of Mr. Sean Slater, who is employed by Time as an IT project manager. What Mr. Slater had been asked to do was essentially to undertake some calculations for the validity of which he was unable to vouch. The calculations involved taking a cost for employing Mr. Anyon, Mr. Brotherston, Mr. Cleaver and others identified only by description, and applying to such cost in each case an assessment of how much time the person or persons concerned spent on working on the Software project. A similar calculation was undertaken in relation to an outside contractor, Mr. David Plant. While in cross-examination he claimed to have some impression, at least, of how much time Mr. Anyon, Mr. Cleaver and Mr. Plant spent working on the Software project, Mr. Slater made no such claim in respect of the others whose alleged costs he had calculated. Where Mr. Slater had an impression it was not based upon any contemporaneous record. The only record of any sort produced by Mr. Slater was copies of the invoices relating to the time of Mr. Plant. Each invoice expressly mentioned an underlying timesheet, but the relevant timesheets were not put in evidence. While I have no doubt that Mr. Slater sought conscientiously to perform the task which he was asked to perform, there was no reliable evidence that the exercise was appropriate in any case. I reject the Management Element as not proven in any event.

Mr. Taylor at paragraph 10 of his first witness statement dated 7 February 2003 commented that, of the hardware purchased to enable the Software to operate, some had been reused by Time. He did not say which, or for what purpose it had been used. He did not say which hardware had not been used or why. In the end I just had no idea which, if any, of the hardware originally purchased for use in connection with the Software had not been of use to Time or what the cost of that hardware had been. This element of claim therefore also fails for want of proof.

It was also Mr. Taylor who gave evidence in support of the claim in respect of loss of the contemplated ability to make staff savings from the introduction to operational service of the Software. At paragraphs 20 to 23 inclusive of his first witness statement Mr. Taylor explained which roles in the various departments to which I have referred would have been able to be dispensed with had the Software become operational. A problem with this evidence of Mr. Taylor was reconciling it with paragraph 24 of the same witness statement, and also with other evidence to which I shall refer. At paragraph 24 of his first witness statement Mr. Taylor said:-

Mr. Kinsky submitted that even in the case of a repudiatory breach of contract which the innocent party has accepted and thereby brought the contract to an end, the innocent party remains under a duty to mitigate its loss. In support of that proposition Mr. Kinsky relied upon the decision of the Court of Appeal in The Solholt [1983] 1 Lloyd’s Rep 605. I am satisfied that that decision does support the proposition for which Mr. Kinsky contended. Its application in the present case, Mr. Kinsky contended, was that Time ought, even if there had been a repudiatory breach of contract on the part of Astea, to have permitted Astea to have completed the Services in reasonable mitigation of its damages. I accept that submission. By 6 March 2001 the work which Astea had to do to perform the Services was all but complete. What remained was essentially being available to assist Time with any further problems. Time’s testing itself appears to have been well on track towards completion. The principal task to be tackled before the Software could become operational was the training of the relevant Time staff. All the alleged wasted cost losses would have been avoided, and the allegedly lost savings in staff costs for the future at least would have been achieved, if Time had permitted Astea to complete performance of the Services. As I have already said, there was no suggestion that the Software itself was defective or that the Integration Services or the Configuration Services had not been competently performed.

For the reasons which I have set out there will be judgment for Astea in the sum of £214,769.14, together with interest, as to which I will hear Counsel. Time’s Part 20 Claim is dismissed.

It only remains to express my gratitude to both Mr. Kinsky and to Mr. Hossain for the careful and thorough preparation each of them undertook of their respective clients’ cases and for their clear and concise submissions, which I have found of great assistance.