Mr Mohammed Gulzar v HPAS Ltd trading as Safestyle UK
| Jurisdiction | England & Wales |
| Judge | Claire Jackson |
| Judgment Date | 09 November 2022 |
| Neutral Citation | [2022] EWHC 2692 (Comm) |
| Docket Number | Case No: CC-2020-LDS-000004 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 2692 (Comm)
Her Honour Judge Claire Jackson
Sitting as a Judge of the High Court
Case No: CC-2020-LDS-000004
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS AT LEEDS
CIRCUIT COMMERCIAL COURT (KBD)
Leeds Combined Court Centre
(Sitting at the Leeds Nightingale Court)
1 Oxford Row, Leeds, LS1 3BG
The Claimant appeared in person
Mr Mark Baldock (instructed by Devonshires Solicitors) for the Defendant
Hearing dates: 4–7 October 2022
This judgment was handed down remotely on 9 November 2022 at 9.30am .
Mr Mohammed Gulzar, the Claimant, was engaged as a self-employed sales agent by HPAS Limited trading as Safestyle UK, the Defendant, which carries on a business supplying double-glazed windows and doors. The relevant engagements for this case took place between July 2013 and February 2019 pursuant to a number of written contracts on terms which in all material respects were identical (the “Sales Agent Contracts”).
Pursuant to the terms of the Sales Agent Contracts, the Claimant would offer the Defendant's products to customers for sale at appointments provided by the Defendant. The Claimant would attend the appointment and calculate the price of the products ordered by a customer by reference to the prices provided to the Claimant by the Defendant. A document headed “purchase contract” would be signed by the customer.
A surveyor appointed by the Defendant would then attend the customer's property. Items were sometimes added to customer orders submitted by the Claimant.
The Claimant was entitled to be paid commission for each contract which the Defendant concluded with a customer that had been introduced by the Claimant. Clause 2.1 of the Sales Agent Contracts provided that commission was to be paid to the Claimant by the Defendant “ in accordance with the commission structure in force at the time.”
At all material times, the Defendant's commission structure provided for commission to be calculated on the basis of the difference between the so-called “ list price” of the items which the Claimant offered for sale to the customer and the actual price which the customer paid for the items (the agent having a discretion to offer items for sale at a discount). The percentage difference between the list price and the actual price corresponded to a commission percentage. The commission percentage was inversely proportional to the percentage difference and therefore the greater the percentage difference the lower the commission percentage.
From time to time, there was the possibility that the Claimant would be entitled to an additional bonus based on the sales achieved within a given period and the average percentage difference between list price and actual price paid that the Claimant achieved.
The Claimant disputes the commission paid to him on in excess of 800 orders between 2013 and 2018. The Defendant does not accept the disputes raised by the Claimant. The main point of contention between the parties is a dispute as to the construction of the commission structure. This judgment which considers the question of construction, and a bonus scheme operated by the Defendant, follows the preliminary issue trial of eight test cases. If judgment is given in favour of the Claimant directions will need to be given to allow any disputes on the remaining cases to be resolved.
One point of importance at trial was that an allegation raised by the Claimant that the Defendant had tampered with evidence in this case was withdrawn by the Claimant during the course of the trial. The Court notes that no evidence capable of sustaining an allegation of evidence tampering was in any event placed before the Court.
The Sales Agent Contracts
During the course of his sales agency for the Defendant the Claimant entered into a number of Sales Agent Contracts. The terms of those contracts remained the same throughout the period 2013 to 2019.
The terms of the contracts so far as relevant to the case provided that:
1 Agreement
1.1 Safestyle UK has offered and you have agreed on the terms set out in this Agreement, to sell window and door frames for Safestyle as a Self Employed Sales Agent.
1.2 Under this Agreement, you represent Safestyle UK. However, you do not have authority to incur liability on behalf of Safestyle UK or accept any order or make any contract binding on Safestyle UK in respect of the sale and purchase of windows and door frames, or negotiate the sale and purchase of doors and windows outside the standard price list of Safestyle UK.
2 Commission
2.1 Subject to Clause 5 (Deductions), Safestyle UK will pay you in accordance with the commission structure in force at the time. Safestyle UK reserves the right to amend the commission structure at its discretion with reasonable notice. The present fee structure can be obtained at the Sales Branch.
[…]
5 Deductions
5.1 You agree that Safestyle UK may deduct such sums or other amounts from the commission to form a Retention Fund, the current rate of which can be obtained from the Sales Branch. Deductions from Commission and the Retention Fund may be made in respect of:
• Commission and Retention Clawbacks.
• The cost incurred by Safestyle UK in respect of any mistake made by you or a substitute.
• Any loss or theft of a deposit or a survey fee prior to their receipt by Safestyle UK
• Sales Kit (see Clause 6)
• Transport Deductions
• Compensation paid to a customer as a result of your representations.
[…]
7 Customer Documentation
7.1 You shall obtain from the customer upon signing a Purchase contract:
The Survey Fee
Any signed Finance Documentation (if applicable) and supporting information
A signed and completed Purchase Contract
A signed and completed Building Work contract (if applicable)
A signed copy the Treating Customers Fairly Checklist
[…]
9 Regulation and Statutory Requirements
9.1 The Industry in which Safestyle UK operates, namely replacement windows and doors, is subject to a number of regulatory and statutory requirements. In order to meet such requirements, Safestyle UK has put in place procedures, codes of conduct and guidelines.
9.2 You agree that when you are representing Safestyle UK you will at your own cost comply with any current procedures, codes of conduct and guidelines which have been issued to you by Safestyle UK.
[…]
11 Entire Agreement
11.1 This Agreement shall comprise the entire agreement between the parties and cancels and replaces any former agreements between you and Safestyle UK whether oral or in writing. This Agreement may not be changed by oral agreement but only in writing signed by both parties.”
The Claimant's case
The Claimant appeared in person at the trial. He had previously been supported and assisted by a McKenzie Friend, Ms Ellen Walker, a freelance paralegal, with the permission of His Honour Judge Klein. Ms Walker was unable to attend the trial due to illness. The Claimant was able to obtain assistance from Support Through Court for the first morning of the trial only. The Claimant therefore had no assistance for the remainder of the trial. However he confirmed that he wished for the trial to proceed.
The Claimant claims that the Defendant has used the wrong “ list price” for the purposes of calculating the “ percentage out” for his standard commission, and accordingly has made errors in the payment of his commission. The Claimant says that “ list price” means the listed price of those items which he offered for sale to the customer. In his skeleton argument the Claimant contended that this was because anything further provided to the customers by the Defendant were gifts to customers.
The Claimant claims that applying his construction of “ list price” to the eight Test Cases that he has been underpaid “ not less than £1,119” as the purchase orders completed by the Claimant, being the contract of sale between the Defendant and the customer, was the document from which the list price was to be calculated, save for deductions due to mistakes by him in accordance with Clause 5 of the Sales Agents Contracts. Changes made by the Defendant to orders after completion of the purchase order in the test cases were not due to mistakes by him, as he did not make mistakes.
In that regard the Claimant asserts that, at all times, he offered for sale to householders those goods that he was required to offer according to the training provided to him by the Defendant and the applicable legislation. In this regard the Claimant asserted in his skeleton argument that
“ [the defendant] provided training to [the claimant] consisting of an induction course in 2003, details of which are shown at tab 66, when [the claimant] commenced his first engagement for [the defendant] but that is all the training that [the claimant] received from or was offered by [the defendant].
… The only training [the claimant] was provided with in 2013 was an update to literature and the sales pitch.”
Therefore the Claimant claims that his commission should have been calculated on the listed price of the items noted in the purchase contract. The Claimant further asserts that if there is any doubt about the construction of the standard commission structure, as operated under the Sales Agents Contracts, then, given this was the Defendant's document, it should be construed against the Defendant under the contra proforentum rule.
Further the Claimant asserts that the Defendant has failed to pay him a £4,000 bonus in accordance with the “£100k Bonus Club” structure that was in force in 2018.
The Defendant's case
The Defendant denies the claim in its entirety. The Defendant avers that first, and as a matter of construction of the relevant commission structures the “ ...
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