Phoenix Interior Design Ltd v Henley Homes Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 09 June 2021 |
| Neutral Citation | [2021] EWHC 1573 (QB) |
| Date | 09 June 2021 |
| Docket Number | Case No: QB-2018-003981 |
| Court | Queen's Bench Division |
[2021] EWHC 1573 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Freedman
Case No: QB-2018-003981
Andrew Legg (instructed by Warners Law LLP) for the Claimant
Nicholas Broomfield (instructed by Edwin Coe LLP) for the Defendant
Hearing dates: 9, 10, 11, 12, 15 & 18 February 2021, with further submissions on 22 February 2021
Approved Judgment
I Contents
| SECTION NUMBER | SUBJECT | PARAGRAPH NUMBER |
| I | Contents | |
| II | Introduction | 1–4 |
| III | The parties | 5–7 |
| IV | The contractual relationship between the parties | 8–29 |
| V | Evaluation of the witnesses | 30–41 |
| VI | Expert evidence | 42–48 |
| VII | The issues | 49 |
| VIII | The identity of the contracting parties | 50–53 |
| IX | The terms of the Phase 1 Contract | |
| A. The Initial Brief, the documents that form the Phase 1 Contract and the terms thereof | 54–63 | |
| B. Contractual terms – incorporation of the Claimant's standard terms | 64–76 | |
| X | If the Claimant's standard terms and conditions were incorporated into the Phase 1 Contract, are they unreasonable for the purposes of the Unfair Contract Terms Act 1977? | |
| A. The statutory provision and the terms of Clause 8 | 77–78 | |
| B. The pleaded case | 79–84 | |
| C. Discussion | 85–86 | |
| XI | Did the Claimant owe the Defendants a tortious duty to act with reasonable skill and care? | 87–89 |
| XII | Did the Claimant “complete” the Phase 1 Contract causing the balance of the contractual monies to fall due and/or were the goods “accepted”: the legal analysis | 90–104 |
| XIII | Did the Claimant act in breach of contract or its tortious duty of care? | 105 |
| (1) Any matters relating to the negotiation and terms of the contract relevant to the alleged breaches | 106–113 | |
| (2) The history of the dealing as regards the signing off performance of the contract | 114–128 | |
| (3) The effect of the continued use by the Defendants of the goods supplied | 129–135 | |
| XIV | Conclusions before considering specific defects | 136 |
| XV | Furniture | |
| (1) Introduction | 137–139 | |
| (2) The Defendants' case | 140–149 | |
| (3) The Claimant's case | 150 | |
| (4) Discussion | 155–166 | |
| XVI | Roman Blinds/Black-Out-Blinds | 167–178 |
| XVII | Curtains, Curtain rails and Curtain Rods | 179–189 |
| XVII | Glass topped coffee tables | 190–194 |
| XIX | Marble coffee tables | 195–196 |
| XX | Headboards | 197–198 |
| XXI | Damages/quantum | 199–216 |
| XXII | Did the Claimant “complete” the Phase 1 Contract causing the balance of the contractual monies to fall due and/or were the goods “accepted”? | 217 |
| XXIII | If the Claimant's standard terms and conditions were incorporated into the Phase 1 Contract, is the Claimant in breach of clause 8 of its standard terms and conditions? | 218 |
| XXIV | Conclusion | 219–211 |
II Introduction
The Claimant, an interior designer, claims unpaid invoices from the Defendants in a sum of £232,550.42. This arises out of goods supplied and services rendered in connection with the Dunalastair Hotel in the Scottish Highlands. One of the issues is whether the Claimant contracted with the holding company, the First Defendant (“Henley Homes”), or with its subsidiary, the Second Defendant (“Union Street”). Although in the end the correct defendant is only one of the two defendants, I shall use the terms “the Defendants” to refer to the Defendants or either of them.
The Claimant says that the balance outstanding comprises one half of the agreed contractual sum. The Defendants say that the last 50% of the price was payable only on completion, and that the performance was so defective that completion never occurred. As a result, the Defendants submit that the remaining half of the contractual sum never became due. Further or in the alternative, the Defendants say that the goods supplied were so defective that the Defendants are entitled to compensation which exceeds the amount unpaid. This forms the basis of a counterclaim.
It will be necessary for the Court to consider a number of issues, including who were the contracting parties, and what were the terms of the contract. This includes consideration of whether the Claimant's terms and conditions were incorporated into the contract and, if so, whether they satisfied the requirement of reasonableness. At the very heart of the dispute is the issue of whether the goods supplied and installed were of satisfactory quality and fit for purpose, and if not, what loss was suffered by the Defendants. In the course of the cross-examination of Susan White, the managing director of the Claimant, it was put to her “…this case is very much about quality, is it not”, to which the response was “this case is about non-payment…” The Court did not at the time find it constructive for the parties to be trading the headlines of the case. Be that as it may, that inter-change essentially summarises the perceptions of the parties about the case.
More particularly, the Defendants say that they intended to create a five-star offering for their clients in what became a five-star hotel. They say that the Claimant supplied goods which were sub-standard and unsuitable for the deluxe market for which they were intended. There is a dispute between the parties about the specification of the hotel, which the Defendants say were supposed to be furniture, fittings and accessories suitable for a five-star hotel. The Claimant does not accept that characterisation of the contractual terms, but in any event, denies that the goods were not suitable for purpose. At the time of the hearing, about four years since the time of the supply of the goods, they have not been replaced, and indeed until the closures during the pandemic, the Defendants continued to use them. If and insofar as there were defects, the Claimant says that they can be rectified for less than £10,000: the Defendants claim sums which are greater than the sum claimed.
III The parties
The Claimant is a company which was incorporated in 2003. Its core business is the design and installation of show houses and sales and marketing suites. It has about 15 employees. The managing director of the Claimant is Susan White. She has a university degree in interior design and about 25 years' experience in the industry. The Claimant engages sub-contractors as and when required. It provides interior design services and also supplies and installs furniture and fittings. Instead of charging separately for the advice about interior design, it takes an uplift on the cost of the goods supplied and installed. Its turnover is about £1.7 – £1.9 million per annum, according to Ms Granger who deals with the accounts of the Claimant.
Henley Homes is a property development group one of whose subsidiary companies is Union Street, which company was incorporated on 27 April 2007. One of the properties which was acquired by Henley Homes is the Dunalastair Hotel Suites, Kinloch Rannoch, Scotland (“the Hotel”). It is in the Scottish Highlands. In 2014, the property was transferred to Union Street.
The CEO of Henley Homes is Tariq Usmani. The director of hotels and leisure for the Henley Homes group of companies is Nassar Khalil: he has a master's degree in international hospitality management and has managed hotels throughout the world. He commenced work on the project in issue in about September 2015.
IV The contractual relationship between the parties
The Claimant and the Defendants worked together, with the Claimant providing interior design services over a period of 10 years prior to the instant contract on a frequency of about one contract per annum. There was therefore a long-standing relationship between Ms White on behalf of the Claimant and Mr Usmani on behalf of the Defendants. Evidently, they got on well, as evidenced by the Claimant extending payment terms when necessary, and Ms White providing some free advice for Mr Usmani in connection with his home in Beaconsfield. Later in the judgment, there will be reference to the way in which Ms White says that she drew to the attention of the Defendants its terms and conditions in the 10 years of prior trading.
In mid to late 2014, Mr Usmani and Ms White discussed a new Henley Homes project in Scotland. Henley Homes had acquired the Dunalastair Hotel Suites and transferred ownership to Union Homes in June 2014.
The Claimant had no prior experience in hotel interior design. Mr Usmani's evidence (his statement at para. 8) is that the Claimant claimed to have substantial hotel experience. Ms White's evidence (her statement at para.10) is that she made it clear at the outset that the Claimant had no experience in this sort of project, and she said that the Defendants were in the same position. When Mr Khalil became involved, he looked at the Claimant on the internet, and from a quick review of the Claimant's website it was clear that it had no experience of designing interiors of hotels or supplying furniture, furnishings and fittings to hotels. He mentioned this to Mr Usmani.
The concept formed the basis of initial discussions between the Claimant and the Defendants. On 18 December 2014 Union Street sent a briefing email to the Claimant (from Suze Jones to Susan White) and invited it to tender/quote (“the Initial Brief”). An...
To continue reading
Request your trial
-
Scottish UCTA Decision Illustrates Courts' Reluctance To Interfere In A Commercial Bargain
...or unusual terms contained in their standard terms and conditions. For instance, in Phoenix Interior Design Ltd v Henley Homes plc [2021] EWHC 1573 (QB), the High Court held that an exclusion of liability clause was unreasonable under UCTA as it had been "an unusual clause tucked away in th......