Arbroath strawberry farmer successfully refutes exclusive jurisdiction argument in defective polythene dispute
A strawberry farmer in Arbroath who was supplied with defective polythene sheeting has succeeded in establishing that the contractual dispute between his company and the sheeting’s supplier could be heard in the Scottish courts.
Peter J Stirling Ltd, of which Peter Stirling was the sole director and primary shareholder, raised the action against Brinkman (Horticultural Service) UK Ltd on the basis of having incurred losses as a result of the sheeting not being fit for purpose. The defender argued that, per the terms of the contract, the courts of England and Wales had exclusive jurisdiction.
The case was heard in the Outer House of the Court of Session by Lord Clark.
Prior to the dispute, the pursuer and its predecessor companies had ordered sheeting from the defender on numerous occasions. The pursuer ordered the disputed sheeting from the defender in the summer of 2016. Following its delivery in August 2016, an invoice for payment was sent in September 2016 and paid in November 2016. Following payment, the alleged deficiencies in the polythene arose.
The parties entered into discussions regarding the defective polythene, in which it was brought to the pursuer’s attention that the defender had updated their terms and conditions of sale in August 2012. The defender claimed they had sent a letter to the pursuer in July 2012 informing them of the changes, enclosed with which was a copy of the new terms and conditions.
Among these new terms and conditions was a clause that gave exclusive jurisdiction to the English courts in respect of all disputes arising out of a contract governed by the conditions. The pursuer averred that the letter was not addressed to PJ Stirling LLP, the pursuer’s predecessor, but to “Windy Hill Farm”, correctly known as Windyhills Farm, which hosted several businesses that were unconnected to the pursuer in addition to Mr Stirling’s business.
Several witnesses for the pursuer stated that they had never seen a letter in the manner specified by the defender and that if it had been wrongly addressed it would have reached them via another person at the farm given that the postcode on the letter produced by the defender was correct.
Witnesses for the defender stated that prior to 2016 all invoices sent to the pursuer’s predecessor were sent to “Windy Hill Farm” with the same details as the terms letter that the defender claimed to have sent in July 2012.
The pursuer submitted that the defender had not been able to produce any evidence that a letter was actually sent. The evidence was sufficient to rebut the presumption that its terms and conditions were sent to the pursuer, if the presumption even arose at all. Further, there was no specific consent to the jurisdiction clause by the pursuer as required by the Civil Jurisdiction and Judgments Act 1982.
The defender submitted that the contract of sale was formed by a combination of discussion between the relevant employees of the parties and their email correspondence. No attempt was made to reach any express agreement about many aspects of the contract. The pursuer had not made an issue about the incorrect address at any time, and it was highly likely on the balance of probabilities that the letter had been delivered to the pursuer.
Would have been retained
In his decision, Lord Clark held that the letter had likely been sent, saying: “I do not regard it as necessary to have direct evidence that the specific individual item, the letter dated 30 July 2012, was posted. The evidence of [a witness for the defender], which was credible and reliable, was that a bundle of letters to be sent to each individual customer was prepared, there being more than 1,000 customers. The letters were printed off and she folded each letter, placing it an envelope, and the envelopes were then franked and put in the post bag.”
He continued: “This is not merely evidence of the general practice of the defender; rather, it is evidence of a materially important commercial exercise (the notification of terms and conditions to every customer), that took place over two or three days.”
However, regarding whether it had been received by the pursuer, he said: ”Had it been received, it would have been retained. The archived material included any important items from 2012. But the searches, which were thorough and comprehensive, did not locate the letter. Moreover, the evidence was also clear that the specific request made in the letter, for the email address of the pursuer’s accounts department to be sent, would have been responded to, but again a thorough check of sent emails indicated that this had not occurred and there was no evidence from the defender’s witnesses that any such response had been made.”
Moving to the terms of the contract, he said: “I see no force in the submission for the defender that in making and accepting the order [the parties’ employees] did not attempt to reach any express agreement about matters such as the precise date of delivery, payment terms, warranties or retention of title, implying that further terms and conditions were needed. Their agreement sufficed as contract.”
On whether the jurisdiction of the Scottish courts had been excluded, he said: “In view of my decision that the letter was not received, this issue does not arise for consideration.”
However, Lord Clark went on to express what his conclusions would have been had the letter been received, saying: “It is quite clear that the exchanges between the parties in relation to this particular order (which each party refers to as the contract) made no express reference to the terms and conditions. In some cases, the question which may arise is whether there was an overarching contractual agreement, within the terms of which certain orders were placed, which satisfies the test in the authorities. However, that was never put forward as the situation here.”
He concluded: “As I understood the defender’s position, it was that consent to the terms and conditions should be taken to arise from the making of a future order, by means of telephone calls and emails in June and July 2016. This, however, does not meet the test of agreement or consensus in relation to exclusive jurisdiction being clearly and precisely demonstrated and being agreed in writing or evidenced in writing.”
For these reasons, Lord Clark held that the defender’s case failed on the basis that the letter had not been received by the pursuer and that even if it had been the test for exclusive jurisdiction had not been met. The case was put out by-order to determine further procedure.
© Scottish Legal News Ltd 2021