Alfred Overy v Paypal (Europe) Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Hegarty |
| Judgment Date | 02 March 2012 |
| Neutral Citation | [2012] EWHC 2659 (QB) |
| Docket Number | Case No: 8LS40594 |
| Court | Queen's Bench Division |
| Date | 02 March 2012 |
[2012] EWHC 2659 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
MERCANTILE COURT
Manchester Civil Justice Centre
1, Bridge Street West
Manchester
M60 9DJ
His Honour Judge Hegarty QC
Case No: 8LS40594
The Claimant appeared in person
Mr David Drake (instructed by Boote Edgar Esterkin) for the Defendant
Hearing dates: 28 th, 29 th & 30 th November 2011
CONTENTS
| PART I | |
| Introduction | 1 |
| PART II | |
| Background | 10 |
| PART III | |
| The Present Proceedings | 30 |
| The Amended Defence | 31 |
| Summary Judgment | 64 |
| The Order for Directions | 70 |
| The Points of Claim | 76 |
| Subsequent Pleadings | 82 |
| The Issues | 83 |
| PART IV | |
| 88 | |
| PART V | |
| Was Mr Overy Acting as a Consumer? | 97 |
| PART VI | |
| Unfairness and Unenforceability | 182 |
| Preliminary Observations | 184 |
| Material Circumstances | 187 |
| Individual Terms: Category 1 | 201 |
| Individual Terms: Category 2 | 214 |
| Individual Terms: Category 3 | 234 |
| Individual Terms: Category 4 | 255 |
| PART VII | |
| 261 | |
| PART VIII | |
| Conclusions | 272 |
In this action, which was commenced by a claim form issued out of the Leeds District Registry on 11 th July 2008, the Claimant, Mr Alfred Overy, claims damages of a little over £1m against the Defendant, Paypal (Europe) Limited ("Paypal") for its alleged breaches of a contract made on or about 22 nd January 2007 by which Paypal agreed to provide electronic payment services to Mr Overy. Though the claim was initially started in the Leeds Mercantile Court, it was subsequently transferred to the Manchester Mercantile Court and has come before me on a number of previous occasions.
The circumstances which have given rise to the claim are of a somewhat unusual nature. Mr Overy had carried on business for some time as a professional photographer specialising in wedding photography and DVDs. But in 2006 or thereabouts, he was contemplating retiring and moving from the substantial residential property owned by himself and his wife and known as "The Old Parsonage", Reedness, Goole, East Yorkshire ("the property") into somewhat more modest accommodation. At some stage, the idea came to him that he might be able to raise a substantial amount of money by offering the property as the prize in a competition rather than by attempting to sell it in a more conventional manner. He calculated that he would make a substantial profit from the entry fees charged to competitors, even after taking account the value of the property, the costs of the competition and a donation of a proportion of the proceeds to charity. In order to avoid any possible contravention of United Kingdom gambling laws, he designed the competition so as to introduce an element of skill, along the lines of the "spot the ball" competitions which are or were frequently to be found in popular newspapers. His variant on this theme was to invite contestants to identify precisely where a shadow cast by a telegraph pole shown in a photograph of the property would fall at a certain time and date. An entry fee of £60 would be charged to each contestant and the competition would close in July 2007, or earlier once 25,000 entries had been received.
Paypal provides electronic payment services both to businessmen or merchants and to private individuals. On 22 nd January 2007, Mr Overy entered into an agreement with Paypal for the provision to him of electronic payment services. The competition was launched in the latter part of April 2007 and over the next few days a significant number of entries was received and the entry fees were electronically processed through the Paypal facilities in accordance with the agreement. But on 30 th April 2007, Paypal suspended the service and it seems eventually to have been terminated. It took some time for Mr Overy to set up alternative payment arrangements; and it is his case that this hiatus, and the bad publicity which accompanied it, meant that his competition was far less successful than it would otherwise have been. He contends that the suspension and termination of the facility by Paypal was a breach of contract on its part and that, in consequence, he has suffered substantial loss and damage. That is the basis upon which the present proceedings were commenced.
Paypal has defended the proceedings on various grounds. But its principal substantive defence is that it was entitled to suspend or terminate the facility by virtue of the express provisions of the agreement between itself and Mr Overy. This led to an application on its part for summary judgment on a number of issues which, if resolved in its favour, would, at least in its estimation, have provided it with a defence to the claim without the need for an expensive and time-consuming trial of all the issues.
On 15 th May 2009, I gave judgment on this application, granting summary judgment on no less than 14 issues, as set out in the Schedule to my order of that date. I also gave various directions for the future conduct of the proceedings. There was no appeal from my order granting summary judgment. But Mr Overy has repeatedly expressed dissatisfaction about the fact that no comprehensive disclosure has ever been given by or ordered against Paypal and has expressed scepticism as to whether the terms and conditions governing his agreement with Paypal were, in fact, those which were relied upon by Paypal at the hearing of the summary judgment application.
In this court, of course, my judgment on that application is conclusive. But Mr Overy has acted in person since the first day of the hearing of that application, though, for a time, it seems he had some assistance from a firm of solicitors. Accordingly, at the outset of the present hearing, in order to ensure that no possible injustice had been done, I heard what Mr Overy had to say on this point and looked with some care at the documentation which was put before me. After considering these matters, I was quite satisfied that there was nothing in the point; and I delivered an extempore oral judgment dealing with the issue. So far as I could tell, Mr Overy appeared to accept the conclusions which I arrived at.
My order of 15 th May 2009 resolved most of the issues as to the incorporation of Paypal's standard terms and conditions into its agreement with Mr Overy and as to their effect in the particular circumstances of the case. I shall have to return to the detailed provisions of in this order in due course. What is of particular importance for present purposes, however, is that it did not determine any issue as to the effect of the Unfair Contract Terms Act 1977 or the Unfair Terms in Consumer Contracts Regulations 1999 on the enforceability of any of the terms and conditions relied upon by Paypal. On the contrary, I directed that there should be a separate trial of any such issues. Those are the issues which are now before me and which are the subject-matter of this judgment.
It took some considerable time, however, for this trial to come on for hearing. On 19 th October 2009, I gave further directions for the purposes of the intended trial. But these directions themselves gave rise to further disputes which had to be resolved by way of supplemental orders made by myself and David Richards J; and Paypal then sought to short-circuit any further proceedings by making a second application for summary judgment which was essentially based upon the proposition that Mr Overy could not, in any event, establish that he had suffered any or any significant loss as a result of any breach of contract on the part of Paypal. I dismissed that application in a written judgment which was formally handed down on 31 st March 2011; and thereafter, on 4 th May 2011, I gave further directions for the purposes of the trial of the present issues.
At the trial of those issues, Mr Overy appeared in person; and Paypal was represented by Mr David Drake of counsel. Points of Claim, Points of Defence and Points of Reply had been exchanged between the parties; and witness evidence had been served by both sides. I heard evidence on behalf of Paypal from a Mr Spiros Theodossiou who was, at the material time, a product manager involved in the management of Paypal's website, and from Mr Robert Caplehorn, the Vice President of Legal and Compliance for Paypal (Europe) S.a.r.l. et Cie S.C.A. (which now carries on the European business of Paypal), and who was, until 30 th April 2007, legal director of Paypal, the Defendant in these proceedings. Mr Overy also gave evidence on his own behalf.
Much of the background is either uncontentious or was resolved by the order which I made on 15 th May 2009 on Paypal's application for summary judgment. Mr Overy, as I have previously observed, had been in business as a professional photographer for many years. He told me that he had latterly specialised in creating DVDs of weddings. He had an arrangement with a concern known Colab, which provided him with a page on its website and processed payments on his behalf. But, at some stage, he decided to set up his own website under the trading name Kalf Studios, under which name it seems that Mr Overy had been trading since November 1990.
The application process which led to the opening of his Paypal account was carried out by Mr Overy entirely on line via the Paypal website on 22 nd January 2007. The process was described in some detail by Mr Theodossiou in his witness statement and was not challenged. It appears that Mr Overy wished to sign up to Paypal's "Website Payments Pro" product which allowed the merchant to accept credit and debit card payments from customers directly via his own website,...
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