Aint Gobain Building Distribution Ltd (t/a International Decorative Surfaces) v Hillmead Joinery (Swindon) Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeHis Honour Judge David Grant
Judgment Date15 May 2015
Neutral Citation[2015] EWHC B7 TCC
Docket NumberCase no 2BM5 0015

[2015] EWHC B7 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

BIRMINGHAM DISTRICT REGISTRY

TECHNOLOGY & CONSTRUCTION COURT

Before:

His Honour Judge David Grant

Case no 2BM5 0015

Between:
Aint Gobain Building Distribution Limited (t/a International Decorative Surfaces)
Claimant
and
Hillmead Joinery (Swindon) Limited
Defendant

Draft made available to the parties on 23.03.15

Judgment handed down on 15.05.15

A: Introduction

The various persons involved

1

This case concerns the initial manufacture of laminated sheets, and their subsequent bonding onto MDF substrate to form bonded panels.

2

There is a long chain of interested parties, only two of whom are parties to these proceedings. The laminate sheets are manufactured by Polyrey in France. The claimant ("IDS") carries on business as a distributor of those laminate sheets, among other products. Polyrey has two distributors of their products in the UK: the other being BGN (page C/142). IDS is the larger, accounting to some 75% 1 of sales of Polyrey's laminate sheets in the UK.

3

The end-user of the bonded panels in this case was Primark which, with effect from around 2006 (page C/150), was engaged in a programme of fitting out some of its stores in the UK and Ireland. Primark engaged architects and other professionals to provide appropriate services in connection with that fitting out programme. Primark also had an in-house project manager who worked on the fitting out programme (Gerard O'Sullivan: cross-examination; transcript 2/117/19 – 21). In addition, Primark engaged Railston Design, who carried on business as shop-fitters, to carry out the shop-fitting.

4

Railston Design placed orders for bonded panels with the defendant ("Hillmead") for use in various of Primark's stores. In order to manufacture bonded panels, Hillmead purchased laminate sheets from IDS. While Hillmead had the capacity to manufacture some bonded panels, it subcontracted almost all of such work to other fabricators, primarily Arnold Laver. In turn, while it fabricated a

substantial number of bonded panels itself, Arnold Laver also sub-subcontracted some of that work to other fabricators e.g. J A Rose Ltd and Premier Post Forming Panels Ltd (see paragraph 11 of Darren Selman's first witness statement at page C/3)

The claim and counterclaim

5

IDS commenced these proceedings by claiming the price of various goods sold and delivered. That claim was met by Hillmead's counterclaim. The claim is admitted, with the consequence that the trial was effectively the trial of Hillmead's counterclaim. The counterclaim relates to different products from those which are the subject matter of the claim.

The sales alleged in the counterclaim

6

These are set out in schedule 1 to the defence and counterclaim (page 1/23). At trial Darren Selman of Hillmead's parent company 2, accepted that the ninth invoice was sent to, and paid by, MWC Fittings Ltd (transcript: Day 1/109/12–15): I therefore find that the ninth invoice does not form part of Hillmead's counterclaim. The dates of the sales are from 15 February 2008 to 12 June 2008.

Rejections

7

In paragraph 14 of his first witness statement, Darren Selman (although employed by Hillmead's parent company was also working as Hillmead's sales office manager) stated (page C/4) that Mark Shepherd (now deceased) of Railston Design had informed Ellis Greenhill, who was also employed by Hillmead's parent company, "… that there was a problem with the panels supplied to the Ealing Primark store, and

that Primark had rejected these panels. This was the first of a series of rejections." He stated there were subsequent rejections between May and July 2008.

The complaint

8

In paragraph 15 of his first witness statement, Darren Selman stated (page C/4–5) that "… I was aware that Primark and Railston Design were complaining that the panels were unsatisfactory as the surface finish of the panels was inconsistent, and had a mottled effect, and that ripples were evident across the surface of the panels". Although he referred to the fact of complaints in paragraph 6 of his witness statement, Gerard O Sullivan, a director of Railston Design, did not state what the substance of the complaint was; that may well have been because that aspect of the matter was dealt with at Railston Design by his late colleague Mark Shepherd.

The initial discussions

9

Hillmead's belief (not disputed by IDS) was that "Primark's interior design contractors or in-house designers had discussions with Polyrey about the type of laminate to be used in the stores", as Darren Selman put it in paragraph 7 of his first witness statement. However, neither party called any witness at the trial from either Polyrey or Primark, its architects or any of the professional team engaged by Primark in connection with the fitting out programme. Hillmead did call Gerard O'Sullivan of Railston Design as a witness at trial, but as indicated above he did not give direct evidence about the substance of the complaint.

The respective values of the goods sold, and Hillmead's counterclaim

10

The value of the first eight invoices listed in schedule 1 to the counterclaim is £13,019.27. Hillmead's counterclaim is stated to amount to £367,408.69. In round figures, £46,000 of that total is alleged by way of "diversion of staff time" (item 12); and £254,000 of that total is alleged by way of "loss of business" over a six year period 3.

B: The issues in the case

11

Although the parties have agreed a detailed list of issues, the principal issues fall into the following categories:

(1) What were the terms of the contract between IDS and Hillmead? In particular (a) were IDS' standard terms and conditions incorporated into the contract; and/or (b) did the contract have the usual implied terms as to satisfactory quality and/or fitness for purpose as Hillmead alleges?

(2) If IDS' standard terms and conditions were incorporated into the contract, did they (whether all or individually) satisfy the statutory test of reasonableness?

(3) Was IDS in breach of contract? This will involve an assessment of the expert opinion evidence in the case.

(4) Was the loss alleged by Hillmead caused by any breach of contract, or did other factors cause or contribute to the incidence of such loss? In particular, did Hillmead have the opportunity to inspect either the laminate sheets or the bonded panels for defects?

(5) What is Hillmead's measure of loss and damage? In particular, is any of the claimed loss of business too remote?

C: The terms of the contract between IDS and Hillmead

12

Hillmead's case is that IDS' terms and conditions were not incorporated into the contract between Hillmead and IDS. The reason for Hillmead taking that position is stated in paragraph 3 of its rejoinder 4 where Hillmead stated (page A/44): "the terms and conditions were not annexed to the application for credit facilities signed by Mr Bowers…, and Mr Bowers made no representation that future sales would be governed by the terms and conditions (whether by the declaration or at all)".

13

In his cross-examination (transcript day 3/42/10 — day 3/48/21) Mr Bowers explained that his "accounts lady" had taken a photo copy of the application for credit facilities (page I/54/111–114), but the copy which she filed did not include the terms and conditions of sale which are printed on the fourth page of the original document. In February 2012 the claimant's solicitors sent the defendant's solicitor a certified copy of the original document which contains the terms and conditions printed on the fourth page of the application for credit facilities i.e. on the reverse face of the second page. Mr Bowers did not think he was ever shown a copy of the original document, which he had signed.

14

In the event, in the course of his cross-examination, Mr Bowers was shown the original document, and he accepted (transcript day 3/44/3) that the terms and conditions formed part of the original document. That is indeed apparent from perusal of the original, which comprises a document of four sides of A4 size paper; the paper being rather thicker than standard paper used for ordinary word-processing and

photocopying purposes; the text being printed on each side of the paper, the first sheet being apparently joined to the second by a perforated edge.
15

Paragraph 12 of the application form, under the heading in capitals "declaration", provides:

"I/we the undersigned applied to the Company for Credit facilities and declare that the information given is correct.

I/we have read the 'Terms and Conditions' and should Credit facilities be granted agree to trade solely under these terms. The Company reserves the right to terminate this Agreement forthwith by notice upon a breach by the customer of any Conditions and all amounts then outstanding will become due forthwith …"

In paragraph 13 of his written opening submissions Mr Cutting submitted that "… it is D's position that the mere reference to the T&Cs at paragraph 12 is not "reasonably sufficient" to render D liable to the T&Cs without a clearer notification of the T&Cs". That point was not specifically stated in Hillmead's rejoinder: the point taken there was merely that the T&Cs were not annexed to the application form, and accordingly Mr Bowers did not make the representation that future sales would be governed by the T&Cs. In my judgement the point which Mr Cutting sought to make in paragraph 13 of his written opening submissions goes rather beyond Hillmead's stated case, and strictly the point is not open for Hillmead to take at trial. Nevertheless I shall consider it.

16

In my judgement the answer to the point is to be derived from (a) the language of paragraph 12 of the application form containing the declaration, and (b) the surrounding circumstances. Hillmead was applying for credit facilities; IDS was prepared to...

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