England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BRADFORD COUNTY COURT
(HIS HONOUR JUDGE ADAMS)

		Royal Courts of Justice Strand London, WC2 Thursday, 12th December 2002

1. LORD JUSTICE CHADWICK: This is a renewed application for permission to appeal from an order made on 16th October 2002 by His Honour Judge Adams sitting in the Dewsbury County Court at Bradford in proceedings brought by PCB Media Ltd against Kolorcraft Ltd. PCB Media carries on business as a consultant and supplier of information technology equipment. Kolorcraft was a user of such equipment and a customer of PCB Media.
2. The claim in the proceedings was for payment under a contract for the supply of maintenance services in respect of information technology hardware over a number of years. The claim is based on an invoice dated 12th January 2001. The invoice is less than specific; in that it refers simply to "arrears of hardware maintenance as per accompanying letter". The accompanying letter indicates that the amount claimed, some £32,500 excluding VAT, was a final bill for adjusted maintenance supplied since 1993. It enclosed a spreadsheet. The letter continued:

"As you will appreciate the spreadsheet used to calculate the difference is the same one that has been mutually agreed ... whilst the [principle] of adjusting/correcting the figures in arrears has also long been agreed - notably with your former Financial Director Derek Fieldhouse."

3. The judge found that the maintenance services were supplied under an agreement made orally in 1993 between the managing director of PCB Media, Mr Peter Marsland, and Mr Fieldhouse on behalf of the defendant. He found that that agreement was to the effect that maintenance services would be provided in respect of equipment supplied to the defendant by the claimant; and that those services would be charged at an annual rate of 10 per cent of the invoiced value of the equipment. But he also found that the claim must be limited to be payments due in respect of the six years commencing on 6th February 1996. Earlier years were barred by the Limitation Act 1980. The effect of limitation was to reduce the amount claimed to £15,308.73, including VAT. The judge applied a discount of 10 per cent to the amount claimed and so reached the figure of £13,778 for which he gave judgment. It is against judgment in that sum that the defendant seeks permission to appeal.
4. The proposed grounds for appeal, as set out in section 7 of the Appellant's Notice and elaborated in oral argument this morning, reduce to two. First, that there was no contractual entitlement to payment at all; and secondly, that if there were a contractual claim, the claimant had failed to prove loss in the amount for which the judgment was given or any amount.
5. As I have said, the judge found that there was an oral agreement made in 1993. He did so on the basis of evidence given by Mr Peter Marsland which he accepted. Mr Marsden's evidence was that he had made the agreement with Mr Fieldhouse. Mr Fieldhouse did not give evidence at the trial. Indeed, it appears that the defendant had not asked him to make a witness statement. In those circumstances, Mr Marsden's evidence was uncontradicted and the judge was entitled to accept it. In particular, the judge accepted, as he said at paragraph 6 of his judgment, that the cost of annual cover would be 10 per cent of the value of the equipment and that it was to be paid in advance. Those are findings of fact.
6. The defendant asserts that any oral agreement that was made between Mr Marsden and Mr Fieldhouse was overtaken by a written agreement signed on 22nd April 1994, but with a commencement date of 17th September 1993. That document lists in a schedule equipment described by reference to six systems, a cost of maintenance for each system and a total, being the aggregate of those six individual costs, in the sum of £3,570.27 per annum, excluding VAT. On the reverse of the document is the small print setting out the terms of business. It is plain that the obligations under that agreement were obligations specific to the scheduled equipment. In particular, clause 3.3 of the terms of business provides that the maintenance of devices not listed in the contract is excluded. Clause 6 provides that unless the equipment is found to be an unacceptable condition, the agreement will extend from year to year at the company's then prevailing terms, subject to termination. In that context the equipment is plainly the equipment listed in the schedule. It is to that equipment, also, that the whole of agreement clause -- clause 8 of the terms of business -- apply. That clause provides that the agreement shall constitute the whole of the agreement between the parties. No variation is to be made unless it complies with the conditions set out above; and no additional or contrary terms are to be valid in the absence of a signed agreement.
7. The position, therefore, was that so long as the scheduled equipment remained in the defendant's use, the claimant was entitled to charge £3,570.27 a year for maintaining it. But if the claimant maintained other equipment, installed after 17th September 1993, it could not rely on the written maintenance agreement. It had to rely on the original agreement made between Mr Marsden and Mr Fieldhouse on the basis that that provided for an overriding arrangement under which equipment maintained would be maintained at a charge equal to 10 per cent.
8. It is plain that it was contemplated that, as new equipment was supplied by the claimant, either it would be added to the schedule in the existing agreement -- with a consequential adjustment to the charge -- or it would, itself, be subject to a separate written maintenance agreements or a sequence of written maintenance agreements. That is what the judge found was the parties' intention: see paragraph 9 of his judgment.
9. But these parties never got round to producing either amendments to the September agreement or further maintenance agreements to cover the additional equipment. So they were left with the original oral agreement between Mr Marsden and Mr Fieldhouse. That is the agreement which the claimant was entitled to enforce, and the judge gave judgment accordingly.
10. The second ground of appeal is that the judge was not entitled to reach a conclusion that the amount to be paid was £13,778 exclusive of VAT. The judge reached that conclusion on the basis of a schedule which the claimant had produced; after he had disallowed the amounts claimed in respect of earlier years and made a reduction of 10 per cent on the balance. He made a deduction of 10 per cent to allow for the possibility -- which he recognised -- that the schedule might include claims for equipment which had gone out of use in the relevant year.
11. That was an assessment of loss he was entitled to make on the evidence before him. He is not to be criticised for taking the view that this was a case in which the interests of the parties were best served by an assessment on the material available; rather than requiring a detailed analysis as to which equipment was being used by the defendants from time to time. It would have been open to the defendants to challenge individual items if they had wished to do so; but they did not take that course.
12. In my view, this is an appeal which would have no real prospect of success. Accordingly, this application must be refused.

ORDER: Application for permission to appeal refused.

(Order not part of approved judgment)