ALEXANDER OASTLER LTD AGAINST VALERIE WILLIAMS
SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE AT DUNDEE
[2017] SC DUN 17
A42/16
JUDGMENT OF SHERIFF SG COLLINS QC
In the cause
ALEXANDER OASTLER LTD
Pursuer
against
VALERIE WILLIAMS
Defender
Act: Ridley, Blacklocks Solicitors
Alt: Party
Dundee, 23 January 2017
The Sheriff, having resumed consideration of the cause, grants decree against the defender for payment to the pursuer of the sums of (1) £6,324.94, together with interest thereon at the rate of 8.5% from 7 October 2015 until payment; (2) £199.92; and (3) £100.00; finds the defender liable to the pursuer in the expenses of the cause as taxed, but subject to deduction of the sum of £100.
Findings in Fact:
1. The pursuer is a limited company providing joinery services. The defender is the owner of Refresh Skin Clinic Limited, a hairdressing and beauty salon business.
2. In around late 2014 the defender acquired new shop premises for the said business, namely 17 Whitehall Crescent, Dundee. These premises needed to be internally redesigned and refurbished for this purpose. The defender spoke to Mr Victor Robatti, then a personal friend, who is employed by the pursuer as a contracts manager. He introduced her to Gordon Walker, an interior designer. The defender contracted with Mr Walker to act on her behalf, inter alia, to produce plans to redesign and refurbish the shop premises, arrange contracts with suitable tradesmen for the necessary works, and also to supervise the carrying out of those works. She signed Mr Walker’s letter of engagement of 7 December 2014, now production 5/1/1.
3. Mr Walker duly produced a design and refurbishment plan for the defender and sought quotations for the various joinery, plumbing, electrical and other works necessary to give effect to it. In relation to the joinery work Mr Walker produced a specification of works for his design and sought and obtained a quotation from the pursuer.
4. The terms of the pursuer’s quotation are as set out in production 5/1/6. Various items of work are listed and the respective cost proposed for each item is specified. The total cost quoted by the pursuer was £12,907.21 plus VAT. Mr Walker received this quotation at around the beginning of February 2015. He communicated its terms to the defender at this time and discussed it with her, by phone, text and email. She thought the overall cost was too high. She had originally hoped that the entire refurbishment of the shop – that is, not only the joinery, but all the other works as well – could be achieved within a budget of £15,000. This was not realistic. However Mr Walker agreed with the defender to delete certain items of work from his design and amend others, so as to reduce the cost of the joinery works. Other than as regards these deleted and amended items the defender accepted the terms of the pursuer’s quotation.
5. In the light of this agreement Mr Walker wrote to the pursuer the letter now lodged as production 5/1/7. This letter is dated “2/9/15”, but was in fact written and sent on 9 February 2015. The letter replicated the quotation set out at production 5/1/6, but certain of the items of work were annotated by Mr Walker to show the deletions and amendments he had agreed with the defender. The cost of the two deleted items of work amounted to £2,520.73. Five items of work were annotated as amended, in various ways. The defender wanted the refurbishment work started and finished as soon as possible in order to get her business up and running. Accordingly rather than wait for a new quotation from the pursuer as regards the amended items she agreed that Mr Walker would contract with the pursuer on her behalf to carry out these items (in addition to the un-amended items) on the understanding that the cost of each amended item would be lower to her than originally quoted.
6. On this basis the defender contracted with the pursuer to carry out the joinery works (other than the two deleted items) specified in production 5/1/7. The contract was a commercial contract, being a contract for the supply of services, where the pursuer and the defender were each acting in the course of a business.
7. Between around 9 and 27 February 2015 the pursuer carried out the contracted work to the said shop premises. Other contractors were also on site during this period. The defender had made arrangements for an opening party and reception on the latter date and accordingly the job was done under considerable time pressure. In the course of the refurbishment various other items of work were carried out by the pursuer, that is, additional to those specified in production 5/1/7. In particular:
a. It became apparent that certain hot water pipes in the kitchen and treatment room had to be boxed in. Although Mr Walker had initially suggested that this would not be necessary, the plumber on site indicated to him that it was required in order to comply with health and safety requirements. The defender agreed with Mr Walker that this work be carried out, and to pay a reasonable fee for it. Mr Walker then instructed the work and the pursuer’s employees carried it out.
b. The design required holes to be cut in an area of panelling in order to locate certain sockets. It became apparent that it was necessary to alter the location of these sockets and thus to cut the holes in different places from those originally planned. The defender discussed this with Mr Walker and he agreed to instruct the pursuer’s employees accordingly. However he failed to do so before the holes had been cut according to the original design. The pursuer therefore required to carry out further work to relocate the holes.
c. The defender had purchased certain specialist seats for use by clients, a mirror and toilet roll holder for the toilet, and pictures for the walls. These items had been delivered to the shop. On the last day of the works, under pressure to have everything finished for an opening party which she had arranged, the defender asked Mr Robatti to have the pursuer’s employees build up the seats, and put up the mirror, toilet roll holder and pictures. This work was duly carried out. Mr Robatti did not say to the defender that there would be no charge for it.
8. Mr Walker had, at the defender’s instruction, designed a seat and rear panel to be located in a particular area of the shop. The pursuer quoted £400 for the cost of this work, as set out in production 5/1/7, which the defender accepted. She later agreed with Mr Walker that the seat should have a walnut wood panel backing, which increased the cost to £450. The pursuer’s employees initially did not construct the seat according to plan, and the work had to be redone by them. The defender was not charged for this remedial work. When this work had been redone, the seat and panel were conform to Mr Walker’s design plans as agreed with the defender.
9. Following completion of the work the defender initially appeared satisfied with it. The pursuer submitted an invoice for the completed works to Mr Walker, now lodged as production 6/1/2, together with the pursuer’s joiners’ timesheets relative to the work. The total sum invoiced by the pursuer was £10,270.68 plus VAT. Each of the five amended items referred to at finding 5 above had, as agreed, been charged at a lesser amount than the amount stated in the pursuer’s original quotation at production 5/1/6. One additional item had also been charged at a reduced cost. The total cost reduction in relation to these six items (items 4, 6, 7, 8, 11 and 12 on page 1 of the invoice), as compared with the original quotation, amounted to £2,149.54.
10. Mr Walker checked each item on the invoice against the pursuer’s employees’ timesheets in order to satisfy himself that each item of work had been done and that the cost was reasonable. He annotated each of the items on the invoice. In particular:
a. Item 14 on page 1 (“seat and rear panel”) was charged at £450. Mr Walker annotated this item: “as per agreed quote”. This related to the seat and rear panel referred to at finding 8 above;
b. Item 2 on page 2 (“pipeboxes in kitchen and treatment room”) was charged at £327.35. Mr Walker annotated this item: “requested on site”. This related to the additional work referred to at finding 7(a) above;
c. Item 10 on page 2 (“cut holes for electrician”) was charged at £146.20. Mr Walker annotated this item: “altered positions for lights and sockets”. This related to the additional work referred to at finding 7(b) above;
d. Items 11 (“build up clients seats”), 12 (“fit only mirror and toilet roll holder”) and 14 (“hanging pictures”) on page 2, were charged at £87.72, £25.00 and £29.24 respectively. Each of these items was annotated by Mr Walker as having been “instructed on site.” These related to the additional works referred to at finding 7(c) above.
11. Having checked and approved the account Mr Walker advised the pursuer of this. In particular on 30 June 2015 he issued an interim certificate, now lodged as production 5/2/9, certifying that the sum of £10,270.78 plus VAT (total £12,324.94) was now due for payment by the defender to the pursuer. He emailed this to the defender, a copy of which is lodged as part of production 5/1/4. Mr Walker did not seek the defender’s prior approval of the costs of any of the items of work, in particular the additional items specified at finding 10 above. Having received the certificate the pursuer then rendered an invoice direct to the defender, now lodged as production 5/2/8.
12. The defender wrote to the pursuer on 30 June 2015 advising that she was unhappy about the items on the invoice detailed at finding 10 above. Her letter is lodged as production 6/1/4.
13. On 6 October 2015 the defender paid £6,000 to the defenders on account, leaving a balance due of £6,324.94.
14. At around the time of service of the present action, in February 2016, the defender wrote to the pursuer (production 6/1/1), taking issue with the sums sought for various specified items on the final invoice. She asked that these items be deleted from the account, so reducing the outstanding sum due to £5,242.75. She enclosed a cheque for this amount. The pursuer did not cash this cheque.
15. In or around July 2016 the defender wrote again to the pursuer (production 6/2/4) enclosing a cheque for £2,742.78 in settlement of the outstanding sum due. The pursuer did not cash this cheque.
16. The sum of £6,324.94 remains unpaid in respect of the invoice for the works carried out by the pursuer pursuant to the invoice production 5/2/8.
Finds in fact and law:
1. The defender having contracted with the pursuer to carry out the items of works specified in production 6/1/2, the pursuer having carried out those works at a total cost of £12,324.94 including VAT, and the defender having paid only £6,000 to date, she is liable to pay to the pursuer the sum of £6,324.94.
2. The contract between the parties being a commercial contract to which the Late Payment of Commercial Debts (Interest) Act 1998 applies, the pursuer is entitled to payment of interest on the said sum at the rate of 8% over the Bank of England base rate (being 0.5%), thus 8.5% per cent per annum as follows: (i) on the sum of £12,324.94, from 31 July 2015 to 6 October 2015, being £199.92; (ii) on the sum of £6,324.94, from 7 October 2015 until payment. The pursuer is also entitled to payment from the defender of £100 by virtue of section 5A of the 1998 Act.
Note:
[1] I heard proof in this matter on 12 December 2016. The pursuer was represented by Miss Ridley, solicitor. She led evidence was from the pursuer’s managing director, Brian Thomson, from Gordon Walker, an interior designer, from Victor Robatti, the pursuer’s contracts manager, and from Keith Elliot, one of the pursuer’s joiners involved in the relevant works. The defender represented herself, her solicitors having ceased to act for her earlier in the year. She gave evidence herself, and also led evidence from Lynn Suttie, a chartered surveyor. I then heard submissions from Miss Ridley and from the defender and reserved judgment.
Brian Thomson
[2] Mr Thomson gave evidence that the pursuers had become involved in carrying out joinery works at 17 Whitehall Crescent because the defender knew Victor Robatti, the contracts manager, who had put her in touch with Gordon Walker. The defender had then instructed Mr Walker who had sought quotations for the various works, including a quotation for the joinery works from the pursuer. Mr Thomson confirmed that production 5/1/6 (although it is neither signed nor dated) was the original quotation sent (emailed) by the pursuer (in reality, one of the estimators in their office) to Gordon Walker. He confirmed that this was later revised, and that production 6/1/2 reflected the final account, from which certain items of work originally quoted for had been deleted or altered to reduce the overall cost. He had had little direct contact with the defender. As far as he was concerned the contract had been arranged through Mr Walker and all instructions to the pursuer had come through him. In particular the additional works listed on the final account were instructed by Mr Walker. Mr Thomson assumed that the defender would have instructed Mr Walker in this regard on site, but had no direct knowledge of this.
[3] In particular, Mr Thomson’s position was that Mr Walker had agreed the revised quotation and then ‘signed off’ the final account, and that accordingly any dispute about the presence or cost of any item of the work on this account was between the defender and Mr Walker, not the pursuer. Further and in particular, he said that he was not aware of any agreement to do any item of work without charge. Nor had he ever agreed to price or carry out the joinery works so as to ensure a total all trades budget of £15,000. Mr Thomson had not cashed the cheques sent by the defender in an attempt to settle the matter. As far as he was concerned the pursuer’s account was not in dispute and so should be paid in full; he was not willing to accept lesser payments. Any dispute the defender might have was between her and Mr Walker. For similar reasons he had not responded to the letters from Lynn Suttie (now productions 6/2/2 and 6/2/3). He did not produce the pursuer’s joiner’s timesheets to Miss Suttie as he had already produced them to Mr Walker. He had received no specification from Miss Suttie as to how the figure of £2,500, referred to in her letter of 13 July 2016, had been arrived at.
Gordon Walker
[4] Mr Walker confirmed that he had been instructed by the defender to provide interior design services for the shop at 17 Whitehall Crescent, and spoke to his letter and terms of engagement in that regard, now production 5/1/1. He described his arrangement with the defender as “a full design and supervision contract”. He confirmed that he had produced a design with working drawings and a specification of works, and had sought a quotation from the pursuer for the joinery work. He had not put the joinery work out to competitive tender. Mr Walker was referred to his letter of engagement to the defender of 7 December 2014, now production 5/1/1, and described in very general terms the ‘ID/10’ agreement referred to therein, but this agreement – which Mr Walker said would run to about 40 pages – was not itself produced. He denied that the figure of £15,000 mentioned in his letter was a quote by him for the whole works.
[5] Mr Walker said that he had received the quotation from the pursuer as replicated in production 5/1/6 and that he had emailed its content to and discussed it with the defender prior to the work being started. He confirmed that she had been concerned about the total cost, and that therefore it had been agreed between them that certain items would be deleted or altered. These agreed deletions and alterations were reflected in Mr Walker’s letter to the pursuer of 9 February 2015 (he confirmed that this was the correct date), now production 5/1/7. He said that he had the defender’s instructions in this regard. As regards the amended items, Mr Walker said that the precise cost of these was not agreed in advance of the work starting, but the defender agreed to these items being done by the pursuer on the understanding that the cost for each item would be less than that originally quoted. Mr Walker confirmed that the final account, production 6/1/2 (which had been annotated by him), did ultimately reflect reductions in the cost of all these items, and he stressed the efforts which he had made to keep costs down overall. Mr Walker said that in any event the defender had agreed the cost of all the un-amended items of work referred to in production 5/1/7.
[6] Mr Walker spoke to receiving the final account, production 6/1/2, from the pursuer and going through it, cross referencing it to quotes, phone calls and discussions. He confirmed that the annotations on this account were his. He said that he checked each item against the pursuer’s timesheets and was content to sign off the account as reasonable for the works undertaken by the pursuer. As regards the additional works detailed on page 2 of the account, Mr Walker said that these were either discussed and agreed with the defender on site, or became necessary in the course of ongoing work in order to complete the job or to comply with building regulations or statutory requirements. The pursuer had then included the items in the final account, and he had checked both that they were agreed or necessary, and that the costs were reasonable. He then agreed the costs with the pursuer on the defender’s behalf.
[7] Mr Walker was asked in particular about various disputed items of work on the final account production 6/1/2:
a. As regards item 14 on page one (“seat and rear panel – £450 – as per agreed quote”) he said that what was ultimately provided – after an initial error by the pursuer for which no additional charge had been made by them – was what he had specified in his design drawing, and which had been agreed in advance by the defender. The only change had been that it had later been agreed that the seat would have a walnut wood backing, which had increased the cost from £400 to £450. Mr Walker rejected the suggestion that the seat and panel had not been conform to what had been contracted for. The defender had not previously complained to him about the design. Mr Walker added that he had litigated himself in order to recover his own fees from the defender and had now successfully done so.
b. As regards item 2 on page 2 (“pipebox in kitchen and treatment room – requested on site”), Mr Walker said that initially he had accepted that pipe boxing would not be necessary in a staff area, but that in the course of the works the plumber told him that certain (hot water) pipes in the kitchen could not be left exposed for health and safety reasons. Mr Walker said that he spoke to the defender or one of her staff about this and that it was agreed that additional boxing work had to be done. In any event it was necessary to do it. No fee was agreed, but it was understood that the defender would pay a reasonable fee for what was necessary. Mr Walker said that he was satisfied that what was ultimately done was indeed necessary, and that the fee charged by the pursuer was reasonable.
c. As regards item 10 on page two (“cut holes for electrician – £146.20 – altered position for lights and sockets”) Mr Walker disputed that this was due to any mistake by him. He and the defender had agreed that the original socket design could be modified (to save money), but the relevant workman had then come in at five am the next morning (working out of hours due to the pressure of time to complete the job) and had carried out the work as originally instructed before he, Mr Walker, had been able to contact him to tell him of the need for modification. Hence there was an additional cost for additional work which it was necessary for the pursuer to carry out. However Mr Walker said that the overall cost for this item (one of the amended items on production 5/1/7) was still marginally less than the original cost for it which had been quoted and agreed.
d. As regards items 11 (“build up client seats – £87.72”), 12 (“fit only mirror and toilet roll holder – £25.00”) and 14 (“hanging pictures – 29.24”) on page 2 of the account, Mr Walker said that these were instructed by the defender on the final day of the work. Matters were chaotic at that point, with the pursuer’s employees still trying to finish the works in time for the opening party. A power cut had made matters worse. The items all related to furnishings and fittings which had been delivered. Mr Walker said that the defender agreed that the joiners would assist in relation to these items in order to have the premises open and ready for the party. Mr Walker did not recall it being said that any of these items would be done ‘as a favour’, or otherwise without charge. He was satisfied that the charges then made by the pursuer were reasonable. He added that the joiners had in fact done other works that day (by way of clearing and cleaning the site) and for which the pursuers did not ultimately charge.
[8] Having checked and approved the pursuer’s account, Mr Walker said that he then issued the certificate of 30 June 2015 now production 5/2/9. He did not suggest that the defender had expressly approved the costs for the above mentioned disputed items before he issued the certificate. He said that he considered that he had authority to do so on her behalf in terms of his contract with the defender. He also said that the defender had not queried the pursuer’s account with him directly prior to the raising of the present action.
Victor Robatti
[9] Mr Robatti confirmed that he was the contracts manager for the pursuer and had introduced the defender to Gordon Walker. He knew the defender and his daughter worked for her as a hairdresser. He said that the initial £15,000 estimate related only to the joinery work, not the whole job. Once the work started he said that he was on site most of the time, instructing and supervising the pursuer’s workman, rather than doing any hands on work himself. He too spoke about the chaotic last day of the job. He said that the defender had asked him, not Mr Walker, if the pursuer’s workman would carry out the items of work referred to in finding 7(c) above. Even if she could have hung the pictures herself, Mr Robatti said that she too was very busy and stressed on that day getting ready for the opening party. He denied that he had agreed that the joiners would do any of these items of additional work free of charge. He had spoken to Mr Thomson about these additional items but he did not have input into the particular amounts charged. He said that he had not seen the joiner’s timesheets for this work and had no knowledge as to how long it had taken them to do it.
[10] Mr Robatti was cross examined about gifts that the defender said that he accepted from her, by way of background to his involvement. He accepted that he had had free haircuts, but said that he could not remember the defender giving him a case of red wine. He denied that acceptance of any gifts was indicative of his willingness not to instruct a charge against the defender for certain items of work on the job.
Keith Elliot
[11] Mr Elliot was one of the pursuer’s joiners who worked on the job at site. He gave brief evidence that his instructions came from Mr Walker or Mr Robatti or both. He said that if there were any problems on the job identified by the defender they would fix them. He too confirmed that the last day was hectic, particularly due to the power cut.
The defender
[12] The defender took the oath and gave evidence on her own behalf, being subjected to questioning by me and cross examination by Miss Ridley. Her position ultimately came to be as set out in her letter to the pursuer production 6/2/4, namely that she accepted that she was due to pay an additional £2,742.78 under the contract, but that she should not be required to pay for the items specified in her letter to the pursuers production 6/1/1 for the reasons set out there, and that a further deduction of £2,500 should be made as stated in the letter from Lynn Suttie of 13 July 2016, production 6/2/2.
[13] More particularly, in relation to the disputed items, and again with reference to the final account production 6/1/2:
a. As regards item 14 on page one (“seat and rear panel – £450 – as per agreed quote”) she said that what was produced was not conform to Mr Walker’s design. She claimed that the design documents made this clear – but had not produced or lodged them. She said that the seat was supposed to fill the whole of window recess in the shop but did not do so as there were gaps at each side and additionally it was not centred.
b. As regards item 2 on page two (“pipeboxes in kitchen and treatment room – requested on site”) the defender said that she had agreed to some additional pipe boxes, but not in the kitchen. She did not think it was necessary. She said that there were other pipes in the kitchen which were still exposed. Her position was that the cost should be abated by £196.41 inclusive of VAT. She could not remember on what basis she quantified her proposed abatement.
c. As regards item 10 on page two (“cut holes for electrician – £146.20 – altered position for lights and sockets”) the defender said that there had been a conversation during which she, the hairdressers and Mr Walker had agreed that the holes for the sockets would have to be a different place than originally specified. She said that this conversation had taken place before the holes had been cut. Mr Walker had said that he would communicate this to the joiner but failed to do so before the holes were cut the following day. Hence she said that the extra work was Mr Walker’s fault and she should not have to pay for it.
d. As regards items 11 (“build up client seats – £87.72”), 12 (“fit only mirror and toilet roll holder – £25.00”) and 14 (“hanging pictures – 29.24”), the defender said that Mr Robatti had offered his men to do these items. She said that they were hanging about during the power cut with nothing to do. She accepted however that Mr Robatti had not expressly said that these works would be done for free but assumed they would be. Otherwise, she said, she would have done these items herself. In any event she said the charges were excessive – in relation to item 14, for example she said that this had involved putting two nails into a wall, which had now fallen out. She accepted however that although instructed on the chaotic last day, these works were not in fact carried out until a few days later, when the pursuer’s joiners returned to the premises to carry out this and other snagging items.
The defender did not give evidence as to why the sum of £2,500 should be deducted in addition to the charges in respect of the above items.
Lynn Suttie
[14] Lynn Suttie is a qualified and experienced building surveyor with J&E Shepherd. She was instructed by the defender in around June 2016 to represent her in her dispute with the pursuer. She is the author of the two letters to the pursuer lodged as productions 6/2/2 and 6/2/3. In the first of these letters (6/2/3), in summary, she sought a breakdown of the charges for a number of the works on the invoice 6/1/2 and the pursuer’s timesheets relative thereto. She also repeated a number of the particular criticisms made by the defender in her letter at production 6/2/1. Having got no reply from the pursuer Ms Suttie wrote the letter now lodged as production 6/2/2, offering on the defender’s behalf to settle the account by payment of £2,742.78, being the outstanding balance less the items already disputed by the defender and a further £2,500 deduction for unspecified ‘excess costs’. As mentioned above, that came to be the pursuer’s position at proof.
Discussion
[15] In this case the defender contracted with Mr Walker to design the refurbishment of the shop at 17 Whitehall Crescent, to negotiate contracts for the work with relevant tradesmen, and to supervise the carrying out of the work. The pursuer’s position was that the defender had given Mr Walker authority, under the terms of her contract with him, to also agree the terms of the pursuer’s invoice in June 2015, that is, without prior reference to her. On that basis, as Mr Thomson himself argued in evidence, the pursuer’s invoice had been agreed in full, and any further dispute about that was between the defender and Mr Walker, not the pursuer.
[16] If Mr Walker did have such authority under his contract with the defender, however, this was not properly established in evidence. His letter of engagement is lodged at production 5/1/1, but the BIID Agreement for Interior Design Services referred to in it is not. No good explanation for this was advanced, and none was apparent to me. Mr Walker was asked general questions about his remit, which included ratifying the pursuer’s account. He thought that he had authority to agree the pursuer’s invoice on the defender’s behalf but the best evidence of this would clearly have been the full written contract between him and the defender, which was not produced. Mr Walker did not suggest that he got prior express agreement from the defender to agree the disputed items on the invoice. In these circumstances, and on the evidence which I heard, I was not prepared to find that the defender was precluded from disputing the account with the pursuer merely by virtue of Mr Walker having agreed it and issued his certificate.
[17] The defender raised a number of general grievances in her defence of the pursuer’s claim for payment:
a. It was initially averred in the defences that any contract was with the defender’s company, not her as an individual. That argument was not insisted in at the proof.
b. The defender complained that Mr Walker and/or Mr Robatti had agreed a £15,000 limit on the whole project (of which the joinery was only a part), and so was aggrieved that the final bill went well beyond this (and accordingly beyond what she said she could afford to pay). Both Mr Walker and Mr Robatti disputed that they agreed to any such limit. In any event, however, it is clear in my view that the pursuer never agreed to any total budget for the works – nor could it, given the other independent contractors involved – but merely agreed the joinery costs with Mr Walker on the defender’s behalf as set out in the above findings.
c. The defender complained that she did not have sight of the pursuer’s quotation before the work started and did not agree it. It is possible that she did not see the actual quotation documents, but Mr Walker did, and I accept that he made the defender aware of the content of them and discussed them with her. I did not accept the defender’s evidence to the contrary, which flies in the face of the fact of the detailed notes of deletions and amendments to the quotation set out in production 5/1/7. These can only have been made by Mr Walker in the light of discussion of the original quotation with the defender. I accept therefore that she knew its terms, and agreed them.
d. The defender was also aggrieved that the ‘good deal’ that Mr Robatti had promised her did not materialise, notwithstanding the gifts which she had given him. I had some sympathy with her here. I suspect that Mr Robatti was quite content to accept the defender’s generosity and to let her think that this would lead to a reduction in her account from the pursuer. I had little doubt that he was being less than truthful when he said that he could not remember receiving a case of wine from her. But I do not think that Mr Robatti actively misrepresented the pursuer’s position with regard to the account, and in any event he did not have authority to reduce it. Ultimately I think that it was simply naïve of the defender, and a mistake on her part, to think that she could take advantage of a personal relationship with Mr Robatti and so get the work done by the pursuer at a cut-price rate.
[18] Notwithstanding these various grievances, and as noted above, at the proof the defender’s dispute came down to a refusal to pay for a number of specific items on the account, as specified in her letter production 6/1/1, together with a general allegation that the work had been substandard and in any event overcharged.
[19] As regards the specific disputed items, my conclusions were as follows:
a. As regards the boxing in of the hot water pipes in the kitchen, I preferred Mr Walker’s evidence to that of the defender. He said that although he had initially not seen this work as necessary the plumber had told him that it had to be done for health and safety reasons. He had discussed this with the defender and she had agreed that it be done. It was obvious that a charge would be made. The defender’s insistence that she had agreed to boxing of pipes in the treatment room but not the kitchen did not make sense to me, given that the health and safety issue was common to both. Even if other pipes in the kitchen still remained unboxed, as the defender claimed, that did not mean that the pursuer had not done work for which a charge was payable. The defender could not explain the quantification of the sum which she sought to abate, but I accepted Mr Walker’s evidence that the whole sum sought by the pursuer for this item was reasonable.
b. As regards the seat and panel, I considered that the defender had not established that these were constructed by the pursuer’s employees in a manner which was dis-conform to Mr Walker’s design. Again I preferred his evidence to hers. It is not disputed that the pursuer’s joiners did not get this piece of work right first time, and that no charge was rendered to the defender for the remedial work which was subsequently carried out by them. That this had occurred gave support in my view to Mr Walker’s insistence that what was ultimately produced in this regard did conform to the agreed design – he would have been aware of the need to check compliance with his design carefully and I was satisfied that he had done so. I considered that if the defender wished to establish the contrary position in defence of the pursuer’s claim for payment then the evidential onus was on her to do so. Most obviously, she could have lodged the agreed design drawings, but did not do so. The defender did try to introduce a photograph of the seat during her cross examination of Mr Walker, but this was objected to by Miss Ridley as being produced too late, and I sustained the objection. On the available evidence I considered that if there was an issue on this matter, it was really a dispute as to the design of the seat, not the pursuer’s joinery work. As such I considered that the defender’s dispute as regards this item lay with Mr Walker, not the pursuer, and that she had not established good grounds to challenge the pursuer’s charge for this item.
c. As regards the re-cutting of the holes for the lights and sockets, there is no real factual dispute between the defender and Mr Walker. The defender said that Mr Walker would notify the relevant tradesman of the change to the plan before the cutting was carried out, and ultimately he did not dispute this. He then failed to do so. His failure is perhaps understandable in the circumstances, but it led to additional work being done by the pursuer which would not otherwise have been required. However that is not the pursuer’s fault. This additional work had to be done, as the defender agreed, and the pursuer was entitled to be paid for it. Any claim which the defender might have had in this regard, therefore, was again a claim against Mr Walker, and in my view the defender has established no good grounds for non-payment of the pursuer’s account as regards this item.
d. Finally, as regards the putting together of the chairs, and the putting up of the mirror, toilet roll holder and pictures, there is again no real factual dispute. The defender instructed Mr Robatti to do these items of work, did not secure agreement that they would not be charged for, and did not agree the cost in advance. She may have grounds to feel aggrieved by Mr Robatti’s personal behaviour, as already described, but has not established that the pursuer was not entitled to charge for these items as it did. The costs might appear high for what was done, but taking into account the fact that the pursuer’s joiners returned to the premises in order to carry out these works, and Mr Walker’s evidence that the costs were reasonable in the light of sight of the joiner’s timesheets, I was not prepared to hold that the pursuer was not entitled to the sums sought.
For these reasons I was satisfied that the disputed additional works were all works which were instructed by the defender, which were actually carried out by the pursuer, in respect of which the sums sought were reasonable, and for which it is entitled to payment.
[20] As regards the defender’s allegation that the work carried out by the pursuer was generally substandard and overcharged, there was in my view insufficient evidence to substantiate this. It was based on the terms of Ms Suttie’s letter to the defender, production 6/2/2, referred to above, which contains a similarly general allegation. In examination of this witness the defender sought to explore this further, but Miss Ridley objected to this line of questioning on the grounds of a lack of record, or at least, lack of specification, and I sustained her objection.
[21] The pleadings have suffered both from the manner in which the defender’s solicitors originally framed the defences, and from the fact that from shortly thereafter the defender has not been legally represented. The defences were lodged in March 2016. They did not contain any answer to condescendence 4 of the initial writ, which contained the substance of the pursuer’s case. Instead they raised the technical issue, now not insisted in, that any contract was with the defender’s company, not her personally. Answer 6 also refers to the defender’s letter (presumably the letter now lodged as production 6/1/1) in support of an averment that the pursuer failed to carry out work to an appropriate standard.
[22] The defender’s solicitors having withdrawn from acting, the defender lodged a document headed ‘Statement of Defence’ on 22 August 2016. This is not in proper form in that it does not bear to answer the articles of condescendence in the initial writ. It does however contain the claims, by reference to Ms Suttie’s letter, that she found “some aspects [of the work] to be below average standard and at least 20% overpriced based on the breakdown of the work [the pursuer] provided…”. Beyond these inspecific claims, however, the document largely repeats the defender’s position to the court regarding the particular disputed items detailed above, and the defender’s belief that some of this work was to be done without charge.
[23] Four days later, on 26 August 2016, the defender lodged a document headed ‘Addition to Statement of Defence’. This does at least bear to try to answer the various articles of condescendence. It makes no reference to the earlier ‘Statement of Defence’, and so it is not really clear whether it is intended to supplement it, or to amend the initial defences. The pursuer’s solicitors clearly took it to be the latter, in that the Record made up by them for the Options Hearing on 30 August 2016 contains elements of the original defences and incorporates the ‘Addition’ document, but not the ‘Statement of Defence’. The averments in the original defences alleging substandard work were therefore deleted and not incorporated into the Record. It was in this form that the Record was closed, apparently without objection from the defender, and on which the proof proceeded.
[24] There is therefore no averment on record at all to provide a foundation for the questions put by the defender to Ms Suttie which were objected to. However even if I were to take a very broad view of matters and have regard to the ‘Statement of Defence’ document, there is still no specification of the claim that the work was overcharged.
[25] I considered that this was not merely a technical matter. The court can make some adjustments for party litigants, but not to the extent of denying the other party fair notice of the case that it is proposed to make. If the defender wished to establish that any particular item of work was substandard and/or overcharged to the extent that she should not have to pay the amount sought in respect of it, she should have set out averments as to which items were affected, and why, and the legal basis on which she said that some or all of the payment claimed was therefore not due. Furthermore the defender’s case on this issue would also have to confront the fact (now accepted by me) that she agreed in advance to pay certain of the (un-amended) costs specified in production 5/1/7, and that even if they were overpriced the law does not protect people from making bad bargains.
[26] In any event it was apparent that Ms Suttie’s evidence on alleged overcharging would have been of no real value to the defender in any case. This is because she confirmed, in answer to questioning from me, that in order to give a properly informed opinion on this issue she would have to have had sight of the pursuer’s timesheets for the work. These had been requested from Mr Thomson but were not produced by him to Ms Suttie, and no attempt had been made to recover them, for example by way of a specification of documents. Any opinion evidence which Ms Suttie could have given would therefore, on her own admission, have been general and speculative, and insufficient to provide a good defence to the pursuer’s claim for payment.
[27] For all these reasons I am satisfied that the defender has not established good grounds to resist payment of the pursuer’s account in full, and I will therefore grant decree as first craved.
Interest
[28] The pursuer averred that the contract in this case is a commercial contract to which the Late Payment of Commercial Debts (Interest) Act 1998 applied. That averment is denied on Record, but it is clear from the evidence that the contract between the parties is a contract for the supply of services, where the purchaser and the supplier were each acting in the course of a business, and is not an excepted contract for the purpose of the Act. The Act therefore applies by virtue of section 2.
[29] The pursuer avers that it is entitled to statutory interest amounting to £382.23 to 10 February 2016 (the date when the initial writ was lodged). It is also averred that there is an entitlement to payment of £180 under section 5A of the Act. No attempt is made in the pleadings to quantify these sums by reference to the Act. Nor was I favoured with detailed submissions in this regard by Miss Ridley, which is regrettable to say the least, standing the complexities of the Act and its application to the facts of this case.
[30] In terms of section 4(2) of the Act statutory interest runs from the day after the relevant day for the debt, at the rate prevailing at the end of that day under section 6. The relevant day for the debt is in general the agreed payment day, if there is one, or if not, the last day of the relevant 30 day period. In terms of section 4(2H) the relevant 30 day period is the period of 30 days beginning with the later or latest of (a) the day on which the obligation of the supplier to which the debt relates is performed; (b) the day on which the purchaser has notice of the amount of the debt or (where that amount is unascertained) the sum which the supplier claims is the amount of the debt; and (c) where subsection (5A) applies, the day determined under subsection (5B). Subsection (5A) applies where (a) there is a procedure of acceptance or verification (whether provided for by an enactment or by the contract), under which the conforming of goods or services with the contract is to be ascertained; and (b) the purchaser has notice of the amount of the debt on or before the day on which the procedure is completed. Subsection (5B) provides that for the purpose of subsection (2H)(c) the day in question is the day after the day on which the procedure is completed.
[31] Section 6 provides that the rate of statutory interest under the Act shall be prescribed by Order. The relevant Order in Scotland is the Late Payment of Commercial Debts (Rate of Interest) (Scotland) Order 2002/336. In terms of Article 4 of that Order the prescribed rate of interest is 8 percent per annum over the official dealing rate in force on the 30th June (in respect of interest which starts to run between 1st July and 31st December) or the 31st December (in respect of interest which starts to run between 1st January and 30th June) immediately before the day on which statutory interest starts to run. The official dealing rate is, in terms of Article 3, the rate announced from time to time by the Monetary Policy Committee of the Bank of England and for the time being in force as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets.
[32] Although in the absence of detailed averment or submission the pursuer’s precise position on some of these various issues is unclear to me, I consider that I am bound to try to apply the terms of the Act to the debt which I have held is due.
[33] In my judgment it has not been established that there was an agreed payment day in the contract, therefore interest runs from the last day of the relevant 30 day period. Whether or not that is taken to be the day on which the defender had notice of the amount of the debt (that is, the date of the invoice production 5/2/8, or the date on which Mr Walker completed a relevant acceptance and verification procedure (presumably the date of the certificate production 5/2/9) does not matter: both dates are 30 June 2015. I therefore take the relevant 30 day period to be the 30 day period beginning with the day after 30 June 2015, thus 1 July 2015. The last day of that 30 period is therefore 30 July 2015, which is therefore the relevant day for the purpose of section 4. Interest therefore runs from the day after that day, that is, 31 July 2015.
[34] Given that the relevant day for the debt is 31 July 2015, the rate of interest is 8% over the Bank of England official dealing rate on 30 June 2015, calculated by reference to the 2002 Order. The official dealing rate on that date was 0.5%. It has since reduced, to 0.25%, from 4 August 2016, but as I read Article 4 of the 2002 Order the interest rate applicable to the debt is fixed by the rate at the relevant day for the debt, and does not change from time to time relative to fluctuations in the official dealing rate. Therefore the rate of interest on the debt in this case is simply 8.5%.
[35] The amount of the debt due from 31 July 2015 was £12,324.94, VAT being included for the purposes of the Act. The defender paid £6,000 on 6 October 2015. Therefore interest is due on £12,324.94 for the period 31 July to 6 October 2015. Interest under the Act is simple, not compound. Thus the annual amount of interest on £12,324.94 at the rate of 8.5% is £1,074.62 (£12,324.94 / 100 x 8.5). The daily rate is therefore £2.94 (£1,074.62 / 365). 31 July to 6 October is 68 days (31 July, 31 days of August, 30 days of September, and 6 days of October). Therefore the interest due for this period is £199.92 (£2.94 x 68). From 7 October 2015 the amount of the debt due has been £6,324.94. The annual amount of interest on this sum at the rate of 8.5% is £537.62 (£6,324.94 / 100 x 8.5). The daily rate is therefore £1.47 (£537.62 / 365). As at date of decree (23 January 2017) the interest due is therefore £701.19 (£1.47 x 477 days). However interest will continue to accrue until payment.
[36] I have also considered the terms of section 5 of the Act. This section applies where by reason of any conduct of the supplier, the interests of justice require that statutory interest should be remitted in whole or part in respect of a period for which it would otherwise run in relation to a qualifying debt. In such circumstances the Court is given a wide discretion to remit the interest otherwise due for the whole or part of the relevant period, or to apply interest at a reduced rate for a period or periods. Conduct of the supplier includes acts or omissions, whether before or after the time when the date was created.
[37] While the mischief at which the Act is directed is casual or feckless non-payment, simply because there was a genuine dispute about whether all or part of the debt was due does not in itself mean that it will be in the interest of justice to remit: see Banham Marshalls Services Unlimited v Lincolnshire CC [2007] EWHC 402 (QB), paragraph 70. It has been suggested that the discretion should work on this principle: that interest should be remitted wholly or in part in respect of only any sums in respect of which the supplier had created or allowed uncertainty. There should be no remission in respect of sums which from the paying party’s point of view were clearly payable: see Ruttle Plant Hire Ltd v Secretary of State for the Environment, Food and Rural Affairs [2009] EWCA Civ 97 at paragraph 53.
[38] The issue in the present case which has caused me a little pause for thought is the fact that the defender offered payment to the pursuer of the sum of £5,242.75 in around February 2016, and subsequently offered payment of £2,742.75 in around June 2016. Indeed she sent cheques for these amounts. The pursuer chose not to cash them. Mr Thomson’s position in evidence, as mentioned above, was that he simply considered that the whole sum was due, that any dispute was between the defender and Mr Walker, and therefore that he did not see why the pursuer should accept less than the full amount. The defender clearly intended the cheques when offered to be in full and final settlement of the pursuer’s claim, and Mr Thomson was no doubt concerned that acceptance of either cheque might bar or prejudice the pursuer’s ability to recover the whole sum.
[39] Ultimately I have accepted that the pursuer is entitled to recover the whole debt. The defender has disputed part of it at proof, but the material elements of that dispute were not raised by her until many months after the work was completed and the debt fell due. The pursuer has certainly not created or permitted any uncertainty of its position as regards the sum said to be due. Accordingly having considered the matter I do not consider the pursuer’s conduct in not cashing either cheque offered by the defender was such that it would be in the interests of justice to remit the interest on the whole sum which would be otherwise due.
[40] There remains the question of entitlement to payment under section 5A of the Act. The pursuer craved the sum of £180 under this section, but I am unclear how this figure was arrived at.
[41] Section 5A(1) provides that once statutory interest begins to run in relation to a qualifying debt, the supplier shall be entitled to a fixed sum (in addition to the statutory interest on the debt). The amount of that fixed sum is prescribed in section 5A(2). Where the debt is £10,000 or more the sum is £100. In the absence of argument on the point I take this to mean that where the debt exceeds £10,000 as at the relevant day, the purchaser becomes liable for a fixed sum of £100 on that day. In other words where, as here, the debt is subsequently reduced below £10,000, that does not affect the fixed penalty payment which has already become due. In this case, therefore, the pursuer is entitled to decree of £100 under section 5A given that interest under the Act began to run, on 31 July 2015, on a qualifying debt in excess of £10,000.
[42] It is then necessary to consider section 5A(2A). This provides that if the reasonable costs of the supplier in recovering the debt are not met by the fixed sum due under section 5A(1), the supplier shall also be entitled to a sum equivalent to the difference between the fixed sum and those costs.
[43] On the face of it this subsection appears to give the supplier a right to that amount of the reasonable cost of recovering the debt which exceeds the relevant fixed payment under section 5A(1). He is not however entitled to the whole of the reasonable cost of recovery in addition to the relevant fixed payment. I would imagine that this subsection would most obviously have application where the debt has been successfully pursued extra judicially, at a cost to the supplier, as he may have no other right to recover that cost. However where a supplier has successfully litigated his claim and has been found entitled to the expenses of the legal process, I am not clear what further reasonable cost of recovery might be allowed under section 5A(2A). In such a case the pursuer’s entitlement would therefore be to decree for the principal sum plus interest, decree for the fixed sum payment under section 5A, and decree for the expenses of the action on the appropriate basis but subject to deduction of a sum equivalent to the fixed sum payment.
Expenses
[44] In the present case Miss Ridley did move for the expenses of the action, as taxed. As the pursuer has been wholly successful in the action, and the general rule being that expenses should follow success, I will grant Miss Ridley’s motion.
Disposal
[45] In all the circumstances, therefore, and having regard to the above considerations, it seems to me that the appropriate disposal of this case is as follows. I shall grant decree against the defender for payment to the pursuer of the principal sum, namely £6324.94. I shall further grant decree for payment of £199.92, being the ascertainable amount of interest due under the 1998 Act to 6 October 2015. I shall further grant decree for payment of interest on the sum of £6,324.94 at the rate of 8.5% per annum from 7 October 2015 until payment. I shall further grant decree for the sum of £100 by way of fixed payment under section 5A of the 1998 Act. And I shall find the defender liable to the pursuer in the expenses of the action, as taxed, but subject to deduction of the sum of £100.