DRL scores Court of Appeal win over logistics firm
NORTH West online white goods retailer DRL has won a Court of Appeal case after a dispute with logistics giant Wincanton Group.
The appeal court overruled an earlier decision by the High Court and ordered Wincanton to repay DRL – which trades as – appliancesonline.co.uk – more than £500,000 including costs.
DRL was represented by the dispute resolution team at Manchester law form Pannone.
The dispute began in 2007 and came to a head in 2008. It related to liability of goods damaged while in the care of the logistics group and the standard of the delivery service provided by Wincanton to DRL’s customers.
DRL currently employs more 500 staff and supplies fridges, freezers, washing machines and dishwashers via appliancesonline.co.uk and appliancedeals.co.uk, and has contracts with major retailers such as House of Fraser, B&Q, Argos, Next, Marks & Spencer and Boots to supply products to their customers.
DRL had engaged Wincanton to deliver to its customers across the UK.
Under the terms of the contract, Wincanton was required to offer to unpack and inspect the goods for each customer on delivery. However, DRL claimed that the logistic firm failed to comply with the standards required and operated a ‘dump and run’ service and, as a result, was left with a large number of customer complaints and almost £3m worth of lost and damaged goods.
Towards the end of the contract between the two parties, DRL agreed, despite its concerns over damage to goods to pay Wincanton £1m in order for it to continue to deliver the remaining orders and ensure a smooth handover with the incoming logistics company in order for liability to be agreed at the end of the contract.
However, two days before the contract was due to end, Wincanton demanded a further £250,000, rising to £300,000 for the release of stock owned by DRL and due to be delivered to its customers.
DRL took its case to the High Court and while the High Court agreed that Wincanton’s demands for a further £300,000 was a breach of the agreement and “quite unjustified and a flagrant attempt to impose improper commercial pressure on DRL to pay a further significant sum which the parties had agreed should be frozen”, it ruled that DRL was still obliged to make payment for deliveries made by Wincanton.
However, the Court of Appeal has now overturned that decision and has ordered Wincanton to repay DRL in excess of £470,000 plus costs. The final sum owed by Wincanton in relation to the claim is still to be determined and is likely to be heard by the High Court in 2012 in the absence of an agreement being reached.
Partner Michael Kennedy of Pannone represented DRL. His assistant Andrew Vickerstaff. said: “The Court of Appeal has now overturned the decision of the High Court on this issue and agreed that in the face of such unjustified and improper demands that DRL’s board was fully within its right to consider the relationship at an end and cease further payments to Wincanton.”
DRL Finance Director Steve Caunce said: “DRL is relieved at the decision of the appeal court. The problems DRL encountered during the relationship with Wincanton were highly material to the business, however we sought to end the relationship in as clean and professional manner as possible.
“Given the events that occurred in the final weeks of the contract, to be found as the party that breached the agreement in the first hearing was very hard to take. We therefore welcome the recent decision.”
