England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/06/2008

Mr Justice Jack :

Introduction

1. Over periods of years the eight claimants supplied photographs in the form of transparencies to the defendants for the defendants to consider them for publication in their magazines. The claim concerns the loss of some such transparencies in November 2004. The first claimants, Photolibrary Group Limited, represent a number of photographers. The other claimants are single photographers. They all specialise in photographs of gardens, plants, shrubs and trees. The first and second defendants, Burda Senator Verlag GmbH and Verlag Aenne Burda GmbH are incorporated in Germany and are members of the Burda publishing group. They are the publishers in Germany of, inter alia, the garden magazines, Mein Schoner Garten and Garten Und Wohnen, respectively. I will refer to them as 'the publishing companies'. The third defendant, Burda Publishing Centre GmbH, also incorporated in Germany, has an office in London, which acted for the publishing companies in procuring the transparencies. It uses the name Burda Media. The costs of Burda Media are shared between the Burda companies which use its services.
2. The business was done in the following way. It was concerned with analogue images in the form of transparencies. It was not concerned with pictures in digital format. Requests for photographs of a particular description would be passed to Burda Media in London from the Burda offices in Offenburg through the department headed by Petra Jacob. Each request would be translated and sent out by Burda Media to a number of photograph providers by fax. This was normally done by either Carmen Durrant or Dorte Peter, Editor and Editorial Assistant respectively. The provider would then search to find photographs to submit in answer to the request. The request might cover a number of subjects and so between about 10 and 100 or even 200 photographs might be chosen. These would be sent to Burda Media either by a recorded delivery post or by courier. Burda Media would send them on to the publishing companies in Germany. There they would be considered and some might be chosen for publication. Some might be returned quite quickly, others more slowly. If a publishing company was interested in an image but did not wish to use it immediately, it might be retained for months, perhaps up to a year. Burda Media would return the transparencies to the producers. It would also inform the producers as to any picture chosen for publication and the producer would then bill Burda Media for the appropriate licence fee. The case is not concerned with the arrangements relating to licence fees.
3. When the transparencies were sent by the producers to Burda Media in London they were accompanied by a delivery note. This listed the transparencies sent. On its face and back it set out terms of business. These were in each case based on the standard terms of business recommended by the British Association of Picture Libraries and Agencies, commonly called BAPLA. Each batch of transparencies received from a producer would be sent on by Burda Media to the relevant publishing company under cover of a Burda Media dispatch note.
4. In November 2004 a substantial parcel of 1,865 transparencies belonging to the claimants were allegedly lost while in the custody of Lufthansa in transit between Germany and London. The claimants' delivery notes provided that in the event of loss a loss fee should be paid in a specified sum varying between £450 and £750 according to claimant. The sum due on this basis is £1,085,100, and that is the main claim made in this action. The second claim is for £183,316 claimed as holding fees in respect of other transparencies, again as set out in the delivery notes.

The proceedings

5. Proceedings were commenced by the claimants against the first two defendants, the publishing companies, on 26 July 2006. On 7 December 2006 it was ordered that there should be a preliminary issue:

'as to the terms on which the Claimants supplied their original analogue photographic transparencies to the Defendants'.

The primary question is whether the terms set out in the delivery notes form part of contracts made between the claimants and the publishing companies.

6. The claimants' case is that the terms set out on the delivery note formed part of a contract made between the particular claimant and the publishing company at whose request Burda Media had acted in requesting the transparencies in question. Their favoured way of putting it is that the delivery of the transparencies accompanied by the delivery note was an offer which was accepted by the retention of the transparencies and their transmission to Germany. A second analysis is that the request by Burda Media to the claimant was a request to supply transparencies in accordance the well-established course of dealing, which included the provision of transparencies under the terms of the delivery note, which offer was accepted by the provision of the transparencies and delivery note. A third analysis simply relies on the course of dealing, which, it was submitted, was sufficient to enable the claimants to rely on the terms.
7. The defendants case is that, first, no contracts relating to the transparencies came into being at all - there was simply a gratuitous bailment with a duty to take reasonable care of the transparencies; second, that, if there were contracts, they were between the relevant claimant and the relevant publishing company but did not incorporate the terms of the delivery notes, either because there was no express or implied agreement to their incorporation or because Burda Media had no authority to agree to it. It is also alleged in paragraph 9.5 of the defence in the preliminary issue that any right to rely on the terms of the delivery notes has been waived or is barred by estoppel. It is agreed that although this might be thought to fall outside the terms of the issue ordered, I should consider it at least in so far as the evidence enabled me to do so. Mr Richard Lord Q.C. suggested that the evidence I had heard might not enable me to fully resolve the issue: Mr Andrew Ayres submitted on behalf of the defendants that I could and should deal fully with the point. Further defences, such as whether the loss charges specified in the delivery notes are unenforceable because they are to be treated as penalties, do not fall within the ambit of the issue and will be considered subsequently.
8. The claimants do not allege that the loss of the transparencies in November 2004 was caused by any lack of care on the part of the defendants. The defendants accept that, if the claimants can rely on the relevant terms sets out in their delivery notes, then they are liable to reimburse the claimants accordingly. But, as I have stated, not all issues relating to that will be determined by this trial.
9. In further information dated 3 April 2007, which had been ordered to be provided by the publishing companies to clarify the legal relationships which they asserted, it was alleged in the alternative that any contracts were with Burda Media. This resulted in Burda Media being joined as the third defendant. It is now agreed on both sides that Burda Media acted as an agent and not as a principal.

The claimants and their dealings with the defendants

10. It was correctly agreed that I must look at the history of the trading between the claimants and the defendants individually, even if in the end there were to be no differences which were determinative. I will begin with the first claimant not only because it is the first but because it is not atypical.
11. Before I do so I should say a little more about the form of delivery note which is recommended by BAPLA. BAPLA is a member of what is described as an umbrella association for the photographic industry in the United Kingdom called the British Photographers Liaison Committee, BPLC. In 1987 BPLC drew up a set of terms for the use of the industry to accompany the supply of images to clients. The terms have been revised from time to time, most recently in 2001, giving rise to the 2002 terms. It is up to the individuals whether they use the terms, and whether they adopt them as drafted or whether they adapt them. The delivery note is used extensively by members of BAPLA when sending transparencies to clients by post or by courier. It, or variations of it in some cases, is the standard method of doing business. Similar terms are used in Europe. The changes effected in the 2002 terms were made to take account of digital imaging. The changes are not relevant to the issues here. The most important aspect of the terms is the provision that, where images are lost prior to return to the provider, compensation shall be paid in a fixed sum which is stated on the face of the delivery note. The terms may or may not have been adopted by an individual photographer. In her unchallenged evidence Miss Linda Royles, the chief executive of BAPLA, stated: 'It has been a standard provision within the terms of UK photographers and photo libraries that the client will be obliged to pay liquidated damages if it loses or damages irreparably the photographer's transparencies. Indeed it is a standard term for the industry around the world.' In her witness statement on behalf of the first claimant Sally Wood stated: 'To my knowledge all Picture Libraries in the UK, US, Europe and Australasia supply their images upon the same or similar terms and have done so for the past 30 or more years.'
12. I am also satisfied by the claimants' evidence that the actual loss fees and rental or holding fees (payable for late return) specified in their delivery notes were not unusual or particularly onerous. Fees at those levels were standard. No evidence was led to the contrary.
13. The standard BPLC delivery note is printed on both sides. It is stated at the top:

"These images have been sent on loan. Discrepancies should be advised immediately. Images must be returned, or reproduction licence agreed, by the Date for Return below."

There is a space for the transparencies to be listed. It is then stated 'Please sign and return one copy to acknowledge safe receipt', and there is a space for signature and date. Then there appears 'Fee for loss or damage (see 7 over) an original £ …. a print £ ….. duplicate £ ….'. Adjacent to that is 'Rental fee per week, per image (see 5 over) £ …. I omit some other matters. Then is stated:

1. Any client who has not previously dealt with us on the terms and conditions set out overleaf and who does not wish to accept such terms and conditions must return all the images immediately……. . The client will be deemed to have accepted our terms and conditions if all the Images are not returned within five days of their receipt.

2. Any client who has previously dealt with us on the terms and conditions set out overleaf will be deemed to have accepted them by virtue of having made the request for the Images referred to above.

14. The terms on the back include:

4) "Return Date" is the date by which the Images must be returned as specified on the delivery note or licence. If no date is specified, the Return Date shall be four weeks from the date of the delivery note.

5) You must pay the rental fee specified in the delivery note until we receive the images back. ….

7) You must immediately notify us in writing of any loss or damages. You must pay us compensation for each Image lost or damaged at the rates specified on the delivery note which are a genuine pre-estimate of the loss we will suffer. …. .

15. The first claimant, Photolibrary Group Limited, trades as Garden Picture Library. It was founded in 1987 and came to represent over 100 garden and plant photographers. The other claimants are single photographers, but that difference has no significance to the issues I have to determine. Mrs Sally Wood was one of Garden Picture Library's founders. The business was sold in 2005 and she ceased to be creative director in 2007. She was the main contact with Burda Media, and she dealt mainly with Carmen Durrant. Between May 1994 and February 2005 Garden Picture Library supplied Burda with 34,985 transparencies under 1557 delivery notes. Burda Media in London requested selections of transparencies and would collect them when ready by their own bike service. Occasionally an urgent request would come directly from Germany.
16. The delivery note used by Garden Picture Library from 2002 provided a space at the top for the statement of the return date. It did not have a space for a signature and omitted the words preceding that on the BPLC form. This was because Garden Picture Library had been advised that a signature was unnecessary. The fee for loss or damage was stated as £550, and the rental fee per week as £5. It included paragraphs 1 and 2 which I have set out from the front of the BPLC form. Paragraphs 4 and 7 on the back included the words I have set out above from those paragraphs in the BPLC form.
17. Burda Media never returned a signed delivery note to Garden Picture Library, or to any of the claimants. This appears to have been simply because it was the practice not to do so. When Carmen Durrant joined Burda Media in London she was told by her predecessor to the effect of 'Don't bother. We never do.' However in their early years at Burda Media both she and Dorte Peter would staple the photographer's delivery note to the Burda Media delivery note going to Germany, and Carmen Durrant would note on the latter the amount of the charge for a lost original. The stapling was stopped because the German office said that there was too much paperwork and it needed only the Burda Media delivery notes. Petra Jacob began employment with the second defendant in January 2002. In her witness statement she said that she was aware that the English photographers sought to operate on the basis of standard business conditions, and that she saw these on the back of their delivery notes from time to time. She said that she paid no attention to them. I find that the German end of the operation, the publishing companies, at all times knew what was happening at the English end, and so knew that the first claimant was delivering transparencies to Burda Media under the cover of delivery notes which set out standard terms including terms as to loss and holding fees. Further, they knew that it was the usual way in which this business was carried on.
18. In 1995 one of Garden Picture Library's transparencies was lost. The loss fee stated on the delivery notes at that time was £500. It was agreed with Burda Media that this would be paid, and on 10 January 1996 it was. In 2001 105 transparencies were lost. At this time the defendants had insurance against the loss of third parties' transparencies. At a subsequent date they ceased to do so. The defendants had some difficulty with the insurers, and the insurers would offer only £80 per image. In an e-mail to Petra Jacob Dorte Peter stated, in translation, 'The full amount is £500 per picture. We will start negotiations today with GPL. Even though we feel that £80 per picture is too little we will submit this amount to the agency.' That offer was made by letter of 27 November 2001. It was rejected by Sally Wood in a letter of 29 November, saying ' Regarding your proposed settlement, can I first say that £80 represents a mere 16% of the fee we stipulate in our terms and conditions of supply. We pre-estimate £500 to be the genuine loss we would suffer.' She went on to refer to another client who had lost 124 images and had paid Garden Picture Library the £500. She asked for settlement at the full figure. Dorte Peter reported this to Petra Jacob saying 'As you see, GPL assumes a completely rigid position. Of course there will always be room for negotiations and I see this chance in the fact that GPL is very interested in further cooperation with us.' That refers to the unequal strength of the parties. For the defendants' business was important to Garden Picture Library, but the defendants could easily drop them from their list of suppliers. Petra Jacob replied complaining that Dorte Peter had revealed that the defendants were insured, saying 'It is obvious that she insists on the full amount, now she knows that this is covered by insurance!' She ended 'Is there any chance to achieve anything in negotiations? Or will we have to use artillery on sparrows in the form of a lawyer?' Carmen Durrant replied that it was absurd to pretend they were not insured. She said 'What you call 'haggling' is – unfortunately – rigid insistence on the known business conditions of the agency.' Petra Jacob replied that if £500 per picture was insisted on the insurance would be cancelled with immediate effect, which should be conveyed to Sally Wood. Petra Jacob later instructed Dorte Peter to offer £290. By letter of 14 January 2002 Dorte Peter offered that to Sally Wood. She wrote:

"However, after strenuous negotiations between ourselves and the German Insurance Company, we were able to agree compensation payments of £290.00 per picture which amounts to £30500.00 for the whole shipment. We feel that this represents a fair offer, particularly in view of the large number of GPL pictures we publish month after month. Like you, we are keen on continuing our good business relations and for that reason I hope that you are able to accept this offer."

Sally Wood did accept the offer. She prepared an invoice to cover the payment. It began 'for the loss of 105 transparencies from one complete delivery note no. … dated 2/3/2000 – consignment at the agreed rate of £290.48 per picture. This conceded from our usual rate of £500 per picture in recognition of our otherwise good business relations.'

19. This negotiation was conducted by the defendants on the basis that the rate to which Garden Picture Library was entitled in accordance with the delivery note was £500, which could be reduced to reflect the commercial interest of Garden Picture Library in retaining the defendants' business. There was no suggestion either by Burda Media or by Petra Jacob that the term set out on the delivery note was irrelevant because it did not bind the defendants.
20. Apart from a possibility that loss fees were charged in 1995 it does not appear that Garden Picture Library ever made a charge to Burda Media for the late return of transparencies. It was recognized that the defendants regularly needed to retain transparencies for long periods, and that it was in the interest of Garden Picture Library that they do so because it increased the chance of publication. But that does not mean that the return dates and the possibility of rental fees were ignored. Thus on 18 April 2001 Dorte Peter asked for an extension of a month on 35 delivery notes, which was granted. Burda Media was concerned about the possibility of holding (or rental) fees. Thus on 14 September 2001 Dorte Peter requested to Germany 'Urgent warning (reminder) Please return all outstanding images as per my reminders as otherwise very high loss fees will be levied.' She meant holding fees. At some point soon after this Petra Jacob instructed Dorte Peter or Carmen Durrant to telephone the photographers to discuss loan periods and to explain that the German publishers needed sometimes to retain transparencies for long periods. Dorte Peter said in her witness statement 'Whilst we explained to photographers that we did not expect to be invoiced holding fees, we encouraged them to keep sending us reminders, … .' Sally Wood did not, I think, have a recollection of the conversation, but she said that she understood that position: Garden Picture Library understood the processes and valued Burda's custom: it was a reflection of how they trusted one another.
21. On 1 March 2002 Garden Picture Library sent, or intended to send, letters to all its customers about its revised terms of business. Burda Media have not found a copy of the letter in its files, and Carmen Durrant and Dorte Peter have no recollection of seeing it. Carmen Durrant said that if it had been received it would have come to her and she would have remembered it. I consider that the probability is that for some reason a copy did not reach Burda Media.
22. As a result of the loss of the transparencies in November 2004 early in 2005 the defendants simply ceased to request further photographs from Garden Picture Library and the other claimants. They continued to retain photographs which they had, and have published photographs from those retained. Garden Picture Library has made a claim for rental fees in respect of photographs so retained in the sum of £16,824. The facts relating to those photographs and how the sum is calculated were not examined in the evidence. Nor were they in relation to the similar claims made by other claimants.
23. Having dealt at length with the facts relating to the first claimant I can deal with the other claimants more shortly, concentrating on the points of difference.
24. The second claimant, Harpur Garden Library, is a partnership and markets the photographs of father and son, Jerry and Marcus Harpur. Jerry Harpur began business with Burda in the 1980s, and the defendants have been a major client of the partnership since it began in 1992. Computerised records show that between 2001 and 2005 30,157 images were submitted under cover of 632 delivery notes following requests from Burda Media. Harpur sent transparencies by special delivery, and so had signatures for receipt.
25. The delivery notes used by Harpur Garden Library stated return dates on their face but no rental fee – which was left blank. There was a space for signature under the instruction 'Please sign and return one copy to acknowledge safe receipt.' The figure stated for loss or damage of an original was £700. The paragraphs 1 and 2 which I have quoted above from the BPLC form were set out. The terms on the back are probably taken from a BPLC form prior to the 2002 form. They are not materially different.
26. The defendants paid loss fees to Harpur on two occasions. In each case there was a negotiation as to the amount. In May 2002 £700 was paid in respect of the loss of two, so £350 each. In January 2004 £300 was paid in respect of the loss of one. The Burda remittance advice for the former described the payment as 'loss fee'. The loss fee stated on the delivery notes was then £700. Mr Marcus Harpur stated that the negotiations were with Carmen Durrant and started from the stated £700. He was prepared to negotiate down by reason of goodwill. It is clear that it was never suggested that stated loss fee was irrelevant because Burda were not bound by the delivery note. Equally Mr Harpur was aware that Burda were unwilling to pay the full amount but would try to negotiate him down. Mr Harpur mentioned four publishers who had paid his loss fees without demur.
27. On his delivery note Mr Harpur specified a service fee of '£20 separately invoiced if no images used' for the selection of images for submission. These fees were paid by Burda Media.
28. The third claimant, Clive Nichols Garden Pictures, is a partnership between Mr Nichols and his wife. He is the photographer, and Mrs Nichols manages the business. Carmen Durrant contacted her to begin their business in 1995. Burda was a good source of work, and they submitted 35,824 pictures under 914 delivery notes. They were sent by special or recorded delivery and so Burda's signature for receipt was not needed. On occasion they were asked to send transparencies direct to Germany with a copy of the delivery note going also to London.
29. The Nichols delivery notes stated the return dates on their face. The loss or damage fee was stated as £500 and the weekly holding fee as £4. It was stated in capitals at the bottom 'If you do not accept these terms and conditions, please inform us and return the submissions immediately.' The terms on the back appear to have been taken from an earlier BPLC form.
30. Nichols agreed the following loss fees with Burda Media: March 2000, one image £300; May 2000, one image £350; September 2002, one image, £300. Mrs Nichols said that the lower fees were agreed 'in view of the fantastic business with Burda'.
31. Mrs Nichols accepted that she was content that Burda retain transparencies past the return date provided that there was a chance of publication.
32. It is unclear if on occasion Mrs Nichols charged Burda a service fee for selecting images for submission because the only delivery note which I have states 'service fee – non refundable £0'.
33. The fourth claimant is Andrew Lawson trading as Andrew Lawson Photography. Mr Lawson had begun business with Burda in 1988 and has supplied over 21,000 transparencies in over 500 deliveries.
34. Mr Lawson based his delivery note on the BPLC form but amended it to suit his own needs. On the face a return date was provided. There was a space for signature under 'Please sign and return one copy to acknowledge safe receipt.' The loss figure was stated as £500. At the bottom was stated:

FULL TERMS AND CONDITIONS OVERLEAF. PLEASE NOTE THE FOLLOWING:

1. Pictures are the client's responsibility until received back by supplier. They should be returned by registered post or insured courier.

2. Minimum compensation for loss or damage £500.

3. The service charge quoted may be varied or waived at the supplier's discretion, according to the number of pictures used.

4. A holding fee of £2 per week may be charged for pictures held beyond the return date, unless an extension has been agreed.

35. In November 2000 Burda paid Mr Lawson £200 for a damaged transparency. In November 2003 he agreed the full £500 for one lost transparency but to make no charge for another because there was a dispute as to whether it had been returned or not. It is clear from the correspondence that the parties were proceeding on the basis that the delivery note term was applicable.
36. Mr Lawson said that he regarded the charging of holding fees as a matter of last resort because if they were charged the client would soon be lost.
37. Mr Lawson charged services fees of £15 as stated on his delivery notes, which were paid by Burda Media.
38. The fifth claimant is Derek St Romaine trading as Garden Photo Library. Mr St Romaine was telephoned by Carmen Durrant in 1999 to ask if he would supply transparencies to Burda. Between 1999 and 2005 he submitted about 20,000 transparencies under about 715 delivery notes. His delivery notes followed the BPLC form.
39. In July 2001 he agreed with Carmen Durrant by telephone that, depending on the time taken to deal with a request for transparencies, he might charge a service fee.
40. Prior to the loss in November 2004 he had never had to ask Burda for a loss fee.
41. Mr St Romaine said that he was happy for Burda to retain his transparencies for long periods: it would have been madness to charge holding fees: he wanted the work.
42. The sixth claimant is Marianne Majerus trading as Marianne Majerus Photography. Miss Majerus began dealing with Burda in the mid 1990s but did not do so on a regular basis until January 2004 when Carmen Durrant came to see her to discuss her supplying to Burda. She showed Carmen Durrant her delivery note, and she responded to the effect of 'Oh yes, those are the BAPLA terms'. In her witness statement Miss Durrant stated that she did not agree to the terms. I am satisfied that it was implicit that she did. The statement continued: 'In any event, I knew our colleagues in Germany were aware of the standard business conditions which appeared on the photographers' delivery notes, as they frequently received them.' In the following 12 months Miss Majerus supplied over 3,000 transparencies under cover of 62 delivery notes. Collection was by courier.
43. The delivery note used by Miss Majerus largely followed the BPLC form. The fee for loss or damage of an original was £750. It referred to a service charge of £25. The face of the note did not set a rental fee or refer to rental fees, although it did set a return date. Condition 5 on the back was in the BPLC form, namely: 'You must pay the rental specified in the delivery note until we receive the Images back.'
44. Miss Majerus did not receive back a signed copy of the delivery notes. She said that she was not concerned as to that because collection was by courier, and Carmen Durrant knew the terms. Her service fees were always paid in accordance with her invoices. She said that on a number of occasions she had chased Burda for the return of transparencies and had mentioned holding fees: Burda would then send them back. They did not normally retain transparencies for much longer than a month.
45. Miss Majerus was paid a £25 service fee, which she had agreed at her meeting with Carmen Durrant, and which appeared on her delivery notes.
46. The seventh claimant is Eric Crichton Photos. Mr Crichton dealt with Burda occasionally between 1991 and 1995, and then dealt with them on a regular basis. Between 2000 and 2005 he supplied 14,876 transparencies under 355 delivery notes.
47. The face of Mr Crichton's delivery notes followed the BPLC form. The figure for loss or damage was given as £500, and the rental fee as £2 per week.
48. In 9 December 1996 Mr Crichton wrote to Burda sending 44 transparencies in response to a fax from Burda Media. He said:

"As I have not supplied transparencies to the magazine for some years now, please will you read the conditions of the delivery note. If they are acceptable I shall look forward to a signed delivery note in acknowledgement of the safe arrival of the package. If the magazine is unable to accept the terms and conditions, please arrange for the return of the transparencies … ."

He received no response to his letter but the transparencies were not returned but were sent on to Germany. Mr Crichton said in cross-examination that as Burda had signed for the delivery of the transparencies, further confirmation was not required.

49. On 2 December 2003 Mr Crichton invoiced Burda Media for a lost transparency in the sum of £500 'per as set out in the terms and conditions of the delivery note'. It was paid on 5 March 2004. On 1 November 2004 he sent Buda Media two invoices, each for a lost transparency in the same terms quoted above but in the sum of £200 in each case. That he said was the figure which had been negotiated with him.
50. On 22 June 1992, 8 June 2001 and 30 June 2001, Mr Crichton sent Burda Media invoices for holding fees, which were paid. On 18 February 2002 Mr Crichton wrote to Burda saying he had made a list of overdue transparencies and would charge holding fees after 6 months. He pursued this in a letter of 6 March enclosing an invoice. Dorte Peter responded to the letter of 18 February on 7 March saying that she was aware of the position and pictures could not always be returned within 6 months. On 11 March Carmen Durrant wrote in answer to the letter of 6 March saying no other library charged holding fees on the grounds Mr Crichton had advanced, and asking him to cancel the invoice. Mr Crichton enclosed two further invoices on 12 April. The outcome was that Carmen Durrant told him by telephone that Burda would cease to use him if he persisted. He did not.
51. Following the loss of November 2004 and after problems had arisen Mr Crichton responded to 4 orders from Burda Media by sending transparencies. In his covering letter he stated that he wished to reconfirm the terms of the delivery note. There is written on the letter in German dated the next day: 'Do not respond / Ignore / Do not pass on / Find alternative photographer'.
52. Mr Crichton had agreed with Carman Durant that he would not charge service fees on every delivery note. His evidence was that he charged only approximately every other note, because often there would be two dealt with together.
53. The eighth claimant is Gardenpix Limited, which is the vehicle of Nicola Stocken Tomkins. Her business with Burda began following a visit on 4 March 2004 which she had arranged with Dr Jurgen Wolff, the Chief Editor of Mein Schoner Garten, in Offenburg. She wanted to show him and his colleagues her work. Dr Wolff invited her to join the list of photographers used by Burda Media in London. Carmen Durrant contacted her and she sent her first transparencies on 9 March.
54. Gardenpix's delivery note follows the BPLC form. The figure for loss is stated as £450.
55. Gardenpix had no reason to claim loss fees or holding fees prior to the loss of November 2004. Mrs Stocken Tomkins said that 5 or 10 per cent or perhaps more of her transparencies were returned late. The provision for holding fees was a safeguard and she would not consider charging them within a year of starting a new relationship – it was not how one did business.
56. Mrs Stocken Tomkins gave evidence of a conversation which she had had when Carmen Durrant telephoned her in mid February 2005 when she was out photographing snowdrops on the Welsh border. She said that Carmen Durrant was very upset and concerned that the London office would be closed because of the size of the loss. She tried to console her, and might have said she had similar images to match those lost. Later she found one similar image only. Carmen Durrant did not recall the conversation, but said that she would not have been upset and would not have spoken about the London office closing save in jest. I am satisfied that the conversation took place, that Mrs Stocken Tomkins got the impression that Carmen Durrant was upset and that some reference was made to the future of the London office. But I do not think that the conversation has any relevance to what I have to decide.
57. It appears that Gardenpix did not charge Burda Media service fees.

Authorities

58. I was referred to a number of authorities which relate to the making of contracts and the incorporation of one party's terms of business. The difficulties have been more in the application of the principles than in their statement. I can be selective in my citations.
59. I will take Interfoto Picture Library v Stiletto Visual Programmes Limited [1989] 1 QB 433 first. For it has some similarities with the present case, but also important differences. There the claimants ran a photographic transparency lending library. Following a telephone enquiry by the defendants the claimants sent 47 transparencies together with a delivery note which set out printed conditions. One of them was that if the transparencies were not returned within 14 days a holding fee of £5 per day per transparency would be charged. The parties had not done business before. The defendants did not read the conditions. A director of the defendants, Mr Beeching, telephoned the claimants to express appreciation for the receipt of the transparencies. The transparencies were returned after 4 weeks, which resulted in an invoice for £3,783. As was noted by the Court of Appeal, it is remarkable that it was not alleged that the clause was unenforceable as providing for the payment of a penalty, but it was not. The Court of Appeal rejected the argument that the contract was made before the note was delivered. Dillon LJ stated at page 436:

"An alternative argument for the defendants, in this court as below, was to the effect that any contract between the parties was made before the defendants knew of the existence of the delivery note viz, either in the course of the preliminary telephone conversation between Mr. Beeching and Miss Fraser, or when the jiffy bag containing the transparencies was received in the defendants' premises but before the bag was opened. I regard these submissions as unrealistic and unarguable. The original telephone call was merely a preliminary inquiry and did not give rise to any contract. But the contract came into existence when the plaintiffs sent the transparencies to the defendants and the defendants, after opening the bag, accepted them by Mr Beeching's phone call to the plaintiffs at 3.10 on 5 March. The question is whether condition 2 was a term of that contract."

After an authoritative review of some of the leading authorities Bingham LJ stated at page 445:

"Turning to the present case, I am satisfied for reasons which Dillon L.J. has given that no contract was made on the telephone when the defendants made their initial request. I am equally satisfied that no contract was made on delivery of the transparencies to the defendants before the opening of the jiffy bag in which they were contained. Once the jiffy bag was opened and the transparencies taken out with the delivery note, it is in my judgment an inescapable inference that the defendants would have recognised the delivery note as a document of a kind likely to contain contractual terms and would have seen that there were conditions printed in small but visible lettering on the face of the document. To the extent that the conditions so displayed were common form or usual terms regularly encountered in this business, I do not think the defendants could successfully contend that they were not incorporated into the contract."

The court held that the term relied on was a particularly onerous clause and that insufficient had been done to bring it to the defendants' notice. If it had been a usual term it could have been relied on.

60. The most important differences between the facts in Interfoto and the present case are as follows. There is here in the case of each claimant a very substantial course of dealing. Burda Media knew that the claimants intended to deal on the terms of their delivery notes, and were familiar with the terms which are relied on. Petra Jacob in Offenburg had the same knowledge and familiarity. Claims had been made previously by several claimants for loss fees, which had been paid, usually at a reduced amount following negotiation. There had been some consideration of holding fees. In contrast with the fees claimed in Interfoto the fees which are claimed here are not in any way unusual but are at the level at which was normal in the business. It was known to those involved in London and in Germany what the levels were. There is no evidential basis for the submission here that the terms were particularly onerous or unusual and that not enough had been done to bring them to the attention of the defendants.
61. I will refer to one passage only from Hardwick Game Farm v SAPPA [1969] 2 AC 31. Lord Morris of Borth-y-Gest stated at page 90:

"A separate issue arises, however, as between Grimsdale and SAPPA. There were three contracts between Grimsdale and SAPPA. They were oral. The learned judge found that there had been frequent prior transactions between them. There had been three to four deals a month during the previous three years. The practice had been that Grimsdale would sent a contract note to SAPPA either later on the day of an oral contract or on the day following. SAPPA would expect to receive such a contract note. It was routine practice. The same practice was indeed followed when SAPPA bought this type of material (cakes and meals) from London wholesalers. On the back of the contract notes there were certain terms or conditions. Mr. Golden who acted for SAPPA knew that there were such conditions though he had not read them. One term on the contract notes was as follows: "The buyer under this contract takes the responsibility of any latent defects." It was the contention of Grimsdale (a) that the terms or conditions on the contract notes were terms of or were incorporated into the relevant contracts of sale and (b) that the above-quoted term operated, on the facts of the present case, to relieve Grimsdale from any liability to SAPPA. As to (a), the learned judge, after considering the case of McCutcheon v. David MacBrayne Ltd.[1964] 1 WLR 125, H.L., held that the conditions in the contract note were not incorporated into the contracts of sale. In agreement with all the members of the Court of Appeal I consider that they were. Over the course of a long period prior to the three oral contracts which are now in question SAPPA knew that when Grimsdale sold they did so on the terms that they had continuously made known to SAPPA. In the circumstances it is reasonable to hold that when SAPPA placed an order to buy they did so on the basis and with the agreement to sell would be on the terms and conditions set out on their contract notes to the extend to which they were applicable."

62. In Circle Freight International Limited v Medeast Gulf Exports Limited [1988] 2 Lloyd's Rep 427 the defendant exporters had traded with the claimant freight forwarders on a number of occasions. The Court of Appeal was concerned with the defendant's counterclaim for goods stolen from the claimant's van. The claimants' invoices had stated that they transacted business on the terms of the Institute of Freight Forwarders. In the course of his judgment Taylor LJ stated at page 433:

"Here, the parties were commercial companies. There had been a course of dealing in which at least 11 invoices had been sent giving notice that business was conducted on the IFF terms at a place on the document where it was plain to be seen. Mr. Zacaria knew that some terms applied. He knew that forwarding agents might impose terms which would frequently be standard terms and would sometimes or frequently deal with risk. He never sought to ask for or about the terms of business. The IFF conditions are not particularly onerous or unusual and, indeed, are in common use. In these circumstances, despite Mr. Gompertz's clear and succinct argument to the contrary. I consider that reasonable notice of the terms was given by the plaintiffs. Putting it another way, I consider that the defendants' conduct in continuing the course of business after at least 11 notices of the terms and omitting to request a sight of them would have led and did lead the plaintiffs reasonably to believe the defendants accepted their terms. In those circumstances it is irrelevant that in fact Mr. Zacaria did not read the notices.

Accordingly. I consider that the learned Judge erred in his conclusion on the first issue and I would hold that the IFF conditions were incorporated in this contract"

Again there are distinctions with the present case, and they are in the claimants' favour.

Conclusions

63. In my judgment the most straightforward analysis of the contractual situation is that a delivery of transparencies accompanied by a delivery note is to be treated as an offer, which was accepted by the acceptance of the transparencies and their onward transmission to Germany. In each case a contract was made in that way. It incorporated the terms of the delivery notes. That is the appropriate objective interpretation of the parties' conduct, whatever the actual intention of the defendants. However, I should say that I do not think that the evidence established any positive intention on the part of the defendants not to deal on the basis of the delivery notes. The evidence was actually to the contrary. For they knew what the terms were. They never rejected them, or said they would not be bound by them. In the early days the claimants' delivery notes were sent to Germany and loss fees were noted on Burda Media's delivery notes. I find that they negotiated loss fees on the basis that the claimants were entitled to the amounts stated in their delivery notes but could be persuaded to accept less because they wanted their businesses with the defendants to prosper. That was the appreciation on both sides. In the case of the sixth claimant, Marianne Majerus, there was an express acceptance of her terms at her meeting with Carmen Durrant in January 2004. Mr Crichton can also rely on the terms of his letter of 9 December 1996.
64. The alternative analysis that the faxed requests for transparencies to be submitted were offers to submit them on the usual terms, that is, the terms of the delivery notes, which offers were accepted by the submission of transparencies accompanied by the notes, seems to be equally viable. Likewise the case can be put on the basis of an established course of dealing on the terms of the delivery notes: compare the Circle Freight case.
65. Mr Ayres put great emphasis on the fact that Burda Media did not sign the delivery notes, which, he submitted, showed that the terms of the notes were not accepted. If the notes had been returned signed, that would have made the defendants' position as to incorporation really unarguable. But the converse does not follow. The signature which was requested, where it was, was to acknowledge safe receipt. If the terms were not acceptable, Burda Media was asked to return the transparencies. That, of course, was never done.
66. I accept that where there is a course of dealing between parties the court must examine the whole of it to see what the position is. So, even if examination of the documentation coming into being at the time the contracts were made suggested that the parties were dealing on particular terms, that might be shown not to be so by other conduct. For there might be something which expressly negated that intention, such as a letter saying so. Or possibly the way the parties carried on the business might show that they were not intending the terms to be applicable. There is nothing express here. Nor do I consider that the negotiation of loss fees works to that effect: on the contrary it supports the claimants' position for the reason I have stated.
67. I have held in paragraph 12 that the fees set out in the delivery notes were not unusual or particularly onerous. Contrary to Mr Ayre's submission the point which succeeded in the Interfoto case is therefore not available to the defendants. There are also the further distinctions that the fees were plainly stated on the face of the delivery notes and were known to Burda Media, and the levels were known to the publishing companies if not the actual fees in every case.
68. It follows also that I reject the submission that the deliveries of transparencies are to be considered as bare bailments with no terms apart from a term as to the return of the transparencies with an obligation to take due care of them in the meanwhile. While it is now clear that contract is not a pre-requisite to bailment – I refer to Chitty on Contract 29^th Edition paragraph 33-002, in my view, in commercial situations such as the present where goods are passed by way of business from one party to another, it will be very unusual that there will be no contract between those parties.
69. I come to the question of authority. I can deal with this shortly. When the first and second defendants instructed Burda Media to obtain transparencies so they might be considered for their magazines, it was implicit in the request that Burda Media would do so on the usual terms on which transparencies were obtained for such a purpose. Those terms were known to the publishing companies, the first and second defendants. For they were certainly known to Petra Jacob, who was the only witness called from Germany. The evidence shows not only that such terms were standard in the United Kingdom but that similar terms operated in Europe. So they would have been known to others as well. Further the defendants knew that the transparencies were in fact being supplied by the claimants on those terms. So the publishing companies must be taken to have instructed the obtaining of the transparencies on those terms.
70. It was submitted that the claimants had waived their rights to claim loss fees and holding fees. It was put alternatively as estoppel. In respect of loss fees the point can only be run against a claimant whose transparencies has been lost and who had either not been made claims or had not pursued them for the full amount. There was no evidence of claims not being made. I have recounted the evidence as to fees being negotiated down on the basis of good will. There was, of course, no statement by any claimant that he or she would not in the future rely on their right to the full loss fee. It can arise only by implication. This is where the submission breaks down. For the negotiations which took place were specific to their circumstances, and in my judgment no promises for the future are to be deduced from them. Even if they could be, such promises would not apply in a situation as now exists where there is no goodwill to be preserved.
71. The position is different with regard to holding fees. All the claimants accepted in evidence that prior to November 2004 they would not claim holding fees in accordance with the terms of their delivery notes but would give the defendants very much longer in which to return their transparencies. That was something which was imposed on Mr Crichton, but he accepted it as a necessary part of continuing to do business with the defendants. So there is a very strong argument that the claimants could not now recover holding fees incurred in the ordinary course of the business as it was in fact conducted between the parties prior November 2004, or perhaps prior to the cessation of the supply of further transparencies. As I have stated I heard no evidence as to how the holding fees which are sued for arose. Likewise I heard no submissions as to how they might or might not be distinguished from other holding fees. I cannot make any decision as to this part of the claim and waiver or estoppel.
72. The last issue is as to the position of the second and sixth claimants whose delivery note terms referred to holding fees on the reverse but stated no sum of their face. Mr Lord submitted on their behalf that it was to be implied that a reasonable figure per week was payable. Mr Ayres submitted that none being stated none was payable. In my view it gives better effect to the presumed intention to imply that a reasonable sum shall be recovered rather than to negate the term on the reverse of the delivery note.