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The National Guild of Removers & Storers Ltd v OIS Removals Ltd

Central London County Court, 4-5 July 2018

Mark O'Grady acted for the Defendant company (“OIS”) in resisting a claim brought by the Claimant company (“the NGRS”) in respect of unpaid membership and ancillary fees totalling some £13,000.  The case was heard before DJ Fine at the Central London County Court on 5 July 2018.

The majority of the claim was in respect of unpaid membership fees.  The monthly fees on the order form which OIS had signed were detailed in large bold font as £150 per month for 24 months (£1,800 per annum).  However, there was a clause in the NGRS’s standard terms and conditions which held that, if there was any breach of any of the standard terms and conditions, the fees payable would be £5,200 per annum, and the whole sum for the remainder of the term would be due immediately on demand.

OIS were intending to argue before the court that the above mentioned standard terms were sufficiently onerous that, as a matter of contract law, in order for them to be properly incorporated special notice of the terms would need to have been brought to the attention of OIS.  Since the term was simply buried in very small font amongst a whole raft of other terms, which flatly contradicted the headline rate of £150, OIS were confident of succeeding.  (The NGRS had been on notice of the arguments that OIS had intended to run earlier in the week).

On the morning of trial, counsel for the NGRS informed the court that their witness Mr Jon Martin (sole director of the NGRS) would not be attending, and that it was not known where he was or why he was not in attendance.

The NGRS then proceeded to inform the court that it would only be seeking judgment on an admission made in OIS’s Defence in respect of £1,780 + VAT.  Judgment was therefore entered for NGRS in that sum.

Costs

On the question of costs, the NGRS sought to rely on a Part 36 offer dated July 2017 in the sum of £500.  They said that since they had beaten their Part 36 offer, they were entitled to their costs on the indemnity basis: costs totalling £65,694.

Meanwhile OIS sought to rely on an open offer it made, some one month after the claim was issued in May 2014, that OIS would pay all fees at £150 month, plus the ancillary fees.  In the intervening period, OIS had in fact paid the NGRS the £150 per month for 21 months (leaving 3 months unpaid).  In essence the court held, OIS had offered, four years earlier, to pay the entire value of the present judgment sum which was being entered.

The learned judge held that the NGRS had “vastly inflated its claim” and that “it was grossly inflated by over six times”.  She criticised the NGRS for offering no explanation as to why the witness had not attended, holding that the NGRS had wasted the court’s time and resources. 

Mark successfully argued that:

  1. NGRS had brought the claim in the wrong track (the Fast Track), and that in reality this case should have been a Small Claims Track matter.  The court agreed and limited the NGRS’s recoverable costs to £265 (the costs it would have been awarded if it had pleaded its case at the correct figure).
  2. NGRS’s Part 36 offer, made as it was nearly three years into the litigation, was solely a tactical device designed to afford the NGRS the cost consequences of Part 36.  It was not a genuine attempt to settle proceedings.  Considering CPR 36.17(4) and whether it would be just to apply the usual cost consequences of Part 36, the court held that, “If there was any case where it would be unjust, looking at all the circumstances of the case, it would be this one.”
  3. OIS should be entitled to its costs, since it had reasonably instructed solicitors to deal with the claim since it came with the usual Fast Track costs risks.  Had it been a small claim, Mark argued, OIS would not have spent c.£30,000 on legal costs.  The court ordered payment of £19,500 of OIS’s costs (roughly 2/3 of the total amount that OIS spent defending the claim).

Following trial, the records of Companies House showed that in fact, Mr Jon Martin resigned as sole director of the NGRS with effect from 4 July 2018 – the day before trial – which may explain why he didn’t attend.

Philip Alden / 5th Sep 2018


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