Guest Supplies Intl Ltd v South Place Hotel Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Murray |
| Judgment Date | 03 December 2020 |
| Neutral Citation | [2020] EWHC 3307 (QB) |
| Docket Number | Case No: QB-2019-002382 |
| Date | 03 December 2020 |
| Court | Queen's Bench Division |
[2020] EWHC 3307 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HON. Mr Justice Murray
Case No: QB-2019-002382
Mr Nicholas Trompeter (instructed by Ince Gordon Dadds LLP) for the Claimant
Mr Gary Lidington (instructed by Emmerson Law Limited) for the Defendants
Hearing dates: 3 and 6 July 2020
Approved Judgment
I direct that copies of this version as handed down may be treated as authentic.
THE HON. Mr Justice Murray
In relation to this claim for breach of contract, brought by Guest Supplies International Limited (“GSIL”) against South Place Hotel Limited (“SPHL”) and D&D London Limited (“D&DLL”), I have before me the following three applications:
i) the defendants' application dated 24 April 2020 for further security for its costs;
ii) GSIL's application dated 19 May 2020 for release of the security for the defendants' costs it had previously provided; and
iii) the defendants' application for specific disclosure and inspection dated 24 April 2020.
In addition to these applications, I am asked to determine the reserved costs of an earlier application dated 2 September 2019 for specific disclosure made by SPHL before D&DLL was joined to this action.
The defendants also made an application dated 25 June 2020 (sealed by the court, it appears, on 29 June 2020, although the bundle copy is difficult to read) to extend the trial window to 30 July 2021. This was opposed by the claimant. Given limited time for this hearing, which occupied most of two days, I considered that this could be dealt with on a subsequent occasion by the assigned Master. Following the hearing, the matter was resolved by consent.
The trial of this claim is due to be heard in a trial window opening on 19 April 2021, with a time estimate of six days.
Background
The claimant, GSIL, is a supplier of branded amenities products for hotels. The sole director of GSIL is Mr Aristos Aristodemou.
The first defendant, SPHL, is a company that operates the South Place Hotel in the Moorgate area of the City of London. The second defendant, D&DLL, is a company that provides management, accounting, and administration services to companies within the D&D London group of companies, including SPHL.
By its claim GSIL seeks damages for breach of contract, payment of outstanding invoices and loss of profits for the period of an exclusivity agreement that it says was part of the contractual arrangements between the parties. The defendants deny the existence of the exclusivity agreement, in the absence of which the defendants assert that GSIL is entitled only to a small fraction of what it is currently claiming. SPHL also seeks to assert a set-off, against any amount due to GSIL, of a sum that SPHL says is owed to it by GSIL for wrongful detention of goods owned by the defendants.
GSIL asserts that there were three relevant agreements between the parties. Brief details of these agreements are as follows:
i) First, there was a written agreement, signed by Mr Aristodemou for GSIL on 3 June 2014 and by Mr James Dempsey, Group Purchasing Manager, for an entity described as “South Place Hotel” on 14 June 2014 (“the First Agreement”) for the supply of specified branded products to the South Place Hotel. GSIL maintains that D&DLL was its contracting party or, if that is not right, then SPHL was its contracting party. The defendants deny that D&DLL was a party to the First Agreement or any other relevant agreement with GSIL.
ii) Second, there was an oral agreement made in October or November 2014 (“the Second Agreement”) under which GSIL agreed to purchase a stock of branded amenities for the South Place Hotel from a prior supplier, namely, Bunzl UK Ltd, trading as Buwier Finest Guest Amenities (“Buwier”), and to store the stock (“the Buwier Stock”) in its premises at no cost to the defendants. There is a dispute as to whether the Second Agreement was concluded orally over the course of the period from about 23 October to mid-November, as GSIL asserts, or via an exchange of emails on 23 and 28 October 2014, as the defendants assert. GSIL says that the Second Agreement also included a term to the effect that GSIL would become the exclusive supplier of branded amenities to SPHL for a period of five years on the terms of the First Agreement, applied mutatis mutandis. The defendants deny that the Second Agreement included any such exclusivity term.
iii) Third, there was an oral agreement made in a meeting held on 3 February 2016 between Mr Aristodemou, Ms Eve McIlvaney, the Group Purchasing Manager for D&DLL, and others. It is common ground that some sort of oral agreement was concluded at the meeting on 3 February 2016, but the terms of, and parties to, that agreement are disputed, as discussed in more detail below.
The Second Agreement came about because in or about August 2014 Buwier informed the defendants that it intended to start charging a fee for storage of the Buwier Stock. GSIL says that Mr Michael Patterson, the Group Category Manager for D&DLL, then approached Mr Aristodemou, seeking his assistance to avoid that fee.
In his second witness statement dated 16 June 2020 Mr Aristodemou said that GSIL agreed to purchase the Buwier Stock for £56,039.25, lending that sum interest-free to SPHL to repay at the rate of about £5,000 per month. GSIL also agreed to store the Buwier Stock, comprised of some 500 large boxes, in its warehouse without charge. He asserted that this arrangement made no commercial sense for GSIL without an agreement by the defendants that, once they had finished calling off the Buwier Stock, they would call off GSIL's equivalent stock exclusively for five years.
On 7 January 2016 Ms McIlvaney sent an email to Mr Aristodemou giving notice “to end the contract between South Place and Guest Supplies”. The email also said that “we will not be authorising any further orders and if placed will not be liable for payment …”. GSIL says that this represented a repudiatory breach of the Second Agreement.
There then followed the meeting on 3 February 2016. The respective positions of the parties on the terms of the oral agreement said to have been reached at that meeting are set out in the pleadings. In the Amended Particulars of Claim at paragraph 22, GSIL alleges:
“At the Meeting, the parties: (i) ratified, confirmed and/or elected to continue the Second Agreement; or in the alternative (ii) concluded a new oral agreement between the Claimant and the Second Defendant, alternatively between the Claimant and the First Defendant … under which it was agreed that the Claimant would be appointed the exclusive supplier of the Products to the Second Defendant, alternatively to the First Defendant, for a period of five years on the terms of the First Agreement (mutatis mutandis).”
In the Amended Defence at paragraph 27, the defendants allege:
“… at the meeting on 3 February 2016, the First Defendant … and the Claimant entered into a new oral agreement …, on the following terms:
a. the obligations under the First Agreement were mutually discharged;
b. the Claimant would continue to act as a supplier to the Defendant of the branded goods identified in the First Agreement at the prices in the First Agreement;
c. the existing stock held by the Claimant would not be replaced after it was purchased by the First Defendant;
d. there would be no minimum quantities of stock held by the Claimant.”
GSIL contends that following the meeting on 3 February 2016 Mr Aristodemou accurately reduced to writing the oral agreement reached at the meeting (“the 2016 Document”). He did not do this immediately following the meeting, for reasons set out in his witness statement dated 7 February 2020, but initially created the 2016 Document on 29 April 2016 on a computer at his place of work. He then copied his initial draft of that document on to a USB stick and took it home to continue working on it, making his final changes on 23 May 2016 and creating a cover letter. Mr Aristodemou signed the 2016 Document and sent two hard copies of it, with his cover letter, via the post to D&DLL for counter-signature. GSIL has, however, never received from D&DLL a counter-signed copy.
In his witness statement dated 7 February 2020, Mr Aristodemou said that he does not have an original copy of the 2016 Document in its finalised form in hard copy or in its original electronic format. He did not keep a hard copy when he sent it to D&DLL on 23 May 2016, as he intended to rely on the electronic copies on his laptop and on the USB stick. His laptop and the USB stick were, however, both stolen when his home was burgled in September 2016. When GSIL decided to bring this claim, Mr Aristodemou found that he was unable to locate a final signed version or the digital version of the 2016 Document.
Mr Aristodemou's witness statement of 7 February 2020 continued at paragraphs 11–12 as follows:
“11. … Without waiving privilege, I therefore took the version [of the 2016 Document] that I had on my computer at the time, which was the version which was created on 29 April 2016 …, and recreated the final version of the agreement as it would have been and sent this to my former solicitor to give him an accurate version of what the final agreement would have looked like. I recreated the agreement and sent it to my former solicitors on 11 February 2019. … [emphasis in original]
12. It was never said by me (to my former solicitors or the Court) that this was the...
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